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to ask if this is wishful thinking? (Politics related, sorry)

(9 Posts)
DaughterAndSon Wed 26-Dec-12 21:41:00

I have no idea if there is even a grain of truth in this, so I am putting it to more knowledgeable mners.

Over Christmas lunch yesterday, a member of my family mentioned they were feeling the strain financially, and as the conversation progressed, it turned to politics and the national debt crisis.

An extended member of my family said that "the vast majority of private and public debts could be wiped out via a fairly painless piece of legislation which would simultaneously create a 10% increase in output, remove instability and tax payer risk from the financial system and stabilise prices".
Apparently, "the deputy division chief of the modeling division in the IMF's research department, responsible for the funds global macroeconomic model is the person making these claims."

I had to admit, I didn't understand what she was trying to explain to me, so she has just texted me everything I have quoted above.

Is this even possible? And could anyone make any sense of what she has said, or has she been at the sherry for too long??

<<head explodes>>

Merry Christmas too!! grin

DaughterAndSon Wed 26-Dec-12 21:45:50

I felt I should reply to her text to ask her exactly what this 'fairly painless piece of legislation' would be, to have such a dramatic effect.

I am awaiting a reply.

DaughterAndSon Wed 26-Dec-12 21:48:56

Her reply: The fairly painless piece of legislation is "making the ability for banks to create money out of nothing at will away from them, which isn't something they would give up easily."


RedTinsel Wed 26-Dec-12 22:00:54

So just print more money then? that doesn't work for complicated economic reasons I don't really understand.

As an aside Im quite impressed about the level of conversation though. Ours was about Skylanders, next door but one's new GF and Strictly Xmas Special. <low brow alert>

kim147 Wed 26-Dec-12 22:02:39

Message withdrawn at poster's request.

Cabrinha Wed 26-Dec-12 23:15:35

I think you mean "taking" not "making"? And how can she simultaneously describe that as painless, but something the banks will not give up easily?

Permanentlyexhausted Thu 27-Dec-12 00:10:22

She's talking about a paper called Positive Money: a Return to Sovereign Money. Not sure if this link takes you straight there . You might need to scroll down to find the right article.

MutantPumpkin Thu 27-Dec-12 01:53:19

So your friend read an Internet site and became an expert? The article referenced is complete toss. Firstly printing money devalues your currency and leads to hyper inflation, numerous actual historical occurrences. Banks do NOT win twice on loans! Have you heard of a balance sheet! Loan out (neg cash flow) desk elsewhere benefits from positive cash flow, but will usually be paying/receiving libor +/- agreed rate. Your friend reads and believes the Daily Mail, ignore them on this thing and love them for who they are ;-)

LuluMai Thu 27-Dec-12 02:09:17

Quantitative easing has been done loads before... and as someone else said, it actually creates problems. I'm no economist- this is just what I've read/been told! But if it was just as simple as printing more money, we'd surely have no economic problems in this day and age. Unless I'm missing something?

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