So, I read somewhere that when banks create loans for residential property they don't actually (need to) borrow any money from either their own savings or a central bank. Rather, what they do is simply write $XX debit on my side of their ledger and $XX credit on their side of the ledger. In this way the banks create money (and inflation).
So my question is, is all currency debt? Because when banks create money like this there is no debt obligation to the central bank (or anyone else) for money created.
The banks can’t just create currency. They need to have assets to do it (e.g. sovereign bonds) first but yes you are correct. It’s ledger entries only.
Have a look here for a reasonable explanation. It’s old but the idea is there. It’s useful because it discusses how gold was used; now there’s no gold, bonds instead.
Consumer price inflation is much slower because of the fractional reserve nature (i.e. not 100% created) of bank created currency and the circuit where the debt is directed into (e.g. historically primarily housing in NZ). But when the central bank creates currency 100% and injects it directly into the consumer circuit via bond buying (the subject of this post) then that hits consumer prices.
Yes, all currency is debt. 100% of it: aka debt-based fiat currency. No debt, no currency. The rate of creation dictates the rate of price inflation, the destination of the debt dictates where the price inflation occurs.
Without Googling, I believe there have been all too rare periods in history of honest (precious metals backed) money, particularly in England and the United States, 18th, 19th centuries comes to mind, with stable prices for extraordinary long periods when compared to most of history. Which provides stability, sureity, trust, reliability, long term planning, creation of high-trust societies, and communities. With associated old fashioned values of hard work, thrift, saving for a rainy day. Ha, ha seems quaint, right?
Instead of financialization, inflation, fraud, speculation, gambling and associated errosive financial activities. Housing is a classic. I have actually said to people that is not an investment, but it appears to be an investment because of the financial system we live under. And in fact, housing investment, runaway prices and the awful rapacious real estate and "rental industry" are a destructive social I'll.
I’ve had the same problem for over two decades. It’s getting old.
I saw some academic-type research & data recently about UK pricing going back (I think) to the early 1700s until c1900. Overall slight price deflation, with periods of high inflation followed almost immediately by actual price deflation so very stable prices over the long term. NZ needs the same info; the data’s there but there’s a bit of work to retrieve it.
Weight based precious metal currency of course. Getting rid of legal tender laws would be a useful start. Eliminate the market for the NZD.
You sound barking only because most people don't speak the language.
To be fair, though, most of us ARE stupid when it comes to the banking system. I'm near the top of the list for that even though I'm not generally stupid. There comes a point where you wonder WTF are we supposed to do about it? Ya know? Without specific expertise, such as what you have, what on earth CAN we do? Even so, you know what's going on and honestly is there anything you can do about it besides letting 'them' know you're onto them? And sharing with dummies like me of course - which is a little like throwing pearls to swine.
I wouldn’t say it’s stupidity. No-one’s born with the knowledge. This is a result of schooling. Money/finance, which should be taught at a very young age, is omitted. That’s intentional. No question.
“Inflation” is just the term they like to use to obfuscate what is really going on.
They are stealing your/our savings. They are pushing back our retirement. They are making us work harder so we will have more trouble meeting our financial obligations and therefore less time to think.
They are also putting more distance between them and us.
The hell that money creates - in ANY form. Good look at the mess!!!
So, I read somewhere that when banks create loans for residential property they don't actually (need to) borrow any money from either their own savings or a central bank. Rather, what they do is simply write $XX debit on my side of their ledger and $XX credit on their side of the ledger. In this way the banks create money (and inflation).
So my question is, is all currency debt? Because when banks create money like this there is no debt obligation to the central bank (or anyone else) for money created.
The banks can’t just create currency. They need to have assets to do it (e.g. sovereign bonds) first but yes you are correct. It’s ledger entries only.
Have a look here for a reasonable explanation. It’s old but the idea is there. It’s useful because it discusses how gold was used; now there’s no gold, bonds instead.
https://craighutchinson.substack.com/p/new-zealands-financial-resets-110-e2e?utm_source=publication-search#footnote-20-140431022
Consumer price inflation is much slower because of the fractional reserve nature (i.e. not 100% created) of bank created currency and the circuit where the debt is directed into (e.g. historically primarily housing in NZ). But when the central bank creates currency 100% and injects it directly into the consumer circuit via bond buying (the subject of this post) then that hits consumer prices.
Yes, all currency is debt. 100% of it: aka debt-based fiat currency. No debt, no currency. The rate of creation dictates the rate of price inflation, the destination of the debt dictates where the price inflation occurs.
Without Googling, I believe there have been all too rare periods in history of honest (precious metals backed) money, particularly in England and the United States, 18th, 19th centuries comes to mind, with stable prices for extraordinary long periods when compared to most of history. Which provides stability, sureity, trust, reliability, long term planning, creation of high-trust societies, and communities. With associated old fashioned values of hard work, thrift, saving for a rainy day. Ha, ha seems quaint, right?
Instead of financialization, inflation, fraud, speculation, gambling and associated errosive financial activities. Housing is a classic. I have actually said to people that is not an investment, but it appears to be an investment because of the financial system we live under. And in fact, housing investment, runaway prices and the awful rapacious real estate and "rental industry" are a destructive social I'll.
And people think I am barking mad.
They can't see the woods for the trees.
I’ve had the same problem for over two decades. It’s getting old.
I saw some academic-type research & data recently about UK pricing going back (I think) to the early 1700s until c1900. Overall slight price deflation, with periods of high inflation followed almost immediately by actual price deflation so very stable prices over the long term. NZ needs the same info; the data’s there but there’s a bit of work to retrieve it.
Weight based precious metal currency of course. Getting rid of legal tender laws would be a useful start. Eliminate the market for the NZD.
You sound barking only because most people don't speak the language.
To be fair, though, most of us ARE stupid when it comes to the banking system. I'm near the top of the list for that even though I'm not generally stupid. There comes a point where you wonder WTF are we supposed to do about it? Ya know? Without specific expertise, such as what you have, what on earth CAN we do? Even so, you know what's going on and honestly is there anything you can do about it besides letting 'them' know you're onto them? And sharing with dummies like me of course - which is a little like throwing pearls to swine.
I wouldn’t say it’s stupidity. No-one’s born with the knowledge. This is a result of schooling. Money/finance, which should be taught at a very young age, is omitted. That’s intentional. No question.
Yes, I agree Craig.
I hope that you will tell us more about the "Crown balance sheet".
I'm not too happy with owing Charlie anything; is he going to want to collect on the debt.
"In January 2020 the RBNZ balance sheet was ~ NZ$25 billion. By February 2023 it was ~NZ$104 billion."
This is good food for a dinner party discussion, I wonder what course would be best.
LOL
Ha. Hor d'oeuvres if you want to liven up the party.
It is not really inflation.
It is the devaluation of the currency.
“Inflation” is just the term they like to use to obfuscate what is really going on.
They are stealing your/our savings. They are pushing back our retirement. They are making us work harder so we will have more trouble meeting our financial obligations and therefore less time to think.
They are also putting more distance between them and us.
https://craighutchinson.substack.com/p/new-zealands-financial-resets-110