Comments on: Bernanke doesn’t understand the basic economics of central banking http://www.creditwritedowns.com/2009/12/bernanke-doesnt-understand-the-basic-economics-of-central-banking.html Finance, Economics and Markets Fri, 10 Feb 2012 00:37:00 +0000 hourly 1 By: flow5 http://www.creditwritedowns.com/2009/12/bernanke-doesnt-understand-the-basic-economics-of-central-banking.html#comment-57864 flow5 Sun, 27 Dec 2009 17:54:00 +0000 http://www.creditwritedowns.com/2009/12/bernanke-doesnt-understand-the-basic-economics-of-central-banking.html#comment-57864 Auerback doesn't understand Bernanke. There's no independence at the FED. He just talks to the legislators like kids because of political pressure. And Auerback, the "trading desk" has operated using the federal funds "bracket racket" since 1965. What Bernanke doesn't understand, is what all economists don't understand, that the money supply can never be managed by any attempt to control the cost of credit. This old procedure has given the bankers access to what ever they banks needed to cover their expanding loans – deposits. There is currently a hugh demand for loan funds (credit worth customer). It comes from the deficit financing of our Federal Government. There was a severe shortage of government debt during the Great Depression. Now there's not. Net debt was lower in 1939 than 1929. If bank credit isn't expanding at a rate-of-change in excess of 2-3 percent of real output, then the FED should monetize more long-term, public, and private debt. Auerback doesn’t understand Bernanke. There’s no independence at the FED. He just talks to the legislators like kids because of political pressure.

And Auerback, the “trading desk” has operated using the federal funds “bracket racket” since 1965. What Bernanke doesn’t understand, is what all economists don’t understand, that the money supply can never be managed by any attempt to control the cost of credit.

This old procedure has given the bankers access to what ever they banks needed to cover their expanding loans – deposits.

There is currently a hugh demand for loan funds (credit worth customer). It comes from the deficit financing of our Federal Government. There was a severe shortage of government debt during the Great Depression. Now there’s not. Net debt was lower in 1939 than 1929.

If bank credit isn’t expanding at a rate-of-change in excess of 2-3 percent of real output, then the FED should monetize more long-term, public, and private debt.

]]> By: Weston http://www.creditwritedowns.com/2009/12/bernanke-doesnt-understand-the-basic-economics-of-central-banking.html#comment-57808 Weston Sat, 19 Dec 2009 19:23:00 +0000 http://www.creditwritedowns.com/2009/12/bernanke-doesnt-understand-the-basic-economics-of-central-banking.html#comment-57808 I would have to disagree and say Ben knows exactly how Central Banking works and what its job is. Sure it doesn't help us but that is not what he is out there to do, he's there have control over the country, Black Mail if needed to turn off the printing press etc etc I would have to disagree and say Ben knows exactly how Central Banking works and what its job is.

Sure it doesn’t help us but that is not what he is out there to do, he’s there have control over the country, Black Mail if needed to turn off the printing press etc etc

]]> By: demandside http://www.creditwritedowns.com/2009/12/bernanke-doesnt-understand-the-basic-economics-of-central-banking.html#comment-57807 demandside Sat, 19 Dec 2009 17:01:00 +0000 http://www.creditwritedowns.com/2009/12/bernanke-doesnt-understand-the-basic-economics-of-central-banking.html#comment-57807 Absolutely correct. Baffled Ben does not understand how money is created.I would say that, or perhaps ask your opinion on whether leverage ratios could restrict banks overleveraging.And again, if there is financing available, by hook or innovative crook, it will find a borrower, since it pushes up the price of assets above the cost of producing them. Absolutely correct. Baffled Ben does not understand how money is created.I would say that, or perhaps ask your opinion on whether leverage ratios could restrict banks overleveraging.And again, if there is financing available, by hook or innovative crook, it will find a borrower, since it pushes up the price of assets above the cost of producing them.

]]> By: Mark Wadsworth http://www.creditwritedowns.com/2009/12/bernanke-doesnt-understand-the-basic-economics-of-central-banking.html#comment-57806 Mark Wadsworth Sat, 19 Dec 2009 15:43:00 +0000 http://www.creditwritedowns.com/2009/12/bernanke-doesnt-understand-the-basic-economics-of-central-banking.html#comment-57806 Correct. Borrowers create loans create deposits and not vice versa. That is key to understanding all this. Correct. Borrowers create loans create deposits and not vice versa. That is key to understanding all this.

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