Saturday, 22 November 2014

Updated! Been trying to talk some accounting sense to UKIP guys

I don't know if they managed to, at least, check my arguments before dismissing them out of hand based simply on orthodox economic notions that they've been indoctrinated with.
But I sure as hell kept going with presenting FACTS.
You can see the conversation here. Scroll down a bit until you find my replies:
https://twitter.com/SerbanVCEnache/status/536105706143764480

Update:
After all what I debated and argued, this is what the UKIP advocate had to conclude:
"So you want me to continue to pay for your welfare?"

I argued further that his taxes don't pay for anything; but hell, the guy cannot comprehend a simple fact that the fiscal deficit has a correspondent surplus in the economy, surplus owned by the private sector. Neither did he understand that the money for his pension comes from the public debt.
What's worse is that they don't even bother to respond with facts, if they have any. All they do is keep saying the same bullshit as the caviar rightists and caviar leftists.
In conclusion, UKIP supporters are part of the same problem. They are nothing new.
Sometimes, blocking mindless drones is the best thing one can do.

Tuesday, 18 November 2014

Banking proposals for the EZ a la Warren Mosler and Yanis Varoufakis



1. The ECB to provide unlimited guarantee for euro deposits.

2. The ECB to lend unsecured to member banks, and in unlimited quantities at its target funds rate, by simply trading in the funds market.

3. Make a zero interest rate policy permanent. This minimizes cost pressures on output, including investment, and thereby helps to stabilize prices. It also minimizes rentier incomes, thereby encouraging higher labor force participation and increased real output. Additionally, because the non government sectors are net savers of financial assets, this policy hurts savers more than it aids borrowers, so a fiscal adjustment such as a tax cut or spending increase would be appropriate to sustain output and employment.

4. Banks should not be allowed to have subsidiaries of any kind. No public purpose is served by allowing banks to hold any assets ‘off balance sheet.’

5. Banks should not be allowed to accept financial assets as collateral for loans. No public purpose is served by financial leverage.

6. EZ banks should not be allowed to lend off shore. No public purpose is served by allowing EZ banks to lend for foreign purposes.

7. Banks should not be allowed to engage in proprietary trading or any profit making ventures beyond basic lending. If the public sector wants to venture out of banking for some presumed public purpose it can be done through other outlets.

8. Use ECB approved credit models for evaluation of bank assets. I would not allow mark to market of bank assets. In fact, if there is a valid argument to marking a particular bank asset to market prices, that likely means that asset should not be a permissible bank asset in the first place. The public purpose of banking is to facilitate loans based on credit analysis, rather than market valuation.

9. Banks should not be allowed to buy (or sell) credit default insurance. The public purpose of banking as a public/private partnership is to allow the private sector to price risk, rather than have the public sector pricing risk through publicly owned banks. If a bank instead relies on credit default insurance it is transferring that pricing of risk to a third party, which is counter to the public purpose of the current public/private banking system.

10. EZ banks should not be allowed to contract in an interest rate set in a foreign country, with a large, subjective component that is out of the hands of the EZ member state governments.

11. Banks should only be allowed to lend directly to borrowers, and then service and keep those loans on their own balance sheets. There is no further public purpose served by selling loans or other financial assets to third parties, but there are substantial real costs to governments regarding the regulation and supervision of those activities.

12. The ECB should buy EIB (European Investment Bank) bonds, financing thus projects of public interest in and among member states - without there being a need for further deficit spending for member state governments. The later have the liberty to focus on fiscal policy (deficit spending included) for their own domestic purposes.


PS: The bulk of the proposals belongs to Warren Mosler. Number 12 belongs to Yanis Varoufakis, and not just to him but to S. Holland and J.K. Galbraith.

Saturday, 15 November 2014

Check out my Gumroad page

Gumroad, Gumroad... it sounds so friendly, doesn't it? ^_^
Well, as of now, you can download my Of Hate And Laughter ebooks from Gumroad too.
Here's the link: https://gumroad.com/ofhateandlaughter

Monday, 10 November 2014

Fiscal deficit funds are liability-free money for the private sector

A promise made and unfulfilled we call a debt. The US dollar, the japanese yen, the british pound, they are just government issued liabilities, they are a tax-credits, they are government IOUs. All money is debt. The two of us can create our own IOUs, but we'll have a hard time finding others to accept them in transactions, that's why private IOUs are not the same as public IOUs. The government levies a money tax or fee upon its citizens, not to finance spending, but to determine the citizens to accept the government's money in exchange for their labor, goods, and services. Government taxation creates unemployment of money paying jobs and public spending employs the unemployed previously created by taxation. Naturally, the government doesn't wish to hire all the labor force. In order to allow the private sector to hire everyone else, it needs to run an adequate fiscal deficit. Ergo, the government needs to spend more than it taxes, it needs to leave more money into the private nongovernment sector via spending than it takes away/destroys via taxation. The correct size of the fiscal deficit is that which achieves and maintains full employment and price stability. Private banks can do what they do now because the legal framework allows it; all of them operate under the CB's charter, and the CB itself is a creature of parliament.
Problem with the banking system today is that they're fully covered on the liabilities side by gov deposit insurance, but they're not regulated on the asset side. Overall, modern money is endogenous - the money supply grows and shrinks according to private sector behavior. The MS grows when private debt is contracted, and it shrinks when those private debts are paid off or are defaulted upon. But money creation within the banking system does not create NEW NET financial assets, nor does it destroy them. Only the government can do this via fiscal policy.
(S-I)+(G-T)+(X-M)=0
The government fiscal deficit equals the net financial savings or net financial surplus of the nongovernment sector to the penny in a given fiscal year.
The government is supposed to run the deficit, so we, the people, can run the corresponding surplus. Why do you think the institution with the biggest negative capital in the USA is the US treasury? Where do you think the money for the pension funds come from? It comes from the government debt. Government spending finances government taxation; vice-versa is not only illogical, it is operationally impossible.
One of the main reasons the americans decided to rebel against the british was that they were tired of paying their taxes to the crown in gold.

Thursday, 6 November 2014

FRANCIS RAGES AT SIM CITY, MORE LIKE SIM SHITTY


Stop supporting companies that make crappy games and that treat their customers like crap.
Like a certain user left a comment on this vid, EA stands for Electronic Assholes.

Wednesday, 5 November 2014

Manley ASMR - ASMR for Men

Put your head-phones on and listen to Ephemeral Rift's brilliant video.
It's funny and relaxing at the same time.

If you enjoy ASMR in general, don't forget to give a like and/or subscribe to his channel.

Saturday, 1 November 2014

Creationism and racism can't decide on evolutionism...

Indeed, when white people see white people act weird or do stupid things, they never say - "fucking cracker" or "fucking white trash", "honkey" or just plain old "huh, white guys/boy" et all. And a thing I find ironic is that the many racists who use "monkey" when referring to black folk; one frequently finds these people to be creationists who don't believe at all in evolution. LoL. Stupidity and malice go well together.