Cyprus-Forum.com

[cyprusgrump]

CG. Then. if banks cannot create money ad-infinitum explain how the £2.5 trillion UK National came into being ...... and who holds the debt? I think you will find it is the Banks! And the private debt is even larger! Where does all this money come from?

So you think your local Barclays Branch has pushed £2½ Trillion over the counter to fund mortgages do you... because they can obviously just create 2½ Trillion Pounds from thin air...?

You haven't heard of Government Borrowing, QE, etc.?

[Robin Hood]

CG. Then. if banks cannot create money ad-infinitum explain how the £2.5 trillion UK National came into being ...... and who holds the debt? I think you will find it is the Banks! And the private debt is even larger! Where does all this money come from?

So you think your local Barclays Branch has pushed £2½ Trillion over the counter to fund mortgages do you... because they can obviously just create 2½ Trillion Pounds from thin air...?

You haven't heard of Government Borrowing, QE, etc.?

If your are sensible instead of acting stupid .....my reference was to government borrowing i.e. National Debt, and you would know that such transactions are done through the major Banks HQ's . But you obviously don't know the important bit .... HOW they do it?

As I have come to understand it over the years ............. it's mind boggling and defies common sense.

The Government issues Bonds (Promissary Notes) with guaranteed interest annually for a fixed term, to the Bank of England ...... the BoE sells these to the Banks at an Auction. Problem is the Banks don't have any money ..... so they go to their Bank (The BoE) and it gives them credit .... just as your bank gives you credit when you want a loan.

Just like your loan, when the Bank buys the Bond with the borrowed money it creates New Money into circulation.

So the Banks buy the Bonds from the BoE with the credit they have from the BoE , who created it out of thin air just like your Bank pays out your loan to you ..... they give the Government the money they borrowed in exchange for the Bonds. The BoE accepts the Bonds as security on the Banks credit account. The bank collects the interest off the Bond until the Bond value is redeemed, Doing this reduces government debt. And so t goes on round-and-round for ever increasing debt.

Simple question: Why does the BoE not give the money straight to the Government ..... and cut out the middle man? Simple answer ...... the middle man .... the Private Banks ...... would lose billions in interest from from the Government.

Where did the money come from? Out of this air ...... where did it go when repaid ..... in the trash can ..... and then they borrow it again .... and again .... and again! And all the time the private banks soak up the interest like blotting paper ....... and the Government have to borrow it all over again plus what it cost them in interest!

[Lordo]

What about Inflation though?

Will the increasing of interest rates reduce the type of inflation we have currently? If so why did Hunt have a meeting today to see if corporations are profiteering by hiking up prices. Should this not be done automatically. Was it not obvious seeing the Supermarket prices and Energy prices considering how much wholesale prices have come down and yet prices are so high?

While we are at it, now that Thames water is in 1.2 billion in debt, why is the government considering buying it back? Was it not that industry is run better when in private hands. Instead of investing in the infer-structure they creamed off all the profits and now they are about to declare bankrupt knowing we will foot the bill.

Niiiiiiiiiiiiiiiice init?

https://www.bbc.co.uk/news/business-66039170

The same is happening to railways. They are keeping the prfitable lines and handing back the shit ones back to Government.

Double niiiiiiiiiiiiiiiiiiiiiiice.

One last question. How the hell was Thames water allowed to pay billions in bonuses and dividends and run up a debt of 14 billion? What a way to run a vital utility firm.

[Maximus]

Where did the money come from? Out of this air ...... where did it go when repaid ..... in the trash can ..... and then they borrow it again .... and again .... and again! And all the time the private banks soak up the interest like blotting paper ....... and the Government have to borrow it all over again plus what it cost them in interest!

I have a mate that sells socks and underwear at the local Sunday market and he often asks me the same question when the ladies are browsing for knickers.

Where did the money come from he asks? out of thin air i tell him. don't worry about it, just take the money and let them go with their new pair of knickers.

What are you going to do with the money I ask him? Well most of it will go back in to buying new knickers because every few weeks or so, they come back for more. but I I get to keep some of it for myself to feed the family.

Well why dont you make the knickers to make more I ask? I dont have the time to deal with all that, I could hire people to make them but it just aint worth it he says.

Nice I say, just keep doing it again and again and again.

[Maximus]

What about Inflation though?

Well my mate who sells sock and underwear at the local market says that he puts the prices up for knickers when the demand is high for them.

If he gets stuck with pairs he cant shift for long periods of time, he lowers his prices until the ladies start biting again.

[Lordo]

What it sounds like is you don't know what the ladies keep in their pouch. I suppose it could have something to do with inflation.

[Lordo]

So clearly we do not have any overheating and wage rises which means there is no need to increase interests to solve the inflation problem

But the corporations are saying that there is a supply chain problem which is pushing prices. If indeed it was this this would not make any more profits for the corporation as all they would be doing is paying for the extra costs and charging for it. So the fact that they are making excessive profits when compared with before the pandemic and the Ukraine war suggests that that is not the issue. it looks more like Greedflation.

Let us assume that it is true that the demand is outstripping supply which is pushing prices up. Surely this is not being caused by extra money in the system or etra demand but shortages of supply. So if we go back to the idea of Supply and demand to regulate prices, surely it would be more appropriate to solve the supply chain problem and increase supply. Inflation solved and nobody has to suffer any pain.

So it seems they always go for reducing demand by increasing interest rates. Why? What drives this decision? it means the corporations are in it with the government and they are all benefiting from this one way or another.

One last thing to think about is the fact that people have had a cut in wages for the last 13 years of Swine rule and now they are being asked to fork out anything from 500 pounds per month to 1500 pounds per month for their mortgages. Well this is not good news for the government either as people lose their homes they will end up being put up in hotels and the government will fit the bill.

One last thought though. Fishy was talking about growing the economy and here he is now deliberately driving it into recession. Headless chickens come to mind.

[Lordo]

So back to square it is then. Having increased the interest rates deliberately to cause a recession to reduce inflation, they then asked the banks to help homeowners to makes payment easier by either converting the loan to an interest only loan or increase the term of the loan to 35 to 40 years instead. Judging by the fact that some of the loans have up to 2 years fixed rate and are not going to be feeling the effect and the effect is being negated by changing the terms of the loan, how exactly is the rate rises help reduce inflation?

One is simply lost for words. But of course this is not the policy of only the Swine party we now have a new Swine round the corner named Starmer.

[Lordo]

After having interest rates increased for 13 months in a raw and inflation showing no inclination to fall, it has been shown that it does not work. So clearly this inflation is demand lead. It is not even led by broken supply chain because if it was so, the prices in corporations charge would go up but so would their costs which means they would be making the same profit as before. Instead that have been found to be making excessive profits.

Back to demand led inflation. If Interest rates go up and then surely a little later the interest paid to depositors will also go up. So with one hand they are pouring water on the fire and with the other hand pouring petrol on it.

But the real aim of this hike is finally out. Old Lamont the Swine has split the beans.

A living standards crunch is needed to bring down inflation and avoid prolonging the economic crisis, two former Tory chancellors have said. Conservative grandees Norman Lamont and Philip Hammond both endorsed the strategy adopted by Jeremy Hunt of avoiding giveaways which would ease the impact of the increase in living costs.

We have over 11 million pensioners, sick, unemployed and working people who are living below poverty line. How many more do they need to be satisfied with their greed?

Unfortunately the stomach has a limit for greed but the mind does not. Like an old goat the Swine will eat the grain till they explode.