June 10, 2013 § Leave a comment
This design maintains the mutual elements of the UK banking system – our common cash machine system and payments infrastructure as well as the ‘free banking’ transaction system, it frees the lenders from a crippling cost obligation and it ensures that everybody can rely on ‘cash in the bank’ being there – regardless of the turmoil in the lending institutions.
The one casualty is interest on deposits. To have interest on deposits in a private system there has to be income from somewhere else to pay that interest. Therefore in this system it becomes a line item of government spending – likely via interest bearing accounts for individuals at National Savings. Paying interest on deposits in this way is then really just the same as paying coupons on Gilts. Gilts, of course, would cease to be issued under any rational government. read more
February 4, 2013 § Leave a comment
All the water you drank today was sewage in the recent past and very possibly excreted by the person sat next to you right now.
Their output made your coffee possible. That and the stewed cowpats in which the coffee grew.
Water operates in a cycle, and therefore starting at any point on that cycle is as valid as any other point. But the emotional impact is vastly different.
The standard water cycle always starts with evaporation. Even the pre-treatment of water to make it drinkable is barely mentioned, and we certainly don’t go into the mechanics of what happens after you flush.
But wind that cycle back a stage and you can immediately generate a severe disgust reaction. So much so that even in areas with a severe shortage of water any attempt to use our advanced technological knowhow to short-circuit the evaporation/precipitation part of the cycle gets a label: “toilet to tap”.
And that tends to stop any rational debate on the subject stone dead.
Precisely the same trick is used with government spending. Government spending is just like the pre-treatment of water. It is an artificial intervention into the natural system that stops people and businesses dying unnecessarily. It is why we have an advanced economy rather than all of us having to stew our own cowpat juice.
And, like water, any spending in a credit economy creates a form of effluent that has to be dealt with by an active intervention. These are the excess saving desires of the non-government sector. They have to be sorted out or everything starts to go very smelly very quickly. read more
PHOTOGRAPH: Jessica Tremp