[LJ11]

Yeah, it's definitely a matter of "when", not "if". Since last week I've tried to understand how this would affect to the market. Will the Euro goes down or up? What does this mean to the stock market? When is the best time to invest? How long can the crisis be prolonged?

Here's some FX blurbs, not that it really means much, no one truly knows how this will all play out.

http://ftalphaville.ft.com/blog/2012...-in-guesswork/

[HollovVpo1nt]

You know, at times like these people show their ugliest faces. I can't imagine how it must be when the Eurozone melts down. I'm really worried about my future. I'll graduate (hopefully) in a month in Architectural Engineering and finding a job won't be easy.

[Amibguous Cad]

No, there aren't actually. In a fiat monetary system, all government obligations are "printed away."

I understand your point about clarity of terms, but isn't bringing p hyperinflation kind of important right now? Youre advocating Withdrawing from the euro and servicing debt in sovereign currency, so discussing the possible fallout of that decision seems to me to be a good place for this discussion to go.

[LegendofJoe]

I agree with you de los sapos, the EU needs to become more like the US. All eurozone members need to be required to pass mandates in their legislatures that require they balance their fiscal budgets. It is the only way the EMU will become a true currency union.

[defel]

Can greek gaffer explain to me why did Greece adaopt euro in the first place?

Socially and politically the Euro was a symbol for the Greeks that they were part of Europe. Their prosperity and their future was equal to that of France, Germany, Spain and Italy. The prospect of a single currency unifying the continent would have been intoxicating. Even now, as a Brit, part of me would love to have the UK in the Euro, be able to travel freely throughout Europe, be part of an exclusive club. Its almost like the beginning of European patriotism. Most of the actual drivers underlying the movement towards a single currency are social, political and emotional but of course at the time many economic arguments were also made such as:

Greece would benefit from lower inflation, fewer exchange rate fluctuations, lower interest rates, cheaper credit, the hard-nosed, trustworthy German and French central bankers guaranteeing the safety of their currency around the world, world reserve currency status. In theory there would be greater trading between Euro members meaning cheaper goods and greater prosperity. From what Ive seen in the years leading up to 2008 evidence suggested that many of these things had actually occurred but one of the fundamental laws in economics Ive learnt is that there is always an equal and opposite reaction and Greece are currently paying the price for that.

[empty vessel]

I understand your point about clarity of terms, but isn't bringing p hyperinflation kind of important right now? Youre advocating Withdrawing from the euro and servicing debt in sovereign currency, so discussing the possible fallout of that decision seems to me to be a good place for this discussion to go.

I don't take issue with anybody discussing that. My point in the comment you quoted was merely that the person to whom I was replying seemed to think that there was a difference between "printing money" and how a government with a modern fiat monetary ordinarily spends. The reality is that, in such a system, all government obligations (including, e.g., social security payments) are fulfilled by "printing money." (The term "printing money" is euphemistic, because what actually happens is that the government uses a computer to credit accounts.) The only relevant question (for any government with a modern fiat monetary system--not just Greece should it exit the Euro) is not whether it ought to "print money" to spend--it must do that--but whether the contemplated spending--regardless on what it is--will cause the economy to have too much money chasing too few real goods and services, i.e., inflation. This is the only restraint on a (Euro-free) Greek government's spending.

What will happen is that Greece will (hopefully) spend a lot of Drachmas to begin rescuing its pitiful economy (increasing aggregate demand). As a result of this spending, its currency will become devalued relative to other currencies. Because of its weak currency, Greek tourism will become very attractive and explode, putting a bottom under the fall in the price of its currency relative to other currencies. All the while, aggregate demand is being increased (instead of decreased as the Eurozone is requiring it to do). According to Mitchell, there are risks of inflation present, but nothing that cannot be prevented:

While the Greeks do not have large quantities of natural resources like Argentina did when it defaulted and floated in 2001-02 it still has very desirable assets that are exchange rate sensitive – its tourism capacity. I predict that there would be a boom in that sector virtually immediately and investment funds would flow into it. The change in the current account would put a floor into the currency fall. But in the meantime there would be a risk of inflation coming through the current account – as import prices rose in domestic-currency terms. As the currency appreciated again (as the Germans flooded into the sunny Greek islands to escape the Berlin winter) the inflation risk would be attenuated. The Greek government would be advised to “discount” cost of living adjustments in their pension and wages system in this context. The exchange rate will not fall for very long – it would be a sharp, once-off adjustment. This means that there is a real income loss to the nation (via the higher import prices) and that must be borne. Attempting to adjust nominal returns within the nation for these losses would create the danger of an inflationary spiral. But as long as real productive capacity can be brought into use via public spending the danger of hyperinflation is low in these circumstances.

http://bilbo.economicoutlook.net/blog/?p=18172

[Vagabundo]

If it happens I hope there is still enough - then solely internal - pressure to sort out the corruption.

Afterward I can see tourists flocking to Greece bringing their deliciously inflated Euro with them.

[maquiladora]

Laura Kuenssberg @ITVLauraK Just been to trading floor where they have built drachma into their systems-surreal to see it on screen ready to go in case of 'grexit'

5.19pm: Prospects of Greece's political impasse being resolved at tonight's talks in Athens are waning considerably. A senior member of the small Democratic Left party has just told Helena Smith that the formation of a new government is impossible and that elections in June are now inevitable

http://www.guardian.co.uk/business/2...k-exit-markets

[el retorno]

http://www.guardian.co.uk/business/2...k-exit-markets

I really think it's now more likely they leave than stay

[poisonelf]

Jean-Claude Juncker, chairman of finance ministers of euro zone and prime minister of Luxemburg, about Greece leaving the Eurozone:

"I don't envisage, not even for one second, Greece leaving the euro area. This is nonsense, this is propaganda,"

http://news.yahoo.com/euro-zone-fina...-business.html

[Jason's Ultimatum]

Turkey can replace Greece. Or maybe Turkey dodged a bullet.

[Flatline]

Turkey can replace Greece. Or maybe Turkey dodged a bullet.

Who would want to join EU after what it has done to PIGS pre and post 2008 other than a small rich elite?

[subversus]

fuuuuuuuuuuuuuuuck


26 Italian banks downgraded as part of wider review of European banks

We downgraded 26 Italian banks as part of a review for downgrade of various European banks initiated on 15 February 2012. We already took action on seven Portuguese banks in March. We expect to conclude the remaining reviews on other European banking systems by the end of June. This wider review is driven by the difficult European operating environment caused by the prolonged euro area crisis, and the deteriorating creditworthiness of certain euro area sovereigns (including Italy)

Moody's report

[el retorno]

Jean-Claude Juncker, chairman of finance ministers of euro zone and prime minister of Luxemburg, about Greece leaving the Eurozone: http://news.yahoo.com/euro-zone-fina...-business.html

Isn't he part of the Troka you hate so much? Why do you take his word for it?

fuuuuuuuuuuuuuuuck 26 Italian banks downgraded as part of wider review of European banks Moody's report

The European banks (especially the southern european banks) are in the crapper.

[pgtl_10]

Eagerly await the excuses of the Austrian-schoolers. "We just didn't austerity hard enough!"

Honestly not spending during a recession? Who came up with such an idea?

[pgtl_10]

Is debt is so bad then why is Japan over 200%?

What is killing Europe is that they don't have control of their currencies.

[Slavik81]

Is debt is so bad then why is Japan over 200%? What is killing Europe is that they don't have control of their currencies.

Japan's stagnation isn't exactly a model that anyone's aspiring to.

[Neo C.]

Is debt is so bad then why is Japan over 200%?

200% isn't healthy either. Even a very moderate jump in interest could give Japan enormous trouble.

[pgtl_10]

Japan's stagnation isn't exactly a model that anyone's aspiring to.

No but most of their debt is in domestic. Also their unemployment rate is less than 5%. On a whole they are better than the EU countries. Overall I' say their Yen strength hurts them more than anything.

[rodvik]

fuuuuuuuuuuuuuuuck 26 Italian banks downgraded as part of wider review of European banks Moody's report

ruh roh

Wall Street is going to be ugly tomorrow.

[Evlar]

ruh roh Wall Street is going to be ugly tomorrow.

Ehh. Moody's is always the last to know.

[SlipperySlope]

Is debt is so bad then why is Japan over 200%? What is killing Europe is that they don't have control of their currencies.

I wouldn't exactly use Japan as a model for success...

[SlipperySlope]

I'm confused about something. If the Greeks are about to lose like 70% of their savings due to the likely Drachma change, why hasn't there been a bank run?

[GaimeGuy]

No but most of their debt is in domestic. Also their unemployment rate is less than 5%. On a whole they are better than the EU countries. Overall I' say their Yen strength hurts them more than anything.

No Japan is NOT in better shape than any of the major eurozone countries.

Japan has had a decrease in the 15 and under population for 32 years and counting. That is TERRIBLE.

[Piecake]

No Japan is NOT in better shape than any of the major eurozone countries. Japan has had a decrease in the 15 and under population for 32 years and counting. That is TERRIBLE.

One reason why I dont really see China eclipsing America as 'the' superpower. Their demographic issues are going to fuck them over hardcore

[Flying_Phoenix]

The Euro is like a testament to how looney neo-liberal economics can get. Have multiple nations under one currency without centralizing them all? What...the...fuck? Its like some Ron Paul shit. Its up there with the gold standard.

One reason why I dont really see China eclipsing America as 'the' superpower. Their demographic issues are going to fuck them over hardcore

And they'll still be three times bigger than the U.S.

[imtehman]

The Euro is like a testament to how looney neo-liberal economics can get. Have multiple nations under one currency without centralizing them all? What...the...fuck? Its like some Ron Paul shit. Its up there with the gold standard.

having worthless paper be backed by something of intrinsic value is looney? slap yourself.

[Keio]

I know it doesn't fit the doom and gloom scenario but German economy looks pretty healthy; Greece is still a blip on Eurozone scale and I'm confident there's enough firewall to prevent contagion to I,P,S.

Greece will adopt a presidentially appointed government and go full austerity though.

[Flying_Phoenix]

having worthless paper be backed by something of intrinsic value is looney? slap yourself.

Yes having paper of such value that millions of people depend on for their lives resting on an experiment with multiple nations spending and manipulating the currency with hardly any oversight or direction is looney.

[XMonkey]

having worthless paper be backed by something of intrinsic value is looney? slap yourself.

Having money tied to a finite natural resource is loony, yes.

[Zeppelin]

Having money tied to a finite natural resource is loony, yes.

Why?

[Flying_Phoenix]

Having money tied to a finite natural resource is loony, yes.

Wait. He was referring that the gold standard wasn't looney?

Ahahahahahahahahahahahahahahahaha!

[XMonkey]

Why?

Because it's a scarce material, it would limit the money supply available to an economy as production capacity (and population) grows over time. Also gives an unfair advantage to those countries that produce gold or have large reserves of it.

There's a lot of good, thorough information on why the gold standard is a bad idea. I'd suggest a simple Google search if you'd like to know more (from both sides I guess).

[jamesinclair]

having worthless paper be backed by something of intrinsic value is looney? slap yourself.

How is a worthless metal any better?

Like paper currency, gold only has worth because people say it has worth.

It's just a shiny rock.

Say the world economy collapses. Would you prefer having a pile of paper you can burn for heat....or gold? Have fun eating that, using it for shelter, or really, giving it any use.


If you want a currency based on something of value, adopt the cow as your currency of choice.


In an apocolyptic future, have fun trying to trade a gold bar for a cow. One has value, one doesnt.

[DirtyEd]

Greeks have been stealing from their own government like there's no tomorrow. And the politicians have not stood up against this because then they would not be re-elected.

You could travel around in Greece for weeks without seeing a single receipt because no hotel or resto ever pay proper tax or VAT. Cheating taxes and benefits is like a national sport. So the government in fear of the mob chooses to steal from the EU instead by lying and faking reports.

I'm from Norway and even still rolling in oil money we pay taxes like crazy. If the greeks feel its impossible to make a living with current tax level, lower the but go hardcore on collecting. Its the nations attitude that needs to change.

[poisonelf]

Isn't he part of the Troka you hate so much? Why do you take his word for it?

I'm not "taking his word for it", I'm just providing information to the thread that's as relevant and as official as it gets.

Personally I believe the turn to drachma is inevitable, but I don't believe it will happen as soon. These past two years everything played out exactly as Germany and France wanted, struggling smaller countries so their banks can be shielded.
So there is no reason for me to believe that Greece will be forced out of the euro now, since it will still cause loses of hundreds of billions, up to 2 trillion, to the EU.

The powers that be don't care about Greece obviously, but why should they risk immense loses? I think it's going to take 1-2 more years and then, once Germany has drained all possible gains from being in the euro, Germany along with other northern countries will be the ones to leave the euro and break up the euro zone first.

That's just a scenario I've thought up of course and I could be utterly wrong.

[poisonelf]

Greeks have been stealing from their own government like there's no tomorrow. And the politicians have not stood up against this because then they would not be re-elected. You could travel around in Greece for weeks without seeing a single receipt because no hotel or resto ever pay proper tax or VAT. Cheating taxes and benefits is like a national sport. So the government in fear of the mob chooses to steal from the EU instead by lying and faking reports. I'm from Norway and even still rolling in oil money we pay taxes like crazy. If the greeks feel its impossible to make a living with current tax level, lower the but go hardcore on collecting. Its the nations attitude that needs to change.

If you do care to be informed on the issue and not rely on half-truths, go over that past post on mine on Greek taxation:
http://www.neogaf.com/forum/showpost...96&postcount=1

If you want I can provide more information.

What you say is partly true, but as difficult as it is for someone from a functioning country to realize and accept, what you describe is essentially a defense mechanism that is forced upon small businesses so they can hope to survive.
A small business in Greece pays more than 10-12 different taxes, up to 20 if you dare own property, before even coming to VAT.

It's a schizophrenic system relying on laws that are decades old, on the fact that the government assumes you will steal anyway and so steals you back even if you try to be 100% legal, on the fact that public officials want to always have the leisure to fine you or even close you down if needed.... Ask any small-business owner and 9 out of 10 will tell you that the government is the official mafia in Greece.

Another issue that is hard for someone from a country like Norway to realize, is how here in Greece you feel that each and every penny you pay to the government goes to villas, yachts, luxury travels of politicians and high ranking public officials, as well as their accounts in Switzerland or off-shore countries.
When I say every penny I'm not being literal of course, but there exists corruption to such an extent that people are at a sorts of war against the government. It's not like you know that your taxes will go for better roads, hospitals, education, etc.

One of the things that pretty much everyone asks for is a reform of the taxation system. If it becomes a sane, normal system where there are a few logical taxes most people agree that there should also be harsh punishments such as confiscation of property or jail time.

I do agree that the nation's attitude needs to change. But I feel such a change must start from those who set the rules of the game, that the government must provide a sense of justice and protection for its citizens, show it cares for Greece and not a few families serving outside interests.

Go through the post I linked.

[Neo C.]

I'm confused about something. If the Greeks are about to lose like 70% of their savings due to the likely Drachma change, why hasn't there been a bank run?

People with savings already put lots of money outside Greece. And the decision isn't made yet. But yeah, all the savings in Greece are going to crumble. My family knows what this means (Vietnam in the late 70s).

[DirtyEd]

As you point out the whole tax system needs a total rewrite but do not think that other countries have easier rules. In Norway we have stupid laws and taxes as well..

up to 18% employer tax, means if you pay a worker 100k euro a year the business has to pay 18k euro a year in tax..f crazy. Oh and 2-3k euro a year for extra pension for the worker. If the store is bigger than 150sqm you can not sell goods on a Sunday except if you trade garden stuff.. wtf.. A worker can be sick 24 days (that's 10% of total work days) a year without doctors note and still collect 100% pay. Filling out taxes in Norway is a months work if you want to do i proper because of all the rules, so most ppl dont bother and end up paying more tax than needed (me included).

Every country is fucked up but the greeks should stop making all kind of excuses. Nobody else than them got them into this mess.
Greeks politicians are still greeks voted into position by fellow greeks.

Who forced Greece to make all those loans? Its like a person without sens of finance buying stuff on credit and when he can't pay he blames the people giving him money.

[Keio]

To be honest you can't just blame the Greeks; the personal loan analogy fails here. For EU's internal market to function, it's important to have the south purchase goods from the north. It didn't play out well, but that was the goal for the eurozone...

[poisonelf]

I'm confused about something. If the Greeks are about to lose like 70% of their savings due to the likely Drachma change, why hasn't there been a bank run?

There have been significant bank runs in the past couple of years. Especially people with substantial savings now have moved them out of Greece.

At this point there are no more large bank runs because many people either don't believe anything anymore or are too tired to care.

For two years the EU, the IMF, our media and our politicians have been bombarding us hourly with how everything is going to crumble any day now, how there will be no money to buy food, how our lives depend on the next TROIKA payment which is not ensured and we may be plunged into chaos the next day unless we accept more cuts, more unemployment, more taxes, etc....
If you also take into account the fact that when sometimes payments were not made because of negotiations failing, nothing happened and money turned up for salaries and everything, many people just don't believe anything anymore, even though this time the propaganda and terror mongering might actually be closer to the truth.

As you point out the whole tax system needs a total rewrite but do not think that other countries have easier rules. In Norway we have stupid laws and taxes as well.. up to 18% employer tax, means if you pay a worker 100k euro a year the business has to pay 18k euro a year in tax..f crazy. Oh and 2-3k euro a year for extra pension for the worker. If the store is bigger than 150sqm you can not sell goods on a Sunday except if you trade garden stuff.. wtf.. A worker can be sick 24 days (that's 10% of total work days) a year without doctors note and still collect 100% pay. Filling out taxes in Norway is a months work if you want to do i proper because of all the rules, so most ppl dont bother and end up paying more tax than needed (me included). Every country is fucked up but the greeks should stop making all kind of excuses. Nobody else than them got them into this mess. Greeks politicians are still greeks voted into position by fellow greeks. Who forced Greece to make all those loans? Its like a person without sens of finance buying stuff on credit and when he can't pay he blames the people giving him money.

I really don't think most European countries, and certainly not the US, have as many different taxes as Greece does at this point. Scandinavian social states are pretty much an exception, and especially oil-rich Norway.

I don't know much about Norwegian taxes, but you also have to take into account some other vast differences. In Norway, as far as I know, you may pay lots of taxes (which I still doubt are as many and 'hidden' as non- taxes as in Greece), but you know that all that money is used for your society.
Those very same welfare privileges you describe are available in various forms to everyone, you have almost 50,000 euro 'stashed' for each Norwegian for fuck's sake from oil earnings.

I was in Norway a few months ago (I really liked it and everyone was super polite. The countryside felt like I imagined Cimmeria :p), and everything is extremely expensive by Greek standards.
Having gajillion level salaries allows for gajillion level prices, and I'm pretty sure that businesses can afford some forms of high taxation, especially since they know that the money they pay are going towards improving their own society and country.

Did you go through the post I linked to? At this point taxes for property are at such levels that it's an indirect way of confiscating property from everyone but the very well off, and business taxes are such that there have been tens of thousands of businesses closing down the past two years.
Streets that used to be trade hot spots are now like ghost towns. That's not normal as you realize.

Also, when I was in Norway people would talk about joining the EU or not. If you want my opinion, DON'T. I'm sorry to say but the leaderships of the EU are essentially colonialists, and trust me, oil is what they hear when you say Norway.

[SteveWD40]

For two years the EU, the IMF, our media and our politicians have been bombarding us hourly with how everything is going to crumble any day now, how there will be no money to buy food, how our lives depend on the next TROIKA payment which is not ensured and we may be plunged into chaos the next day unless we accept more cuts, more unemployment, more taxes, etc.... If you also take into account the fact that when sometimes payments were not made because of negotiations failing, nothing happened and money turned up for salaries and everything, many people just don't believe anything anymore, even though this time the propaganda and terror mongering might actually be closer to the truth..

This is very true and applies to other country's and issues as well.

Be it the Govt selling cuts, the opposition trying to scare everyone to vote for them or the media trying to sell papers / viewer-ship, there is a huge amount of the "boy who cried wolf" going on since 2008.

We have had nothing but doom-merchanting for so long that people just don't listen now, which is probably for the best as public sentiment is important and if people don't panic things won't fall apart.

[Chris1964]

Greeks have been stealing from their own government like there's no tomorrow. And the politicians have not stood up against this because then they would not be re-elected. You could travel around in Greece for weeks without seeing a single receipt because no hotel or resto ever pay proper tax or VAT. Cheating taxes and benefits is like a national sport. So the government in fear of the mob chooses to steal from the EU instead by lying and faking reports. I'm from Norway and even still rolling in oil money we pay taxes like crazy. If the greeks feel its impossible to make a living with current tax level, lower the but go hardcore on collecting. Its the nations attitude that needs to change.

Be a permanent citizen of Greece and we'll see how you'll survive one year with the average salaries, cost of life and crazy taxes it has. We "steal" from our government? We try to take back what they steal from us.

I'm tired of every expert who knows everything for the reason Greece got here because he came for vacation one summer. Majority of local population can't afford to go 1 week holidays in its own country.

[poisonelf]

This is very true and applies to other country's and issues as well. Be it the Govt selling cuts, the opposition trying to scare everyone to vote for them or the media trying to sell papers / viewer-ship, there is a huge amount of the "boy who cried wolf" going on since 2008. We have had nothing but doom-merchanting for so long that people just don't listen now, which is probably for the best as public sentiment is important and if people don't panic things won't fall apart.

I realize that current media-government partnerships work the same way in most countries right now, but Greek media, like Greek government, are a very special case of utter corruption.

Watch this piece by al jazeera that aired a few days ago:

http://www.aljazeera.com/programmes/...636694496.html

It's about the immense corruption of Greek media. Each and every mainstream TV channel and reporter are paid by the same centers of power that control Greece, be it political parties or European bankers and officials.

A single channel that was speaking against the brutality of riot police and the scandals of our politicians (even though they were no saints either, I have no idea whose interests they were serving), was shut down by Papandreou under pretenses of owing debts, when all channels here owe the same amount.

I don't think the shock doctrine has ever been more thoroughly and brutally implemented in a country before.

[SteveWD40]

A single channel that was speaking against the brutality of riot police and the scandals of our politicians (even though they were no saints either, I have no idea whose interests they were serving), was shut down by Papandreou under pretenses of owing debts, when all channels here owe the same amount.

:O

That's all kinds of fucked up.

[tino]

Be a permanent citizen of Greece and we'll see how you'll survive one year with the average salaries, cost of life and crazy taxes it has. We "steal" from our government? We try to take back what they steal from us. I'm tired of every expert who knows everything for the reason Greece got here because he came for vacation one summer. Majority of local population can't afford to go 1 week holidays in its own country.

Well it sound like the system is broken. Why don't you guys have a revolution?

[IrishNinja]

If you do care to be informed on the issue and not rely on half-truths, go over that past post on mine on Greek taxation: http://www.neogaf.com/forum/showpost...96&postcount=1

this was a really informative post man, thanks for that. the greek people had my sympathy before, but fuck, that's a really unfair deal, especially if you want to run a small business.

[Chris1964]

Well it sound like the system is broken. Why don't you guys have a revolution?

These elections was a type of revolution you know.

[Alpha-Bromega]

Well it sound like the system is broken. Why don't you guys have a revolution?

LOL do you realize how fucking ridiculous this statement is? so casual, so condescending, like you're talking about what they should have for dinner.

[empty vessel]

Japan's stagnation isn't exactly a model that anyone's aspiring to.

Japan's doing fine. If anything, it doesn't spend enough.

http://bilbo.economicoutlook.net/blog/?p=6090

200% isn't healthy either. Even a very moderate jump in interest could give Japan enormous trouble.

Japan controls the interest rate. It is not subject to market forces. And 200% is fine. It's a totally meaningless number that, if anything, merely describes the size of the national bank Japan has chosen to run relative to the size of the economy. Japan, like the US, can stop issuing bonds entirely if it so chose, even while continuing to net spend.

having worthless paper be backed by something of intrinsic value is looney? slap yourself.

There is no such thing as intrinsic value. It is only humans who assign value. There was actually a great post about "reification of the money signifier":

A fancy but analytically precise way to describe hard-money belief is to state that believers in hard-money “reify” the money signifier by insisting that it be treated as an invariant, virtually physical entity. Reification means that one treats in one’s mind, abstract relationships and ideas as if they were things. There are two level of hard-money ideology: the rarer goldbug like Ron Paul and “Goldbugism Lite” which is a common, widespread belief among supposed moderates about governments running out of (nonconvertible paper) money. Advocates of the gold-standard think that all forms of money need to be or represent a hard thing, a representation of gold. This belief is upon closer examination so foolish that few moderately intelligent people will persist in advocating for it: why should the supply of money be tied to the availability of a not particularly useful metal in limited supply? More complex and more insidious is the hard money belief found in the Center and on the Left who are convinced that somehow government cannot spend and control money, which is mysteriously made substantial only by rituals associated with private banks or in the space between a nominally “independent” central bank and private financial actors. The latter group are not gold-bugs and recognize that there is demand for a growing money supply in a growing economy but make money a creature of the private sector, from which all money must be borrowed. Public spending for them is not “authentic money” therefore the ritual observance of borrowing money to spend over tax receipts. Johnson and Kwak’s position in White House Burning is exactly that money must originate in private sector transactions (with the blessing of the central bank in the fictional narrative of the money multiplier) but somehow cannot or ought not be minted by government to spend for the public purpose.

http://neweconomicperspectives.org/2...signifier.html