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swimfeeders
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swimfeeders is offline
Shropshire
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22-06-2021, 02:24 PM
41

Re: The Triple Lock.

Originally Posted by Donkeyman ->
I'm a bit confused here Todgy, does the treasury own the banks?
Or do the banks own the treasury ?
Doesn't the treasury borrow it's money to fund national expenditure?
Who from?
Banks or the stock exchange? Or are they the same thing ??
Somebody seems to have a shitload of money laying around
somewhere??
Or is there NO money as such anymore, and money is now
CREATED ON DEMAND from treasuries ??
Perhaps there is no real need to work anymore, it's just to occupy
our minds ? And stop us thinking where the moolah comes from !!
Donkeyman! 🤔🤔🤔
Hi

How it works

https://www.bankofengland.co.uk/mone...itative-easing
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The Artful Todger
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The Artful Todger is offline
Suffolk UK
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Posts: 12,816
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22-06-2021, 02:35 PM
42

Re: The Triple Lock.

Originally Posted by Donkeyman ->
I'm a bit confused here Todgy, does the treasury own the banks?
Or do the banks own the treasury ?
Doesn't the treasury borrow it's money to fund national expenditure?
Who from?
Banks or the stock exchange? Or are they the same thing ??
Somebody seems to have a shitload of money laying around
somewhere??
Or is there NO money as such anymore, and money is now
CREATED ON DEMAND from treasuries ??
Perhaps there is no real need to work anymore, it's just to occupy
our minds ? And stop us thinking where the moolah comes from !!

Donkeyman! 🤔🤔🤔
Bit of a mess. The treasury invested money in some UK banks but doesn't actually own Treasury money comes from taxes and selling "gilts" (treasury bonds) to cater for deficit annual budgets but these need to be serviced and that is where money comes from to cater for deficits. Gilts are sold through government's Debt Management Office - or through brokers. Banks, world wide, can and do buy gilts as part of their business models.

Is there a shitload of money just laying around? Not really but there are tradeable credits that can be - well traded.

It's a highly complex subject that is all but impossible to describe just thinking of money, which is why money comes in different forms, M1, M2, etc. Unfortunately there is no "101" for international high finance. The expression "Time is Money" is true in so many ways.
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The Artful Todger
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The Artful Todger is offline
Suffolk UK
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22-06-2021, 02:41 PM
43

Re: The Triple Lock.

Originally Posted by swimfeeders ->
Hi

How it works

https://www.bankofengland.co.uk/mone...itative-easing
That relates only to QE which is one way of attempting to plaster over an economy that has been broken by government policy.

It this case it was the Labour government following gross stupidity by chicanery by that scoundrel Brown
Donkeyman
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22-06-2021, 07:34 PM
44

Re: The Triple Lock.

Originally Posted by The Artful Todger ->
Bit of a mess. The treasury invested money in some UK banks but doesn't actually own Treasury money comes from taxes and selling "gilts" (treasury bonds) to cater for deficit annual budgets but these need to be serviced and that is where money comes from to cater for deficits. Gilts are sold through government's Debt Management Office - or through brokers. Banks, world wide, can and do buy gilts as part of their business models.

Is there a shitload of money just laying around? Not really but there are tradeable credits that can be - well traded.

It's a highly complex subject that is all but impossible to describe just thinking of money, which is why money comes in different forms, M1, M2, etc. Unfortunately there is no "101" for international high finance. The expression "Time is Money" is true in so many ways.

So there is nothing to back up the so called " gilts" Todgy?
Just the government's "word" that Joe public will be willing to
pay up when the time comes by paying higher taxes ?? Or maybe
use some high value asset to satisfy the creditors ?
Who sets the interest rate for these "gilts", the buyer or the seller?
surely if the rate is low enough to keep the seller happy, it will be too
low to attract a buyer in competition with more juicy offerings on
the the stock exchanges? If l remember correctly the main buyers of
government bonds was the pension funds due to the lack of risk,
I believe this is no longer the case? So who does buy "gilts" now
then?
Sorry to bother you so much, but l have been trying to get to the
nitty gritty of all this shyte for some time now with no success !!

Donkeyman! 👎🤔🤔👎
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The Artful Todger
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The Artful Todger is offline
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22-06-2021, 07:51 PM
45

Re: The Triple Lock.

Originally Posted by Donkeyman ->
So there is nothing to back up the so called " gilts" Todgy?
Just the government's "word" that Joe public will be willing to
pay up when the time comes by paying higher taxes ?? Or maybe
use some high value asset to satisfy the creditors ?
Who sets the interest rate for these "gilts", the buyer or the seller?
surely if the rate is low enough to keep the seller happy, it will be too
low to attract a buyer in competition with more juicy offerings on
the the stock exchanges? If l remember correctly the main buyers of
government bonds was the pension funds due to the lack of risk,
I believe this is no longer the case? So who does buy "gilts" now
then?
Sorry to bother you so much, but l have been trying to get to the
nitty gritty of all this shyte for some time now with no success !!

Donkeyman! 👎🤔🤔👎
No bother. Really. But yes, there's not much behind gilts other than the buyers confidence that they will be serviced and repaid when they mature. That is why the independent credit rating of a country by one or more of the internationally recognised Credit Rating agencies such as Standard and Poor is so important.

It also shows why expanding the economic activity in the UK is so important and likewise the cost of housing.

The better the rating the lower the servicing costs, conversely the lower the credit rating the higher it must be and so the more it costs to borrow from the bond buyers. Yes, insurance and commercial banks and even foreign nations can and do buy bonds but so could you! You could do this through a market trader or even high street bank --- or even personally! There is a government dept to do just that thing.

I have bought bonds in the past, bonds issued by Manchester corporation, but sold them prior to their maturing. They were a very safe investment but far from exciting so out they went. Now I steer clear from bonds. I see other areas of opportunity and no, certainly not crypto's.
Donkeyman
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Donkeyman is offline
Melton,United Kingdom
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Posts: 9,088
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22-06-2021, 09:14 PM
46

Re: The Triple Lock.

Originally Posted by swimfeeders ->
Hi

How it works

https://www.bankofengland.co.uk/mone...itative-easing
Thanks for that Swimmy but that seems to be mostly about QE !
So l am not much wiser !!
QE seems to be about printing and issuing "NEW " money to save
a country from going bankrupt when the rich people have sucked
all the money out of the system and either hidden it or wasted it??
I am more interested in where the "NEW" money comes FROM ??
If government's don't have money that can only mean they have to
borrow it from the rich people that sucked it out of the system in
the first place??
Sort of circular money if that makes sense ??

Donkeyman! 🤔🤔🤔
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The Artful Todger
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The Artful Todger is offline
Suffolk UK
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Posts: 12,816
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22-06-2021, 09:35 PM
47

Re: The Triple Lock.

Originally Posted by Donkeyman ->
Thanks for that Swimmy but that seems to be mostly about QE !
So l am not much wiser !!
QE seems to be about printing and issuing "NEW " money to save
a country from going bankrupt when the rich people have sucked
all the money out of the system and either hidden it or wasted it??
I am more interested in where the "NEW" money comes FROM ??
If government's don't have money that can only mean they have to
borrow it from the rich people that sucked it out of the system in
the first place??
Sort of circular money if that makes sense ??

Donkeyman! 🤔🤔🤔
It's not a case of rich people sucking anything about - in the case of the Brown led fiasco it was that the control of the bank's had been lost and as a result UK banks HAD to buy bad stock from the US in order to comply with the terms of their certification of incorporation that would pre-Brown have been controlled by the BoE. Brown cynically broke that link and replaced it with NOTHING. Did anyone actually benefit? Not in the UK, but definitely in America where's changes in The Fed encouraged banks to issue sub-prime mortgages which they then bundled in with prime loans which were sold on and because of Browns stupidity (?) our banks simply had to buy.

Did our banks benefit? Scarcely but a few individuals did coin it in.

Nowhere near as much as the media presented it to be though.

Did American banks, institutions and others benefit?

Oh yes. BIG time.
Donkeyman
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Donkeyman is offline
Melton,United Kingdom
Joined: Jan 2019
Posts: 9,088
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22-06-2021, 11:27 PM
48

Re: The Triple Lock.

Originally Posted by The Artful Todger ->
It's not a case of rich people sucking anything about - in the case of the Brown led fiasco it was that the control of the bank's had been lost and as a result UK banks HAD to buy bad stock from the US in order to comply with the terms of their certification of incorporation that would pre-Brown have been controlled by the BoE. Brown cynically broke that link and replaced it with NOTHING. Did anyone actually benefit? Not in the UK, but definitely in America where's changes in The Fed encouraged banks to issue sub-prime mortgages which they then bundled in with prime loans which were sold on and because of Browns stupidity (?) our banks simply had to buy.

Did our banks benefit? Scarcely but a few individuals did coin it in.

Nowhere near as much as the media presented it to be though.

Did American banks, institutions and others benefit?

Oh yes. BIG time.
So little England bailed the mighty USA out Todgy, is that it ?
I know it happened! But not why it happened ??
The way l heard it, our bankers got too greedy and bought debts
that were not redeemable thinking they could make more money
due to the risk factor? THEY WERE. WRONG, and ended up bailing
each other out and then we had to bail the lot of them out from
the public purse ? during all this schmamoozal they continued to
pay themselves fantastic bonuses ??
I was out of the country at the time, but that is how l heard it ?

Donkeyman! 🤔🤔
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The Artful Todger
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The Artful Todger is offline
Suffolk UK
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Posts: 12,816
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23-06-2021, 11:10 AM
49

Re: The Triple Lock.

Originally Posted by Donkeyman ->
So little England bailed the mighty USA out Todgy, is that it ?
I know it happened! But not why it happened ??
The way l heard it, our bankers got too greedy and bought debts
that were not redeemable thinking they could make more money
due to the risk factor? THEY WERE. WRONG, and ended up bailing
each other out and then we had to bail the lot of them out from
the public purse ? during all this schmamoozal they continued to
pay themselves fantastic bonuses ??
I was out of the country at the time, but that is how l heard it ?

Donkeyman! 🤔🤔
It's a highly complex situation. The root cause of the financial collapse came about as a repealing of the US Glass Steagall act which had ensured financial rectitude in American banking - as much as any form of rectitude can be found in most areas of American activities. Now it gets messy but I'll have to ask you to please excuse me 'cos it's turned eleven and I MUST attend to a bit of urgent trans-Atlantic business. More later though.
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The Artful Todger
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The Artful Todger is offline
Suffolk UK
Joined: Mar 2019
Posts: 12,816
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23-06-2021, 02:21 PM
50

Re: The Triple Lock.

Right! Sorry about that. I needed to contact someone before the markets opened.

Sooo - together with other changes in the US Banks substantially restructured their businesses which removed a number of safeguards and enabled mortgages and loans to be made especially in the construction sector. People were given loans to buy usually new-builds that normally they would not have a snow balls chance of getting but those loans were shown as assets on US banks books. The removal of Glass-Steagall allowed the US Banks to mix these toxic loans with prime loans and sell as bundles.

Now it gets problematic because Brown broke the UK banking sector by taking the BoE out of the picture in order to prevent what he was about to do linking The Treasury with the value of Sterling and passing the buck to the BoE while he played fast and loose.

Moving rapidly on it is law in the UK that unless the instruments of incorporation indicate otherwise the prime responsibility of a company is to maximise shareholder value which meant that UK banks had to buy American bank packages because there was no laws to stop them thanks to Brown. Come settlement dates and the toxic loans failed.

The construction sector in the US collapsed, homelessness followed, the arse fell out of their economy --- and ours.

But so what? We're did the money come from and go?

Now a word about money. Well there are four particular kinds of money. Try this --- https://quickonomics.com/different-types-of-money/.

How is money created? Start to think about Fractional Reserve Banking. To get into that start to think about keeping balls in the air.

Is this the sort of thing you wanted?
 
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