On the road again …

In case you are wondering what is going on with my blog today – the answer is it is flying …

I am heading back from Europe most of today just in time for the – 14th Path to Full Employment Conference/19th National Unemployment Conference – (aka The CofFEE Conference), which I host in Newcastle each year. It starts on Wednesday, December 4.

To get us in the travelling mood here is a classic.

In the next 24 hours or so I will have limited capacity to respond to E-mails and moderate any comments. I moderate all comments which contain links so if it is sitting in the queue for some time you will understand why.

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4 Responses to On the road again …

  1. petermartin2001 says:

    Hope you have a good flight! I do have a question if you’ve time to answer it.

    I’ve been discussing the issue of how banks supposed create money and its occurred to me that one way to look at the problem would be to say each bank behaves a bit like a government with a fixed currency to support. So for instance, if I look in my bank account I can see, say $2000, but they aren’t quite Australian dollars. They are actually Commonwealth Bank Australian dollars – which can be considered a sub-currency. They can create as many of them as they like, by keystoke, but they do have to maintain the confidence of the market that they are have enough reserves to maintain their peg to the Australian dollar. So, the more they lend, the more reserves (or capital base) they need to do this.

    It also explains why QE doesn’t work. Once the bank has decided what reserves it needs it doesn’t make any difference whether they are in bonds or cash. It won’t change the bank’s lending practice.

    Would you say this is a valid way of looking at the issue?

  2. jeff everitt says:

    I would also like to know if this is a good way to look at the issue of banking.

    It gives rise to the philosophical issue of whether it is a good idea that the m3 money supply is essentially at the whim of shareholders. From my understanding M3 isn’t a massive problem under MMT since is it is more of a measure of pure flow with no real stock element unless its increased productive capacity is matched by further currency (M1) issuance, but does M3 not determine private sector employment, overnight interest rates, and forex rates as well? Isn’t it a little dangerous that these things are so heavily determined by board members & shareholders of large private banks?!?!

  3. jeff everitt says:

    Sorry if I’m completely befuddled, since I’ve never formally studied economics (why our k-12 ignores such a MASSIVELY important subject in a highly connected society is disgusting). I am just trying to get my head around the concepts that barely seem to bother most everyday people as if economics doesn’t affect them. Go easy on me, I’m trying to learn

  4. larry says:

    Had never seen this before, so thanks for the clip, Bill. That said, I think I still prefer Willie Nelson’s version.

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