Wednesday 10th February, 2010

Veronica dumps the contents of her brain on all and sundry.

Wednesday 10th February, 2010

Postby Veronica » Wed Feb 10, 2010 3:13 pm

(With thanks to BBD for finding this) I sent the following email to Paul: of the Morran family, at HM Treasury:

FAO: Paul: of the Morran family.

Dear Paul,

Long time ... no speaks.

If you consult the following publication:
http://www.bankofengland.co.uk/publications/quarterlybulletin/qb0801.pdf

… their Page 103 … PDF Page 105 … bottom paragraph left, you will see (in the bank's own words):

"As transactions balances and so the means of exchange in our payments system, the moneyness of bank deposits lies at the core of credit intermediation. Subject only but crucially to confidence in their soundness, banks extend credit by simply increasing the borrowing customer's current account, which can be paid away to wherever the borrower wants by the bank 'writing a cheque on itself'. That is, banks extend credit by creating money. This 'money creation' process is constrained: by their need to manage the liquidity risk - from the withdrawal of deposits and the draw-down of back-up lines - to which it exposes them."

Is this saying:

1. That Banks create money out of thin air whenever "confidence and soundness" exists? (I notice they don't define either "confidence" or "soundness"!)

2. That HM Treasury (not referred to in any way in that paragraph) (head honcho = Chancellor of the Exchequer), takes absolutely no part in this process? (It just "all happens" ... in which case what, precisely, do you actually do? Paul, I think your organisation is involved, myself)

3. What right do PRIVATE COMPANIES, CLAIMING LIMITED LIABILITY, and simply TRADING AT A PROFIT FOR THE ENJOYMENT OF THEIR SHAREHOLDERS ... namely "Banks" ... have to (and I quote) "Write cheques to themselves"? What possible "confidence" or "soundness" is there in someone - or something - that is busily engaged in "writing cheques to itself". What is the difference between that and counterfeiting? Or "Fraudulent Conversion"?

4. If 'money' is simply created "by simply increasing the borrowing customer's current account" what right does ny Bank have to expect it to be "paid back"? How is it possible to "pay back" something created "by simply increasing the borrowing customer's current account"?

(You may treat these questions as FOIs if you wish, however your answers will be published publicly)

Regards,

Veronica: of the Chapman family.
Freedom's just another word for: "Nothing left to lose" (Janis Joplin)
"There is no path to peace, peace IS the path" (Mahatma Ghandi)
"There is no path to freedom, freedom IS the path" (Veronica Chapman)
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