Trickle Down Economics Explained

[wellyfish]

Don't forget it's only printed money not earned, thus it's never never money...

I thought it was pretty obvious, but I note you dodged the question of how much reserves a bank should hold

For example prior to the 2008/9 crash Barclays held a negative reserve...

Do you think that's ok economically wise?

And how do you stand about the possibility of a 'cyprus haircut'?
(It's already authorised in UK law btw)

Decided to have lunch later.

It's not obvious what you meant, you like the dodging accusation thingy here dontcha.

I asked for clarification as many people conflate capital requirements/banking regs with bank reserves. They are not the same thing.
Let's persevere. Here's my answer to your question: How many reserves should any commercial bank hold?

As many as they need to clear interbank payments (intrabank transactions don't require reserves). If, at the end of the day, any particular bank doesn't have enough reserves for payment settlement then they can borrow the necessary reserves from another commercial bank or, if they want to get the backs of their legs slapped, they can borrow reserves from BoE. So, it's entirely up to each commercial bank what quantity of reserves they decide to hold. No dramas.

Next, Cyprus:

The only way that kind of operation would happen here is if the UK did as Cyprus (and the rest of the Eurozone donuts) did. That is give up their own sovereign currency and, in effect, accept the imposition of a foreign currency.

Right, so ... what's our understanding of how fiat economies work

 

[ajohn]

The best option is new labour

The so called extreme left is more early mid 20th century, more early really. The ideas came about because of some aspects of Russia that looked good. Even Putin sees comunism as a dead end and it scarcely exists in the traditional way any more anywhere.

So Labour in real terms is not that left and hasn't been for a long time really. Corbyn was a very misunderstood man. It not worth bothering to explain why other than his basic idea which was in certain areas state intervention is benificial. There are example of that being a fact in some countries. The fact here is that so called privitisation to cause competition especially in the utility area is not working and there is state interventions anyway. A recent example. Water companies polluting rivers. Fixing that will add £60 to everybodies water bill so don't do it. They wont do it out of profits they would borrow to do it.

 

[ellal]

Decided to have lunch later.

It's not obvious what you meant, you like the dodging accusation thingy here dontcha.

I asked for clarification as many people conflate capital requirements/banking regs with bank reserves. They are not the same thing.
Let's persevere. Here's my answer to your question: How many reserves should any commercial bank hold?

As many as they need to clear interbank payments (intrabank transactions don't require reserves). If, at the end of the day, any particular bank doesn't have enough reserves for payment settlement then they can borrow the necessary reserves from another commercial bank or, if they want to get the backs of their legs slapped, they can borrow reserves from BoE. So, it's entirely up to each commercial bank what quantity of reserves they decide to hold. No dramas.

Next, Cyprus:

The only way that kind of operation would happen here is if the UK did as Cyprus (and the rest of the Eurozone donuts) did. That is give up their own sovereign currency and, in effect, accept the imposition of a foreign currency.

Right, so ... what's our understanding of how fiat economies work

Thank you for sharing that b*llshit...

At least you've cleared up something...

That you know absolutely f*ck all about finance!

Oh, and btw would you care to tell us why only £85k of savings are protected in any account (or multiple accounts collectively held in banking groups) from sequestration?

But thanks for confirming a FIAT banking system relies on the 'never never'...

"If, at the end of the day, any particular bank doesn't have enough reserves for payment settlement then they can borrow the necessary reserves from another commercial bank or, if they want to get the backs of their legs slapped, they can borrow reserves from BoE"

What reserves?

Oh that's right, more printed (invented) money!

And what does that do for inflation?

PMSL!

 

[Pat ex]

Mrs T in some ways laid the grounds for globalisation. Good UK companies shifted to not making stuff here. Some were pretty crap and couldn't really compete with imports. Some cut their product range which resulted in a much smaller size. ICI is an example. Done on the basis that they couldn't compete due to import costs compared with makers local to the materials needed.

You think Mrs T predated the industrial revolution, or mass production assembly lines and electricity?
Read the link provided by gant to learn what globalisation is. (although he seems to think it's about immigration)

An economist explains the pros and cons of globalization | World Economic Forum

 

[carmanmemoranda]

Thank you for sharing that b*llshit...

At least you've cleared up something...

That you know absolutely f*ck all about finance!

Oh, and btw would you care to tell us why only £85k of savings are protected in any account (or multiple accounts collectively held in banking groups) from sequestration?

But thanks for confirming a FIAT banking system relies on the 'never never'...

"If, at the end of the day, any particular bank doesn't have enough reserves for payment settlement then they can borrow the necessary reserves from another commercial bank or, if they want to get the backs of their legs slapped, they can borrow reserves from BoE"

What reserves?

Oh that's right, more printed (invented) money!

And what does that do for inflation?

PMSL!

he didn't even answer the question. He wrote...


So, it's entirely up to each commercial bank what quantity of reserves they decide to hold. No dramas.


That is not an answer, to another specific question.

 

[carmanmemoranda]

There's a little job for you. Why don't you create a 'centrist' political party.

No, you are wrong.

 

[wellyfish]

he didn't even answer the question. He wrote...


So, it's entirely up to each commercial bank what quantity of reserves they decide to hold. No dramas.


That is not an answer, to another specific question.

Ok, here's a simpler answer for simpler folk.

What's my understanding of fractional reserve banking? It's not a thing in the UK. Commercial banks are not constrained in any way by the amount of reserves they have on deposit with the BoE.

Simple enough for you?

 

[wellyfish]

Thank you for sharing that b*llshit...

At least you've cleared up something...

That you know absolutely f*ck all about finance!

Oh, and btw would you care to tell us why only £85k of savings are protected in any account (or multiple accounts collectively held in banking groups) from sequestration?

But thanks for confirming a FIAT banking system relies on the 'never never'...

"If, at the end of the day, any particular bank doesn't have enough reserves for payment settlement then they can borrow the necessary reserves from another commercial bank or, if they want to get the backs of their legs slapped, they can borrow reserves from BoE"

What reserves?

Oh that's right, more printed (invented) money!

And what does that do for inflation?

PMSL!

Well, we can come back to who knows what about finance later and even maybe discuss deposit insurance.

But, instead of p!ssing yourself, why not stop dodging my point and explain how you think fiat economies, like the UK, work?

 

[gant]

(although he seems to think it's about immigration)

You know that's not true but I won't give you an answer because you don't respect the posters on here.
Have you ever posted as bobby dazzler on screwfix? Careful with your answer.

 

[ajohn]

You think Mrs T predated the industrial revolution, or mass production assembly lines and electricity?

Silly boy
I said in some ways and gave examples
Learn to read and also think.

 

[ellal]

But, instead of p!ssing yourself, why not stop dodging my point and explain how you think fiat economies, like the UK, work?

I didn't dodge your ignorance...

I simply pointed out that FIAT economies don't work for the majority...

Care to show otherwise?

Still PMSL at your posts btw

 

[ellal]

he didn't even answer the question.

To be fair he probably didn't even understand the question in the first place!

 

[wellyfish]

I didn't dodge your ignorance...

I simply pointed out that FIAT economies don't work for the majority...

Care to show otherwise?

Still PMSL at your posts btw

What did your buddy write? Oh yeah ...

he didn't even answer the question. He wrote...


.....


That is not an answer, to another specific question.

As I said, we can come back later to find out who knows what about finances, banking etc

Later, if you like, we could even have a discussion whether fiat economies 'work for the majority' or not.

However, for now, stop p!ssing yourself (maybe seek some medical attention for that) , stop trying to dodge (again, that's twice now) and explain how you think fiat economies, like the UK, work. Not whether they work or not but how you think they work.

Off you go...

 

[ajohn]

That you know absolutely f*ck all about finance!

I think he follows some of the rant concerning QE

Nice video on this page stating that is is thought to have an effect but. It's a no choice when rates are low. Of late I think it is now regarded as a bad idea but if needs must.

Quantitative Easing (QE): What It Is and How It Works

Quantitative easing (QE) is a monetary policy by which central banks spur the economic activity of their nations by buying financial assets in the open market.

www.investopedia.com

Now lets say the is X billion of QE. The only way it's effects on currency value is in relationship to the total ammount of the currency that is available. That is not the amount of actual paper money that is around. It will be rather a lot more. Why was it done - simple, banks had lost rather a lot of money. One way was oh lets back people who can't afford it and insure against losses and a number of bizarre deal. When rates went high in MrsT's time banks had also lost money. Maybe that could be an alternative. I knew some one who worked in a banks head office at the time and they said rates were bound to rise due to losses. There will probably have been other reasons.

Just print money. Another link. The FED is just like many other central banks

How Central Banks Can Increase or Decrease Money Supply

Central banks use various methods to change their nations’ money supplies, such as adjusting reserve balance requirements and certain interest rates they control.

www.investopedia.com

People may remember reserve levels being mentioned in relationship to QE. It was to restore them. Money that had just gone, vaporised into thin air from losses. What they need to hold depends on risks with the area they are involved in.

What sets the value of a currency is what the money market is prepared to pay for it. QE infers there is a problem. What do you think that does to value? As many did the same thing not as much as some might expect.

The money market is more powerful than any goverment hence the end of govs trying to maintain a value as they used to do. They wiould buy themselves when it was falling or even declare lower value or even sell the dam things. That sort of control isn't on any more. This is what took us out of the ERM. Pass on why we were picked on but maybe others were more capable of maintaining a value. Ireland did.

The United Kingdom entered the ERM in October 1990, but was forced to exit the programme within two years after sterling came under major pressure from currency speculators.

Actually the UK had suffered from that problem in the past. Hence FIAT currencies. There is no real alternative these days and hasn't been for a long time now. They are worth what the market will pay.

 

[wellyfish]

Jeez...

You really crack me up...

Because it's so obvious that you won't/can't justify your b*llshit, and have decided to stick your head up your own crack!

No doubt your next pearls of wisdom will be sounding very muffled in future!

Well, you've had a couple of chances to back up your position and you haven't taken either.

If you could, you would have. I'll let people make their own decisions.

Want to have a discussion about finance, banking deposit insurance etc.?