1888? Whitechapel Murders, Nintendo

March 14, 2014 § Leave a comment

1888-whitechapel-140314

The Bank of England’s Quarterly Review contains a detailed description of how money creation works in the UK’s fiat money economy…

And it is controversial. It rejects conventional theories of bank lending and money creation (my emphasis):

“The reality of how money is created today differs from the description found in some economics textbooks:

• Rather than banks receiving deposits when households save and then lending them out, bank lending creates deposits.

• In normal times, the central bank does not fix the amount of money in circulation, nor is central bank money ‘multiplied up’ into more loans and deposits.”

To be sure, numerous papers from many eminent researchers and august institutions (including the Fed, the IMF, the ECB and the Bank for International Settlements) have cast doubt upon conventional theory as an adequate explanation of money creation in a modern fiat money system. But to my knowledge this is the first time that a central bank has presented an explanation of money creation that so comprehensively departs from conventional orthodoxy…

It is of course difficult for mainstream economists to accept that the theory they have believed and taught for so many years – and upon which many models of the economy depend – is simply inadequate.  read more

PHOTOGRAPH: Katie West

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People always ask, Why did you stop drinking? They never ask, Why did you start drinking?

October 9, 2012 § Leave a comment

Our cultural belief is that harmony is good and dissonance, bad. Those forms of music that have abandoned connection to what most people regard as “harmony” can be very difficult to listen to: for many people the onslaught of dissonance in much twentieth-century “serious” music amounts to torture, and they retreat to Mozart for relief. Yet music that has no dissonance is equally difficult to listen to, not because it is painful but because it is dull – particularly if it lacks rhythmic definition as well. Twentieth-century minimalist music is not as challenging to Western ears as twentieth-century serialism, but it is just as difficult to listen to attentively. After 5 minutes of unrelenting ostinato, the average listener is asleep…

Permanent dissonance is perhaps not quite as dangerous as permanent harmony. The soporific effect of unrelieved harmony can be disastrous, as anyone who has fallen asleep at a car wheel could testify. Listening to challenging music can be an effective way of warding off fatal sleepiness.  Listening to undemanding musak can make sleepiness worse. When things are going well we are lulled into a false sense of security, which means that the crisis when it comes is all the worse because it is unexpected. In the recent financial crisis many people asked why it wasn’t predicted. The truth is that it WAS predicted, by many economists, but politicians and people alike didn’t want to listen to the Cassandras and wheeled out their own “experts” to “prove” that there would be no crisis, despite the mounting evidence that there was an unsustainable boom in house prices and credit expansion. They were asleep at the wheel, and the result was a crash.  read more

ART: RB Kitaj

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