[ExI] Money Games
thespike at satx.rr.com
Mon Dec 15 18:26:26 UTC 2008
At 09:35 AM 12/15/2008 +0000, BillK wrote:
> > Barbara Lamar the tax lawyer comments:
> > I don't buy Paul Grignon's statement that if interest is charged
> on loans of
> > "real" money, the bankers end up with all the money. This would
> only be true
> > (even on a theoretical level) if the banks could loan money in excess of
> > their reserves.
>...that is exactly what the banks did.
>The banks lent out many multiples of their reserves during the bubble
Oy, wake up there at the back!
Notice the framing word "real" up there?
Barbara adds now for the context-challenged:
< "Real" money in this context is money that represents past or
present value, as opposed to "bogus" money that represents only
future value. I was referring to the latter part of the video where
Grignon talks about moving to a sustainable economy. He argued that a
government (presumably a central bank) should own the lending
industry. At the heart of his case for government ownership was his
claim that, even if loans were made on "real" money, privately owned
banks would end up with all the money via the process of earning
interest on loans. He does not offer any proof for this in the video,
and it doesn't make sense to me. As long as a lender does not enjoy a
legal monopoly, there is no reason that charging interest on loans
would result in the lender ending up with all the money, any more
than charging rent for the use of land results in the lessor owning
all the land.>
She adds in reply to MB's post:
<Sorry, no time to reply in the depth your question deserves, but
briefly, part of the problem with current corporation law is that
investors approach buying stocks rather like buying lottery tickets.
Based on what I have observed of investor and broker behavior, most
investors don't know very much about the companies in which they
invest. I doubt that any more than one in a thousand even bothers to
take a quick look at a company's annual reports before buying that
company's securities, especially when investing via a fund.
Surely, the degree of liability should be greater for the people
directly in control of a corporation (I am using the term corporation
here to include all forms of limited liability entities), but passive
shareholders should bear some responsibility for the harm done
through the use of their money. Under present law, they risk only the
amount they have invested. >
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