http://www.economist.com/news/finance-and-economics/21631140-interest-rates-turn-negative-some-worse-nothing?fsrc=scn/tw/te/pe/ed/worsethannothing : The Economist reporting that a German bank is to apply a negative interest rate to personal accounts with balances of more than 500,000 euros in an attempt to get people to do something productive with their spare money. I can’t see how negative interest can work when it’s applied by only one bank…
They just don’t get it, these “experts”. Here’s Adair Turner (former Director-General of the Confederation of British Industry, former Chairman of the UK Financial Services Authority, member of the Financial Policy Committee, part-time lecturer at the London School of Economics) explaining very clearly why debt is the main problem with the UK economy and then completely…
US Debt Ceiling: Hatred Of Government And Love Of Money
This article on the BBC News website tells us that the US Treasury expects to reach the “debt ceiling” sometime in October. The debt ceiling is an arbitrary amount of federal government borrowing that Congress has decided cannot be exceeded. It’s a bit like an overdraft limit for the nation. The limit has been imposed…
Where Did All The Money Go? Pundits Missing The Point (Again).
Rory Bremner’s One Question Quiz on Radio 4 this evening asked Where Did All The Money Go? Most of it was predictable comedy that skimmed the surface of our financial dysfunction, but they did tell us loud and clear that banks create most of our money when issuing loans, which was unexpectedly accurate. More disappointing…
Great article by John Aziz explaining why you can’t get a return on hoarded, idle, stagnant money during a recession. For an economy to thrive money has to be used to fund productive activities. Recession is caused by too much money rotting in bank accounts.
Who Cares If The Rich Get Richer?
This article by Tim Harford in the Financial Times tells us that the gap between rich and poor has grown significantly over the last few decades, and suggests that the trend is self-perpetuating: the bigger the gap the easier it is for the rich few to become richer and fewer. Tim reckons that the free…
A nice clear summary from Positive Money of why the reported economic recovery is an illusion, and why we will suffer from ever-increasing debt until we change the way that money is created and used.
This short video from Positive Money explains why the rich get richer and the rest of us get deeper in debt. There’s a lot of stuff on their website that’s worth investigating if you’re interested in understanding how our economy got into such a mess.
Views From The Boatshed 