Rich motherf**kers avoiding tax

[Zhivago]

The cash in the vault is clear, but the electronic balances are still not clear to me. Are these just a portion of the banks deposits that it holds/owns?

No. They are central bank money.

How do commercial banks get this central bank money?

Do they borrow it from the central bank against collateral?

[UGagain]

Government spending, repos, selling government securities, retained earnings, swaps, borrowing them from other LFIs.

[jared_7]

Which country are you referring to in your explanation? What is the reserve requirement there?

Ignore me, I'm obviously wrong.

Ok I retract the claim you are 'wrong'. But I need to understand your argument better.

When you say the gov have a monopoly on the issue of pounds sterling, what are you referring to by pounds sterling? For example to me this means money as a functional entity, and therefore includes demand deposits. Are we agreed on this point?

My understanding is Banks loan to deposit ratios mean they lend out in loans what the take in as deposits. They aren't creating money, just moving it horizontally within the non government sector. At the end of each day their account must be balanced with the central bank. It is the central bank that controls the reserves, and therefore "creates" new money.

No. Loans create deposits. Every new loan is new money.

Banks create money in the act of making loans but they cannot create net financial assets (as for each loan (asset) they create an equal liability (deposit) and can not create reserves).

All interbank transactions and all bank to government transactions are done in reserves (central bank liabilities and thus non-government assets).

Government spending creates net financial assets in the non-government sector and taxation and charges extinguishes them.

Bank credit is denominated in and redeemable for state currency but the state currency only comes from the state.

Hmmm OK, thought I had the right gist, my terms are incorrect.

[Zhivago]

Which country are you referring to in your explanation? What is the reserve requirement there?

Ignore me, I'm obviously wrong.

At least you're trying to understand. That's already more than most people.

http://cowles.yale.edu/sites/default/fi ... /d0159.pdf

[Zhivago]

Government spending, repos, selling government securities, retained earnings, swaps, borrowing them from other LFIs.

Thanks. I'll do some research into it, this is already helping:
http://www.bankofengland.co.uk/markets/ ... fault.aspx

[jared_7]

Which country are you referring to in your explanation? What is the reserve requirement there?

Ignore me, I'm obviously wrong.

At least you're trying to understand. That's already more than most people.

http://cowles.yale.edu/sites/default/fi ... /d0159.pdf

Cheers for the link

This 3 Part series from a guy who was linked to here a while ago is pretty good, still getting my head around it but I think he is making it as simple as possible considering it goes against everything you were brought up to understand.

Deficit Spending 101 Part 1
http://bilbo.economicoutlook.net/blog/?p=332

Deficit Spending 101 Part 2
http://bilbo.economicoutlook.net/blog/?p=352

Deficit Spending 101 Part 3
http://bilbo.economicoutlook.net/blog/?p=381

[UGagain]

Which country are you referring to in your explanation? What is the reserve requirement there?

Ignore me, I'm obviously wrong.

My understanding is Banks loan to deposit ratios mean they lend out in loans what the take in as deposits. They aren't creating money, just moving it horizontally within the non government sector. At the end of each day their account must be balanced with the central bank. It is the central bank that controls the reserves, and therefore "creates" new money.

No. Loans create deposits. Every new loan is new money.

Banks create money in the act of making loans but they cannot create net financial assets (as for each loan (asset) they create an equal liability (deposit) and can not create reserves).

All interbank transactions and all bank to government transactions are done in reserves (central bank liabilities and thus non-government assets).

Government spending creates net financial assets in the non-government sector and taxation and charges extinguishes them.

Bank credit is denominated in and redeemable for state currency but the state currency only comes from the state.

Hmmm OK, thought I had the right gist, my terms are incorrect.

Economics is confusing largely because economists have a vested interest in making it so. And most of them don't understand the system anyway.

The hardest part of understanding macro is to forget everything you think you know.

In terms of reserves vs bank credit this is a pretty good explanataion.

http://heteconomist.com/verticalhorizon ... ndogenous/

[Eugene Wrayburn]

You can't pay taxes or buy government securities with it.

Bollox you can't.

[UGagain]

You can't pay taxes or buy government securities with it.

Bollox you can't.

Oh do tell.

[UGagain]

I guess we'll never get the answer.

[Zhivago]

I guess we'll never get the answer.

Cos it was bollox

[UGagain]

What was?

[canta_brian]

Am I correct in saying that it is perfectly legal and above board for Sir Philip Green to purchase BHS and transfer the pension fund to his wife's offshore account having made the purchase in her name?

Why is a company's pension pot offered so little legal protection? Or is the fact the tax payer may have to guarantee the fund considered protection enough?

[UGagain]

Am I correct in saying that it is perfectly legal and above board for Sir Philip Green to purchase BHS and transfer the pension fund to his wife's offshore account having made the purchase in her name?

Why is a company's pension pot offered so little legal protection? Or is the fact the tax payer may have to guarantee the fund considered protection enough?

The Pension Protection Scheme isn't 'funded by taxpayers'. It is funded by the government.

But yes, the government will effectively pay out what Green and his wife have stolen from their former employees. If the employees are lucky and the government doesn't screw them for a bit of fun.

Another Blair confidant paid out.

[morepork]

Fund managers over here are snapping at pensions to compensate their wonderfully speculative "investment" failures. It's genius, state governments pay them fat fees and commissions, they spunk the funds away, then get to give them a haircut when they post a loss.

[UGagain]

Fund managers over here are snapping at pensions to compensate their wonderfully speculative "investment" failures. It's genius, state governments pay them fat fees and commissions, they spunk the funds away, then get to give them a haircut when they post a loss.

Looting the Pension Funds

All across America, Wall Street is grabbing money meant for public workers

By Matt Taibbi

http://www.rollingstone.com/politics/ne ... s-20130926


.....and then read the oh so progressive NY Times treatment of the same issue.

Rhode Island Averts Pension Disaster Without Raising Taxes
By MARY WILLIAMS WALSH

http://www.nytimes.com/2015/09/26/busin ... taxes.html

[UGagain]

That is a cunning plan. Back to the rugby forums for me.

Pathetic.

You came here demanding maths. Now you're confronted with maths that doesn't fit your bigoted ideology, you cry off.

Not really pathetic. I just think this is pointless and I have better things to do than bang my head against a brick wall on here. We have entirely different outlooks - we can go round in circles but I won't change your mind and you won't change mine. Now we've gone into an area of wholly changing the dynamics of the economy. I don't want to discuss that, just as I don't want to discuss anything else I believe to be preposterous and wholly unlikely to happen. Discussing changes within the present system is fine. Fanciful discussions, and ones I don't believe in, about changing the entire system don't interest me.

As for the maths. There are mathematic 'theories' on both sides, they are not the same as mathematical facts. I asked for maths, not for the SNP to shout numbers out of context. When Jared showed his Tax Research maths I didn't decry it or just call it a lie, I just pointed out the potential for bias.

Oh look, 1971 is calling.




45 years after the fact and you won't change your mind.

Little wonder you whimp off when challenged.

[Zhivago]

Think this is relevant
http://www.thecanary.co/2016/08/12/sing ... e-deficit/