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Fractional reserve banking in history

with 479 comments

I was amazed to read this piece by Gerard Jackson. Jackson critiques Robert Shiller who advances the idea that the emergence of speculative asset bubbles are correlated with the emergence of quick conduits of information like newspapers. In the process of his critique, Jackson trawls through history and sometimes looks as if he could’ve been channeling  one of the most infamous and prolific regular commenters at Catallaxy:

Let us begin with Florence where in the late twelfth century a banking system began to develop. At first these banks adhered to a 100 per cent reserve. But human nature being what it is, they started to create phony credit by dropping their reserves. (Carlo M. Cipolla, The Monetary Policy of Fourteenth Century Florence, Berkeley University of California Press, 1982). Surprise, surprise, Florence found itself enjoying a boom — and not a single newspaper in sight — followed by a bust that was so sever that. Cipolla compared it to the Great Depression …

Abbot Payson Usher, a Harvard economist, gave an account of the development of fractional reserve banking in the late Middle Ages. According to Usher fractional banking emerged in the thirteenth century. (The Early History of Deposit Banking in Mediterranean Europe, Cambridge, Massachusetts, Harvard University Press, 1943). It’s important to bear this fact in mind because credit expansion can only be produced by a fractional reserve system. And every boom has always been preceded by a rapid monetary expansion*. I do not know of a single exception …

I have had some rather abusive Keynesians tell me that this is rubbish because “seventeenth century banking was too primitive for a fractional reserve system to emerge”. Such critics obviously do not even have a passing knowledge of the history of banking. They certainly do not understand the ramifications fractional banking. In any case, These critics stand refuted by historical studies that clearly show the existence of medieval fractional reserve banking

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Written by Admin

October 18, 2006 at 3:46 pm

Posted in Uncategorized

479 Responses

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  1. Here we go again….

    FDB

    October 18, 2006 at 5:16 pm

  2. well, I’m not prepared to say that GMB has been vindicated .. yet … but I have to acknowledge it when there is some substance to what he says

    jasons

    October 18, 2006 at 5:21 pm

  3. of course printing money causes asset price inflation…everyone knows that…

    its classical monetary theory…

    price is demand and supply of money vs good…increase money price goes up – inflation.

    inflation creates information problems, hence misallocation hence “bubbles”

    the solution is private currency, but the best government solutions are pegged increase (a la milton, replace fed with computer program, no discretionary powers, and everyone knows exactly what is happening so we can just factor inflation right in to finance calculations), no increase (which is a subset of pegged increase with rate 0, birds solution through backed currency), followed by inflation targetting (not too bad and is a complicated way of approximating pegged increase) finally full discretion and political intervention (terrible bloody results =)

    c8to

    October 18, 2006 at 5:51 pm

  4. You know in the pub Jason… I found out that your bias in favour of the status-quo wasn’t JUST a bad habit. Nor was it just a FIRST-BORN problem (in accordance with Sulloway.)

    But it was an actual belief to do with methodology.

    If a non-consensus idea isn’t sustainable that will quickly become apparent even if you are biased AGAINST the consensus.

    The consensus has natural institutional advantages in the first place. So to have an actual BELIEF that one ought reinforce this bias on the individual level makes no sense at all.

    And it becomes a learning impediment.

    If you had only just focused on the damn case you would have gotten this far in 1 week.

    Not several months and more then 60 pages in total.

    What we need is an EPISTEMOLOGY thread. Which would become the ultimate meta-comments thread. And a thrashing out of blog-debate-methodology with a view to always converging on the truth.

    GMB

    October 18, 2006 at 6:06 pm

  5. I wouldn’t get too excited about Jackson’s screed, Jason. As he showed with his commentary on tulipmania, he’s sloppy – if not downright manipulative – with his sources. He’s a hack.

    You’ll note that he doesn’t actually quote any of the books stating that fractional reserve originated in medieval Italy and Spain. He implies they do, but doesn’t show where. The reality is that medieval Italian banks were essentially merchant banks, funded by debt and equity, not demand deposits. They typically failed not because of fractional reserve but because of dud loans. But that’s wholly inconvenient for Jackson, so he necessarily concludes that they must have been run on fractional reserve.

    Moreover, as I’ve shown previously [insert link here to Thread of Doom, currently AWOL], Jackson fails to note that no fractional reserve banking was practised in the Netherlands at the time of tulipmania – the deposits he refers to were held in the Wisselbank, which did not lend money. There simply was no banking infrastructure to facilitate the kind of fractional reserve money creation he claims, falsely, caused Tulipmania.

    Fyodor

    October 18, 2006 at 7:08 pm

  6. “Moreover, as I’ve shown previously [insert link here to Thread of Doom, currently AWOL], Jackson fails to note that no fractional reserve banking was practised in the Netherlands at the time of tulipmania – the deposits he refers to were held in the Wisselbank, which did not lend money. ”

    You asshole. I’ve already explained what happened there idiot.

    That was a one-off deal where the established free coining.

    Since it was just about the only 100% backed bank that people trusted all this gold started coming in from all over the globe.

    Silver and Gold were even coming in from Japan. The number of cold coins soared, in this one-off deal and so you had this rarest of things which was a 100% backed bubble.

    Now you already KNOW this.

    I’ve already TOLD you this. But you are such a fucking liar you come back with this bullshit over and over again.

    It was BUBBLE.

    It was STILL a monetary phenomenon.

    Thats the take-home-story here.

    You are too fucking stupid to be on this subject.

    Go away you fucking idiot.

    GMB

    October 18, 2006 at 7:41 pm

  7. “The reality is that medieval Italian banks were essentially merchant banks, funded by debt and equity, not demand deposits. They typically failed not because of fractional reserve but because of dud loans.”

    You are just LYING.

    They weren’t fractional reserve banks its true. Because fractional reserve begins in fraud and embezzlement. So they WEREN’T SUPPOSSED TO PRACTICE FRACTIONAL RESERVE BUT DID ANYWAY.

    “The reality is that medieval Italian banks were essentially merchant banks, funded by debt and equity, not demand deposits. They typically failed not because of fractional reserve but because of dud loans.”

    Jason. He’s just fucking lying again.

    Can you throw this idiot off.

    Lets not pretend that he’s not lying all the time.

    GMB

    October 18, 2006 at 7:44 pm

  8. What a fucking asshole he is.

    Here is a chance finally for people to understand whats going on here.

    And fucking Fyodor just comes along and starts LYING again.

    Take your bipolar obsessions elsewhere you fucking asshole.

    GMB

    October 18, 2006 at 7:47 pm

  9. Ohh… I feel like the site’s never been down.
    Graeme, you admit that the merchant banks weren’t fractional reserve, but then you start asserting that they *were* fractional reserve, even though they were apparently 100% backed. Which one is it?

    Liam

    October 18, 2006 at 7:50 pm

  10. What are you talking about you fucking idiot?

    For starters.

    Sort out what CENTURY you are talking about.

    GMB

    October 18, 2006 at 7:53 pm

  11. Look what’s happened here.

    Fyodor has come on. And in MINUTES he’s got people totally confused with his dishonesty.

    HE’S A THREADWRECKER.

    Piss him off and deep-six any posts since he showed up.

    GMB

    October 18, 2006 at 7:54 pm

  12. Liam.

    I fucking explained what happened.

    What is your fucking problem pal?

    I’ll be back later you moron.

    GMB

    October 18, 2006 at 7:56 pm

  13. Jason,
    Perhaps one way of putting it is:
    Yes, when money supply gets too high, inflation breaks out. As this is usually unanticipated, it results in a boom which is followed by a bust once expectations catch up.
    Yes, if people are able to treat their own deposits as cash by trading notes backed by those deposits without actually having to draw on them this will increase the money supply, which could well be a source of the increased money supply that may well lead to inflation.
    Is that happening now? No. You cannot issue notes backed by your own deposits, or even float cheques for long any more, as it is all relatively quick to settle and if you use EFTPOS it is instant.
    Ergo, the old notion of increasing the money supply through fractional reserve being a problem is no longer the case as what you have in the bank is not money, merely a call on the bank’s assets. It is only money when it is transferred.
    .
    GMB,
    Thanks for clarifying my thinking in this area – even if it is to disagree with you.

    Andrew Reynolds

    October 18, 2006 at 8:23 pm

  14. OK, I suppose this makes my bet with GMB moot, as the relevant thread is currently toast and i recall it had a two week moratorium anyway. And as GMB seemed pretty reluctant to get on and sort out his terms , if he’s agreeable we’ll call it off. I’ll mail you my bank account GMB, if you could retransfer the money asap that would be great.

    Daniel Barnes

    October 18, 2006 at 8:44 pm

  15. give barnesy his money back, Bird. he’s been straight with you.

    Jason Soon

    October 19, 2006 at 2:13 pm

  16. Birdy, does it really take six comments for you to admit I was right and you were wrong?

    Just kidding, I know it takes thousands. But you’ll get there, Liarbird, even if we have to reenact the whole shebang on this here thread that Jason has ever so kindly presented.

    BTW, I notice you haven’t given Daniel Barnes his money back yet. Are you a thief as well as a liar and a coward?

    Fyodor

    October 19, 2006 at 2:13 pm

  17. Bird
    since we’re virtually starting from a blank slate here, maybe you should resolve to just be nice to Fyodor and start debating him properly.

    Jason Soon

    October 19, 2006 at 3:15 pm

  18. Fyador says:
    “I wouldn’t get too excited about Jackson’s screed, Jason. As he showed with his commentary on tulipmania, he’s sloppy – if not downright manipulative – with his sources. He’s a hack.”

    Prove it. Refute the comments in his latest piece otherwise don’t say a thing because your comment only proves that you are being mendacious.

    “The reality is that medieval Italian banks were essentially merchant banks, funded by debt and equity, not demand deposits.”

    Of ocurse they were deposit takers in a historical context. They were financiers. The question in determining the difference between a loan to an entity and a deposit in those days was one of semantics anyway. Investment banks these days work in pretty much the same way when referring to loans or deposits. An investment bank would carry very few deposits on its books but it sure as heel operates on loans… lots of them seeing they can be leveraged as high as 25:1 and 50:1 in some areas where liquidity is readily available in case of distress selling.

    “They typically failed not because of fractional reserve but because of dud loans. But that’s wholly inconvenient for Jackson, so he necessarily concludes that they must have been run on fractional reserve.”

    Well you are stating the bleeding abvious aren’t you. They failed because because they lost their loans on failed deals. What you are avoiding to say is that their balance sheets were leveraged up with capital only forming part of their overall activities…. Isn’t that fractional lending????

    jc

    October 19, 2006 at 4:06 pm

  19. Apologies Fyador.

    Under the new Molotov pact I should have drafted this sentence a little less personal.
    “Refute the comments in his latest piece otherwise don’t say a thing because your comment only proves that you are being mendacious.”

    It should read

    Refute the comments in his latest piece otherwise don’t say a thing because the comment is mendacious.

    jc

    October 19, 2006 at 4:09 pm

  20. Oh, you want to play, do you, JC? OK, let’s play. You’ve just accused me of telling lies. Let’s see who’s lying.

    Jackson assertion #1: Italian banks of the middle ages practised fractional reserve banking.

    Evidence? Jackson claims that the works of Carlo Cipolla, Raymond de Roover and Abbot Usher shows this. He provides no quotations or links to documents stating such assertions. In sum, he produces no evidence for this assertion, only his interpretation of what others are alleged to have said.

    Refutation: aside from the lack of evidence supporting Jackson’s case, Larry Neal, one of the foremost scholars on financial history, states here:

    “London’s goldsmith bankers of the seventeenth century are the storied originators of modern deposit banking. Responsibe for financial innovations such as banknotes, fractional reserves, and interbank clearing before the rise of central banks and government regulation, their place in business history is secure.”

    Refuted.

    Jackson’s assertion #2: Tulipmania was caused by fractional reserve banking.

    Evidence? Reference to Mike Dash’s work (unquoted) on Tulipmania, stating that, because turnover in tulips was 40m guilders relative to bank deposits of 3.5m guilders, “It ought to be clear that it was credit expansion that fuelled the mania.”

    Refutation: as noted above, London was the first site of fractional reserve banking, some 50-odd years after Tulipmania in the Netherlands. Fractional reserve banking simply was not practised in the Netherlands at the time of Tulipmania.

    On the issue of deposits which Jackson raises, as discussed in this paper by Quinn and Roberds, the Wisselbank of Amsterdam, which had the monopoly on money-changing for ALL large transactions, was an exchange or “giro” bank and held all large deposits in the Netherlands. It did not lend against deposits, so it COULD NOT POSSIBLY have created fractional reserve money. There’s no necessary fractional banking connection between tulip turnover and bank deposits.

    Refuted.

    Assetion #3: Jackson implies that fractional reserve banking causes speculative asset bubbles.

    Evidence? The garbage Jackson refers to above.

    Refutation: following from the evidence above, the plain fact that Tulipmania occurred without fractional reserve banking proves that fractional reserve banking is not necessary for speculative asset bubbles to develop.

    Refuted.

    OK, JC, what do YOU have in the way of evidence to prove YOU weren’t lying “being mendacious” in accusing me of “being mendacious”?

    Refute my case or admit you lied.

    Fyodor

    October 19, 2006 at 5:50 pm

  21. Reference to Mike Dash’s work (unquoted) on Tulipmania, stating that, because turnover in tulips was 40m guilders relative to bank deposits of 3.5m guilders, “It ought to be clear that it was credit expansion that fuelled the mania.”

    This could easily be just the result of standard money turnover, not only credit expansion. If I take my money, buy tulips and the person I bought those tulips off buys tulips I do not have credit expansion, just the standard turnover of money. V is not 1 on an annual basis.

    Andrew Reynolds

    October 19, 2006 at 6:00 pm

  22. Fuck off Fyodor you fucking idiot.

    Jason.

    Can you not put pressure on Fyodor to admit he was lying about the “Dud Loan” Bullshit?

    He comes on. And he fucks things up straight away.

    Reynolds you fucking shithead. Don’t tell me you disagree with me!!!!!!

    You are in fantasy land pal. Just believing what you want to believe.

    Tell me where I’m wrong?

    You are always doing this.

    Mindlessly telling me that banks don’t create money. Then mindlessly telling me that fractional reserve doesn’t create the boom bust.

    Because you are being such a fucking relentless idiot you went 45 pages without even figuring out how it could be the a 100% backed bank could cover its costs.

    And now you tell me you disagree.

    But you are a fucking idiot. You are not in any position to make an informed decision to disagree or otherwise.

    Find out where I’m wrong.

    Figure it out.

    But don’t a fucking mindless twit that you are going to tell me you disagree without saying where I’m wrong.
    >>>>>>>>>>>>>

    Jason. Can we just have one thread on this subject where people aren’t lying all the time.

    Can you not do the responsible thing and put pressure on that lying prick Fyodor to tell us how he “knows” that the Medicis made all these “dud Loans”

    He’s such a FUCKING LIAR.

    He just never stops fucking lying.

    GMB

    October 19, 2006 at 6:04 pm

  23. You idiot Reynolds.

    I already TOLD you what happened in the Tulipmania incident.

    There was tons of gold coming in from all over the world to the Amsterdam bank. Because it was the only bank that people trusted.

    And they changed their coining policy to admit free coinage. Which isn’t a bad thing. But you might expect problems in the changeover.

    So it was still a monetary phenomenon.

    GMB

    October 19, 2006 at 6:06 pm

  24. Fuck off Fyodor.

    You are a fucking idiot.

    And you are always lying.

    GMB

    October 19, 2006 at 6:07 pm

  25. “The reality is that medieval Italian banks were essentially merchant banks, funded by debt and equity, not demand deposits. They typically failed not because of fractional reserve but because of dud loans.””

    Fucking admit you are lying Fyodor.

    What is this dud loan business.

    You are fucking lying.

    Jason. Why do you put up with this lying bastard.

    GMB

    October 19, 2006 at 6:09 pm

  26. Look people.

    FRACTIONAL RESERVE IS FRAUD.

    So naturally enough these medici banks were not FRACTIONAL RESERVE BANKS.

    Because you aren’t starting a bank that says WE ARE THE BANK THAT IS GOING TO DEFRAUD YOU.

    But banks, left to their own devices ALWAYS begin this fraudulent practice.

    Now I do not know how Fyodor comes back time after time with his bipolar idiocy and manages to come up with this clever sophistry that confuses people.

    These medieval banks were not FRACTIONAL-RESERVE-BANKS…

    But they practiced FRACTIONAL RESERVE through FRAUD.

    This has always been the case in the history of banking.

    And it stayed that way until the 1670’s.

    What happened then is that tin England all these goldsmiths got together in a massive, nationwide attempt to INSTITUTIONALISE this fraud by establishing a great cartel of people who would practise fractional reserve but accept eachothers dodgy money.

    For the three centuries since we have therefore suffered from a boom/bust cycle. But this behaviour can no longer be considered fraud since every aspect of it is integrated into our system. Or to put it another way every aspect of our society now works to favour this practice.

    The money is always falling in value. The common-law and the legislative law backs up this practice now. The government backs up the banking system with the printing press……….

    And so its no longer fraud its socialism.

    So you can see how stupid it is to claim that in Florence there was no fractional reserve on the grounds that they weren’t FRACTIONAL RESERVE BANKS.

    Banks committed fraud. But there were no FRAUD BANKS.

    Now there is another thing. If all the banks are practising this fraud and one bank comes out and says “No no. We will be different. We will always have 100% backing and we will find a way to guarantee this….”/

    If that happens this bank is going to be sucking up all the gold in the world. And the other banks that practise fractional reserve will lose their deposits.

    And that principle came into force in the 1600’s…. not for EVERY Dutch bank.

    But simply for THE BANK OF AMSTERDAM.

    So because of this one bank the Dutch found themselves with AN EMBARRASSMENT OF RICHES.

    In this way we can still say that the bubble was caused by fractional reserve.

    It was caused by ALLTHE OTHER BANKS practicing fractional reserve and huge amounts of gold and silver from all over the world piling up in the Amsterdam bank.

    We could do it here in Australia today.

    GMB

    October 19, 2006 at 6:24 pm

  27. Fyador

    You provide no evidence that Jackson ois incorrect. That isn’t a refutation it’s merely an adjunct the nonsense you were sprouting in the thread of Doom..
    This is your refutation? My My.

    “Oh, you want to play, do you, JC? OK, let’s play. You’ve just accused me of telling lies. Let’s see who’s lying.
    Jackson assertion #1: Italian banks of the middle ages practised fractional reserve banking.
    Evidence? Jackson claims that the works of Carlo Cipolla, Raymond de Roover and Abbot Usher shows this. He provides no quotations or links to documents stating such assertions. In sum, he produces no evidence for this assertion, only his interpretation of what others are alleged to have said.
    Refutation: aside from the lack of evidence supporting Jackson’s case, Larry Neal, one of the foremost scholars on financial history, states here:
    “London’s goldsmith bankers of the seventeenth century are the storied originators of modern deposit banking. Responsibe for financial innovations such as banknotes, fractional reserves, and interbank clearing before the rise of central banks and government regulation, their place in business history is secure.”
    Refuted.”

    Except your often repeated quote only talks about modern banking standards. Read the comment again. It talks about MODERN deposit taking …….blah blah. It mentions nothing or suggests fractional in some antique form was not practiced prior to this period. That like saying Henry Ford invented car when all he did was change the method cars are manufactured.
    Refuted? Hardly! You wish. Old style Italian fianciers would have to have practiced fractional in order to finace wars and trade etc. To pretend they simply matched equity and loans dollar for dollar and duration is silly quite frankly.

    “Jackson’s assertion #2: Tulipmania was caused by fractional reserve banking.
    Evidence? Reference to Mike Dash’s work (unquoted) on Tulipmania, stating that, because turnover in tulips was 40m guilders relative to bank deposits of 3.5m guilders, “It ought to be clear that it was credit expansion that fuelled the mania.”
    Refutation: as noted above, London was the first site of fractional reserve banking, some 50-odd years after Tulipmania in the Netherlands. Fractional reserve banking simply was not practised in the Netherlands at the time of Tulipmania. “

    Jackoson’s correct. It’s you that is totally misguided about this issue. Jackson makes no mention of fractional in the tupip mania story as far as I can see. It is you that assumes inccorrectly or mendaciously that he is. Jackson correctly states that there was a credit expansion of sorts that didn’t necessarily imply fractional. Read it again.
    Refuted. Do please try to keep up and try again.

    “Refutation: following from the evidence above, the plain fact that Tulipmaniaoccurred without fractional reserve banking proves that fractional reserve banking is not necessary for speculative asset bubbles to develop.
    Refuted”
    Neither he or I has ever said that speculative bubbles can only develop through fractional. However fractional does cause speculative bubbles to develop because of the instability it promotesd particularly when the government has control of the money supply

    Refutd? Hardly/. Try again.

    Please show where I said you were telling lies? Show us where I said that. I accused the argument of being mendacious.

    jc

    October 19, 2006 at 6:35 pm

  28. GMB,
    If you are constructing an argument in amongst the abuse I am missing it.
    Banks do not (currently) create money – all they do is create liabilities, assets and, over time, owner’s equity, any of which they may or may not be able to redeem. They take money from people willing to give up its use for a time and offer them interest in exchange. They then lend much of the money out to people who need (or want) it now in return for (hopefully) more interest.
    As part of that they manage the various risks associated with that activity – liquidity, maturity, operational, credit, market, interest rate and name crisis to mention a few.
    If they manage those risks well, some of the money they take in interest and fees is given to shareholders (if any) in the form of dividends, representing the return on their risk capital.
    Where is the money created? It is only created if you argue that the deposits in a bank are “money”, properly so called. As you know, I disagree with that proposition – they are not money, but calls on the bank’s assets.
    Please hold the abuse and let me know why, after all this time and argument, you still consider a bank deposit to be “money”.

    Andrew Reynolds

    October 19, 2006 at 6:38 pm

  29. Stop being such an ignorant fuckhead Reynolds.

    Banks DO create money.

    And they do so INDEPENDENT of your ignorance on this subject.

    Fuck off if you are just going to join in with this relentless lying.

    Fuck off Reynolds.

    You are an idiot.

    Just fuck off if you cannot accept the most basic realities of banking.

    GMB

    October 19, 2006 at 6:47 pm

  30. Can we not explore this subject without all you people lying?

    What is it about monetary economics and all you idiots lying?

    Surely if you wish to get to the bottom of things NOT LYING would appear to be a minimum requirement.

    GMB

    October 19, 2006 at 6:55 pm

  31. What Fyador is doing with the link about modern banking practices starting in London etc etc etc is using that to suggest that fractional in some antiquated form did not exist before London. This is pure nonsense and not even his link is suggesting that. Pity I didn’t pick that up last time Fyador tried that on. In fact I don’t even think Fydor is lying, he simply doesn’t understand it.

    To get a better idea lets change the industry and bring everything forward in time and see how many people would believe this horseshit:

    This is Fyador quote:

    “London’s goldsmith bankers of the seventeenth century are the storied originators of modern deposit banking. responsible for financial innovations such as banknotes, fractional reserves, and interbank clearing before the rise of central banks and government regulation, their place in business history is secure.”

    Let’s change it around by changing the time, actors and the industry.

    “Detroits Henry Ford of the early 20th century is the storied originator of the modern car. Responsible for the innovations of the modern production line and inventory management practices, it revolutionized car making in the 20th century.”

    Sounds similar to what the London goldsmith were up to in a sort of way, right? And it’s a broadly correct statement for both the London gold guys and Henry Ford..

    But lets add the comment below to the pretend Ford comment I made up and see how many people would agreet.

    “Henry Ford was the inventor of the motor car.”

    That’s bullshit right?

    Fyador has taken a perfectly believable link and seemingly added his own rejoinder in a way by forcing people who don’t know to make assumptions about banking prior to London in the 17th century.

    He assumes we will simply accept that there was no fractional until London goldsmiths came along.

    Fractional is a derivative of futures markets that have actually been around since the time to the Egyptians. Fractional has been around before London is some fashion and it is absurd to suggest otherwise.

    jc

    October 19, 2006 at 6:56 pm

  32. Graeme/Chairman Mao
    can you stop spraying abuse at everyone? If even JC can debate Fyodor in a civil manner, I don’t see why you can’t.

    Jason Soon

    October 19, 2006 at 6:56 pm

  33. Why not ask them to stop fucking lying.

    Surely its not unreasonable for me to get angry with these idiots if after 60 pages they are still lying about stuff like this.

    GMB

    October 19, 2006 at 6:58 pm

  34. This is not even too difficult a subject Jason.

    If these assholes would stop fucking lying. And if you just stopped your knee-jerk rejection of anything for which no-one has been sanctified by Swedish bankers for…….

    If you just stopped this intellectual and actual dishonesty you would have nailed down the truth of this in about 1 week flat.

    But here we are hundreds of thousands of words on and all you morons still can barely understand any of this let alone put together informed opinions about it.

    GMB

    October 19, 2006 at 7:01 pm

  35. SHOW don’t tell, Chairman.
    If they’re lying, SHOW us, don’t TELL us. that’s all you need to do, The truth will out itself.

    Jason Soon

    October 19, 2006 at 7:02 pm

  36. But JC.

    Its just uncanny how clever Fyodor is in the confusion he sows.

    The difference in the 1670’s that for the first time there was an attempt at nationwide cartelisation.

    Instead of going one way…. where the industry might have asked the crown to keep them all honest…

    They went the only other logical way… Which was create a nationwide network where they agree to accept eachothers funnymunny.

    That was the difference.

    It was the CREATION of fractional reserve. It was the INSTITUTIONALISATION of fractional reserve.

    And therefore the establishment of the business cycle.

    GMB

    October 19, 2006 at 7:07 pm

  37. “SHOW don’t tell, Chairman.
    If they’re lying, SHOW us, don’t TELL us. that’s all you need to do, The truth will out itself.”

    No thats bullshit.

    Because when I do that you just come along and say “ho ho Fyodor is really whipping your ass here”

    Or

    ” Ho ho. One of them hasn’t got his epistemology down and its not John.”

    Don’t you even fucking WANT to learn the truth Jason?

    Whats wrong with you man?

    And the only reason the others have been so sloppy in the way they talk about this is that you’ve let this bipolar twit run amok lying all the time and you haven’t yourself pointed out when he was being a complete twat.

    GMB

    October 19, 2006 at 7:10 pm

  38. What fydor would like us all to believe us that prior to London no one had ever thought of using a little surplus capital to start a lending business. Tthat made a little money, then took in loans (deposits) and used that to lend and make a margin. And then lend out longer against short term loans ( deposits) to make longer term loans for an even bigger margin.

    Fyador is actually saying that this never happened before the london goldsmiths

    jc

    October 19, 2006 at 7:11 pm

  39. Graeme
    have you noticed I haven’t intervened in this debate at all?

    why do you think that everyone thinks I’m some sort of Solomon and is hanging off the wisdom that spurts from my lips anyway?

    but just to make sure you can’t whinge about this I am staying out of the debate because as OMNICOMPETENT KING SOLOMON I might unduly influence the outcome.

    so go on – do your best.

    GO!!!

    Jason Soon

    October 19, 2006 at 7:13 pm

  40. Now this battle of secondary sources between Fyodor and JC is an interesting flareup. Fyodor’s right that Jackson’s references to economic history texts are supremely shoddy, containing no page references whatsoever, and frequently citing second-hand quotations. The instances where he’s citing Cipolla’s notes of a journal article are the mistakes drummed out of year 11 history students in NSW. I invoke the Keith Windschuttle rules on his footnotes!
    OK, now to you, JC:

    Old style Italian fianciers would have to have practiced fractional in order to finace wars and trade etc.

    Extensive wars have been financed more or less forever without modern banking, as has long-distance trade. You’re flat wrong.

    Neither [Jackson] or I has ever said that speculative bubbles can only develop through fractional.

    Let’s hear from Jackson (in the article cited by Jason, with bolding by me):

    It’s important to bear this fact in mind [that Usher claims fractional reserve banking started in the thirteenth century] because credit expansion can only be produced by a fractional reserve system.

    Liam

    October 19, 2006 at 7:21 pm

  41. come on Graeme. If JC can do it you can. I want to see a battle of wits between the three of you.
    I won’t intervene by offering my opinion here and if I breach this rule, I will shout you a bottle of red wine. So get to it …

    Jason Soon

    October 19, 2006 at 7:23 pm

  42. Post 36 was supposed to read.

    It was not the CREATION of fractional reserve. It was the INSTITUTIONALISATION of fractional reserve.
    >>>>>>>>>>>
    In any case. When you finally either REALISE that banks create money…. Or you just decide that you are not going to lie about this any more….

    Then it becomes very easy to see why the institutionalisation of fractional reserve lead directly to the boom-bust cycle.

    But 60 pages on Andrew and ABL are still bullshitting about this.

    Under 100% backing you cannot have serious inflations or depressions.

    Since the money supply can never fall. And it can only grow slowly.

    The main point is it can never fall.

    Whereas as soon as your institutionalise fractional reserve you throw what may as well be a random oscillation into the volume of spending within any country.

    Now Jason if you just stop being an idiot and try and learn this the above conclusion is just OBVIOUS.

    Plus its also quite exciting. Because it means we can have a genuine free-enterprise banking system that works a great deal better then this socialised system we have now.

    Whereas before I heard about 100% backing it was pretty clear to me that a Gold Standard was just untenable. And so we could never have free enterprise money.

    GMB

    October 19, 2006 at 7:25 pm

  43. “Graeme
    have you noticed I haven’t intervened in this debate at all?”

    Bullshit.

    For sixty pages you’ve always intervened. And its always been on the wrong side with the effect or the intention of boosting Fyodor and undermining me.

    Thats why its the thread of doom.

    You’ve always been totally unhelpful and moronic.

    And the upshot of it is you simply have failed to learn anything.

    If you had wanted to be helpful you would have asked intelligent questions.

    Instead of laying on this parody of knee-jerk falsification.

    GMB

    October 19, 2006 at 7:29 pm

  44. I am not going to intervene in this thread and I haven’t so far. Does that clarify things?

    Jason Soon

    October 19, 2006 at 7:30 pm

  45. Look at this.

    Fyodor starts spinning shit.

    And minutes later a fellow like Liam….. an economics illiterate comes in talking like there is some sort of legitimate controversy here.

    Like these guys really do have cause to be criticising Jackson.

    He’s a fucking complete fucking asshole Jason.

    But look at the effect he has.

    Liam you don’t know what you are talking about. If you are just going to blithely build on whatever that liar Fyodor comes up with next fuck off.

    Now Liam.

    Ignoring Fyodor… You tell me what Jackson got wrong.

    Fyodors a lunatic.

    Now you tell me Liam what Jackson got wrong and why you think this.

    GMB

    October 19, 2006 at 7:33 pm

  46. “I am not going to intervene in this thread and I haven’t so far. Does that clarify things?”

    Well why not?

    Why not try and undo the harm you’ve done in the past?

    Surely you must see that this is an important subject.

    You’ve spent the rest of the time as a wrecker.

    Why not fix it up.

    Surely you are interested enough in the truth to ask an intelligent question or two?

    GMB

    October 19, 2006 at 7:35 pm

  47. That’s not exactly what I said, Liam. More to the point when was the last time you used references, footnotes, formal attributions to whatever you dish out on your bog?

    If you wish to refute Jackon, do so, but don’t use the lack of extensive footnotes to be a reason why he should be dismissed. If that were the case every columnist would be out of a job. What a piss weak excuse this is.

    Liam, can you even define what banking is and what they do, other than the fact that they make LOTS of money which you think is grotesque… Footnote that you socialist clown.

    jc

    October 19, 2006 at 7:37 pm

  48. Fyodor… You fuck off.

    But the rest of you stop pretending you’ve caught Gerrard Jackson out on something.

    Now Liam do you know something that Gerrard got wrong?

    Yes or no?

    GMB

    October 19, 2006 at 7:40 pm

  49. I don’t do economics, Graeme. I’ve never claimed to. What I do know how to do is how to use and cite secondary sources to construct an historical argument, and I can tell you that Jackson does not know how to do it at all.

    Do you want me to fuck off or tell you things, by the way? You need to get your abusive assertions in order while you’re not abusing your host (the bizarrely tolerant Jason Soon).

    Liam

    October 19, 2006 at 7:45 pm

  50. Liam
    Why though are you breathlessly demanding that Gerry offer university style attribution when you wouldn’t expect that of people on you own side of the political fence like Fyador?

    jc

    October 19, 2006 at 7:49 pm

  51. Right.

    Now the implications of this are very obvious.

    And its not even a hard subject.

    The theory is easy enough and the implications of it are just common sense.

    And the history of banking speaks with one voice.

    Banks are faced, by their very nature, with an overwhelming temptation to commit fraud.

    Yet we need banks for economic development.

    Any country that gets to a certain level of development will lead to the development of banking. But once these banks start up sooner or later they will start to committ fraud.

    The temptation is simply too great. And the authorities do not realise that it has to take more then the normal level of vigilance to stop this fraud getting out of hand.

    So where there has been banks there has ALWAYS been fractional reserve. Not necessarily straight away. But sooner or later they will succumb to the temptation.

    And the temptation goes like this. The banks take your Gold on-call for safe-keeping.

    Now they also take term deposits and then lend them out at interest.

    But once they have built up a great deal of trust with the community they start getting a lot of Gold on hand.

    They get this gold on-call and they issue a receipt.

    And people start using these receipts as if they were the Gold itself.

    But from then on in the potential for fraud is obvious. Since the banks can now lend out FAKE RECEIPTS as if they were backed by cash.

    Now at first this works and they make out like bandits. Its sparks off booms and bubbles but the banks make out like bandits.

    But the history of banking shows they always get into trouble sooner or later and create a depression.

    But once the nationwide cartel was started in England in the 1670’s this lead to something different.

    Actual total collapses weren’t all that frequent. But there was a continuous boom-bust cycle that soon developed once the practise that the English goldsmiths started was taken up more generally.

    And its very easy to see why this would be.

    Now what is hard to understand about this?

    There is nothing hard to understand about this but what happens is that as soon as the subject comes up all these lunatics start fucking lying about it all.

    GMB

    October 19, 2006 at 7:54 pm

  52. Liam says:
    ” Old style Italian fianciers would have to have practiced fractional in order to finace wars and trade etc.

    Extensive wars have been financed more or less forever without modern banking, as has long-distance trade. You’re flat wrong.”

    I am not wrong. The one big difference is that the Italians made the business of war loansharking a business with representation around the courts of Europe. Previosuly loand were made on a one off type situation.

    Medici and the guys in Venice unlike their “antiquated” predecessors turned banking into an almost full time job.

    jc

    October 19, 2006 at 7:56 pm

  53. “I don’t do economics, Graeme. I’ve never claimed to. What I do know how to do is how to use and cite secondary sources to construct an historical argument, and I can tell you that Jackson does not know how to do it at all.”

    Stop being a fucking idiot.

    Now admit that you are being an idiot and resolve not to do it anymore.

    You don’t have shit on Jackson so admit it.

    No-one goes to the trouble of laying down all their footnotes when its not for dead-wood-publication.

    Now admit that you are being a complete fucking idiot and don’t do it again.

    Now Yes or NO.

    Do you or do you not have any reason at all to doubt anything that Jackson is telling you.

    Yes or No?

    GMB

    October 19, 2006 at 7:57 pm

  54. when was the last time you used references, footnotes, formal attributions to whatever you dish out on your bog

    When I quote something, I cite it, most generally in a hyperlink which is the accepted form of reference for internet sources.
    You’ll notice that Fyodor has provided links to sources he cites, as does Jason in the post, and as do all of the other Catallaxy authors.
    The syntax for a hyperlink is <a href=”URL”>link as text</a> and I recommend it to you.

    don’t use the lack of extensive footnotes to be a reason why he should be dismissed

    As I said, I invoke the Windschuttle Rules. Fair is fair.

    Liam

    October 19, 2006 at 7:58 pm

  55. No you are being a fucking tool.

    Its not mandatory to be citing links on an internet blog.

    Now have you any reason to doubt Jackson on anything.

    Go!

    GMB

    October 19, 2006 at 8:01 pm

  56. Come on Jason.

    Try and make a positive contribution for a change.

    Ask an intelligent question.

    You are capable of asking intelligent questions aren’t you?

    GMB

    October 19, 2006 at 8:03 pm

  57. GB
    Does have a point, laim and so do I. Gerry has been faulted many times for not using footnotes and simply says that he can’t be bothered to. If people wish to read him they can. If not fine too.

    Similarly what you say Jason does is quite different when he is posting something. He tell us what he thinks about a story he read of what someone was quoted as saying.

    What you are saying is that you want proper attribution for an essay, something you wouldn’t dream of asking your friends on your side of the political sprectrum like Fyador.

    What GB said. Tell where Gerry is wrong.

    jc

    October 19, 2006 at 8:17 pm

  58. Its just such an eye-opener..

    That where you have such a simple subject that people can develop a sort of mania where they get in the way of what ought to be a very simple process of finding, defending and promoting the truth.

    People can work feverishly to obstruct the truth for sixty fucking pages.

    And if they don’t do it as individuals they do it as a group.
    >>>>>>>>>>>>>>>>>

    Now people this is really a simple story. Is there anything that anyone doesn’t understand about this.

    This is where the business cycle comes from.

    It comes from fractional reserve banking and it doesn’t come from anywhere else.

    GMB

    October 19, 2006 at 8:23 pm

  59. GMB,
    I work in banks most days of my life. I know how banks work. I know what they do. I also know what they are not doing. You can abuse all you want, but if you want to prove me wrong under our current system you have to show why a deposit with a bank is money. As I said – abuse all you want, I have been called much worse by scarier people than you, but you have to show that a bank deposit is money. Have fun – I will expect a torrent of abuse in return, rather than reasoned argument, but I would like to be surprised.

    Andrew Reynolds

    October 19, 2006 at 8:44 pm

  60. Look.

    I have proved you wrong.

    Time and again I’ve drafted examples proving that banks create money.

    And you are just being a lying dishonest fuckhead about it.

    There is no controversy in the economics proffesion about it.

    And its fucking obvious in the first place.

    So just stop lying about it.

    Or pick up a 101 textbook.

    It doesn’t matter whether its Nordhaus or Blinder or Mankiw or Reisman or anyone else from any school.

    They know it. I’ve already proved it.

    So just stop being a shithead about it.

    GMB

    October 19, 2006 at 8:57 pm

  61. Borrow money, count it as a deposit and lend some of it out again. If a deposit is money, then, yes money is created – but only if a deposit is money.

    Andrew Reynolds

    October 19, 2006 at 8:58 pm

  62. Or Lipsey….. Or Friedman…. or

    Is there someone who DOESN’T know that the banks create money and you guys are holding out on me?

    GMB

    October 19, 2006 at 8:59 pm

  63. Why are you lying about this Reynolds.

    Who is the pundit whispering in your ear about this?

    What authority would you take seriously on this matter?

    You have every authority. And you have my examples that prove it. Plus you have the analogy with the other form of fractional reserve that amounts to the release of extra bank gold receipts. And these receipts go on to be treated as money.

    But with demand deposits and electronic banking the principle is still the same.

    GMB

    October 19, 2006 at 9:02 pm

  64. Look I don’t KNOW OF a single economist that does not accept that the banks create money. I’ve proved that they DO.

    Can anyone tell me a serious big-shot living economist that does not understand this?

    GMB

    October 19, 2006 at 9:04 pm

  65. Booms and busts are psychological phenomena. Group/herd mentality, etc.

    To my shame, I agree with GMB. My miniscule knowledge of economics tells me that fractional reserve banking is creating money/credit. Humphreys said I was wrong when I raised this years ago at libertarian.org, and had a reasonable explanation why, but I’ve forgotten what it was, and my (admittedly fallible) instincts are re-asserting themselves. And I can’t see how a deposit with a bank isn’t money. Real currency is deposited, after all.

    That’s my two cents for this, the Thread of Doom II.

    fatfingers

    October 20, 2006 at 12:52 am

  66. GB

    Could the answer be thus?

    Central bank does a permanent add through a buy back of securities. The money gets deposited in the banking system, which through the multiplier becomes a bigger sum that is available to be lent out. In other words it is high-powered money working it way through the banking system that allows money creation. In effect the banks are a conduit for this activity. They don’t actually create money; the central bank does it through the banking system.

    So in effect a bank doesn’t in itself create money, as it is simply the vehicle used by the central bank to get money into the system.

    jc

    October 20, 2006 at 1:10 am

  67. Fyador, Laime

    Forgive me for asking but did either of you two gentlemen even bother to read Jacksons piece?

    Here’s Fyador’s comment suggesting Jackson provided no evidence.
    “Jackson assertion #1: Italian banks of the middle ages practised fractional reserve banking.
    Evidence? Jackson claims that the works of Carlo Cipolla, Raymond de Roover and Abbot Usher shows this. He provides no quotations or links to documents stating such assertions. In sum, he produces no evidence for this assertion, only his interpretation of what others are alleged to have said.
    Refutation: aside from the lack of evidence supporting Jackson’s case, Larry Neal, one of the foremost scholars on financial history, states here:”

    Here’s bloodnut Laime thinking he’s got some juicy road kill and ends up with a one week old carcass lying under the hot summer sun.
    “Fyodor’s right that Jackson’s references to economic history texts are supremely shoddy, containing no page references whatsoever, and frequently citing second-hand quotations.”
    Now here’s Jackson citing a comment that referred to the Florentine period in question. You have direct citations inserted into the piece itself in addition to a quote from Cipolla. Jackson also provided page numbers to check the citation.
    “Let us begin with Florence where in the late twelfth century a banking system began to develop. At first these banks adhered to a 100 per cent reserve. But human nature being what it is, they started to create phony credit by dropping their reserves. (Carlo M. Cipolla, The Monetary Policy of Fourteenth Century Florence, Berkeley University of California Press, 1982). Surprise, surprise, Florence found itself enjoying a boom — and not a single newspaper in sight — followed by a bust that was so sever that. Cipolla compared it to the Great Depression:
    From the end of the thirteenth century and the first decades of the fourteenth there occurred a series of crises comparable in their gravity (if the scale of contemporary economy is taken into account) to the crisis that struck modern economy between 1929 and 1939. It will be sufficient here to cite the famous bankruptcy of the Florentine bank-houses. These crises ushered in a downward trend which continued to 1400 or thereabouts. (Revisions in Economic
    History: XII. The Trends in Italian Economic History in the Later Middle Ages, Economic History Review, New Series, Vol. 2, No. 2, 1949, pp. 181-184). “

    Here’s another quote and citation:
    “Cipolla described the transition from boom to bust as thus:
    The Age of ‘The Canticle of the Sun’ gave way to the age of the Danse Macabre (Ibid).”

    And another:
    “Raymond de Roover provided a detailed account of the dealings of the Medici Bank and its history. (The Rise and Decline of the Medici Bank: 1397-1494 )”

    And here’s another:
    “Abbot Payson Usher, a Harvard economist, gave an account of the development of fractional reserve banking in the late Middle Ages. According to Usher fractional banking emerged in the thirteenth century. (The Early History of Deposit Banking in Mediterranean Europe, Cambridge, Massachusetts, Harvard University Press, 1943).”

    And here’s another
    “Mike Dash wrote a heavily detailed account of tulip mania in which he made the essential point that the volume of trading around promises to buy and sell during the mania “was not less than 40 million guilders” while the Dutch banking system only contained reserves of 3.5 million guilders. (Tulipomania, Random House, 2001).”

    As we can see Jackson provided some useful references for the body of his work but Fyador and Laime think he didn’t provide enough. Fyador requests that Jackon provide directly sourced work, yet he expects us to accept that Larry Neal is “the foremost expert” in the argument he tried to present. By whose authority is Neal, who also not the primary source, the most qualified to speak about this era? Fydor. I can only assume it is Fyador who rates Neal as the most qualified.

    The problem with all this is that Bird is right. We spend far too much time with these useless arguments rather than the actual body of work we ought to be discussing.
    Maybe this time, Soon or Reynolds could actually arbitrate and tell if they thought Jacksons’s work was grossly not referenced that should attract this sort of attack.

    jc

    October 20, 2006 at 2:17 am

  68. Laime

    Tell us where you think Jackson was mistaken in this piece. Let’s fucking here it for once, otheriwise you shouldn’t ever fucking post let alone even read a banking thread again.

    Now tell us???????????

    jc

    October 20, 2006 at 2:21 am

  69. “Central bank does a permanent add through a buy back of securities. The money gets deposited in the banking system, which through the multiplier becomes a bigger sum that is available to be lent out. In other words it is high-powered money working it way through the banking system that allows money creation. In effect the banks are a conduit for this activity. They don’t actually create money; the central bank does it through the banking system.”

    Well they still create money. Because thats whats happening when the high-powered money is being pyramided upon.

    In practice these days it works the other way around. Where the banks lend a bunch, then the Reserve Bank has to pump in a bunch of cash as they get cagey that thinks will now fall back.

    But it takes both parties.

    Since if the central bank DIDN’T funnel this cash in the whole system would crash.

    But we would want to look at it at the moment of original sin. Where fractional reserve is still considered fraud. And the banks have taken a whole generation to get folks to trust them.

    Beginning from 100% backing some banks will begin fractional reserve… that is to say embezzlement.

    Now since they aren’t at that point loaned up to the hilt this is immediately inflationary.

    Whereas in the current situation since they are always loaned up to the hilt it sets up an oscillation, hence a boom-bust, which at least now the central bank ATTEMPTS to smooth out some.

    But too you market-watchers, since the banks are already loaned up, you would GET THE ILLUSION that only the high-powered money mattered.

    But supposing I came in, and without producing any more cash, brought the RAR up to 100% overnight.

    Well there would be a massive depression. Because banks would make no new loans until all their debts had been paid and the payment of these debts would be impossible.

    So we cannot let peopole wish the money-creation role of fractional reserve away and make-believe that it is just some sort of definitional problem.

    Starting from 100% backing the bank money created would be all one way.

    But when they are loaned to the hilt its an oscillating deal. Which may create the illusion that the bank money is no money.

    Plus when we get more money we offload it for something else. Perhaps some other financial product.

    And this can also obscure things to market-watchers.

    But there is no question that starting from a 100% backiing starting-point the bank-money-creation would be inflationary on a one-to-one basis.

    And you see this when banking starts expanding in Europe.

    GMB

    October 20, 2006 at 3:53 am

  70. Brilliant, just brilliant.

    We’re getting on to 50 comments after my last and neither Birdy nor JC has produced a single fucking fact supporting their hack, Jackson.

    Contra JC, my refutations of Jackson’s assertions DO stand. And I must say, JC, it’s very generous of you to lose the same argument, on Tulipmania, three times in a row now. Care for a fourth?

    The point about EVIDENCE, JC, is that it has to be RELEVANT to the issue at hand. Jackson’s quotations on, for example, Florentine banking crises that NEVER MENTION fractional reserve banking, have – suprise, surprise – no applicability to the issue of fractional reserve banking. My references DO apply, however.

    Oddly enough, given we’re discussing evidence and standards of proof, in your cackhanded attempt at a counter-argument you have taken the rather perverse strategy of producing NO facts, and nor have you been able to discredit the facts I presented. You simply have nothing. Now isn’t that ironic, dontchathink?

    Produce some evidence for your case, JC, or I will conclude you have lied. Oh, and while you’re at it, look up “mendacious” in the dictionary. I’ve cautioned you before about using words you don’t understand.

    As for you Birdy, just chalk this one up as another embarassing loss you’ll have to live down. I couldn’t detect a single new, unshredded argument in any of the verbose garbage you just produced. You have form in the incoherent ranting waffle department, but this could be a first even for you.

    Fyodor

    October 20, 2006 at 8:34 am

  71. Let’s get it straight, JC.
    First, Fyodor and I go to town on Jackson’s piece, which is sufficiently referenced for a bad newspaper or magazine op-ed but not for anything more. If you get your information about the world from bad editorial articles, good luck to you.
    Second, you just quote directly from Jackson’s column, expecting it to be different or to actually use evidence properly, perhaps through the magic of ctrl-C ctrl-V. It doesn’t, and he’s still second-hand citing with no page numbers.
    Third, you confuse primary sources (about which you’re right, nobody including Jackson has cited any) with citation and evaluation of a secondary source. Whether Neal is an expert of anything is irrelevant, Fyodor came up with a link and you haven’t.

    As to Jackson’s article itself and my problems with it?

    Let’s fucking here it for once, otheriwise you shouldn’t ever fucking post let alone even read a banking thread again.

    Jackson is mistaken if he thinks that the evidence he’s citing supports the argument he’s making. It doesn’t require economics training to be able to do simple reading. Or to be able to spell ‘here’, which is where I’ll continue to post despite your cry-baby antics.

    Liam

    October 20, 2006 at 10:00 am

  72. Asked Liam a question asking him to tell us what’s wrong with Jackson’s piece and this is what i get.
    Hmmmm
    “Jackson is mistaken if he thinks that the evidence he’s citing supports the argument he’s making. ”

    Ntxt time Laime, try and not overdo it on the substantive parts.

    jc

    October 20, 2006 at 10:33 am

  73. Fyador:

    Stop whinning and tell us what’s wrong with what he said. Are you are up t it? Not what source he should have used, not if he should have used that dubious hack you cited. Just simply tells us where you think Jackon has been wrong.

    jc

    October 20, 2006 at 10:37 am

  74. Laime
    Nothing personal, but if you can’t give a proper accounting about what’s wrong you, you need to fuck off and don’t come back to this thread again as you’re wasting pixels and everyone”s time. teliing the IBID was incoorectly cited or insuffient sources doesn’t cut it.

    If you can’t do it, don’t come back.

    jc

    October 20, 2006 at 10:40 am

  75. Fyador
    Re comment 73.

    Comment 74 applies to you but without the swear words of course.

    Both of you have offered nothing substantia in you criticsim of Jackson other than whinning about his references ignoring the fact that his economics is “flawless” as ABL was said.

    If you can’t critcise the piece from a histroical perspective I would suggest you shouldn’t waste your own time either.

    jc

    October 20, 2006 at 10:44 am

  76. Fyador

    Don’t accuse me of lying again o. Go tale a look a my apology….I made a correctionsaying it applies to the argument you made.

    I corrected myself….your argument is mendacious which it certainly is. I never said you were. It is quite different.

    So I warn you to keep your paws on the right side of the track.

    jc

    October 20, 2006 at 10:51 am

  77. lets get rid of the Reserve Bank and only have the first greade one!

    Bring Back EP at LP

    October 20, 2006 at 10:56 am

  78. Five comments in a row, JC? Are you taking rhetorial notes from Birdy? You should note that it’s no more persuasive when you do it.

    I’ve made it painfully clear WHAT Jackson got wrong WHERE and WHY. You’ve made it equally clear, if not more painfully, that you don’t have ANY evidence refuting my arguments. As I said, put up or shut up.

    As for lying, you accused ME first of telling lies. That was a lie, and I’ve proved you were lying. Look in the mirror before you start hurling accusations you can’t or won’t substantiate.

    Fyodor

    October 20, 2006 at 11:02 am

  79. Fyador

    You have not provided one single scrap of evidece that the body of his work is incorrect. Nothing. Yet you dismiss it as though you do.
    Tell us where his wrong? Where is his economic history incorrect?

    jc

    October 20, 2006 at 11:07 am

  80. Oh, FFS. I think we should coin a new term for this empty waffling “argument” you’ve presented: filiblustering. It’s just endless vapid bluster with no substance whatsoever.

    Just to repeat the substantive points that you prefer to ignore rather than refute:

    1. Jackson’s wrong in stating that Italian banks practised fractional reserve banking, and my source shows this.

    2. Jackson’s wrong in arguing that fractional reserve banking caused Tulipmania, and my source shows this.

    3. Jackson’s wrong in implying that fractional reserve banking causes asset bubbles, and the evidence I produced for #2 above demonstrates this is wrong in the case of Tulipmania.

    He’s wrong, his economic history is incorrect, and I’ve proved it.

    Now, what do you have, other than these blathering assertions that I’ve not proved my case? It’s plain as day you have NOTHING to offer in support of your mate.

    Fyodor

    October 20, 2006 at 11:27 am

  81. Tell us why he is wrong , Fydor. You haven’t proved a thing with your precious link. Tell us why you think he is wrong.

    As I have already stated, your link does not prove anything. If you can’t prove it say so instead of pretending you have like comment 80

    jc

    October 20, 2006 at 11:36 am

  82. Let me repeat the question in copmment 79 that you failed to answer in comment 80

    Fyador

    You have not provided one single scrap of evidece that the body of his work is incorrect. Nothing. Yet you dismiss it as though you do.
    Tell us where his wrong? Where is his economic history incorrect?

    jc

    October 20, 2006 at 11:38 am

  83. I may just be a dumb bipolar fuckwit, but can someone explain to me the vital importance that medieval Italian banking practices have to you all? I mean, you are all expending so much emotional fucking energy on it…..

    I sort of feel like I’m reading ‘The da Vinci Code’ all over again, really.

    Scott

    October 20, 2006 at 11:49 am

  84. It not that Scott, although some of us think history is important. It’s about the characterization of Jaskson’s piece as being dishonest that get stuck in ones throat.

    These two clowns were attempting some pathetic witch-hunt and they don’t seem to be getting away with it.

    jc

    October 20, 2006 at 11:59 am

  85. Oh, I see: mindless repetition is the name of the game, is it? Two can play that one. However, only one of us has anything substantive to say. I’ll give you a hint, JC: it’s not you.

    ====================================

    Oh, FFS. I think we should coin a new term for this empty waffling “argument” you’ve presented: filiblustering. It’s just endless vapid bluster with no substance whatsoever.

    Just to repeat the substantive points that you prefer to ignore rather than refute:

    1. Jackson’s wrong in stating that Italian banks practised fractional reserve banking, and my source shows this.

    2. Jackson’s wrong in arguing that fractional reserve banking caused Tulipmania, and my source shows this.

    3. Jackson’s wrong in implying that fractional reserve banking causes asset bubbles, and the evidence I produced for #2 above demonstrates this is wrong in the case of Tulipmania.

    He’s wrong, his economic history is incorrect, and I’ve proved it.

    Now, what do you have, other than these blathering assertions that I’ve not proved my case? It’s plain as day you have NOTHING to offer in support of your mate.

    Fyodor

    October 20, 2006 at 12:01 pm

  86. Only thing is Fydaor you haven’t proven a thing.

    So I ask the question again in comment 79 that you still pretend to answer with a pathetic attempt and covering it up

    Fyador

    You have not provided one single scrap of evidece that the body of his work is incorrect. Nothing. Yet you dismiss it as though you do.
    Tell us where his wrong? Where is his economic history incorrect?

    jc

    October 20, 2006 at 12:05 pm

  87. I’ll keep asking the question until you appear out of the closet.

    jc

    October 20, 2006 at 12:08 pm

  88. Birdy I’ve warned you about using that word. I missed it this time around but next time I’m going to do a Sooning if you use it again. I suggest you cut down on the general level of abuse too or you’ll also get a Sooning for that.

    Jason Soon

    October 20, 2006 at 12:13 pm

  89. You have not provided one single scrap of evidece that the body of his work is incorrect. Nothing. Yet you dismiss it as though you do.

    Tell us where his wrong? Where is his economic history incorrect?

    Refer to comment #20, JC. Your questions have been answered and Jackson’s flawed take on economic history has been falsified. If you have a comprehension problem that’s, well, your problem.

    I’ll keep asking the question until you appear out of the closet.

    Get used to disappointment.

    BTW, I’m taking that last comment of yours as a concession from you that you wish to recommence ad hominem hostilities. Confirm yes or no, so we both know where we stand.

    Fyodor

    October 20, 2006 at 3:19 pm

  90. What, that your comment was mendacious? Well of course it was. Judging by the tone and words used you started hostilities a long time ago anyway.

    The only thing you haven’t done is accuse of me of being a coward like you did to Jack S some while ago (on a site you thought you could get away with it) because of his racial background. You are always welcome to try that with me to may face, Fyador. However one of us will end up on a hospital bed with a drip feed for 6 months.

    Anyway you have presented no argument in comment 20. Like comment 89 it are simply mendacious and not in the least damaging to Jackson’s argument.

    It’s your comments that need serious resuscitation. Face it only thing you have done is present a half-baked link to someone you proclaim to be an expert in medieval banking. I have already carved that up into small pieces, which you clearly avoided seeing your stuff was shredded for the junk it is.

    I will ask the question again that you are avoiding:
    comment 79 asks:
    Fyador

    You have not provided one single scrap of evidence that the body of his work is incorrect. Nothing. Yet you dismiss it as though you do.
    Tell us where his wrong? Where is his economic history incorrect?

    jc

    October 20, 2006 at 3:51 pm

  91. What, that your comment was mendacious? Well of course it was. Judging by the tone and words used you started hostilities a long time ago anyway.

    To say that a comment is a lie is not ad hominem, JC. We’ve been through this before. Your last comment, i.e. the one I was referring to was this: “I’ll keep asking the question until you appear out of the closet.” It has an ambiguous meaning that is no way related to the argument. As far as I can see there’s nothing I’ve said which is ad hominem. Enlighten me if you disagree. As I said, clarify your position on the agreement. It’s no skin off my nose if you break first – that was always the challenge that – I admit – I expected you to lose.

    The only thing you haven’t done is accuse of me of being a coward like you did to Jack S some while ago (on a site you thought you could get away with it) because of his racial background. You are always welcome to try that with me to may face, Fyador. However one of us will end up on a hospital bed with a drip feed for 6 months.

    There are plenty of things I’ve NOT accused you of being, JC. I don’t see what cowardice or your race has to do with it. As for Strocchi, I didn’t accuse him of cowardice because of his racial background. I accused him of cowardice because of his unwillingness to follow through on his challenge to me.

    And spare me the bravado – you’re not fooling anybody.

    Anyway you have presented no argument in comment 20. Like comment 89 it are simply mendacious and not in the least damaging to Jackson’s argument.

    It’s your comments that need serious resuscitation. Face it only thing you have done is present a half-baked link to someone you proclaim to be an expert in medieval banking. I have already carved that up into small pieces, which you clearly avoided seeing your stuff was shredded for the junk it is.

    Who do you think you’re kidding? The source you described as a “dubious hack”, Larry Neal is Professor of Economics at the University of Illinois and a past President of the Economic History Association who has published extensively on the financial revolution of the enlightenment. It’s his specialty, and he’s widely cited.

    Your bloke, Gerard Jackson, is a legend in his own lunchbox who can’t even write an editorial without botching the facts. He’s a polemicist, not an authority.

    Not only does Jackson NOT produce ANY evidence supporting his theory, I HAVE produced evidence DIRECTLY REFUTING his theory. The only thing you’ve carved, JC, is Pinnochio’s nose.

    As is plainly obvious, despite your blather and bluster, you have produced NOTHING in the way of evidence or logic attacking my argument. Your comprehensive failure is clear for all to see.

    Fyodor

    October 20, 2006 at 4:33 pm

  92. Ok
    I’ll ask the question agian Fyador which for some resom you aren’t prepared to answer.

    comment 79 asks:
    Fyador

    You have not provided one single scrap of evidence that the body of his work is incorrect. Nothing. Yet you dismiss it as though you do.
    Tell us where his wrong? Where is his economic history incorrect?

    Comment 20 was shredded by both my comments earlier. In other words you failed to present any contrary argument other than steering people the wrong direction.

    So far we have spent a long time gong back and forth and you’re unable to answer the question which only means that you having nothing to go on.

    jc

    October 20, 2006 at 5:09 pm

  93. “1. Jackson’s wrong in stating that Italian banks practised fractional reserve banking, and my source shows this.”

    Go AWAY Fyodor.

    You are a fuckwit. And you are lying.

    Your sources DO NOT SHOW THIS.

    You are too dishonest and stupid for this subject.

    LET ME DEDICATE A SONG TO YOU (EDIT BY ADMIN).

    Your sources DO NOT SHOW THIS SO STOP FUCKING LYING YOU BASTARD.

    Jason.

    Do something about this continuous lying.

    GMB

    October 20, 2006 at 5:17 pm

  94. I don’t know about Larry Neal being a hack or not.

    But NONE of Fyodors sources show what Fyodor is claiming about the Italians.

    He is lying or he is just too stupid for this subject.

    GMB

    October 20, 2006 at 5:19 pm

  95. “Birdy I’ve warned you about using that word. I missed it this time around but next time I’m going to do a Sooning if you use it again. I suggest you cut down on the general level of abuse too or you’ll also get a Sooning for that.”

    Why not just get rid of this lying bastard?

    He just doesn’t stop lying.

    The last time we went over this matter we sorted out the strange and special case that was Tulipmania.

    So any evidence for his minor point on that he got from me.

    But he’s lying about the Italian banks.

    And you should stop him because he never stops himself.

    GMB

    October 20, 2006 at 5:22 pm

  96. You were complaining about my intervening last time, Graeme so I won’t.

    But to make an exception here –
    Fyodor – STOP LYING in bed all day, you decadent banker …

    Jason Soon

    October 20, 2006 at 5:32 pm

  97. It must be understood that we didn’t go through these thousands of posts on at least three threads without this Tulipmania being dealt with.

    We have already been over this. And Fyodor is being powerfully dishonest by not acknowledging what we found out the last time round.

    It is clear that Tulipmania was a MONETARY PHENOMENON like all the other bubbles.

    But there are factors quite unique about it.

    As we altready found out last time.

    GMB

    October 20, 2006 at 5:34 pm

  98. Oh, this is rich.

    Where, exacltly, did you “shred” comment#20, JC?

    Was it comment #31, where you argued that the following quote meant the opposite of what it said?

    “London’s goldsmith bankers of the seventeenth century are the storied originators of modern deposit banking. Responsible for financial innovations such as banknotes, fractional reserves, and interbank clearing before the rise of central banks and government regulation, their place in business history is secure.”

    So, goldsmith bankers WERE responsible for the innovation of fractional reserves, but that means the Italians invented it first?

    Oh, hang on. Here’s your explanation:

    “Fyador has taken a perfectly believable link and seemingly added his own rejoinder in a way by forcing people who don’t know to make assumptions about banking prior to London in the 17th century.”

    But I didn’t add a rejoinder, did I? I simply quoted a passage from an authority on the subject stating the fact of the matter, i.e. that factional reserve banking originated in 17th C London.

    Where’s your proof the Italians invented it?

    Crushing silence.

    Yeah, I thought so.

    Or was it where you bizarrely asserted that fractional reserve banking is a derivative of futures markets? [It’s not, BTW]

    Or, was it in comment #27, where you state that “Jackson makes no mention of fractional in the tupip mania story as far as I can see.” Except he does:

    Mike Dash wrote a heavily detailed account of tulip mania in which he made the essential point that the volume of trading around promises to buy and sell during the mania “was not less than 40 million guilders” while the Dutch banking system only contained reserves of 3.5 million guilders. (Tulipomania, Random House, 2001). It ought to be clear that it was credit expansion that fuelled the mania. Without this expansion there was absolutely no way that speculation in the tulip trade could have reached such ridiculous heights. This view is confirmed by the fact that when the Dutch government decreed in 1637 that tulip bulbs were not investments but products and so had to be bought for cash bank loans collapsed and the mania imploded.

    I have had some rather abusive Keynesians tell me that this is rubbish because “seventeenth century banking was too primitive for a fractional reserve system to emerge”. Such critics obviously do not even have a passing knowledge of the history of banking. They certainly do not understand the ramifications fractional banking. In any case, These critics stand refuted by historical studies that clearly show the existence of medieval fractional reserve banking.

    He clearly refers to 17th century fractional reserve banking in the context of Tulipmania, and it is clear that he is arguing that fractional reserve banking created the credit expansion that supposedly caused Tulipmania.

    As you can see I’ve already been through your “arguments” and they’re worthless.

    I’ve produced evidence; you haven’t.

    I’ve produced logical and coherent arguments; you haven’t.

    You’re the one with the shredded arguments, JC. Just like your mate.

    But don’t let me stop you repeating your nothing arguments. There’s nothing but puffery here for me to blow over again and again and again and again…you get the picture.

    Fyodor

    October 20, 2006 at 5:41 pm

  99. “To say that a comment is a lie is not ad hominem, JC. We’ve been through this before.”

    And to say a comment is “mendacious” is also not an ad hom. However you suggested it was, even though I apologized for calling you mendacious, which you clearly have been towards Jackson.

    “Enlighten me if you disagree. As I said, clarify your position on the agreement. It’s no skin off my nose if you break first – that was always the challenge that – I admit – I expected you to lose.”

    Disagree with what? That you can feel free to call my comment a lie yet I can’t use a similar word-mendacious- to describe yours? Is that your idea of a deal?

    The “closet” comment was in no way attributable to your sexual orientation so I am sorry if you took as a way. It wasn’t an attempt to offend you for being gay. The comment was a mere suggestion that you seem to be hiding away from answering the question.

    “I accused him of cowardice because of his unwillingness to follow through on his challenge to me.
    And spare me the bravado – you’re not fooling anybody.”

    I recently saw you in fine form over at Troppo where you seemed breathlessly happy that “Munny” may have stole my identity again. So I am guessing that you approve of Munns recent racist comments while adding together the Jack S accusation, it makes me feel as though it would be an idea for you to prove just how cowardly I would be if said that to my face. As for fooling anyone…. You can treat it as a challenge anytime.

    Feel free to prove Jackson wrong, if you can.

    jc

    October 20, 2006 at 5:52 pm

  100. Jackson is 100% correct. You and your “link” are wrong 100% with regards to the tulip mania. There is no way in hell that the mania didn’t happen unless it was backed by a credit expansion and fractional lending. Of course the bank of Amsterdam was not involved in this gamble because it did not practice fractional reserve lending until much later. That doesn’t for a moment suggest that other financial institutions weren’t involved. Otherwise you and your pal, Neal may want to explain why the game went belly up when the government came out and prohibited any further transactions unless they were backed by real guilders.

    You may wish to ask Neal this question.

    You are simply ignorant of history (and so is you pal), or you are totally deceitful if you think there were no previous attempts to use fractional reserve lending prior to the gold smiths. If want us to believe that you may want to explain how it was that there were people frequently fronting up to courts asked why they issued promises to pay when they didn’t have the reserves. Even ancient history is littered with this.

    Here’s a thought email Brookesnews with your comments and ask Jackson for equal time to refute his argument. I’m sure he would only be too happy to oblige. Quiggin tried that and he had his head handed to him on a silver platter along with the veggies.
    Somehow I don’t think you would do that though. He would be happy to give you equal opportunity if asked.

    jc

    October 20, 2006 at 6:27 pm

  101. Jackson qoting Cipolla says:

    “…According to Usher fractional banking emerged in the thirteenth century…..”

    Well thats true. Not for the first time mind you. It had bobbed up before. And Fyodor hasn’t provided evidence to the contrary. Its true insofar as Usher the Harvard economist claimed it. If indeed he did claim it.

    But the fact of the matter is that when banking starts up anywhere and has established some level of trust they then break that trust and kick off the fraud that is fractional reserve.

    So its not the case that it started FOR THE VERY FIRST TIME IN EUROPEAN HISTORY IN THE THIRTEENTH CENTURY.

    History comprises very long stretches of time. And one wishes to know which several centuries one is talking about.

    I think the Venetian Empire had somewhat sophisticated banking some centuries prior to that.

    And I know also that the Romans had it.

    One ought not be so literal as Fyodor is being for his own dishonest reasons without getting the original source.

    “…It’s important to bear this fact in mind because credit expansion can only be produced by a fractional reserve system. And every boom has always been preceded by a rapid monetary expansion*. I do not know of a single exception …”

    Thats all true too. And Fyodor in a few threads incorporating hundreds of thousands of words has never been able to show evidence to the contrary.

    We have never once seen a boom incorporating bubbles without a rapid monetary expansion. And Tulipmania was NO EXCEPTION in this regard. It was exceptional for other reasons. Other reasons that Gerrard hasn’t yet found out about. That have only emerged in the last few years.But the fact is there was a MASSIVE monetary expansion.

    As Fyodor knows. Because we went through this before.

    “We now know that irrespective of Shiller’s claims “speculative asset price bubbles” emerged centuries before anyone had thought of newspapers and long before Holland’s tulip mania.”

    Well thats true too. And it proves that Schiller got it wrong. And it was VERY stupid of him to get this so badly wrong.

    But so far I’m not finding anything that FYODOR has caught Jackson out about.

    “Mike Dash wrote a heavily detailed account of tulip mania in which he made the essential point that the volume of trading around promises to buy and sell during the mania “was not less than 40 million guilders” while the Dutch banking system only contained reserves of 3.5 million guilders.”

    OK so far so good.

    But new NEW!!! scholarship has shown that the next thing Gerrard assumes is not quite right. But nonetheless check out his caution in the way he words it. He is not claiming to know something that he does not know.

    This is what he says:

    “It ought to be clear that it was credit expansion that fuelled the mania. Without this expansion there was absolutely no way that speculation in the tulip trade could have reached such ridiculous heights.”

    This is only about half right.

    Modern sholarship over at Mises has shown that the main driving force was totally unique to the Tulipmania deal.

    Its a very reasonable assumption. And I was caught out on this matter as well.

    There was INDEED a massive expansion in money supply….

    But this was what we might call a transitional problem due to two reasons.

    1. Going from government coining to free coining.

    2. The fact that the only bank in the world that people truly trusted to be 100% backed was THE AMSTERDAM BANK…..

    We are not talking about ALL THE BANKS IN HOLLAND. We are just talking about one bank.

    Whereas no bubble has yet been found that did not involve a massive monetary expansion…….. This was a unique bubble in that it was helped along perversely by the fact of the Amsterdam bank being the only one that people knew wouldn’t gyp them by practising the fraud of fractional reserve.

    Actually a bank not practising fractional reserve whilst most others are will find itself accumulating gold.

    Its a natural process.

    NOW ME AND FYODOR have been over this before.

    But Fyodor is very creative with his dishonesty. And so he’s only using half of what it is we found out to mindlessly take a cheap shot at Jackson.

    GMB

    October 20, 2006 at 6:34 pm

  102. First lie by you Fyador:

    You stated that Jackson implied that fractional started in Italy and Spain.

    This is your rant to Jase:
    “You’ll note that he doesn’t actually quote any of the books stating that fractional reserve originated in medieval Italy and Spain. He implies they do, but doesn’t show where.”

    Show us by quotes where Jackson implied any of this? If you can’t I suggest you do the same thing I suggested to Laime…. just fuck off out here and don’t come back.

    jc

    October 20, 2006 at 6:39 pm

  103. “Jackson is mistaken if he thinks that the evidence he’s citing supports the argument he’s making. It doesn’t require economics training to be able to do simple reading. ”

    No thats bullshit Liam.

    Jacksons quotes do very much support his argument.

    You are talking complete fucking idiocy.

    But do continue!

    Expand on this idiots assertion you have just made.

    My god you are a fucking idiot pal.

    GMB

    October 20, 2006 at 6:40 pm

  104. Fyodor creates a terrible conundrum.

    He’s clever in his thread-wrecking. In that to any third party who hasn’t followed this VERY closely from the start will simply not pick up his relentless dishonesty.

    I say this just reading JC losing patience with this obsessive liar.

    And there is very few third parties that would have followed this all close enough to see why Fyodor is being such a prick.

    And whereas Fyodor is an extreme example its less extreme behaviour of this sort that keeps the fraudulent economic school of Keynesianism and left-wing idea more generally in the air.

    GMB

    October 20, 2006 at 8:18 pm

  105. OK it seems the first time around I mistook what it was that was meant by ‘free coinage”.

    Here is the best explanation I’ve seen of the Tulip-mania.

    http://www.mises.org/journals/qjae/pdf/qjae9_1_1.pdf

    Here is an excerpt from the wiki:

    “The term originally came from the period in the history of the Netherlands during which demand for tulip bulbs reached such a peak that enormous prices were charged for a single bulb. It took place in the first part of the 17th century, especially in 1636-37.”

    ESPECIALLY IN 1636-37 says the Wiki.

    Now to satisfy yourself that LIKE EVERY OTHER BUBBLE KNOWN this bubble TOO was a monetary phenomenon and resulted from a massive increase in the money supply all you have to do is:

    All you have to do is go to the pdf and scroll down to the second to last table.

    Just remind yourself of the date of the Tulip Mania… Then check the table that says….

    “TOTAL MINT OUTPUT OF SOUTH NETHERLANDS”

    And you will then be able to put to rest any silliness that this thing wasn’t the result of monetary expansion.

    However there IS some aspects of Tulipmania that are really quite unique that it seems that Gerrard doesn’t yet know about.

    But the facts presented when taken as a whole vindicate his understanding of monetary matters as completely as anything ever could.

    Now Fyodor KNEW all this.

    This all came up before.

    But he’s so dishonest he is having a cheap shot at Jackson.
    >>>>>>>>>>>>>>>>>>>>

    The other thing about this is its actually pretty exciting. We can certainly, here in Australia, reform our banking system long 100% backing lines.

    And if handled right we would attract gold and other precious monetary commodities from all over the world just like the Amsterdam bank did almost four centuries ago.

    GMB

    October 20, 2006 at 9:01 pm

  106. Talk about thread wrecking GB.
    Jackson’s piece was on Shiller who suggested that newspapers are the cause of bubbles. We haven’t been able to focus on this since the beginning of the thread because of fyadors activities.

    It becomes more apparant by the day doesn’t it.

    I went to a speech Shiller gave at one of the Australian universities a few years ago. He was truly pathetic. Yale would be better off without him, or maybe they deserve each other.

    jc

    October 20, 2006 at 10:24 pm

  107. What SCHOOL do you think he belongs to?

    There must be whole schools of know-nothings that are basically Keynesian macromancers butt call themselves something else.

    Newspapers?

    Tch Tch.

    But you know thats not so bad that he had a stab at it in his ignorance.

    But how is this Aussie comentators form?

    Taking it up like its the purist Gospel.

    GMB

    October 20, 2006 at 10:31 pm

  108. If anything newspapers would REDUCE the prevalence of bubbles.

    Because market practitioners can be burnt by these various crashes. And they can get more punch-shy and so forth.

    But unless this sort of thing becomes a part of the mediasphere dudes are going to make the same sorts of mistakes in 15 years time rather then 50 if there isn’t the papers and magazines and such to warn them.

    Surely its the OPPOSITE of Schillers JIVE.

    That these bubbles happen DESPITE our being more greatly informed and not because of it.

    GMB

    October 20, 2006 at 10:35 pm

  109. The dickhead is a Yale professor. He’s a macromancer of the of the first order.

    The first thing he does to suck up to the audience is begin to slag it on the Bush Administration. He was trying to sell his new book about some forgetable crap.

    When it came to question time I asked him why nearly all ivy league professors hate the GOP. His face dropped and basically ignored the question. What a dick.

    I don’t understand it, an idiot like Shiller writes about mean reversion and everyone thinks he is a genius.

    jc

    October 21, 2006 at 11:41 am

  110. I’m posting this comment on Gerry Jaskson’s behalf.

    I admit to being thoroughly bewildered. I write an innocent article on banking
    and booms in medieval Europe and Fyador responds as if I had violated his
    mother’s honour.

    He argues that Holland didn’t have a banking system in the seventeenth century.
    This is nonsense, especially in light of the fact that Amsterdam was then an
    international centre for banking. His other claim that the Italian banks were
    “funded by debt and equity, not demand deposits” is totally irrelevant. The
    point is that these banks expanded credit in exactly the same way as did the
    Barcelona Bank of Deposits. As soon as any bank or lending institution makes
    loans in excess of its deposits it has engaged in fractional reserve banking.
    The problem with the Italian banks is that they treated ‘irregular deposits’ as
    if they were loan or ‘mutuum deposits’. The legal and economic differences
    between these deposits were debated by the Spanish Scholastics.

    Now all that any lending institution needed to do to expand credit was to issue
    bills of exchange in excess of deposits. And this is what the Italian banks did.
    These bills were the equivalent of post-dated cheques. (A Dictionary of
    Economics
    , Penguin Books, 1977). That they were money substitutes is
    confirmed by the fact forged bills became a serious problem. (Fernando Braudel,
    The Structure of Everyday Life: Civilisation & Capitalism 15th-18th Century,
    Vol. I
    , Phoenix Press, 1988).

    The Italian banks used “drafts drawn on their accounts with each other as a
    substitute for payment in coin during the thirteenth century”. (Nathan Rosenberg
    & L. E. Birdzel Jr., How the West Grew Rich, Basic Books, 1986). As for
    England, the seventeenth century goldsmiths were preceded by the “scriveners”.
    (M. W. Thomas, A Survey of English Economic History, Blackie and Son
    Limited, 1967). The late Spanish Scholastics debated the morality of fractional
    banking, with most of them coming down on the side of a 100 per cent reserve.
    (Thomas E. Woods Jr, The Church and the Market, Lexington Books, 2005.
    There also Jes?erto Soto’s Money, Bank Credit and Economic Cycles,
    Mises Institute, 2006 and Alegandro A. Chafuen’s Christians for Freedom:
    Late-Scholastic Economics, Ignatius Press, 1986
    ).

    The Wisselbank Bank, usually referred to as the Bank of Amsterdam, maintained a
    100 per cent reserve for nearly 200 years and acted as a central bank. (It was
    this bank that inspired the creation of the Bank of England, which in itself is
    a fascinating study). But no one should assume from the position of the Bank of
    Amsterdam that it was the only bank in the whole country. Nor should they assume
    that other lending institutions did not exist. With respect to Tulip mania Doug
    French had this to say:

    “The price of tulips only served as a manifestation of the end result of a
    government policy that expanded the quantity of money and thus fostered an
    environment for speculation and malinvestment. This scenario has been played out
    over and over throughout history. Like other periods of heightened”.
    (http://www.mises.org/journals/qjae/pdf/qjae9_1_1.pdf).

    Fyador asserts that “the deposits he [meaning me] refers to were held in the
    Wisselbank, which did not lend money”. If I had meant the Bank of Amsterdam I
    would have said so. Moreover, there was a panic in 1672 that led to massive
    withdrawals from the Dutch banks causing most of them to suspend payments,
    including the Bank of Middelburg, founded in 1616, and the Bank of Rotterdam
    which was founded in 1635. In the words of also Jes?erto Soto the Amsterdam
    bank

    “was founded after a period of great monetary chaos and fraudulent (fractional
    reserve) private banking.”

    It is abundantly clear that Fyador is absolutely wrong about Dutch banking. Now
    Dash’s point is that there was no way in which the banking system’s reserves
    could fund the volume of trade at the height of the boom. If it were otherwise
    then the government decree of 1637 ordering these transactions to be made in
    cash would not have caused a sudden monetary implosion. The mania collapsed
    because there was insufficient cash to maintain the frenzied bidding. (I am
    always mystified by the fact that so many people seem unable to grasp this
    point). In other words, the volume of trading that took place during the mania
    greatly exceed the amount of money defined as silver and gold coins.

    Finally, the manner in which Fyador conducts exchanges makes clear the futility
    of trying to argue facts with him. I have made my sources and thinking
    absolutely clear. If he has a problem with that then I suggest he should try to
    come to terms with it instead of resorting to personal abuse. In the mean time I
    shall continue to read while Fyador continues to rant.

    Gerry Jackson

    jc

    October 21, 2006 at 2:10 pm

  111. 99. jc | October 20th, 2006 at 5:52 pm
    “To say that a comment is a lie is not ad hominem, JC. We’ve been through this before.”

    And to say a comment is “mendacious” is also not an ad hom. However you suggested it was, even though I apologized for calling you mendacious, which you clearly have been towards Jackson.

    I never suggested any such thing, JC. I asked you to prove you weren’t lying, and you haven’t.

    “Enlighten me if you disagree. As I said, clarify your position on the agreement. It’s no skin off my nose if you break first – that was always the challenge that – I admit – I expected you to lose.”

    Disagree with what? That you can feel free to call my comment a lie yet I can’t use a similar word-mendacious- to describe yours? Is that your idea of a deal?

    Disagree with my statement that I have not used an ad hominem attack against you, obviously, as you implied at comment #90: “What, that your comment was mendacious? Well of course it was. Judging by the tone and words used you started hostilities a long time ago anyway.”

    If you want to call something I’ve said a lie, go right ahead and attempt to prove it. I’ve done likewise. Neither is ad hominem and neither violates the agreement. If, however, you want to assert that the “tone and words” I use violate the agreement, the burden of proof is on you to demonstrate such a violation, hence my request for clarification.

    The “closet” comment was in no way attributable to your sexual orientation so I am sorry if you took as a way. It wasn’t an attempt to offend you for being gay. The comment was a mere suggestion that you seem to be hiding away from answering the question.

    Fair enough – thanks for explaining. I haven’t hidden from the question.

    “I accused him of cowardice because of his unwillingness to follow through on his challenge to me.
    And spare me the bravado – you’re not fooling anybody.”

    I recently saw you in fine form over at Troppo where you seemed breathlessly happy that “Munny” may have stole my identity again. So I am guessing that you approve of Munns recent racist comments while adding together the Jack S accusation, it makes me feel as though it would be an idea for you to prove just how cowardly I would be if said that to my face. As for fooling anyone…. You can treat it as a challenge anytime.

    First off, I wasn’t “breathlessly happpy” that Munny may have stolen your identity again, and I don’t approve of his identity theft or racist remarks – I never have.

    As for challenges, if I ever want to issue a childish pseudo-threat online – unlikely, but let’s pretend – I’ll struggle to better that pathetic example. What part of “spare me the bravado” didn’t you understand?

    Feel free to prove Jackson wrong, if you can.

    Already have, but if you want an encore I won’t disappoint my devoted audience.

    Oh look, the man himself is here, sort of…

    Fyodor

    October 21, 2006 at 3:31 pm

  112. First off, thanks for showing up Gerry. Now we can really make some progress.

    I admit to being thoroughly bewildered. I write an innocent article on banking and booms in medieval Europe and Fyador responds as if I had violated his mother’s honour.

    No, just that you botched your use of sources and failed to make your case.

    He argues that Holland didn’t have a banking system in the seventeenth century. This is nonsense, especially in light of the fact that Amsterdam was then an
    international centre for banking.

    Where did I argue that Holland didn’t have a banking system? The issue is whether its banks practised fractional reserve or not.

    His other claim that the Italian banks were “funded by debt and equity, not demand deposits” is totally irrelevant. The point is that these banks expanded credit in exactly the same way as did the Barcelona Bank of Deposits. As soon as any bank or lending institution makes loans in excess of its deposits it has engaged in fractional reserve banking. The problem with the Italian banks is that they treated ‘irregular deposits’ as if they were loan or ‘mutuum deposits’. The legal and economic differences between these deposits were debated by the Spanish Scholastics.

    My “claim” is clearly relevant. If Italian banks were not funded by demand deposits they did not practise fractional reserve. It’s as simple as that. Italian banks were funded by debt and equity, i.e. they were merchant banks, so they did not practise fractional reserve.

    Now all that any lending institution needed to do to expand credit was to issue bills of exchange in excess of deposits. And this is what the Italian banks did. These bills were the equivalent of post-dated cheques. (A Dictionary of
    Economics, Penguin Books, 1977). That they were money substitutes is confirmed by the fact forged bills became a serious problem. (Fernando Braudel, The Structure of Everyday Life: Civilisation & Capitalism 15th-18th Century,
    Vol. I, Phoenix Press, 1988). The Italian banks used “drafts drawn on their accounts with each other as a substitute for payment in coin during the thirteenth century”. (Nathan Rosenberg & L. E. Birdzel Jr., How the West Grew Rich, Basic Books, 1986).

    The banker’s bill is not the equivalent of a cheque – they were bank to bank financial instruments, not circulating money substitutes. They were not the creation of a fractional reserve system, and thus irrelevant to the issue at hand.

    As for England, the seventeenth century goldsmiths were preceded by the “scriveners”. (M. W. Thomas, A Survey of English Economic History, Blackie and Son Limited, 1967).

    “Preceded” as what, pray tell? Are you suggesting scriveners, i.e. professional scribes and notaries, developed fractional reserve banking? Would you mind terribly providing a quote stating that from Thomas’ book?

    The late Spanish Scholastics debated the morality of fractional banking, with most of them coming down on the side of a 100 per cent reserve. (Thomas E. Woods Jr, The Church and the Market, Lexington Books, 2005.
    There also Jes?erto Soto’s Money, Bank Credit and Economic Cycles, Mises Institute, 2006 and Alegandro A. Chafuen’s Christians for Freedom: Late-Scholastic Economics, Ignatius Press, 1986).

    Quote, please.

    The Wisselbank Bank, usually referred to as the Bank of Amsterdam, maintained a 100 per cent reserve for nearly 200 years and acted as a central bank. (It was this bank that inspired the creation of the Bank of England, which in itself is a fascinating study). But no one should assume from the position of the Bank of Amsterdam that it was the only bank in the whole country. Nor should they assume
    that other lending institutions did not exist.

    “Wisselbank” means “exchange bank”, Gerry. It did not lend money – it was a central moneychanging and deposit-taking institution in the decades leading up to and during Tulipmania. To say it was 100% reserve is meaningless if it did not lend against those deposits.

    Furthemore, I never assumed that it was the only bank in the country, or that lending did not exist. My position is that fractional reserve banking did not exist in the Netherlands at the time, a position you’ve been unable to refute.

    With respect to Tulip mania Doug French had this to say:

    “The price of tulips only served as a manifestation of the end result of a government policy that expanded the quantity of money and thus fostered an environment for speculation and malinvestment. This scenario has been played out over and over throughout history. Like other periods of heightened”.
    (http://www.mises.org/journals/qjae/pdf/qjae9_1_1.pdf).

    That’s a marvelous quote, Gerry, as it highlights your selective and inappropriate use of sources. Because, for instance, you ignore this quote from the same document:

    “But what made this episode unique was that the government policy did not expand the supply of money through fractional reserve banking which is the modern tool. Actually, it was quite the opposite. As kings throughout Europe debased their currencies, through clipping, sweating or by decree, the Dutch provided a sound money policy which called for money to be backed one hundred per cent by specie. This policy, combined with the occasional seizure of bullion and coin from Spanish ships on the high seas, served to attract coin and bullion from throughout the world.”

    Yes, Gerry, that’s right: “the government policy did not expand the supply of money through fractional reserve banking”. The increase in money circulating in the Netherlands was a result of trade conducted there attracting coin, not credit expansion, as you assert.

    Fyador asserts that “the deposits he [meaning me] refers to were held in the Wisselbank, which did not lend money”. If I had meant the Bank of Amsterdam I would have said so.

    Apologies, Gerry. I naturally assumed you meant the Bank of Amsterdam, because that’s roughly how much the Bank had on deposit at the time. Perhaps you could steer me to the banks you WERE referring to?

    Moreover, there was a panic in 1672 that led to massive withdrawals from the Dutch banks causing most of them to suspend payments, including the Bank of Middelburg, founded in 1616, and the Bank of Rotterdam which was founded in 1635. In the words of also Jes?erto Soto the Amsterdam bank

    “was founded after a period of great monetary chaos and fraudulent (fractional reserve) private banking.”

    I’d like a page reference for that quote please, and a confirmation that de Soto, and not you, inserted “(fractional reserve)” in that line. Contra Birdy (whom you really should know if you don’t), fractional reserve banking is not fraud.

    The problem is that it’s true the Bank of Amsterdam was founded due to monetary chaos, but not because of fractional reserve banking.

    Neither of the Banks of Middelburg or Rotterdam were fractional reserve banks – they were giro- or exchange-banks established along the lines of the Amsterdam.

    It is abundantly clear that Fyador is absolutely wrong about Dutch banking. Now Dash’s point is that there was no way in which the banking system’s reserves
    could fund the volume of trade at the height of the boom.

    Why not? If most of the system’s money was in circulation, not on deposit, why wouldn’t it be able to fund the trade?

    If it were otherwise then the government decree of 1637 ordering these transactions to be made in cash would not have caused a sudden monetary implosion.

    There was no “monetary implosion”. As for the government decree you mention, it looks like you’re confusing it with the restructure of tulip futures contracts as discussed by Thomson and Treussard

    The mania collapsed because there was insufficient cash to maintain the frenzied bidding. (I am always mystified by the fact that so many people seem unable to grasp this point). In other words, the volume of trading that took place during the mania greatly exceed the amount of money defined as silver and gold coins.

    Be mystified all you like, but I would have thought it was plainly obvious that Tulipmania collapsed because like most such asset bubbles, price had overreached any rational assessment of value. As for the volume of trading exceeding the amount of cash in the system, aside from your earlier confusion about bank deposits, you seem to be ignoring the fact that much of the trading was accomplished via derivatives contracts.

    Finally, the manner in which Fyador conducts exchanges makes clear the futility of trying to argue facts with him. I have made my sources and thinking absolutely clear. If he has a problem with that then I suggest he should try to come to terms with it instead of resorting to personal abuse. In the mean time I shall continue to read while Fyador continues to rant.

    Yes, it’s clear that you should read more. Perhaps some sources that actually back up your unfounded assertions would help?

    Fyodor

    October 21, 2006 at 3:39 pm

  113. JC

    Have you pointed out to Gerrard Jackson that Fyodor is a compulsive liar and an idiot?

    I mean we don’t want the poor fellow wasting a lot of effort trying to reason with him like I did.

    I wouldn’t want to wish that on anyone.
    >>>>>>>>>>>>>>>>>

    Fuck off Fyodor.

    Take you bipolar idiocy elsewhere.

    You are too stupid and dishonest for this subject.
    >>>>>>>>>>>>>
    JC.

    Point out to Gerard that we have been over this before. And Fyodor has been shown all the pdf’s….

    And that he’s just prepared to go on lying and being an idiot about this.

    There is just no point talking to the fucking idiot.

    And Jason is remiss in not simply throwing the thread-wrecker off.

    GMB

    October 21, 2006 at 3:55 pm

  114. You see Jason.

    Fyodor is not just willing to lie flat out to me. He’s now being totally dishonest to and about Gerrard Jackson.

    And this despite the fact that we have gone over the Tulipmania circumstances before.

    Fyodor knew that Tulipmania was the result of monetary expansion.

    But he’s a lunatic who was just determined to confuse people about what Jackson was saying.

    Throw him off.

    GMB

    October 21, 2006 at 3:58 pm

  115. Look really Jason.

    This is a subject that a lot of people have trouble with as it is.

    Surely if you have someone who you know is willing to lie all the time and confuse people surely it is up to you to get rid of him.

    Its not as if YOU YOURSELF haven’t been taken in by this fellow. As your continuing great praise of Fyodor showed.

    You know how dishonest he is?

    Why do you let him stay?

    GMB

    October 21, 2006 at 4:02 pm

  116. Fyador

    “Wisselbank� means �exchange bank�, Gerry. It did not lend money � it was a central moneychanging and deposit-taking institution in the decades leading up to and during Tulipmania. To say it was 100% reserve is meaningless if it did not lend against those deposits.”

    are you saying the Bank of Amsrerdam did not lend money?

    Just a simply yes or no would do.

    jc

    October 21, 2006 at 4:03 pm

  117. “My claim is clearly relevant. If Italian banks were not funded by demand deposits they did not practise fractional reserve. Its as simple as that. Italian banks were funded by debt and equity, i.e. they were merchant banks, so they did not practise fractional reserve.”

    Look at this Jason. Here is Fyodor lying flat out. He’s never produced a scrap of evidence that Italian banks didn’t hold deposits on demand.

    He’s just lying flat out.

    GMB

    October 21, 2006 at 4:05 pm

  118. GB

    re fyador’s quote.
    Is Fydor actually saying that the only way a bank can practice fractional reserve is to have demand deposits? is he saying fractional cannot be done with loans?

    Am I getting this right?

    jc

    October 21, 2006 at 4:09 pm

  119. “My position is that fractional reserve banking did not exist in the Netherlands at the time, a position you’ve been unable to refute.”

    But Fyodor is lying. Because Gerry DID refute it. He refuted that Dutch banks didn’t practise fractional reserve banking prior to the British goldsmiths set up thier nationwide cartel for this purpose.

    He clearly refuted it by pointing out that there was a RUN ON THE BANKS in Holland in the early 1670’s and two banks (not the Amsterdam Bank.) ended up suspending payments.

    This PROOF POSITIVE that they were practising fractional reserve.

    Fyodor has been going on a single poorly worded statement in a pdf about the British Goldsmiths.

    He’s fucking wrong about this and he should be made to retract or be thrown off.

    He didn’t retract the last time we went over this and here the bastard is back making the same lying claims.

    GMB

    October 21, 2006 at 4:12 pm

  120. I thought we were pased that level of understanding.

    Fyador is saying that fractional can only happen when demand are used and not when there loans and equity.

    pardon my ignorance here. But I would have thought that any paper issued that grosses the balance up over the liability and capital side of the balance sheet is fractional banking.

    Maybe I stand corrected here but this looks like an enormous error in thinking.

    jc

    October 21, 2006 at 4:15 pm

  121. “Fyodor has been going on a single poorly worded statement in a pdf about the British Goldsmiths.”

    I know. He gets one link in all these discussions and expects he rants to be believed, yet when he is given a host of reference material he accuses the other people of debating in bad faith.

    I’m sorry, GB. I honestly didn’t follow the other two threads that closely simply becasue I avoided reading much of what he said, so I didn’t really understand you concerns.

    Iit looks to me in this short discussion that he does debate dishonestly. basically what he seems to want to do is close the debate about monetary expansions and the effects.

    jc

    October 21, 2006 at 4:21 pm

  122. JC I wouldn’t want to get into that side of things before the liar came up with even a scrap of evidence that the Italian banks did not hold Gold for safe-keeping. Which is just about the most implausible fucking thing imagineable for starters. Since purchases with Gold are just inconvenient and things can easily be stolen.

    Holding gold for safe-keeping tends to PRECEDE the expansion into taking and making loans if anything. So if Fyodor has this evidence that Italian banks practised one form of banking and somehow SWORE OFF taking gold coins for safe-keeping just beggars belief.

    So its just unreasonable and arbitrary for us to imagine that the Italian banks didn’t hold deposits for safe-keeping.

    He’s never put up any evidence for this.

    He’s just fucking lying.

    GMB

    October 21, 2006 at 4:21 pm

  123. Fyador is saying that fractional can only happen when demand DEPOSITS are used and not when there loans and equity are the liability side.

    jc

    October 21, 2006 at 4:23 pm

  124. The problem you see is that whereas Fyodor bullshits all the time by sheer probablility he’s going to be right once in awhile.

    But this time he played a cheap trick. Because it was me that informed him that the driving force behind the Tulip deal was this massive flight of Gold into The Amsterdam bank and this free coinage business.

    So its hard to determine the extent to which fractional reserve in other banks in Europe played a direct role. And when you look at just how many extra gold coins were coined just before and during the bubble well there is your culprit right there.

    Now Gerard showed evidence for it being a credit expansion and it was very good evidence. But see how Fyodor HAD SOMETHING ON HIM from the last time me and him talked about this subject.

    One would have thought that the take-home-story here was that the idea of monetary expansion causing these bubbles was SUPREMELY VINDICATED.

    But instead of admitting this he has this joker up his sleeve from the last time me and him argued about this and knowing he had this here joker he launches into this general abuse of Jackson.

    Whereas he could have just informed Jackson about the special cirucumstances with the Tulip deal about the massive production of new coins in the area during that time…

    But you see Fyodor would never do this. Because this would be a massive vindication of Jacksons wider thesis and understanding of monetary economics. And it would therefore just be a minor point about the special circumstances of the Tulip deal.

    Instead he just tried to hold this joker over as a GOTCHA and goes after Jackson with all this other Shiite.

    GMB

    October 21, 2006 at 4:31 pm

  125. “Fyador is saying that fractional can only happen when demand DEPOSITS are used and not when there loans and equity are the liability side.”

    Right.

    But what I’m saying is that we ought not even get into this until the compulsive liar comes up with proof positive that the Italian banks of that time never took deposits.

    That would be a very strange thing indeed. But we oughta wait until he can prove this. Because if he can it means I’d have to go through the pdf’s and suss out precisely what it is these guys were up to.

    And why let this fucker tie us in knots when its likely he’s just lying about it.

    GMB

    October 21, 2006 at 4:35 pm

  126. Actually i do recall in the first thread where you brought up those points about the tulip mania. Ha. (swallow). So he took your comments and made them his own. Nor surprise.

    He did that on tiny little things too.

    Let’s get back to the other main point of the thread which is that monetary expansions and then credit expansions cause business cycles.

    The real point of the tulip mania that we shouldn’t forget is that it was a monetary expansion that created the environment for a mania.

    jc

    October 21, 2006 at 4:53 pm

  127. Looks like that compulsive liar Fyodor isn’t in a great-big-fat-fucking-hurry to prove that these Italian banks didn’t take any money on deposit, does it?

    Has there EVER been a banking system ANYWHERE that didn’t take cash for safe-keeping on demand?

    That would be something to find out for starters if he couldn’t prove his tendentious claims about these Italian banks.

    GMB

    October 21, 2006 at 4:58 pm

  128. “Actually i do recall in the first thread where you brought up those points about the tulip mania. Ha. (swallow). So he took your comments and made them his own. Nor surprise.”

    Actually its more ironic then that.

    It had been MY claim that fractional reserve had started towards the end of the 17th century. And he had poo-pooed that notion.

    But of course now I know that it was only sort of formalised then whereas before it had been practised but on the sly.

    Practising on the sly sets up a different dynamic then when its formalised and becomes universal.

    But the thing is FYODOR HAS SWAPPED SIDES ON THIS POINT as it has become convenient to whatever argument he has got going at the moment.

    Its truly bizzare and he is one sick fucker. You see I was the first one to make the claim he is now making about fractional reserve starting then.

    Whereas later I found out the situation was a bit more complicated then that.

    He simply has taken up this new (to him) point of view because it became useful for what he was putting over.

    He’s one twisted fuckup thats for sure.

    GMB

    October 21, 2006 at 5:07 pm

  129. “Let’s get back to the other main point of the thread which is that monetary expansions and then credit expansions cause business cycles.”

    The thing to do is imagine how things would work inductively and see if it actually turned out that way.

    Now so far we do have a pretty stark difference between fractional reserve before and after the late 17th century.

    Though the British goldsmiths didn’t do their thing until the late 1670’s we ought probably ignore matters between then and for another 50 years or so before this new system became pretty much locked into European banking.

    So we might want to look at before 1670 and after 1720 lets say. And build a model that will fit what we loosely know about the differences between these periods and then we can see if the model fits more specifically.

    One loose cannon is just general debasement and or legal tender laws which might have similiar effects to various phases of fractional reserve and could make it hard to fit the data.

    But what we have is not the invention of fractional reserve. What we have instead is the before and the after fractional reserve.

    What we have is the CHEATING-ON-THE-SLY fractional-reserve prior to the 1670’s. And we have the formalised fractional reserve which we’ll take from lets say the 1720’s or so.

    We can expect from these two types a very different dynamic.
    >>>>>>>>>>>>>>>>>>>>>>>>>>>>
    Now what I’m saying is that when banking is starting up anywhere in Medieval Europe or in Rome or whathave you at first they are not going to be able to cheat. Because people aren’t going to trust them in the first place it being a new business.

    But once banking gets going in some part of Europe within a pretty short time the banks will cheat.

    However since this was likely only in one part of Europe, or a couple of principalities in Europe in any one time it would be very hard to notice. Since the monetary effect would be dispersed throughout Europe and not stay within that principality.

    That area would only experience a tiny bit of inflation, it might export a bit of inflation as well but it would be hard to notice.

    Plus it must be understood that there is contradictory things happening here. This would be happening in an advanced area. Like Venice at first and later Italy or Spain.

    So the FACT OF BANKING ITSELF would give these guys a boost in wealth and production and so forth. So on the one hand you would have the flight of gold due to this fractional reserve but it would likely be at war with the other tendency which would be of a more developed region kicking on, producing more and therefore attracting gold by another route.

    Because of this one would expect it to take many decades or perhaps even a century or more for things to come to a head.

    For the banks to slowly take more and more risks. For the citizens to get more and more used to trading the cash and leaving the coins with the banks.

    Because these guys are cheating and they know they are cheating you would expect them to be very cautious in their cheating for a very long time.

    And they could only cheat more and more to the extent that the trading of their paper came to be a habit.

    When the crash came it would be totally devastating for the banks IN THAT AREA.

    Now whether it would throw Europe into a depression would be another question. Because this is banking breaking out and fractional reserve following it in some regions but not in all regions of Europe.

    So it might be as if no new gold were being mined or imported to Europe for a few years if that banking system was small in relation to the Gold Stock of Europe as a whole.

    Because while that banking area would be responsible for a massive dissapearance of money supply that would be absorbed by the rest of Europe since its only one area having that collapse.

    But what if the banking collapse was substantial insofar as the total money stock of Europe was concerned?

    Well then the pattern would be very slow inflation for a number of decades as the banking system built up… then a crash…. then years of monetary famine in Europe (how long depending on what sort of price controls were present at the time. This was not afterall free enterprise)

    And then you might find decades of prices dropping.
    ……………………

    Which is a totally different dynamic to what you would expect from the early 1700’s on.

    Because quickly the banks become loaned up to the hilt. From there on in they are walking a tightrope blown by the two winds of fear and greed. And the behaviour of the public and the other banks reinforces and amplifies the behaviour of each bank.

    And so you would expect a sort of Keynesian dynamic to be set up. And whereas under an honest 100% backed system the money supply would NEVER fall and seldom rise any way but very slowly. And so the total volume of spending would either hold or grow slowly……….

    Whereas an established commodity 100% backed system would be the model of stablility eliminating recessions (once it was properly established) this fractional reserve banking would be like putting a random generator into the total volume of spending.

    But we would not see the assumed pattern of CHEATING-ON-THE-SLY fractional reserve. With MANY MANY decades of slow inflation….. then a crisis…. then many many decades of slow deflation or stable prices.

    Instead we would have oscillations built on oscillation built on oscillation.

    And we would see a substantial boom and a substantial bust pretty much every one or two decades.

    Now of course this isn’t really much of an inductive effort since I already know a bit about what the conditions actually were like before and after this time.

    But we can at least look at that model and see if it pretty much fits.

    GMB

    October 21, 2006 at 5:43 pm

  130. Where did I argue that Holland didn’t have a banking system?

    “ You never mentioned another bank, other that the bank of Amersterdam or the banking system in any of you coments above. Therefore any reasonable person would be led to believe that you thought there was only one bank in existence. You say you do now. How convenient!” Please prove that you have mentioned other banks or the Dutch banking system at the time.

    “My claim is clearly relevant. If Italian banks were not funded by demand deposits they did not practise fractional reserve. It’s as simple as that. Italian banks were funded by debt and equity, i.e. they were merchant banks, so they did not practise fractional reserve.”

    You think your claim is relevant, but you need to prove to us that the Italian banks were not engaging in activities that expanded their balance sheet over their capital and debt. Prove please with sources.

    “The bankers bill is not the equivalent of a cheque – they were bank to bank financial instruments, not circulating money substitutes. They were not the creation of a fractional reserve system, and thus irrelevant to the issue at hand.”

    Are you saying there were no other financial instruments the banks used that were “promises to pay”. Yes or no?

    “Are you suggesting scriveners, i.e. professional scribes and notaries, developed fractional reserve banking? Would you mind terribly providing a quote stating that from Thomas’ book?”
    I think Jackson has provided about 12 odd references and citations to your one link. I think you should prove this otherwise if untrue.

    “Quote, please.”
    See immediately above.

    “That’s a marvelous quote, Gerry, as it highlights your selective and inappropriate use of sources. Because, for instance, you ignore this quote from the same document:”

    Please provide proof your quote was discussing the same exact period and provide page number..

    “Yes, Gerry, that’s right: “the government policy did not expand the supply of money through fractional reserve banking”. The increase in money circulating in the Netherlands was a result of trade conducted there attracting coin, not credit expansion, as you assert.”

    Please clearly show where Jackson said the Government expanded the money supply. Direct quote please.

    “Apologies, Gerry. I naturally assumed you meant the Bank of Amsterdam, because that’s roughly how much the Bank had on deposit at the time. Perhaps you could steer me to the banks you WERE referring to?”

    This is a strange question seeing that above you informed us that you didn’t state there was only one bank which of course implies you know the names of the banks. Names please and prove you do know.

    “Id like a page reference for that quote please, and a confirmation that de Soto, and not you, inserted “(fractional reserve)” in that line. Contra Birdy (whom you really should know if you don’t), fractional reserve banking is not fraud.”
    Please show where Jackson said fractional was a fraud or even alluded to it. As for references, see above. Let’s see you start providing the references.

    “There was no “monetary implosion”. As for the government decree you mention, it looks like you’re confusing it with the restructure of tulip futures contracts as discussed by Thomson and Treussard.”

    There was no monetary implosion? Prove there wasn’t. No confusion there. It’s you who is confused as you don’t seem to equate the decree with the restructuring. Please provide a reference here. Also please show exactly how Jackson was confused. Direct source please.

    “As for the volume of trading exceeding the amount of cash in the system, aside from your earlier confusion about bank deposits, you seem to be ignoring the fact that much of the trading was accomplished via derivatives contracts.”

    Did Jasckon say anything to the effect that they weren’t conducted with derivatives? Show where.

    “Yes, it’s clear that you should read more. Perhaps some sources that actually back up your unfounded assertions would help?”

    Funny that. You provide one simple link to the entire thread and you expect others to do all the work. I love delegation, but that’s absurd after you have only provided one simple link.
    This is very Monty Python of you Fyador. Always claiming victory like the black Knight.

    jc

    October 23, 2006 at 12:18 am

  131. 130. jc | October 23rd, 2006 at 12:18 am

    “Where did I argue that Holland didn’t have a banking system?”

    You never mentioned another bank, other that the bank of Amersterdam or the banking system in any of you coments above. Therefore any reasonable person would be led to believe that you thought there was only one bank in existence. You say you do now. How convenient. Please prove that you have mentioned other banks or the Dutch banking system at the time.

    If I believed that there was only one bank in existence, how would that constitute an argument that Holland didn’t have a banking system? Do you see the contradiction there, JC? My argument is not that there weren’t banks in the Netherlands, but that they did not practise fractional reserve. The onus is on Jackson to prove that I made any such assumption. I did not.

    “My claim is clearly relevant. If Italian banks were not funded by demand deposits they did not practise fractional reserve. It’s as simple as that. Italian banks were funded by debt and equity, i.e. they were merchant banks, so they did not practise fractional reserve.”

    You think your claim is relevant, but you need to prove to us that the Italian banks were not engaging in activities that expanded their balance sheet over their capital and debt. Prove please with sources.

    It’s not a matter of opinion whether my claim is relevant or not. Whether Italian banks practised fractional reserve banking or not is THE point of the argument. I don’t have to prove that Italian banks did NOT practise fractional reserve banking, just like I don’t have to prove the non-existence of unicorns. As it’s JACKSON’S assertion that they did, the burden of proof is on HIM to prove they did. English banks practised fractional reserve in the late 17th century – that’s the earliest example known. If you disagree, PROVE IT.

    “The banker’s bill is not the equivalent of a cheque, they were bank to bank financial instruments, not circulating money substitutes. They were not the creation of a fractional reserve system, and thus irrelevant to the issue at hand.”

    Are you saying there were no other financial instruments the banks used that were “promises to pay”. Yes or no?

    No. That’s irrelevant to the argument. A bankers bill is not accepted as money. Bank notes issued by fractional reserve banks ARE. That’s the difference.

    “Are you suggesting scriveners, i.e. professional scribes and notaries, developed fractional reserve banking? Would you mind terribly providing a quote stating that from Thomas’ book?”

    I think Jackson has provided about 12 odd references and citations to your one link. I think you should prove this otherwise if untrue.

    He hasn’t provided a single shred of evidence that scriveners practised fractional reserve banking. References to books that may or may not substantiate his point don’t count – that’s why I asked for a quote that’s falsifiable.

    “That’s a marvelous quote, Gerry, as it highlights your selective and inappropriate use of sources. Because, for instance, you ignore this quote from the same document:”

    Please provide proof your quote was discussing the same exact period and provide page number..

    Oh dear, now you’re really getting desperate. It’s on page 11 of this document. You know, the one Jackson himself cited in comment #110?

    “Yes, Gerry, that’s right: the government policy did not expand the supply of money through fractional reserve banking. The increase in money circulating in the Netherlands was a result of trade conducted there attracting coin, not credit expansion, as you assert.”

    Please clearly show where Jackson said the Government expanded the money supply. Direct quote please.

    Jackson provided this quote in comment #110:

    “The price of tulips only served as a manifestation of the end result of a government policy that expanded the quantity of money and thus fostered an environment for speculation and malinvestment. This scenario has been played out over and over throughout history. Like other periods of heightened”.
    (http://www.mises.org/journals/qjae/pdf/qjae9_1_1.pdf).

    That’s his quote, JC, not mine. But I didn’t argue that Jackson said the government expanded the money supply. I said he asserted that “The increase in money circulating in the Netherlands was a result of…credit expansion”. He said so here:

    “Mike Dash wrote a heavily detailed account of tulip mania in which he made the essential point that the volume of trading around promises to buy and sell during the mania “was not less than 40 million guilders” while the Dutch banking system only contained reserves of 3.5 million guilders. (Tulipomania, Random House, 2001). It ought to be clear that it was credit expansion that fuelled the mania. Without this expansion there was absolutely no way that speculation in the tulip trade could have reached such ridiculous heights.”

    “Apologies, Gerry. I naturally assumed you meant the Bank of Amsterdam, because that’s roughly how much the Bank had on deposit at the time. Perhaps you could steer me to the banks you WERE referring to?”

    This is a strange question seeing that above you informed us that you didn’t state there was only one bank which of course implies you know the names of the banks. Names please and prove you do know.

    No, YOURS is a strange question, because it has no bearing on mine. Jackson asserted that banking deposits were 3.5m guilders. Then, when challenged as to whether these were deposits held in the Bank of Amsterdam, he replied they were held elsewhere. As before, the onus is on Jackson to substantiate his assertion.

    “I’d like a page reference for that quote please, and a confirmation that de Soto, and not you, inserted “(fractional reserve)” in that line. Contra Birdy (whom you really should know if you don’t), fractional reserve banking is not fraud.”

    Please show where Jackson said fractional was a fraud or even alluded to it. As for references, see above. Let’s see you start providing the references.

    It’s obvious that I never argued that “Jackson said fractional was a fraud or even alluded to it”. I asked him whether he inserted a qualifier into a quote, as is clear from the statement above.

    “There was no “monetary implosion”. As for the government decree you mention, it looks like you’re confusing it with the restructure of tulip futures contracts as discussed by Thomson and Treussard.”

    There was no monetary implosion? Prove there wasn’t. No confusion there. It’s you who is confused as you don’t seem to equate the decree with the restructuring. Please provide a reference here. Also please show exactly how Jackson was confused. Direct source please.

    The monetary history of the era is described in Quinn and Roberds. There was no “monetary implosion”, or severe monetary disruption surrounding either the government decree or the collapse of Tulipmania. As for Jackson’s assertion, it’s up to him to demonstrate that the government issued the decree he claims – I see no evidence of it. The restructure of tulip futures contracts is described on page 3 of Thomson and Treussard.

    “As for the volume of trading exceeding the amount of cash in the system, aside from your earlier confusion about bank deposits, you seem to be ignoring the fact that much of the trading was accomplished via derivatives contracts.”

    Did Jasckon say anything to the effect that they weren’t conducted with derivatives? Show where.

    Jackson compares the trading volume of tulips in guilders with bank deposits and concludes that only credit could finance such activity. He makes no mention of extensive trading in futures, which would permit such large volumes via leverage. It’s a reasonable assumption to make that he ignored this point, as he made no mention of it. Perhaps you could point out where he mentioned this very important part of tulip trading?

    “Yes, it’s clear that you should read more. Perhaps some sources that actually back up your unfounded assertions would help?”

    Funny that. You provide one simple link to the entire thread and you expect others to do all the work. I love delegation, but that’s absurd after you have only provided one simple link. This is very Monty Python of you Fyador. Always claiming victory like the black Knight.

    Nah, JC, what’s funny is that Jackson has failed to make his case twice now, and you think YOUR desperate nitpicking over my sources (several links, if you don’t mind) is going to progress his bankrupt argument. Think again.

    The facts are:

    1.You have NO PROOF that Italian banks invented fractional reserve banking;

    2. You have NO PROOF that fractional reserve banking caused Tulipmania; and

    3. You have NO PROOF that fractional reserve banking causes asset bubbles.

    Perhaps Gerry would like a third try at proving his case in person? Or perhaps he should hire a different proxy with a better handle on logic and evidence?

    And, BTW, fractional reserve banking requires the use of demand deposits and the Wisselbank did not lend money around the time of Tulipmania.

    Fyodor

    October 23, 2006 at 9:55 am

  132. Oh no not another black knight impersonation again.

    jc

    October 23, 2006 at 10:27 am

  133. “If I believed that there was only one bank in existence, how would that constitute an argument that Holland didn’t have a banking system? Do you see the contradiction there, JC? My argument is not that there weren’t banks in the Netherlands, but that they did not practise fractional reserve. The onus is on Jackson to prove that I made any such assumption. I did not.”
    You mentioned in the early thread how “ancient and antique” the banking system was in those days. You have only ever mentioned the Amerstadm bank in all our discussions yet you now acknowledge there was a banking system… ie more than one bank. As I said how convenient of you now when something becomes obvious.
    “My claim is clearly relevant. If Italian banks were not funded by demand deposits they did not practise fractional reserve. It’s as simple as that. Italian banks were funded by debt and equity, i.e. they were merchant banks, so they did not practise fractional reserve.”
    You think your claim is relevant, but you need to prove to us that the Italian banks were not engaging in activities that expanded their balance sheet over their capital and debt. Prove please, with sources.
    It’s not a matter of opinion whether my claim is relevant or not. Whether Italian banks practised fractional reserve banking or not is THE point of the argument. I don’t have to prove that Italian banks did NOT practise fractional reserve banking, just like I don’t have to prove the non-existence of unicorns. As it’s JACKSON’S assertion that they did, the burden of proof is on HIM to prove they did. English banks practised fractional reserve in the late 17th century – that’s the earliest example known. If you disagree, PROVE IT.”

    Jackon has provided numerous citations and references ton your puny number. I think it rests on you to prove this. Blustering won’t make it go away. Prove it!

    “No. That’s irrelevant to the argument. A bankers bill is not accepted as money. Bank notes issued by fractional reserve banks ARE. That’s the difference.”
    This your reply to the above:
    “The banker’s bill is not the equivalent of a cheque, they were bank to bank financial instruments, not circulating money substitutes. They were not the creation of a fractional reserve system, and thus irrelevant to the issue at hand.”
    Are you saying there were no other financial instruments the banks used that were “promises to pay”. Yes or no?”

    I’ll ask the questiona gain.Yes or No.
    “Are you suggesting scriveners, i.e. professional scribes and notaries, developed fractional reserve banking? Would you mind terribly providing a quote stating that from Thomas’ book?”
    I think Jackson has provided about 12 odd references and citations to your one link. I think you should prove this otherwise if untrue with citations and sources of your own.
    He hasn’t provided a single shred of evidence that scriveners practised fractional reserve banking. References to books that may or may not substantiate his point don’t count – that’s why I asked for a quote that’s falsifiable.”
    If this is unture tell why with sources and verifiable proof. Don’t bluster.

    “But I didn’t argue that Jackson said the government expanded the money supply. I said he asserted that “The increase in money circulating in the Netherlands was a result of…credit expansion”.
    And you disagree? You think there was no monetary and credit expansion?

    “No, YOURS is a strange question, because it has no bearing on mine. Jackson asserted that banking deposits were 3.5m guilders. Then, when challenged as to whether these were deposits held in the Bank of Amsterdam, he replied they were held elsewhere. As before, the onus is on Jackson to substantiate his assertion.”
    Another example of inconsistency. If you think there were other bankers why is it such a problem ? What it really means is that in fact you didn’t think here were other bankers or a banking system other than the Bank of Amsertdam.

    “It’s obvious that I never argued that “Jackson said fractional was a fraud or even alluded to it”.
    If so what is your argument then? That he didn’t offer enough citations and references. You offered only one last time. Jackon about 12 or so. Who kidding who. Now it sounds as though you really don’t know what you are arguing about.

    “The monetary history of the era is described in Quinn and Roberds. There was no “monetary implosion”, or severe monetary disruption surrounding either the government decree or the collapse of Tulipmania. As for Jackson’s assertion, it’s up to him to demonstrate that the government issued the decree he claims – I see no evidence of it.”

    He did, but it was too convenient for you not not see it.

    “Jackson compares the trading volume of tulips in guilders with bank deposits and concludes that only credit could finance such activity. He makes no mention of extensive trading in futures, which would permit such large volumes via leverage. It’s a reasonable assumption to make that he ignored this point, as he made no mention of it. Perhaps you could point out where he mentioned this very important part of tulip trading”
    Why would Gerry disagree that futures marketa were involved. Show us where he says this?

    “Nah, JC, what’s funny is that Jackson has failed to make his case twice now, and you think YOUR desperate nitpicking over my sources (several links, if you don’t mind) is going to progress his bankrupt argument. Think again.”

    No need to. You just proved that you have no information to prove otherwise. If you did you would have come with far more citations and references than one second sourced link. Pathetic.

    The facts are:
    1.You have NO PROOF that Italian banks invented fractional reserve banking;
    Where did Jackson say they did. Your lying again. Show us where ackson said this.

    2. You have NO PROOF that fractional reserve banking caused Tulipmania; and
    Where did Jackon say the tulip mania was caused by fractional. Point us to the direct quote.

    3. You have NO PROOF that fractional reserve banking causes asset bubbles.
    Yea. Right. Now we’re back to where you started aren’t you.. It’s too complex, right?

    “And, BTW, fractional reserve banking requires the use of demand deposits and the Wisselbank did not lend money around the time of Tulipmania.”
    Or it requires proof like this.
    “Now all that any lending institution needed to do to expand credit was to issue
    bills of exchange in excess of deposits. And this is what the Italian banks did.
    These bills were the equivalent of post-dated cheques. (A Dictionary of
    Economics, Penguin Books, 1977). That they were money substitutes is
    confirmed by the fact forged bills became a serious problem. (Fernando Braudel,
    The Structure of Everyday Life: Civilisation & Capitalism 15th-18th Century,
    Vol. I, Phoenix Press, 1988).”
    Proof enough for you? If you disagree please provide references, pages nos. and links.

    jc

    October 23, 2006 at 2:25 pm

  134. “If I believed that there was only one bank in existence, how would that constitute an argument that Holland didn’t have a banking system? Do you see the contradiction there, JC? My argument is not that there weren’t banks in the Netherlands, but that they did not practise fractional reserve. The onus is on Jackson to prove that I made any such assumption. I did not.”

    You mentioned in the early thread how “ancient and antique” the banking system was in those days. You have only ever mentioned the Amerstadm bank in all our discussions yet you now acknowledge there was a banking system… ie more than one bank. As I said how convenient of you now when something becomes obvious.

    Admitting you were wrong would’ve been simpler, JC. I never said there were no banks, or only one bank.

    “My claim is clearly relevant. If Italian banks were not funded by demand deposits they did not practise fractional reserve. It’s as simple as that. Italian banks were funded by debt and equity, i.e. they were merchant banks, so they did not practise fractional reserve.”

    You think your claim is relevant, but you need to prove to us that the Italian banks were not engaging in activities that expanded their balance sheet over their capital and debt. Prove please, with sources.

    “It’s not a matter of opinion whether my claim is relevant or not. Whether Italian banks practised fractional reserve banking or not is THE point of the argument. I don’t have to prove that Italian banks did NOT practise fractional reserve banking, just like I don’t have to prove the non-existence of unicorns. As it’s JACKSON’S assertion that they did, the burden of proof is on HIM to prove they did. English banks practised fractional reserve in the late 17th century – that’s the earliest example known. If you disagree, PROVE IT.”

    Jackon has provided numerous citations and references ton your puny number. I think it rests on you to prove this. Blustering won’t make it go away. Prove it!

    Jackson has not provided a single link or quote supporting his assertion. I challenged him to do it, and he failed. And, no, attributing his own views to other authors does NOT count.

    “No. That’s irrelevant to the argument. A bankers bill is not accepted as money. Bank notes issued by fractional reserve banks ARE. That’s the difference.”

    This your reply to the above:
    “The banker’s bill is not the equivalent of a cheque, they were bank to bank financial instruments, not circulating money substitutes. They were not the creation of a fractional reserve system, and thus irrelevant to the issue at hand.”

    Are you saying there were no other financial instruments the banks used that were “promises to pay”. Yes or no?”

    I’ll ask the questiona gain.Yes or No.

    What part of “no” didn’t you understand? Several bank instruments were developed before bank notes. That doesn’t mean they were the equivalent of bank notes.

    “Are you suggesting scriveners, i.e. professional scribes and notaries, developed fractional reserve banking? Would you mind terribly providing a quote stating that from Thomas’ book?”

    I think Jackson has provided about 12 odd references and citations to your one link. I think you should prove this otherwise if untrue with citations and sources of your own.

    “He hasn’t provided a single shred of evidence that scriveners practised fractional reserve banking. References to books that may or may not substantiate his point don’t count – that’s why I asked for a quote that’s falsifiable.”

    If this is unture tell why with sources and verifiable proof. Don’t bluster.

    It’s not bluster. Jackson hasn’t substantiated HIS assertion. That’s a fact. Ask HIM to prove his assertion.

    “But I didn’t argue that Jackson said the government expanded the money supply. I said he asserted that “The increase in money circulating in the Netherlands was a result of…credit expansion”.

    And you disagree? You think there was no monetary and credit expansion?

    I disagree with Jackson’s assertion that the increase in money circulating in the Netherlands was a result of credit expansion.

    “No, YOURS is a strange question, because it has no bearing on mine. Jackson asserted that banking deposits were 3.5m guilders. Then, when challenged as to whether these were deposits held in the Bank of Amsterdam, he replied they were held elsewhere. As before, the onus is on Jackson to substantiate his assertion.”

    Another example of inconsistency. If you think there were other bankers why is it such a problem ? What it really means is that in fact you didn’t think here were other bankers or a banking system other than the Bank of Amsertdam.

    There’s no inconsistency. The issue of WHERE the deposits were held is a “problem” because IF they were held in the Bank of Amsterdam, they could not have been lent out. Thus Jackson’s argument that credit expansion (and, implicitly fractional reserve expansion), backed by these deposits, fuelled tulip speculation would be bogus. THAT is why it’s a problem, JC.

    “It’s obvious that I never argued that “Jackson said fractional was a fraud or even alluded to it”.

    If so what is your argument then? That he didn’t offer enough citations and references. You offered only one last time. Jackon about 12 or so. Who kidding who. Now it sounds as though you really don’t know what you are arguing about.

    No, JC, what is now painfully obvious is that you are not following the argument. Jackson asserted in comment #110 that de Soto said the Amsterdam bank “was founded after a period of great monetary chaos and fraudulent (fractional
    reserve) private banking.”

    My question to Jackson was whether he [i.e. Jackson – still following?] had inserted the phrase “fractional reserve” after the word “fraudulent”. If he had, the quote is worthless as evidence supporting the supposed existence of fractional reserve in the Netherlands at the time of Tulipmania.

    “The monetary history of the era is described in Quinn and Roberds. There was no “monetary implosion”, or severe monetary disruption surrounding either the government decree or the collapse of Tulipmania. As for Jackson’s assertion, it’s up to him to demonstrate that the government issued the decree he claims – I see no evidence of it.”

    He did, but it was too convenient for you not not see it.

    He provided no evidence of “monetary implosion”. None whatsoever. Show me where he did if you disagree.

    “Jackson compares the trading volume of tulips in guilders with bank deposits and concludes that only credit could finance such activity. He makes no mention of extensive trading in futures, which would permit such large volumes via leverage. It’s a reasonable assumption to make that he ignored this point, as he made no mention of it. Perhaps you could point out where he mentioned this very important part of tulip trading”

    Why would Gerry disagree that futures marketa were involved. Show us where he says this?

    Yes, JC, why would he disagree? Why would he assume that only bank lending was the source of leverage? That’s the point: he talks about tulip trading relative to bank deposits without ONCE mentioning the fact that futures trading permitted significant leverage. Given there’s no mention of futures trading in his analysis, we can only assume he ignored it. As I suggested before, if you think he didn’t ignore it, show me where he considered it.

    “Nah, JC, what’s funny is that Jackson has failed to make his case twice now, and you think YOUR desperate nitpicking over my sources (several links, if you don’t mind) is going to progress his bankrupt argument. Think again.”

    No need to. You just proved that you have no information to prove otherwise. If you did you would have come with far more citations and references than one second sourced link. Pathetic.

    In comment #20 I provided two links that destroyed Jackson’s entire case. That’s all that was necessary. You’ve provided NOT ONE SINGLE PIECE OF EVIDENCE supporting Jackson’s assertions, and you think you can lecture me on sources? Pathetic.

    The facts are:
    ”1.You have NO PROOF that Italian banks invented fractional reserve banking;”

    Where did Jackson say they did. Your lying again. Show us where ackson said this.

    In his badly-researched unsubstantiated waffle, Jackson says:

    “Let us begin with Florence where in the late twelfth century a banking system began to develop. At first these banks adhered to a 100 per cent reserve. But human nature being what it is, they started to create phony credit by dropping their reserves.”

    It’s very clear he’s arguing – incorrectly – that Italian banks practised fractional reserve banking in the Renaissance.

    “2. You have NO PROOF that fractional reserve banking caused Tulipmania; and”

    Where did Jackon say the tulip mania was caused by fractional. Point us to the direct quote.

    In his dog’s breakfast of an attempt at argument, Jackson says:

    “It ought to be clear that it was credit expansion that fuelled the mania. Without this expansion there was absolutely no way that speculation in the tulip trade could have reached such ridiculous heights. This view is confirmed by the fact that when the Dutch government decreed in 1637 that tulip bulbs were not investments but products and so had to be bought for cash bank loans collapsed and the mania imploded.

    I have had some rather abusive Keynesians tell me that this is rubbish because “seventeenth century banking was too primitive for a fractional reserve system to emerge”. “

    Again, it is clear Jackson is arguing that the practice of fractional reserve banking in 17th C Netherlands caused Tulipmania.

    ”3. You have NO PROOF that fractional reserve banking causes asset bubbles.”

    Yea. Right. Now we’re back to where you started aren’t you.. It’s too complex, right?

    Who said what’s too complex, JC?

    “And, BTW, fractional reserve banking requires the use of demand deposits and the Wisselbank did not lend money around the time of Tulipmania.”

    Or it requires proof like this.

    “Now all that any lending institution needed to do to expand credit was to issue bills of exchange in excess of deposits. And this is what the Italian banks did. These bills were the equivalent of post-dated cheques. (A Dictionary of Economics, Penguin Books, 1977). That they were money substitutes is confirmed by the fact forged bills became a serious problem. (Fernando Braudel, The Structure of Everyday Life: Civilisation & Capitalism 15th-18th Century,
    Vol. I, Phoenix Press, 1988).”

    Proof enough for you? If you disagree please provide references, pages nos. and links.

    Not nearly proof of any kind. Issuing a bill of exchange is not fractional reserve banking, because those bills are not treated as money in circulation – they are bank to bank transfers, not bank notes circulating as money. The fact that forged bills was a problem says nothing about their substitutability as money. Jackson’s “evidence” is worthless.

    Finally, you’ve made absolutely no progress with the latest post.

    You should have quit after the Black Knight remark – failure is less embarassing if you pretend you’re not trying. But I’m willing to humour you as long as you want: the last attempt was a pitiful recycling of the previous garbage arguments, but feel free to surprise me with something original if you can manage it.

    Fyodor

    October 23, 2006 at 4:32 pm

  135. “In comment #20 I provided two links that destroyed Jackson’s entire case.”

    you’re doing the monty python black knight routine again. I get back to you later.

    jc

    October 23, 2006 at 4:50 pm

  136. Take your time. If the last effort was any guide you’re going to need to do a lot of homework. I’ll give you extra points if you come up with something original – evidence would be good, too.

    Fyodor

    October 23, 2006 at 4:55 pm

  137. Fearless

    before you were picked up on it, you have provided one lousy link to this whole discussion. Jackson has provided about 15. I reckon you ought to look in the mirror more often.

    jc

    October 23, 2006 at 4:58 pm

  138. I reckon you’d better finish your homework, Mary.

    Fyodor

    October 23, 2006 at 5:15 pm

  139. Getting sick of this compulsive liar yet JC?
    Beginning to understand what I’ve had to put up all this time? And if people don’t read both of us with immense care there is just no way to tell that he is lying all the time.

    BUT HE IS IN FACT LYING ALL THE TIME.

    FYODOR SEZ:

    “My argument is not that there weren’t banks in the Netherlands, but that they did not practise fractional reserve.”

    Well Fyodor is WRONG and is being an idiot like the last time we went over it.

    1. The Amsterdam bank was set up FOR THE EXPRESS PURPOSE OF BEIING A BANK THAT COULD BE TRUSTED NOT TO PRACTICE FRATIONAL RESERVE.

    (a) I pointed this out to Fyodor last time we went over this.
    (b) Gerrard too has pointed this out to Fyodor.

    2. A run on the banks in the 1670’s (but prior to the British goldsmiths setting up there system) had a couple of Dutch banks suspending speicie.

    (a) I pointed this out to Fyodor last time we went over this.
    (b) Gerrard has pointed this out to Fyodor as well.

    3. So we have absolutely convincing evidence that Dutch banks EXCEPT FOR THE AMSTERDAM BANK practised fractional reserve both before and after the Tulip incident.

    4. Gerard has come up with further evidence that some banks (not the Amsterdam banks) were almost definitely involved in fractional reserve. This is pretty convincing.

    5. However what we know is that the minting of gold coins just before tulipmania EXPLODED in South Holland.

    6. Fyodor was aware of that since I told him last time round. He didn’t put this forward up front. But instead held it over and attacked Gerrard on all grounds knowing he had this fact in his back pocket.

    (What a fucking PRICK hey?)

    7. But the fact that this proves that the Tulipmania was a MONETARY PHENOMENON backs up Gerrards wider thesis and not Fyodors.

    8. Knowing that other banks in Holland practised fractional reserve both before and after Tulipmania, and taking into account Gerrards further evidence that they practised fractional reserve DURING Tulipmania you would have to have rocks in your head to think that this was not an ADDITIONAL factor in this story.

    9. We see here that people are lunatics when it comes to monetary economics. Here was Fyodor. With this rarely known coinage data up his sleeve. And that was all he needed to distract people from the very obvious fact that it was the INSTITUTIONALISATION of fractional reserve that created our boom/bust business cycles that have plagued us from the early 1700’s on.

    10. Since people are idiots and totally emotional when it comes to monetary economics it IS in fact better to put the Tulipmania to one side as a special case. Since there are one or two things about it that prove to be a distraction when the swarming idiots smell an opportunity to confuse things.

    11. There is NOTHING wrong with Gerrards reasoning. It is sensational as usual. Supposing further information came out showing that the fractional reserve credit creation of the other Dutch banks was only a small part of the deal……. There would STILL be nothing wrong with Gerrards reasoning and it STILL would have been as sensational as usual.

    12. We have the information that this extraordinary new rate of coinage continued after the Tulipmania came to an end. And if there was a destruction of money due to fractional reserve imploding this could QUITE WELL have been compensated for by the continuing high rate of coinage.

    13. Ergo it could be one of the very few serious bubbles/booms in history not followed by a massive recession/depression…. but I don’t know that one way or the other.

    14. This is the alpha and the omega of this business of Fyodors continuing shabby behaviour.

    15. If Fyodor doesn’t want to agree that I am right and he is being a complete fucking idiot and make ALL DUE RETRACTIONS AND APOLOGIES TO JACKSON he ought to be sent on his way to wreck threads elsewhere.

    GMB

    October 23, 2006 at 5:49 pm

  140. Point 4 should read…

    4. Gerard has come up with further evidence that some banks (not the Amsterdam banks) were almost definitely involved in fractional reserve DURING THE TULIP INCIDENT. This is pretty convincing.

    This is important because it means we have evidence of Dutch banks practising fractional reserve banking before, after and DURING the Tulipmania incident.

    GMB

    October 23, 2006 at 5:52 pm

  141. Quick question – why does tulipmania have to have been a monetary phenomenon? That would only be the case if there was a rise in the general price level, not where there is a speculative increase in the price of one asset or a class of assets. Do we know if the general price level in the Netherlands increased during this period or not?
    If the prices of other goods and and services in the Netherlands were dropping during this period it could well have been that there was a simple transfer of spending power to tulip bulbs, rather than a broad price level increase.

    Andrew Reynolds

    October 23, 2006 at 6:30 pm

  142. You might want to have a look at this as well.

    Andrew Reynolds

    October 23, 2006 at 6:36 pm

  143. “Quick question – why does tulipmania have to have been a monetary phenomenon? That would only be the case if there was a rise in the general price level, not where there is a speculative increase in the price of one asset or a class of assets.”

    Not true at all. An increase in the money supply will cause an increase in the volume of spending……

    BUT IT DOES NOT TELL YOU WHAT THE SPENDING WAS ON.

    This incident is unique because it was driven by the FACT OF THE AMSTERDAM BANK which was the only bank in the world that people trusted to keep 100% backing and as well had taken BANKING ITSELF (independent of the fractional reserve issue) to a new level.

    Combined with this was the Dutch coining policy…. which made it near costless to turn gold and silver of all sorts into standardized coins on the cheap.

    So all this money is just running into the country from all sources.

    Now as I said:

    An increase in the money supply will cause an increase in the volume of spending……

    BUT IT DOES NOT TELL YOU WHAT THE SPENDING WAS ON.

    If it is spent on tulip-bulbs its not spent on LOCALLY PRODUCED CONSUMER GOODS.

    If its spent on foreign investments its not spent on locally produced consumer goods.

    If its spent on imports its not spent on locally produced consumer goods.

    Its the fact that this was real gold coming into the country that makes it less surprising if it turns out that there wasn’t a great deal of consumer price inflation.

    If you are spending on speculative goods you aren’t bidding consumer prices up.

    “Quick question – why does tulipmania have to have been a monetary phenomenon? That would only be the case if there was a rise in the general price level, not where there is a speculative increase in the price of one asset or a class of assets.”

    Not true. In fact almost the opposite of the truth. But do you have some information on consumer prices?

    Since this would give us a better picture.

    Gerrard Jacksons earlier article on the balance of payments and monetary matters will flesh out some of what I’ve been saying here.

    GMB

    October 23, 2006 at 7:15 pm

  144. Andrew
    Very good question. In fact it was a question I left Fyador to ponder in the vvery first thread of Doom.

    GB

    thanks. It was very illuminating and you answered most of my isues.

    What he is in fact trying to do is steer the discussion away from fessin up to the fact that there are Monetary and credit expansions. He doesn’t want to own up to it because his enitire world would come crashing down on him. He really is a parthetic lying creep.

    Great great point you concluded. if the bank of Amsterdam was set up not to lend money, why was it set up like that in the first place?

    jc

    October 23, 2006 at 8:50 pm

  145. GMB,
    No I do not have information on prices – it was a genuine question.
    As far as I can see it was nota monetary phenomenon, but a question isolated to one commodity – tulips. If there is evidence of a general price rise (which I do not have one way or the other) then I would agree that it was inflation, but otherwise it was just one commodity – indicating it was not a monetary problem, but a normal question of market operations.

    Andrew Reynolds

    October 23, 2006 at 9:01 pm

  146. Yeah it WAS a monetary phenomenon.

    And we have some but not all of the monetary information.

    We have enough to assume a massive localised expansion.

    Of course that would disperse throughout the continent very quickly so we don’t have the whole picture.

    Are you saying that consumer prices didn’t go up much or not?

    “Great great point you concluded. if the bank of Amsterdam was set up not to lend money, why was it set up like that in the first place?”

    Yeah.

    Well I made the point last time round. And Gerrard made the same point in his reply you posted.

    And he discovered the exact same thing I did as well about the run on the banks in the early 1670’s.

    All that stuff about the 100% bank and the incredible rush of Gold into the country….. and the incredible way it was converted into coins as if to serve the entire world…..

    Well all this stuff takes you by surprise.. And so you have to look at it again.

    So the last time I admitted to Fyodor (by sheer odds as it turned out. If you lie all the time and know nothing you are actually bound to be half-right quite a bit).

    So anyhow I admitted the small points on which I’d been wrong and the other points on which he’d co-incidentally been right…

    And then I went and sorted what actually happened.

    The only thing I didn’t find were some of the markers that Gerrard found implying that there was at least SOME local credit creation going on.

    I didn’t find that.

    Earlier I’d simply assumed that because thats how it had been in the other bubbles that we’d had information on.

    So if you aren’t a liar like Fyodor and you are actually interested in the truth of it… and if there is a few of you in the end you can get a pretty good picture of these things.

    There was much convergence between what Gerrard found and what I found.

    But look what happens when you have these dumb leftists around.

    Nothing new is found out. You just get bogged down in SHIITE.

    GMB

    October 23, 2006 at 9:26 pm

  147. Andrew
    How do ou correctly arrive at the question to ask and then back away from it?
    How do you ask what happened to the general price level, then when you don’t know the answer say it was an isolated incident?
    Fm. are you serious?

    jc

    October 23, 2006 at 9:35 pm

  148. 139. GMB | October 23rd, 2006 at 5:49 pm
    Getting sick of this compulsive liar yet JC?

    Beginning to understand what I’ve had to put up all this time? And if people don’t read both of us with immense care there is just no way to tell that he is lying all the time.

    BUT HE IS IN FACT LYING ALL THE TIME.
    FYODOR SEZ:

    “My argument is not that there weren’t banks in the Netherlands, but that they did not practise fractional reserve.”

    Well Fyodor is WRONG and is being an idiot like the last time we went over it.

    1. The Amsterdam bank was set up FOR THE EXPRESS PURPOSE OF BEIING A BANK THAT COULD BE TRUSTED NOT TO PRACTICE FRATIONAL RESERVE.
    (a) I pointed this out to Fyodor last time we went over this.
    (b) Gerrard too has pointed this out to Fyodor.

    No, Birdy, you’re lying. You’d never heard of the Bank of Amsterdam before I mentioned it. As discussed in Quinn and Roberds, which you seem incapable of reading, despite the fact that I keep shoving it in your moronic face:

    “Another regulatory approach was the creation of an exchange bank or Wisselbank. Exchange banks were intended to address the debasement problem by effectively
    limiting deposits to coins above a certain quality. When debt was settled within the exchange bank, lenders were protected from repayment in debased coin. To generate participation, municipalities, starting with Amsterdam in 1609, required that commercial debts embodied in bills of exchange had to be settled through the city’s exchange bank. Because bills of exchange were the dominant vehicle for iinternational trade credit, merchants were compelled to open an account with the exchange bank. This paper argues that the creation of this exchange bank, known as the Bank of Amsterdam or Amsterdamsche Wisselbank, was effective at reducing debasement.”

    The Wisselbank was set up as an exchange bank. It did not lend money, so the whole issue of fractional reserve banking is meaningless in its context.

    2. A run on the banks in the 1670’s (but prior to the British goldsmiths setting up there system) had a couple of Dutch banks suspending speicie.
    (a) I pointed this out to Fyodor last time we went over this.
    (b) Gerrard has pointed this out to Fyodor as well.

    You pointed out no such thing “last time”, as you were never aware of it. The “run on the banks” you and Jackson refer to involved the Banks of Middelburg and Rotterdam. However, both of you fail to note that both banks were ALSO exchange banks that DID NOT LEND MONEY:

    “The initial structure of the Amsterdam Exchange Bank provided some protection to creditors who held bills payable through the Wisselbank; however, its reach was limited. Other cities (Middelburg 1614, and Delft 1621 subsequently moved to Rotterdam in 1635) eventually opened exchange banks also”

    Neither bank practiced fractional reserve banking. They were exchange or “giro” banks.

    3. So we have absolutely convincing evidence that Dutch banks EXCEPT FOR THE AMSTERDAM BANK practised fractional reserve both before and after the Tulip incident.

    We have nothing of the sort. You’re comprehensively wrong.

    4. Gerard has come up with further evidence that some banks (not the Amsterdam banks) were almost definitely involved in fractional reserve DURING THE TULIP INCIDENT. This is pretty convincing.

    This is important because it means we have evidence of Dutch banks practising fractional reserve banking before, after and DURING the Tulipmania incident.

    No, he hasn’t, as I’ve explained. None of the banks he mentioned practised fractional reserve at the time of Tulipmania.

    5. However what we know is that the minting of gold coins just before tulipmania EXPLODED in South Holland.

    No, it didn’t. Again, Quinn and Roberds show (Figure 13 and Table 1) that in the 10 years around the peak of Tulipmania (1637), coin production, inflation (CPI) and the florin’s exchange rate were all relatively stable. Alternatively, if you don’t like that source’s meticulous research and objectivity check out Van Zanden’s indices for prices and wages for the Netherlands from 1450-1800. It’s the same result – minimal inflation around the time of Tulipmania.

    6. Fyodor was aware of that since I told him last time round. He didn’t put this forward up front. But instead held it over and attacked Gerrard on all grounds knowing he had this fact in his back pocket.

    No, I wasn’t aware of it because: a) you didn’t tell me; and b) it’s a lie anyway.

    (What a fucking PRICK hey?)

    You betcha.

    7. But the fact that this proves that the Tulipmania was a MONETARY PHENOMENON backs up Gerrards wider thesis and not Fyodors.

    Or, to put it another way, the mere fact that the truth is on my side proves I’m right and Jackson’s wrong. It’s a funny thing, objectivity.

    8. Knowing that other banks in Holland practised fractional reserve both before and after Tulipmania, and taking into account Gerrards further evidence that they practised fractional reserve DURING Tulipmania you would have to have rocks in your head to think that this was not an ADDITIONAL factor in this story.

    Except that they didn’t practise fractional reserve, so that point is also void. Pity – it really looks like you were working up quite a head of steam there. But, wait! There’s more!

    9. We see here that people are lunatics when it comes to monetary economics. Here was Fyodor. With this rarely known coinage data up his sleeve. And that was all he needed to distract people from the very obvious fact that it was the INSTITUTIONALISATION of fractional reserve that created our boom/bust business cycles that have plagued us from the early 1700’s on.

    Yes, people are lunatics when it comes to monetary economics. Take you, for instance. Totally oblivious to the facts of the matter, you just stumble along in your little bubble, blissfully ignoring the inconvenient truth.

    10. Since people are idiots and totally emotional when it comes to monetary economics it IS in fact better to put the Tulipmania to one side as a special case. Since there are one or two things about it that prove to be a distraction when the swarming idiots smell an opportunity to confuse things.

    Yes, anomalies are awfully difficult to accommodate within a prejudiced worldview, aren’t they?

    11. There is NOTHING wrong with Gerrards reasoning. It is sensational as usual. Supposing further information came out showing that the fractional reserve credit creation of the other Dutch banks was only a small part of the deal……. There would STILL be nothing wrong with Gerrards reasoning and it STILL would have been as sensational as usual.

    Except that it’s wrong, of course. That’s kind of a biggie when it comes to reasoning, dontchathink?

    12. We have the information that this extraordinary new rate of coinage continued after the Tulipmania came to an end. And if there was a destruction of money due to fractional reserve imploding this could QUITE WELL have been compensated for by the continuing high rate of coinage.

    Nope. Coin production didn’t increase materially until more than a decade after Tulipmania, as shown in Figure 13 of the same bloody report you still refuse to read.

    13. Ergo it could be one of the very few serious bubbles/booms in history not followed by a massive recession/depression…. but I don’t know that one way or the other.

    I do. It wasn’t followed by a massive depression. A lot of asset bubbles aren’t.

    14. This is the alpha and the omega of this business of Fyodors continuing shabby behaviour.

    Shabby behaviour? What do you call your litany of ignorant tripe?

    15. If Fyodor doesn’t want to agree that I am right and he is being a complete fucking idiot and make ALL DUE RETRACTIONS AND APOLOGIES TO JACKSON he ought to be sent on his way to wreck threads elsewhere.

    Ooh, I’m sure you’re fit to explode waiting in suspense, aren’t you? Don’t go holding your breath now, turkey.

    Fyodor

    October 24, 2006 at 11:24 am

  149. jc,
    I asked a genuine question – I did not know. There was nothing to back away from.
    As it happens, the data in one of Fyodor’s links answered my question – there was no significant price inflation around the tulipmania period (see here top of page 30) nor was there unusual issue of coinage, indicating that tulipmania was not a monetary problem, just one confined to a single asset.
    The only way that this could have been related to fractional reserve would be if, in some way, the banks only used fractional reserve to lend for tulips only – possible, but improbable.
    Thanks – my question is now answered, there was no monetary problem around the so-called “tulipmania”.

    Andrew Reynolds

    October 24, 2006 at 12:13 pm

  150. Fyador

    You mind pointing where Jackos ever said the Bank of Amerstam and the giro banks were fractional leders?

    jc

    October 24, 2006 at 12:56 pm

  151. “No, Birdy, you’re lying. You’d never heard of the Bank of Amsterdam before I mentioned it. As discussed in Quinn and Roberds, which you seem incapable of reading, despite the fact that I keep shoving it in your moronic face:
    Totally untrue. Bird fist mentioned the bank of Amerstdam in the very first thread.”
    Despite the fact that it has been shoved in your racist face many times.

    “You pointed out no such thing “last time”, as you were never aware of it. The “run on the banks” you and Jackson refer to involved the Banks of Middelburg and Rotterdam. However, both of you fail to note that both banks were ALSO exchange banks that DID NOT LEND MONEY”
    Notice what this lying racist does here. He says that because you failed to mention it you didn’t know about it. Leaping from an assumtion to create a lie. What a racist creep.

    “No, he hasn’t, as I’ve explained. None of the banks he mentioned practised fractional reserve at the time of Tulipmania.”
    Another distortion to create a lie. Jackson never, ever mentioned they practiced fractional reserve. This lying dishonest racist pantsy is trying to create that impression, otherwise why would he make such a reduandant comment.

    “Alternatively, if you don’t like that source’s meticulous research and objectivity check out Van Zanden’s indices for prices and wages for the Netherlands from 1450-1800. It’s the same result – minimal inflation around the time of Tulipmania.”
    Distorting the truth again. Never looks at asset values to determine if there is asset price inflation, as that doesn’t fit in this racist creeps defintion of inflation.

    “Or, to put it another way, the mere fact that the truth is on my side proves Im right and Jackson’s wrong.”
    Oh no we’ve got the victory lap again. This time he’s wearing a pretty, colored frock.Monty Python’s Black Knight is back claiming victory as his limbs are cut off.

    “Yes, people are lunatics when it comes to monetary economics. Take you, for instance. Totally oblivious to the facts of the matter, you just stumble along in your little bubble, blissfully ignoring the inconvenient truth.”

    Whose inconvenient “truth? Fyador’s.of ocourse.

    “Yes, anomalies are awfully difficult to accommodate within a prejudiced worldview, aren’t they?”
    Shorter Fyador: does that make me sound smart and witty?

    “Nope. Coin production didn’t increase materially until more than a decade after Tulipmania, as shown in Figure 13 of the same bloody report you still refuse to read.”
    Gotta show more links otherwise people are gonna start wondering how I can criticise others who do. That’s two now.

    .” It wasn’t followed by a massive depression. A lot of asset bubbles aren’t”
    Who ever said that Bubbles have to create depressions. Here we go again another distortions from the lying racist creep..

    “Shabby behaviour? What do you call your litany of ignorant tripe?”
    Sure is shabby being a racist and supporting a flagrant racist pig. I don’t what do you call it? Lies and distortions? Everything you write are lies and distortions and ignorant tripe.

    “Ooh, Im sure you’re fit to explode waiting in suspense, aren’t you? Don’t go holding your breath now, turkey.”

    You havn’t apologised to Jack for your racist behaviour and bumbchum “Munny” is Awol, so what is a gal to do?

    jc

    October 24, 2006 at 1:30 pm

  152. “You havn’t apologised to Jack for your racist behaviour and bumbchum “Munny” is Awol, so what is a gal to do?”

    Dunno, Mary. What will you do? Call for an ambulance? Or phone a feathery friend?

    From the above it’s clear you haven’t done your homework like I asked. That last effort was truly woeful.

    Fyodor

    October 24, 2006 at 2:19 pm

  153. I learnt from you. Accept I left out the distortions, lies and the racist stuff. Where’s your buddy Munny to offer… er racist… I meamn moral support.

    I guess you can’t answer the questions that were left for you.

    jc

    October 24, 2006 at 2:32 pm

  154. You only asked me one question, numbnut (“what is a gal to do?”), and I answered it. FMD, you’re in truly moronic form today.

    The rest of that blathering nonsense didn’t contain a single substantive point. You have NOTHING left in the tank, loser.

    Fyodor

    October 24, 2006 at 2:37 pm

  155. Not questions per se pantsy just issues.

    the issues- such as implying what people hadn’t said. You know what i mean. Lets go through them shall we?

    1.Totally untrue. Bird fist mentioned the bank of Amerstdam in the very first thread.

    Yet you’re doing a victory dance.

    2. Notice what this lying racist does here. He says that because you failed to mention it you didn’t know about it. Leaping from an assumtion to create a lie.

    Any comment? Any reason you to create the distortion that failing to meantion this they viewed it opposite?

    3. Another distortion to create a lie. Jackson never, ever mentioned they practiced fractional reserve. This lying dishonest racist pantsy is trying to create that impression, otherwise why would he make such a reduandant comment.

    any comment.Where did jackson ever say, suggest or even infer this?

    4. Distorting the truth again. Never looks at asset values to determine if there is asset price inflation, as that doesn’t fit in this racist creeps scheme to distort.
    What did asset values do during that time.? I know how you just hate talking about asset price inflation.

    5 Strictly speaking you missed this question.
    Shorter Fyador: does that make me sound smart and witty?
    and this one:
    You havn’t apologised to Jack for your racist behaviour and bumbchum “Munny” is Awol, so what is a gal to do?

    I left open issues for you to attend to.

    Loser…? really? that’s what you think of me? And Munmy is what exactly, a winner?

    Nice choice of friends Fyador ( as he decides to attack CL while sucking up to Munny”)

    Moror you call me? I guess I never had the high paying job you do that leves you with hours on hours a day to argue about Middle Age Banking. That’s an executive with time on his hands. Who said banks don’t have lots of fat to cut.

    jc

    October 24, 2006 at 3:02 pm

  156. “there was no significant price inflation around the tulipmania period (see here top of page 30) nor was there unusual issue of coinage, indicating that tulipmania was not a monetary problem, just one confined to a single asset.”

    No you are wrong. I left a pdf with a table of coinage.

    You read people that don’t know squat.

    The price inflation is interesting. And it shows how all that extra gold maintained its purchasing power if thats true. But how can one trust a link that gets the coinage question wrong.

    GMB

    October 24, 2006 at 3:27 pm

  157. What the hell does this have to do with my good self?

    C.L.

    October 24, 2006 at 3:29 pm

  158. I’m surprised that you’re reading this thread in such detail, Hard Currency Lad.

    JC – don’t drag innocent parties into your neverending feud with Fyodor.,

    Jason Soon

    October 24, 2006 at 3:31 pm

  159. “What the hell does this have to do with my good self?”

    Haven’t the foggiest, CL. I think JC is a bit worn out and in need of a good cry. It seems he wants me to stop taking the piss out of him and focus on you instead. How DO you feel about fractional reserve – are you orthodox?

    Fyodor

    October 24, 2006 at 3:34 pm

  160. “No, Birdy, you’re lying. You’d never heard of the Bank of Amsterdam before I mentioned it.”

    That would be Fyodor lying. I just didn’t know it was 100% backed. I believe I was the first one to mention the Bank of Amsterdam.

    GMB

    October 24, 2006 at 3:34 pm

  161. “You pointed out no such thing “last time”, as you were never aware of it. The “run on the banks” you and Jackson refer to involved the Banks of Middelburg and Rotterdam. However, both of you fail to note that both banks were ALSO exchange banks that DID NOT LEND MONEY””

    What an idiot. Here is proved 100% wrong. And he just keeps going.

    Jason. Do something about this idiot. Isn’t it just like fucking leftists. NEVER admit when they are wrong.

    Third parties. Gerrard mentioned already that not only was there a run on these banks… But that they ended up suspending specie payments. Which is PROOF POSITIVE of them practising fractional reserve.

    There are few things in this world that can be proved with such assurance>>>>>>>>>

    >>>>>>>>>>>>>>>

    OK Fyodor you lying asshole. You are going to have to admit you are wrong and or lying this time.

    GMB

    October 24, 2006 at 3:39 pm

  162. Admit you are lying about the Dutch banks Fyodor you complete fuckwit.

    GMB

    October 24, 2006 at 3:40 pm

  163. Time to own up Fyodor you idiot.

    I told you about that run months ago. Gerrard told you about it. And you still lie and won’t own up to being wrong about them not practising fractional reserve.

    On what grounds are you claiming that when the evidence for their fraudulent practice of fractional reserve is manifest.

    You cannot get better evidence then a run on the banks and they refuse to pay up.

    Thats the ultimate test.

    Thats the proof.

    GMB

    October 24, 2006 at 3:43 pm

  164. Fyodor must retract.

    He has been shown up for the liar and or idiot he is.

    GMB

    October 24, 2006 at 3:45 pm

  165. GB
    Let me understand this. There was a run on the banks and they couldn’t meet obligations and this senior executive banker tells you they weren’t fractioned. Is that right. Am I reaading this clearly?

    What a racist, lying loser of a creep.

    jc

    October 24, 2006 at 4:17 pm

  166. GMB,
    Could you please re-leave the URL to the pdf for “I left a pdf with a table of coinage”? The thread is too long and I cannot find it.

    Andrew Reynolds

    October 24, 2006 at 4:26 pm

  167. Fyodor,
    One thing in the piece you linked to by Quinn and Roberds interested me. At page 20 in the para headed “V. The Wisselbank” the following passage appears: “[e]xchange banks (government-owned deposit banks) had developed in the Mediterranean as a substitute for private, fractional reserve banks (Usher 1943).” I cannot find a copy of Usher to see if this is correct, but it would indicate that fractional reserve has a longer history than the London goldsmiths, and indeed hurts your case at comment 112 – again, if his interpretation of Usher (1943) is correct. The full reference is: Usher, A.P. 1943 [1967], The Early History of Deposit Banking in Mediterranean Europe (Russell and Russell, New York).

    Andrew Reynolds

    October 24, 2006 at 4:42 pm

  168. Jason
    CL wasn’t brought into the argument in the way you suggest. Cl was mentioned as an example of Fydor’s MO and the reasons why he had a stoush with CL. The lying dickhead of course distorts this through his pathetic quip straight after your comment..

    I think he needs Munnchkins shoulder for extra support now.

    CL.
    It was the stoush that this racist supporting dickhead started with you that was being referenced. You as in you personally were never part of the argument. His stoush with you was simply abbreviated to “CL”. Sorry for the mix up.

    jc

    October 24, 2006 at 4:50 pm

  169. re comment 167
    Gulp…..

    I can’t wait for the distorted reply to this one.

    Let me try to answer for Fyador here Andrew.

    Fyador says.

    “Look I cited page 118 of Portnoy and Complaint’s Mediaeval Wanking and Fractional Reserve. They tear that reference to bits and thoroughly discredit the idea that there was any fractional lending practiced before the CBA was incorporated. Moreover can you please reference where exactly I ever said there wasn’t any fractional prior to the Goldsmith & Co?. Neither did I mention the names of any Goldsmiths when clearly there were three that were 100% reserved. You also have to remember that the Bank of England was set up 100 years later so the reference is clearly on the side of Goldsmith &Co..

    It really looks like you have to take sides. Do you believe me or Bird and Jackson over this? I have provided over 1,000 references to prove that there was no lending below 100% reserve prior to Bulagari and Van Cleef Appel. Setting up in London prior to the war.”

    jc

    October 24, 2006 at 5:03 pm

  170. Was that a good imitation of Fearless?

    jc

    October 24, 2006 at 5:05 pm

  171. “GB
    Let me understand this. There was a run on the banks and they couldn’t meet obligations and this senior executive banker tells you they weren’t fractioned. Is that right. Am I reaading this clearly?
    What a racist, lying loser of a creep.”

    Gerrard left this info in the post you passed on for him I think.

    Lets check it out.

    “Moreover, there was a panic in 1672 that led to massive
    withdrawals from the Dutch banks causing most of them to suspend payments,
    including the Bank of Middelburg, founded in 1616, and the Bank of Rotterdam
    which was founded in 1635. In the words of also Jes?erto Soto the Amsterdam
    bank
    “was founded after a period of great monetary chaos and fraudulent (fractional
    reserve) private banking.”
    It is abundantly clear that Fyador is absolutely wrong about Dutch banking.”

    But I pointed this out to him earlier.

    So here’s Gerrard. He’s showed that fractional reserve happened in Holland both before and after Tulipmania to a degree of certainty that we can seldom get.

    And he’s provided some evidence that it was happening DURING as well. But we have this South Holland coinage (was South Holland part of the Republic of Holland in the 1630’s. Or was it independent/ quasi-independent?)

    So all these extra coins as well as gold more generally flowing into Holland……

    (and I might point out that this is the INDIRECT result of fractional reserve. In that it is fractional reserve that leads to the massive inflow of Gold to the only bank in the world that people are confident is 100% backed…. Ultimately that still means the bubble was caused by fractional reserve.)

    ………….

    So we have sufficient evidence to show that monetary factors caused THIS boom like all others.

    But elsewhere Gerrard points out other evidence that fractitonal reserve was ALSO involved.

    Now at first you think………….. “Well we already have our explanation”

    But in the overall context Gerrards evidence has to be good enough. We can be pretty sure these banks did get carried away into fractional reserve as well. And in fact it beggars belief to think they wouldn’t.

    Superb evidence before, superb evidence for after. Some evidence for during… But really we would have to be born yesterday not to think that these banks wouldn’t be full participants as well with a mania of this scale.

    That would have to be the DEFAULT POSITION until someone came up with evidence to the contrary.

    Fyodor only went after him because he had the coinage deal I gave to him in his back pocket.

    For someone like Fyodor thats all you need to muddy the waters/

    Dude can you lend your support to the idea of getting rid of him.

    I mean Jasons always putting pressure on me to do this or do that or back down here or there.

    Fyodor gets a free pass to lie all the time and never back down when he’s caught.

    GMB

    October 24, 2006 at 5:07 pm

  172. Fyodor.

    You have to make a retraction about Dutch banks not practising fractional reserve.

    And you should apologise to Gerrard for your stupidity and the rest of us for your dishonesty.

    GMB

    October 24, 2006 at 5:13 pm

  173. Its a pdf by Doug French.

    Gerrard listed it in that post he sent through jc.

    When you find it scroll all the way to the bottom and its the last or second to last table.

    Now the thing is that Holland might not have been all one principality. And if there was a difference in jurisdiction that might reconcile your information with what Doug French is saying.

    GMB

    October 24, 2006 at 5:16 pm

  174. I think, GB that our racist little friend has a little “splaining” to do especially with AR comment 167. Ithink he’ll do a comment 169 to dirty the waters. What do you think?

    jc

    October 24, 2006 at 5:27 pm

  175. He does these big comments with too many implied lies for anyone to clean up.

    He knows he’s doing that.

    Help me get rid of him.

    He’d never just focus honestly on the pre-1670’s fractional reserve issue for example.

    I tell you he has different motivations then normal people. He must get his kicks specifically from throwing these other guys off.

    Like in his time he’s thrown off Reynolds, Jason, John, Currency Lad, Liam.

    Andy number of people.

    And its all been by an endless series of implied lies like you’ve seen him try on in this thread.

    If you were looking for it you could go through the first thread.

    And the whole time its just MASSED-IMPLIED-LIES that no-one could possibly undoe.

    And it would take ten times as many words to clean up after him and the thread is wrecked right there.

    Just help me convince Jason to throw him off.

    He must have taken Jason in like 100 times. It was like people were skipping to read Fyodor to save time in finding what I had said with the refutation as well.

    So they were totally mislead as to what I’d said.

    Help me get rid of him.

    This is about the most important subject there is.

    All the rest if really mucking about.

    GMB

    October 24, 2006 at 5:42 pm

  176. jc,
    Perhaps he will go to Usher (1943) and see whether it has been represented correctly or is incorrect. Again, I am not “taking sides” I honestly want the truth.
    I would like to see any evidence of a generalised price breakout, though – the price of one asset going up does not a country-wide inflationary spell make. If you have some evidence of this, please let me know.
    The other thing I would say is that, according to the reference posted earlier, it may not have been a “mania” at all, but a rational response to regulatory change. I would encourage you to read the link in my comment 142 – it is interesting.

    Andrew Reynolds

    October 24, 2006 at 5:49 pm

  177. GB This is the para Reynolds is referring to.

    If debasement, as described in the previous sections, was the monetary problem
    plaguing the Dutch Republic, then a solution was to end the incentives to debase.
    The most direct mechanism was to correctly value debased coins when those
    coins were used to discharge a debt. The Amsterdam city council partially
    achieved this goal when it created an exchange bank in 1609. Exchange banks
    (government-owned deposit banks) had developed in the Mediterranean as a substitute
    for private, fractional reserve banks (Usher 1943). In response to banking
    instability, cities like Venice created municipal exchange banks that did not lend
    reserves, so the system of payments based on bills of exchange had a stable monetary
    base (Mueller 1997). A public bank arose in Genoa as an adjunct to an institution
    that managed the public debt (Fratianni and Spinelli 2005). The Bank of
    Amsterdam was modeled on the Venetian institution, but the primary focus was
    on stabilizing the coinage rather than the banking system.30
    For Amsterdam, the key aspect of the exchange bank was that any deposit of illegal
    coins would be valued by the bank based solely on their metal content (intrinsic
    value). Withdrawals, in contrast, would be paid in certain types of coin, called
    trade coin or negotiepenningen), of a consistent weight and value. In this way,
    debts payable through the exchange bank would be protected from debasement
    because any deposit of debased coin would have its value at the Wisselbank proportionally
    reduced.

    You won the argument and you and Gerry deserve an apology. I think that Jason also needs to retract declaring Fyador the winner in the past thread . Meanwhile the racist has wasted all our fucking time working around his lies, distortions anjd impediments. He should never fucking return to this site aian and join his vapid bumbuddy, Nabs in limbo.

    This prick wasted so much of our time. I understand why you are so angry with him now.

    jc

    October 24, 2006 at 5:50 pm

  178. No its a monetary thing alright.

    No doubt about that.

    But ALL bubbles involve items that are constrained in their supply to some extent.

    GMB

    October 24, 2006 at 5:51 pm

  179. stop insulting my intelligence, Birdy. I haven’t been taken in by anyone.

    Jason Soon

    October 24, 2006 at 5:51 pm

  180. Thanks Andrew

    Gerry Jasckosn could very well have that book as he own lots of out of print editions about this stuff. Maybe you can email him. He’s an awfully nice person and would help you with the info.

    jc

    October 24, 2006 at 5:52 pm

  181. “stop insulting my intelligence, Birdy. I haven’t been taken in by anyone.”

    No no.

    You’ve been taken in by Fyodor MANY TIMES.

    As your comments on the other threads prove.

    GMB

    October 24, 2006 at 5:55 pm

  182. Jase
    Birdy does have point about Fyador though. Fyador has done his best to lie and distort on three threads on this subject. Meanwhile birdy, to his credit has been a tireless worker in defence of his beliefs and for the truth to come out. He has tried to wreck these threads and has admitted such over at troppo. I think Brid deserves a round of appluase for the effort he has put in, because without him the truth would never have come out and Fyadors distortions would have remained. I take my hat off to him for the effort. thanks Birdy.

    jc

    October 24, 2006 at 6:29 pm

  183. jc,
    The reason I would like to see the Usher book is simple – I am not convinced the problem that they were seeking to correct was fractional reserve – it may have been currency debasement – in this instance coin clipping. The exchange banks would have been a logical response to this, whereas a logical response to any perceived problems with fractional reserve would have been to implement required reserve ratios – even if at the Rothbardian 100%.
    I am also yet to be convinced that tulipmania actually happened – i.e. that it was a “mania” rather than a logical response to regulatory change.
    .
    BTW, GMB – is there a reason you have a picture of Chairman Mao as your Gravatar?

    Andrew Reynolds

    October 24, 2006 at 6:29 pm

  184. That was a plan I had with Anna when I was being banned by the commie-witch-hunters over at Prodeo.

    I reasoned that if I made my Gravatar Chairman Mao, a mass-murderer the leftists would likely let more of my stuff through…. Leftists being absolutely gooey about mass-murderers like those sheilas writing love-letters to Ted Bundy.

    And it seemed to work quite well actually.

    GMB

    October 24, 2006 at 6:33 pm

  185. It doesn’t MATTER that you are convinced or unconvinced.

    Jeepers. Why aren’t you convinced.

    Did not Gerry mention that volume of money SPENT on these things?

    No-one in his right mind ought to be interested in your random-belief-status on matters like this.

    What is your REASONING.

    You’ve seen the evidence for monetary expansion (coincidentally I suppose you would have it) that triggered it.

    What is your REASONING on this matter as opposed to your irrational belief.

    GMB

    October 24, 2006 at 6:36 pm

  186. jc,
    I think Jackson does have a copy of it – it is the one he has referenced in th elead post.

    Andrew Reynolds

    October 24, 2006 at 6:37 pm

  187. “The reason I would like to see the Usher book is simple – I am not convinced the problem that they were seeking to correct was fractional reserve – it may have been currency debasement -”

    No it WASN’T currency debasement.

    Jeepers.

    Thats the opposite of what was going on. The Dutch were standardising all the coins coming into the country, melting them down, and recoining them.

    The Dutch were doing the OPPOSITE of debasing them.

    Stop BELIEVING shit for no reason. No-ones interested anyway. State your reasoning instead.

    GMB

    October 24, 2006 at 6:38 pm

  188. Andrew
    It stands to logic that 100% reserve was implemented in parts of Europe prior to the Goldsmiths because there was fractional lending going on. The debasement was another matter and required separate treatment alluded to in the excerpt I took out and posted above.

    jc

    October 24, 2006 at 6:39 pm

  189. Well I have to press on.

    Because there is no free country without a functioning free enterprise monetary system.

    We are just banging our head against a wall and all our efforts will be overmatched by what we might call public-choice-theory-factors.

    Whereas its at least possible that if we have free-enterprise-money with great vigiliance in clamping down on any Greshams-law-effect or yet any fraud….. then I suspect its all downhill from there with the tax-eaters losing ground every year.

    So the thread must go on until we find a way of explaining this all quickly and easily and somehow in a way that can quickly neutralise the monetary cranks, macromancers and just people of malign intent.

    GMB

    October 24, 2006 at 6:46 pm

  190. GB

    We can though maintain volue in the currency if they changed the way monetary policy is conducted. They can at the very least simply not inflate the money supply beyond and predetermined parameters. I think would go some way towards eliminating all issues relating to unsound money.

    We don’t even need a board and we certainly don’t need a governmor trying to pick which way to move intersest rates. It’s not a bad solution and it certainly is more feasible politically.

    jc

    October 24, 2006 at 6:52 pm

  191. Right.

    But if its not 100% what happens when you try to slow monetary growth down you will risk undershooting.

    If not nationally, then locally.

    Since the demand for money for holding reasserts itself and then this effect is magnified by the existence of fractional reserve.

    So you don’t have the liquidity to handle slowing. Its too painfull to do it that way. People won’t go through what they went through in NZ and Britain in the 80’s.

    But if you get to 100% first you can hit what you aim at and your downward risk is less great.

    And the other thing is we have to wipe out the political risk.

    We cannot do that unless we take it right out of their hands.

    GMB

    October 24, 2006 at 7:01 pm

  192. Jeez, you two clowns really are desperate. Accusing me – without proof – of lying and Birdy down on his knees (again…) simply begging Jason to throw me off – it’s just like old times. Of course, the difference this time is that you’re accusing me of bamboozling the other folk on this site with my “lies”. You’re pathetic.

    But it looks like you’ve thrown up the usual cloud of blathering tripe, so I’ll have to dissect it one loony loop at a time.

    Not questions per se pantsy just issues.

    the issues- such as implying what people hadn’t said. You know what i mean. Lets go through them shall we?

    1.Totally untrue. Bird fist mentioned the bank of Amerstdam in the very first thread.

    Yet you’re doing a victory dance.

    Prove it.

    2. Notice what this lying racist does here. He says that because you failed to mention it you didn’t know about it. Leaping from an assumtion to create a lie.

    Any comment? Any reason you to create the distortion that failing to meantion this they viewed it opposite?

    They clearly were NOT aware that the banks of Middelburg and Rotterdam were exchange banks, otherwise they would not have used the example of 1672 (depositors rushing to withdraw deposits because of a French invasion, not a “run” on the bank due to fractional reserves) as proof they were running fractional reserve. If they knew the banks were NOT running fractional reserve they wouldn’t have used them as an example of fractional reserve in action, would they, moron?

    3. Another distortion to create a lie. Jackson never, ever mentioned they practiced fractional reserve. This lying dishonest racist pantsy is trying to create that impression, otherwise why would he make such a reduandant comment.

    any comment.Where did jackson ever say, suggest or even infer this?

    Keerist you’re woeful. From comment #110, you idiot:

    “Fyador asserts that “the deposits he [meaning me] refers to were held in the Wisselbank, which did not lend money”. If I had meant the Bank of Amsterdam I would have said so. Moreover, there was a panic in 1672 that led to massive
    withdrawals from the Dutch banks causing most of them to suspend payments, including the Bank of Middelburg, founded in 1616, and the Bank of Rotterdam which was founded in 1635. In the words of also Jes?erto Soto the Amsterdam
    bank “was founded after a period of great monetary chaos and fraudulent (fractional reserve) private banking.”

    Jackson is CLEARLY arguing that both the Bank of Middelburg and the Bank of Rotterdam were practising fractional reserve. Characteristically, he slyly uses the word “panic” to imply a bank run, when the problem was the French invasion, not fractional reserve practices. As I said, you are just totally clueless when it comes to evidence.

    4. Distorting the truth again. Never looks at asset values to determine if there is asset price inflation, as that doesn’t fit in this racist creeps scheme to distort.
    What did asset values do during that time.? I know how you just hate talking about asset price inflation.

    Why should I talk about asset price inflation? We’re talking about the bubble in TULIP prices, moron. I was asked about the monetary environment in the Netherlands – there was no breakout of inflation. End of story. If you want to get worked about OTHER asset prices, present the fucking data you buffoon.

    5. Strictly speaking you missed this question.
    Shorter Fyador: does that make me sound smart and witty?
    and this one:
    You havn’t apologised to Jack for your racist behaviour and bumbchum “Munny” is Awol, so what is a gal to do?

    Strictly speaking, moron, I missed no question. The first “question” you mention is rhetorical, idiot, as you are clearly attempting (and failing) to satirise me. The second question I answered, Mary.

    I left open issues for you to attend to.

    Loser…? really? that’s what you think of me? And Munmy is what exactly, a winner?

    Yes, really. You are a loser. Ask around if you don’t believe me. I don’t give a shit about Munny – if forced to choose I would say he’s more of a winner than you. There you go – happy now?

    Nice choice of friends Fyador ( as he decides to attack CL while sucking up to Munny”)

    Munny’s no friend of mine, birdfriend.

    Moror you call me? I guess I never had the high paying job you do that leves you with hours on hours a day to argue about Middle Age Banking. That’s an executive with time on his hands. Who said banks don’t have lots of fat to cut.

    I called you a moron, moron, because you’re profoundly stupid. What you do with your time now that you’re a retired grouchypants is of no concern to me, but I’ve never claimed to be a bank executive. Though for some reason you seem fixated on assuming that I am. Is it because banks no longer want you, loser?

    Fyodor

    October 25, 2006 at 8:47 am

  193. Whoops. Sorry about that. Could you close the bold after the word “begging”?

    Andrew: Usher’s quote doesn’t imply that fractional reserve was practised in Italy at the time. It implies that exchange banking was used instead of fractional reserve – there’s no statement that fractional reserve was (or was not) used . As you say I think we need more context from Usher to be decisive on that point. Though I note that his book is from 1943 so may be difficult to track down. It’s also highly likely that his work has been superceded by more recent research.

    Quinn and Roberds’ use of the quote while discussing currency debasement in the Netherlands preceding the establishment of the Wisselbank suggests that exchange banking – as you point out in your second comment – was invented in Italy to counter debasement, not fractional reserve.

    Fyodor

    October 25, 2006 at 9:01 am

  194. Birdy, the coining data you link to only refers to mint production in one part of the Netherlands, not overall money supply. My earlier data is more comprehensive, and shows no monetary shock of the kind you mention.

    Have you given back that money yet, BTW?

    Fyodor

    October 25, 2006 at 9:05 am

  195. “Prove it”.
    That you’re a lying, deceitful little dickhead that sides with racists? Oh , but I have. How’s Munny this morn? Did you kiss him good-bye as you toddled off to the CBA for another day of stoushing with people? Fuck your job must be boring. I can understand why they put you in the bleaches.

    Oh, you mean prove it he said that. I did.

    “They clearly were NOT aware that the banks of Middelburg and Rotterdam were exchange banks, otherwise they would not have used the example of 1672 (depositors rushing to withdraw deposits because of a French invasion, not a “run” on the bank due to fractional reserves) as proof they were running fractional reserve. If they knew the banks were NOT running fractional reserve they wouldn’t have used them as an example of fractional reserve in action, would they, moron?”

    Look you lying racist moron, they never said anything about this and you’re simply trying to put words in their mouth. For fucks sake you’re lying shit, no wonder you don’t use your own name on these threads dickhead.

    “Jackson is CLEARLY arguing that both the Bank of Middelburg and the Bank of Rotterdam were practising fractional reserve. Characteristically, he slyly uses the word “panic” to imply a bank run, when the problem was the French invasion, not fractional reserve practices. As I said, you are just totally clueless when it comes to evidence.”
    No it’s not clear. It’s simply another example of you attempting to lie.

    “He’s sly now. Known Jackson for along time and I wouldn’t use the word sly to define him. You demeam every thread you go on don’t you. Always trashing people who don’t agree with you. No wonder you are too much of a coward to use you own name.”

    “Why should I talk about asset price inflation? We’re talking about the bubble in TULIP prices, moron. I was asked about the monetary environment in the Netherlands – there was no breakout of inflation. End of story. If you want to get worked about OTHER asset prices, present the fucking data you buffoon.”

    “You were talking about inflation with obvious reference to the price of goods and services. You can’t discuss at inflation without looking at aseet prices , you idiot. We have been through that before and you continually want to avoid this discussion because it doesn’t conform with your view of what inflation actually is.”

    “Yes, really. You are a loser. Ask around if you don’t believe me. I don’t give a shit about Munny – if forced to choose I would say he’s more of a winner than you. There you go – happy now?”

    Course you would think Munny’s a winner. He conforms with your racist views. Thanks for clearing that up. It took such a long to admit ( although in a round about way) that you are in fact a racist creep.

    “ What you do with your time now that you’re a retired grouchypants is of no concern to me, but I’ve never claimed to be a bank executive. Though for some reason you seem fixated on assuming that I am. Is it because banks no longer want you, loser?”
    Proving once again when the road forks you always take Dishonest Ave. I don’t need ot prove to you what I’ve done in my working life and your inferences are amusing. Thanks for the kind thoughts again.

    jc

    October 25, 2006 at 9:34 am

  196. Comment 193 is living proof what a liar Fearless Fred Fyador is.
    The reference used was from this comment:

    “The Amsterdam city council partially achieved this goal when it created an exchange bank in 1609. Exchange banks government-owned deposit banks) had developed in the Mediterranean as a substitute for private, fractional reserve banks (Usher 1943). ”

    Note that Fraction reserve is clearly mentioned here. However Fyador dsimisses the reference by saying:

    “Usher’s quote doesn’t imply that fractional reserve was practised in Italy at the time.”

    So references, links, anything that proves he is a lying rag doesn’t work for him. Second sourcing, which is what this reference has done won’t do.

    This is simply too funny to be true.

    Just admit it, moron. You have been leading everyone down Dishonest Ave. since the very first post and wasted our time with this sort of trash. Do the honorable thing and follow your pathetic vapid friend ( Nabs) in limbo where he’s doing pathetic imitations of himself to draw a crowd.

    jc

    October 25, 2006 at 9:48 am

  197. Commment 196 refers to Fyadors Comment 193 where he’s now resorting to ignoring or trashing links and citations, even his own;

    He says:
    “Andrew: Usher’s quote doesn’t imply that fractional reserve was practised in Italy at the time.”

    and the links says:
    “The Amsterdam city council partially achieved this goal when it created an exchange bank in 1609. Exchange banks government-owned deposit banks) had developed in the Mediterranean as a substitute for private, fractional reserve banks (Usher 1943). ”

    jc

    October 25, 2006 at 10:03 am

  198. Crikey. Deperate, simply desperate. Your first post is blathering garbage. You haven’t proved a damn thing, and can’t point to any proof you claim to have provided.

    As for Usher, where does he state that Italian banks practised fractional reserve? All the quote says is that the Italians practised exchange banking INSTEAD of fractional reserve banking.

    Goddamn, you’re one sore loser.

    Fyodor

    October 25, 2006 at 10:17 am

  199. Fyador
    Does the quote, your reference, second sourcing Usher say this?

    “The Amsterdam city council partially achieved this goal when it created an exchange bank in 1609. Exchange banks government-owned deposit banks) had developed in the Mediterranean as a substitute for private, fractional reserve banks (Usher 1943). ”

    Does it mention “fractional reserve banks (Usher 1943)?

    No need to get stroppy when you get caught lying….. again.

    Man, you do a great imitation of Monty python’s black knight, don’t you?

    ‘” I won, i won, I won”, he screams as he’s ket limbless on the ground..

    You’re such a pathetic loser.

    jc

    October 25, 2006 at 10:28 am

  200. GB
    He even dismisses and lies about his own references now.

    Fyador.

    You go off and cry on “munny’s” shoulder now. He’s there for you, you know. And I’m sure he”ll be gentle while you tell him about the big bad brutes who caught you lying.

    You just give your “Munny” a big kiss on the cheeks now, ya hear.

    jc

    October 25, 2006 at 10:31 am

  201. The fact that Usher mentions fractional reserve doesn’t mean he states it was practised in Italy at the time.

    Honestly, did you fail English comprehension, moron?

    Fyodor

    October 25, 2006 at 10:31 am

  202. yador.

    I notice something about you. You become a more hysterical, frothing at the mouth girly boy when we someone catches you out in lie or distortion.

    Didn’t mum and dad ever teach you to not to lie or distort..

    Comprehehsion isn’t the issue. It’s you, it’s your lies and distortions even in the face of blatent truth.

    You’re pathetic, black knight. just parthetc.

    “I win, i win, I win” he screams as the limbliess carcass hits the ground.

    jc

    October 25, 2006 at 10:42 am

  203. Guys,
    At the moment we are arguing in a vacuum and getting all worked up over a reference from a book. Can someone with access to an actual library that contains this book get a copy and actually read it? It is a matter of establishing two things – did Usher claim that the exchange banks were developed to overcome any (perceived) problems with fractional reserve (as seems the case from the reference to the book) and, if so, was he right?
    On the balance of probability, and using nothing more than my own prejudices, I would think that he did mention is as being a problem (two independent researchers came to the some conclusions) but that he was wrong in saying so.
    To me, creating an exchange bank that hands out only known good coin is a solution not to a perceived problem with fractional reserve, but an actual problem with light coins. If the problem was seen to be fractional reserve a rational response would be to create or increase required reserve ratios – as is the current capital requirement. If the preceived solution to the problem was to issue correct weight coins, as the Wisselbank was required to do, then surely the perceived problem was underweight coins.

    Andrew Reynolds

    October 25, 2006 at 11:53 am

  204. Didn’t they do that, Andrew. Didn’t they actually solve the problem of fractional by the limitations imposed on the Bank Of Amsertdam.

    Let’s not forget that Fyador didn’t create this problem of when Fractional turned up until the second gold thread. That’s when he linked to the Goldsmiths.

    Up to then and 1500 comments prior he never actually discussed the timing of its introduction, so no matter what shit he spews it’s very unikely he knew anything about it until that link appeared. Otherwise the dishonest prick would have said something.

    What I find impossible to believe is that up to then financiers and banks….. like Medicis for example – had never thought of lending reserves in safe keeping if they thougth they could get away with it.

    There are countless intsances proving fractional or its forms existed even in ancient times. People were put to death because the money/ gold was not there when they wanted it.

    The lying little prick is just fucking with our head.

    jc

    October 25, 2006 at 3:32 pm

  205. Essentially, as soon as you borrow short and lend long you are using fractional reserve – all you have to do is deal with the maturity mismatch. I agree – I would be surprised if it was not practiced in all of the ancient civilisations. The Roman financial system was fairly well developed, as was the Chinese, but AFAIK, no records remain as to how they did their banking. To me, there is no reason why they would not have done it. It just makes sense that, if you have a large amount of gold (or silver) lying around that you would attempt to profit from it and reduce your storage and security costs at the same time.
    The fact that interest was explicitly forbidden under Sharia may indicate that it was happening in pre-Islamic Arabia – there is nothing to stop a money-lender lending out any monies deposited with him (or, rarely, her).
    As you know, I see nothing special or scary about fractional reserve. It is just good business provided your customers are reasonably informed.
    If GMB wants to start up the Rothbardian Bank he should be allowed to. I just believe it would fail in fairly short order (but all customers, if any, would get their money back).

    Andrew Reynolds

    October 25, 2006 at 4:04 pm

  206. Andrew

    In of itself I also see nothing hugely wrong with fractional, provided the money supply is not manipulated to pump high powered money in the system, which is what is happening now. That’s just debasement pure and simple.

    I also think the level of leverage in the banking system would be nowhere near where it is now unless there was all the moral hazard crap that makes people perceive banks to be near enough to quasi government enterprises.

    However we also should not lose sight of the fact that it is potentially very unstable and it ought to be applied when there is no currency debasement or used the way the central banks do now in order to pump up the money supply.

    I’ll tell you how natural fractional is. In the old days, before the Aussie was floated, there was what was called the Hedge Market. This market allowed people to buy and sell forward dated contracts in aussie allowing for the interest rate differential. I wouldn’t have known what fractional was if I fell over it as I forget that crap the day I left uni.

    However we figured the only way we could maximize our returns and make more money was if we ran a mismatched book. The days of running a profitable, matched book was over.

    This came naturally to us, it was almost like it was instinctive. Fyador wants us to believe that this instinct to maximize returns by borrowing short to lend long would never have been thought in human history until the London gold smiths when there is overwhelming evidence it was happening. What a wanker.

    jc

    October 25, 2006 at 4:40 pm

  207. where is Birdy these days?

    Him not commenting on Catallaxy is like Homer not making a pun.

    Jason Soon

    October 25, 2006 at 4:57 pm

  208. I made mention a few days ago that i thought the origins of fractional cames from the futures markets that have actaully been around since the time of the Egyptians.

    I have’nt read that anywhere, but I just thought the sme principle applied in the way risk was mismatched.

    What would you think. it’s mere speculation on my part of course.

    jc

    October 25, 2006 at 4:58 pm

  209. Personally, I’d rather not see any more puns. But I like both of them

    Yea, where is the flying creature.
    It’s hilaroous when he turns up. It’s like a fox finally getting into the chicken pen. You see al these feathers and chooks flying everywhere….. lefties heading for the hills. It’s hysterical.

    jc

    October 25, 2006 at 5:02 pm

  210. jc,
    As you note, a forward market is a simple, and natural, thing to develop in an agricultural community. A farmer agrees a price now for his or her crop when it is finished growing. That is a forward contract for delivery of grain. The merchant, who may be contracting to buy grain from 20 farmers, arranges to sell some of it to a miller, some to a bread maker and keeps some to sell to others later, has now got 20 long grain contracts, two short contracts and a residual long exposure.
    Explain it like that and the whole scary bit of financial contracts gets a lot more understandable. Options can be trickier, but perhaps an agricultural example would be where the merchant says to the farmer – “I will give you the two bushels you need for seed grain now if you agree that, at harvest time, I will be allowed first refusal on your crop at a price of one talent per bushel – that is all I ask.”
    Financially, there is nothing new under the sun. All that has happened is that we can now price these contracts better using our shiny new computers.
    Fractional reserve is much the same – we can get closer and closer to the correct amount of reserves as we can forecast better and better what the likely needs are – and we can shift things around faster if we get it wrong.
    I can understand GMB’s argument that it is fraud, and I agree it would be if it is not disclosed, but, otherwise, I disagree.

    Andrew Reynolds

    October 25, 2006 at 5:18 pm

  211. JC sez:

    He (FYODOR) says:
    “Andrew: Usher’s quote doesn’t imply that fractional reserve was practised in Italy at the time.”
    and the links say:

    “The Amsterdam city council partially achieved this goal when it created an exchange bank in 1609. Exchange banks government-owned deposit banks) had developed in the Mediterranean as a substitute for private, fractional reserve banks (Usher 1943). ”
    >>>>>>>>>>>>

    SO YOU PROVE HERE THAT FYODOR IS LYING.

    But I tell you JC.

    If you go back to the very start of the first thread….

    He starts this lying and he never stops or even once pauses.

    And you would for sure have to read the whole thing and you would have to read it all carefully and read all the links as well.

    But if you DID you would see that he starts lying straight away and he never stops.

    Most of them are implied lies where you have the imbedded assumption that the other fellow has said something that he hasn’t said.

    But the implied lying starts and doesn’t stop.

    And he’s only come unstuck really when you think about it when he decided he had to attack Jackson rather then merely continue his constantly mentally disturbed obsession with me.

    GMB

    October 25, 2006 at 5:43 pm

  212. “The fact that Usher mentions fractional reserve doesn’t mean he states it was practised in Italy at the time.
    Honestly, did you fail English comprehension, moron?”

    Here’s a typical implied lie. And with the even more typical leftist projection.

    YOU HAVE ONLY (JC) JUST MADE THE QUOTES.

    And the quote talks about these banks REPLACING these other fractional reserve banks.

    And there he goes on the theory that some people won’t be reading carefully both sides.

    So he just flat out lies to you in an appeal to a one-eyed third party…. And he projects his purposeful misreading onto you as well.

    GMB

    October 25, 2006 at 5:47 pm

  213. He never stops doing this. And it always works because it takes three times the writing to unbundle and explain his lying.

    So there is just no solution to it but banning him. Because if he hasn’t stopped after 60 pages of this he isn’t going to stop.

    GMB

    October 25, 2006 at 5:49 pm

  214. “If GMB wants to start up the Rothbardian Bank he should be allowed to. I just believe it would fail in fairly short order (but all customers, if any, would get their money back).”

    No no Andrew.

    You are being a fucking idiot alright?

    Fractional reserve is either fraud or its government compulsion.

    That is to say its fraud under free enterprise conditions and socialism when government coercion is involved.

    Now we don’t want fraud do we?

    And we don’t want a Greshams Law process perverting our monetary system do we.

    So it s a case of stopping the subsidy to the banks.

    Then a lot of little guys will compete with you bankers on an even playing field.

    And you’ll lose.

    GMB

    October 25, 2006 at 5:53 pm

  215. Andrew

    When I first mentioned the idea I had, that you explain so eloquently, about the utility of futures etc. The weasel, Fyador, who clearly has no grasp of anything especially economics tried to attack this idea. …. He doesn’t have the feel for it.

    GB

    You are perfectly right to complain about him the way you are. Yes, I understand exactly why and how you feel about the prick. He is a liar and distorter.

    He is even denying the quote now.

    This is the quote:

    “The Amsterdam city council partially achieved this goal when it created an exchange bank in 1609. Exchange banks government-owned deposit banks) had developed in the Mediterranean as a substitute for private, fractional reserve banks (Usher 1943). ”

    And the lying buffoon has this to say:

    “Andrew: Usher’s quote doesn’t imply that fractional reserve was practised in Italy at the time.”

    What makes it worse is that you have people like John and CL praising the little fuck but know sweet fuck all about economics. What they need to realize is that the lying cowardly little fuck is a Keynesian and is only reciting shit all dressed up to look pretty. When you get close you realize its just a paper cut out.

    He doesn’t get the issues we are discussing. When it’s shown he doesn’t he resorts to lies and the entire thread gets screwed. He’s like “Munny”, it’s all about them.

    Fyador doesn’t quite get the nexus between money supply growth, asset inflation and how it all works. He doesn’t get it, and when this is proved to be so, he ends up in a hissy fit like a girl with period and resorts to lies.

    Thanks for showing us what a prick he is.

    jc

    October 25, 2006 at 6:04 pm

  216. No, GMB, we do not want fraud – but I disagree that it is fraud or would be under free enterprise. Simple as that.
    If I borrow some money from someone, with a promise to repay an equivalent sum of money, plus interest, on demand, the only way that it would be fraud would be if, at the time I borrowed the money, I did not intend to repay it on demand. Provided I do not have that intent it is not fraud.
    That is my opinion and you are welcome to differ, but I am not lying, nor being otherwise deceptive. I do not see it is fraud, nor do I see it as being fraudulent under any conceivable free enterprise system.

    Andrew Reynolds

    October 25, 2006 at 6:29 pm

  217. “No, GMB, we do not want fraud – but I disagree that it is fraud or would be under free enterprise. Simple as that.”

    Look I’ve told you.

    It just doesn’t fucking matter what you believe or whether you disagree or not.

    No-ones interested in your opinion.

    What is your REASONING.

    Now Fractional Reserve has always at least BEGAN in Fraud and embezzlement when it has ever started up before.

    And when you put yourself in the position of people living under those conditions its pretty clear that it can ONLY GET STARTED UP with fraud.

    This is a very strange idea to people I admit. But it ought not be strange to you after 60 pages.

    The IOU + RP product doesn’t get started. It never gets off the ground. It requires FRAUDULENT FRACTIONAL RESERVE to blaze a path for it.

    GMB

    October 25, 2006 at 6:57 pm

  218. GMB,
    My reasoning is in the second paragraph of my comment 216. If I believe I can redeem that IOU and have a rational basis to so believe then it does not fit the definition of fraud.
    The key element of any fraud is to gain advantage by deceit. If I am open about what I am doing and I have a reasonable grounds to believe that I can redeem the IOU within the terms of that IOU then there is no fraud.
    If I am doing that, do you believe there is fraud. I have not been convinced by any reasoning that you have presented that it is fraud.

    Andrew Reynolds

    October 25, 2006 at 7:44 pm

  219. “If I borrow some money from someone, with a promise to repay an equivalent sum of money, plus interest, on demand, the only way that it would be fraud would be if, at the time I borrowed the money, I did not intend to repay it on demand. Provided I do not have that intent it is not fraud.”

    Right.

    Well its what I said before.

    The IOU+RP product…… if it is clearly explained and not allowed to mix freely with the 100% backed product…… is not fraud.

    Thats understood.

    Its also not getting off the ground in the firstt place under free enterprise conditions without fractional reserve fraud paving the way.

    And it never has gotten off the ground without fraud.

    So we ought simply go to 100% and protect with great vigilance against ever going down that socialist-fraud path.

    GMB

    October 25, 2006 at 7:50 pm

  220. “HOME-OWNERS should brace for another rise in interest rates after the annual inflation rate came in at 3.9 per cent, fuelled by continuing high fruit prices.”

    Those who think Fyador has an impressive understanding of economic issues read that intro in today’s Australian again. And again!

    The RBA is thinking of raising rates because the fucking price of bananas has gone up. Talk about a banana republic right?

    This is what some of us meant hat monetary policy has gone off the rails and could potentially end in disaster again.

    This is why some of us are saying that the CPI is a terrible way to determine inflationary pressures on the economy and why even using condom sales would be a better index (joke).

    Fruit prices’ pressuring the index is not inflation. Banana prices going up is not inflation. It is a demand and supply issue particularly after the storms in north Queensland. In other words it is the market sorting out demand/Supply through price

    If interest rate policy is to be changed it needs to be done so because of money supply issues not because the price of fruit has gone up.

    Next time some of you want to offer accolades to Fyador be aware that your supporting a twerp who likes to base monetary policy on the price of bananas.

    This is why I have consistently maintained that money supply is the key to assessing monetary stabilty. In fact attempting to manage the economy on a banana index one month and inner city apartment in another is almost comical.

    Monetary policy is the one basic pillar of social stabilty. It’s better to get this right.

    Where’s nabakov when Fyador needs him?

    jc

    October 25, 2006 at 10:48 pm

  221. GMB,
    You contend it is fraud, GMB, but, as far as I can remember, all I have seen from you is the wording and the contention. If you have, I apologise – but some reasoned argument would be nice.

    Andrew Reynolds

    October 25, 2006 at 11:08 pm

  222. No no. It IS fraud under free enterprise conditions.

    Socialism currently.

    I’ve never contended its fraud now. Thats a lie. Its fraud under free enterprise. We don’t want fraud OR socialism.

    You have to actually imagine the conditions of free enterprise.

    Low monetary growth means low nominal interest rates. Seldom would you get interest on an on-call deposit in the first place.

    ING offers about 5% from time to time on-call. But if monetary growth was usually a lot lower then it is now you wouldn’t see this.

    You don’t have deposit insurance. You don’t have printing press bailouts……. The banking system would be on a death-watch without printing-press bailouts..

    And you just have to imagine the realities under that situation. It would be as if e-Gold started lending your on-call gold out.

    It ought to be pretty clear that empirically the practice has never began as an IOU+RP product openly advertised.

    Its always begun in fraud.

    GMB

    October 26, 2006 at 3:44 am

  223. yador.

    I notice something about you. You become a more hysterical, frothing at the mouth girly boy when we someone catches you out in lie or distortion.

    Didn’t mum and dad ever teach you to not to lie or distort..

    Comprehehsion isn’t the issue. It’s you, it’s your lies and distortions even in the face of blatent truth.

    You’re pathetic, black knight. just parthetc.

    “I win, i win, I win” he screams as the limbliess carcass hits the ground.

    Speaking of “hysterical, frothing at the mouth girly boys”, that’s quite a performance, Mary. I also liked your ranting nonsense about fruit prices – I could almost hear the veins at your temple throbbbing as you got all choked up over bananas. Very impressive, girlyman.

    I note that you have failed STILL to produce any evidence supporting Jackson’s assertions. Your latest effort can be summarised thusly:

    Shorter JC: “I would have practised fractional reserve if I’d been in renaissance Italy, so they MUST have done!”

    Well, no actually. The fact that you think it was obvious doesn’t make it so. Now produce some proper evidence.

    As for you, Birdy, what makes you think mindlessly repeating your moronic mantras about fractional reserve proves anything? Try not to chew the crayons when working on your master plan, turkey.

    Fyodor

    October 26, 2006 at 7:37 am

  224. Faydors answer for supporting the banana index
    is to throw girly accusations at people.

    jc

    October 26, 2006 at 10:36 am

  225. GMB,
    first, a correction about my wording. I meant to say @ 221 “would be fraud under free enterprise” as I was careful to say at 216. Please do not throw the word “lie” about as if it were confetti. Accusing someone of deliberate falsehood is, to me, a strong accusation, one to be used as a last resort.
    The reason why ING offers 5% at call is two-fold – high inflation and a desire to establish a loss-leading product to build market share. BankWest’s similar product is doing the same. That’s all.

    Andrew Reynolds

    October 26, 2006 at 11:03 am

  226. Is Jc STILL whining about fruit?

    Hey, Birdy, why don’t you give your munnkey a banana to suck on? That might stop him screeching like a castrato.

    Andrew: neither ING Direct’s nor Bankwest’s savings account products are loss-leaders – their returns exceed each bank’s cost of capital.

    Fyodor

    October 26, 2006 at 2:26 pm

  227. Fyodor,
    I cannot say any more than to assure you that in at least one case it is once you take the direct costs of marketing the product into consideration, rather than purely the cost of capital.

    Andrew Reynolds

    October 26, 2006 at 3:06 pm

  228. I’ll answer for Fyador

    Fyador would say:

    Andrew where did I say direct costs aren’t part of fractional. Where’s the proof. You need to present evidence that Goldsmith and Co. were’t party to the early Northerna Italian candle makers debasement my link clearly showed.

    I continue to hold evidence that the banana index the Reserve Bank uses to measure inflation is supeior to gold reserves and metalic backing even when the dutch tulip mania was the result of Russian intervention in New Caladonia.

    So unless your mother’s first name is Maggie, your lying.”

    that’s his Explanation, Andrew. Don’t ask anyone to figure it out as Miss Banana index has an unique way of debating

    jc

    October 26, 2006 at 4:11 pm

  229. I am including all costs, Andrew.

    There’s sufficient spread between the deposit rate they offer and the asset yields available to both companies to produce an acceptable rate of return after expensing operating costs, including marketing.

    Fyodor

    October 26, 2006 at 4:13 pm

  230. Munnkey wanna banana?

    Ooh-ooh. Ah-Ah.

    [I know how you love those animal noises, you naughty old munnkey]

    Fyodor

    October 26, 2006 at 4:20 pm

  231. Fyador

    tell us about the banana index you’re supporting, dickhead. Aren’t you a little embarrassed that you’re now on a banana index. This is hilarious.
    You friggin idiot.

    jc

    October 26, 2006 at 4:22 pm

  232. “Ook -banana-ook”

    ?

    Terribly sorry, Munnkey, but you’re going to have to switch to sign language. That grunting excuse for English just isn’t comprehensible.

    Maybe your handler could interpret for the rest of us…Birdy, what’s the munnkey saying?

    Fyodor

    October 26, 2006 at 4:26 pm

  233. Fyodor,
    Sorry, I can’t say any more for all sorts of reasons. It is not important in any case – GMB’s point was (I think) that 5% was too much for a demand deposit, but I believe that there are sound business reasons why a real interest rate of 1.1 to 1.2% for a demand deposit is reasonable and that the negative real rates we normally get on these accounts is more realistic.
    My only real disappointment is that I cannot use either of these accounts.

    Andrew Reynolds

    October 26, 2006 at 4:26 pm

  234. “Please do not throw the word “lie” about as if it were confetti. ”

    Yeah you are right. That was a rushed post before work.

    I did think about it afterward if thats any consolation.

    But I’ve got to accuse people of lying like confetti. Because often the lies fall like confetti.

    GMB

    October 26, 2006 at 4:27 pm

  235. “I note that you have failed STILL to produce any evidence supporting Jackson’s assertions. Your latest effort can be summarised thusly:”

    This is why I argue that Fyodor is the one person that MUST be blocked.

    Jackson HIMSELF provided a super-sufficiency of evidence.

    And Fyodor KNOWS this.

    Notice he won’t focus LASER-LIKE on a SPECIFIC assertion that Gerrard made.

    Fyodor is never going to change. And yet he seems to keep on sucking folks in and misleading him.

    In theory you have the idea that the truth will win out.

    Well I think that by and large thats true.

    But not when you let people like Fyodor just destroy threads like this.

    GMB

    October 26, 2006 at 4:33 pm

  236. “The reason why ING offers 5% at call is two-fold – high inflation and a desire to establish a loss-leading product to build market share. BankWest’s similar product is doing the same. That’s all.”

    Right.

    But you wouldn’t tend to see this in a free-enterprise setup (starting from 100% backing) unless monetary growth had already taken off and been sustained for awhile.

    GMB

    October 26, 2006 at 4:36 pm

  237. “here’s sufficient spread between the deposit rate they offer and the asset yields available to both companies to produce an acceptable rate of return after expensing operating costs, including marketing.”

    Ha Ha.

    Reynolds. I just have no way of knowing whether he is lying or not or just making it up.

    But in any case supposing what this nutball is saying was TRUE….

    Well it would not normally be true under free enterprise conditions where you started off with 100% backing and were vigilant about making sure that there was not cheating.

    GMB

    October 26, 2006 at 4:39 pm

  238. GMB,
    We are back here then. Is free enterprise defined (at least in part) by requiring 100% backing? I would contend not – you would contend otherwise, I presume. We have to disagree.

    Andrew Reynolds

    October 26, 2006 at 4:55 pm

  239. No no no. Its not that.

    For pages and pages people will hassle me with these definitional ontological-type arguments.

    There is no way digging your way out of that sort of attack when it comes.

    JohnZ was trying that on for about two pages.

    Its really about trying to put yourself in the position of these people from a standing start.

    But the problem is THIS.

    Under an imaginary free enterprise world, but one where there was outsized vigilance against the FRAUDULENT type of fractional reserve………. then fractional reserve ought not get started…… or it ought be a boutique, specialist financial product….

    What I’m worried about is that even the slightest non-free-enterprise influence can kick off a Gresham’s law-like effect and we then will never be rid of it.

    So it would be better if we just outlawed it for fiat and mono-metals money….

    And if someone had a good plan for fractional reserve outside of these two options then it would be very difficult to put it over in a sly way.

    It would be a legitimate financial product in that case and could stand or fall on its own basis.

    And I haven’t forgotten that CAMEO by David Friedman.

    And I take what he said seriously.

    But we have to get started somewhere.

    GMB

    October 26, 2006 at 6:22 pm

  240. That’s right, Andrew: Birdy’s all in favour of free enterprise until it disagrees with him. Very consistent, our fowl-mouthed friend.

    As for your self-confessed ignorance at comment #237, Birdy, look up the bank bill rate the next time you steal the office copy of the AFR, then compare it to the deposit rates on offer. You can thank me later – I’m still waiting on that chocolate for all the other stuff I’ve taught you.

    Oh, and Birdy, Jackson’s case was shredded some time ago. Neither he, you nor your munnkey have been able to substantiate his cack-handed attempt at an argument.

    P.S. you given back the money you stole yet?

    Fyodor

    October 26, 2006 at 6:30 pm

  241. Take your lying and *** disorder elsewhere idiot.

    GMB

    October 26, 2006 at 6:44 pm

  242. What was actually shredded Fyador. Can you please detail it here? We don’t want to see you on one of those lying sprees you have now, girly. Like this:

    The quote from citation
    “The Amsterdam city council partially achieved this goal when it created an exchange bank in 1609. Exchange banks government-owned deposit banks) had developed in the Mediterranean as a substitute for private, fractional reserve banks (Usher 1943). ”

    And the lying buffoon has this to say:
    (lying bufoon is Fyador)

    “Andrew: Usher’s quote doesn’t imply that fractional reserve was practised in Italy at the time.”

    Stick with inflation indexing to bananas you dickhead.

    jc

    October 26, 2006 at 6:47 pm

  243. “Oh, and Birdy, Jackson’s case was shredded some time ago. ”

    JC.

    You and I know he’s lying and that he’s never going to stop.

    Can you try and lobby for Jason to throw him off.

    This is a very important subject.

    Just get rid of this asshole.

    GMB

    October 26, 2006 at 6:49 pm

  244. Andrew – This is why you should NEVER let him change the topic until you have a clear resolution.
    It just goes around and around in circles with him never conceding any point.

    JC – How about you try and persuade the Bird that fractional reserve is not fraud. At the very least he won’t accuse you of lying.

    JohnZ

    October 26, 2006 at 6:59 pm

  245. John

    I’ll do that if you can convince Fearless Fred Fyador…. the girl you said had a flawless undertanding of economics… cough, cough, that inflation indexing to the CPI is laughable when the RBA is now using the price of fresh fruit to deterimine interest rate levels.

    You see finally why some of us think this is a fucked up way to run mon policy?

    jc

    October 26, 2006 at 7:09 pm

  246. jc,
    I think Fyodor was wrong about his interpretation of the quote from Usher, but, until we get a copy of the book we will not know. A single quote, taken out of context, may be indicative, but we cannot be sure. As you know, I do not think the exchange banks would have been a response to fractional reserve bank, but to short weighted coin – an attempt to stop the operation of Gresham’s Law. So, really the difference is moot.
    Note the use of “wrong” rather than “lying” – the difference is important.
    .
    GMB, util we get to a truly free enterprise world I think we will just have to agree to differ. When we get there we, as a group, should decide on what the few remaining laws on commerce should be.

    Andrew Reynolds

    October 26, 2006 at 7:12 pm

  247. “JC – How about you try and persuade the Bird that fractional reserve is not fraud.”

    You are SUCH a dumb fuck?

    Why are you appealing to JC you stupid stupid prick?

    Well its because you are so fucking stupid you got him to LOCK IN A SENTENCE using your stupid LOCK IN A SENTENCE METHOD TO ENLIGHTENMENT.

    No-one (you stupid fuck) on this forum (you fucking idiot) has ever claimed that fractional reserve (you fucking dick) is fraud….. When the meaning of IS is present tense.

    But here you are (being such a dumb stupid fuck) thinking you have JC COMMITTED to this set of syllables…. on the grounds that you got him to SAY this yesterday or the day before.

    The world of STUPID hey?

    Or maybe its a LAKE of STUPID.

    And you go diving in the lake of stupid.

    And it never seems to bottom out.

    And just when you think its bottoming out?

    You know what?

    Its not bottoming out.

    Because JohnZ is just about to make an appearance.

    GMB

    October 26, 2006 at 7:16 pm

  248. “jc,
    I think Fyodor was wrong about his interpretation of the quote from Usher, but, until we get a copy of the book we will not know. ”

    We won’t know whether he’s right or wrong.

    But we know now that he’s lying.

    We humans aren’t given to second site. So being honest with the information that we have before us is far more important then ultimately being proved right.

    GMB

    October 26, 2006 at 7:18 pm

  249. “GMB, util we get to a truly free enterprise world I think we will just have to agree to differ. When we get there we, as a group, should decide on what the few remaining laws on commerce should be.”

    No thats weak man. Thats fucking weak.

    The fact that we are debating about it means we have agreed not to disagree…….. We have agreed instead to call it where the chips appear to be falling.

    Thats the only way to converge on the truth.

    Stick with the reasoning. No-one gives a toss about your agreement/disagreement negotiations.

    GMB

    October 26, 2006 at 7:21 pm

  250. GMB,
    I have given lots of reasoning – have a look above. I disagree with your arguments. We can continue this thread until kingdom come or we can agree to disagree. If that is weak, then so be it.

    Andrew Reynolds

    October 26, 2006 at 7:29 pm

  251. Look.

    Get a grip on yourself.

    The whole country is watching and you are after all a proffessional.

    So there is no agree to disagree JIVE…..

    Thats Ok… I understand… People cannot be tough 24 hours a day..

    I could afterall fall to pieces if I had been quaffing the clear spirits or being force-fed oestrogen by nazis and satan-worshipers.

    We don’t agree to disagree.

    We keep a stiff upper lip even when the Empire is falling apart and we go where the chip fall.

    Now restate your case…

    But wait until you have a chance to have a bit of a rest… watch some old Bronson movies….. Listen to the new Meat Loaf album and just generally get it together..

    And then rework your case.

    But this agree to disagree?

    This isn’t even girly-talk.

    Its worse then that.

    Its lefty-girly-talk.

    GMB

    October 26, 2006 at 8:27 pm

  252. GMB,
    If I was being “…force-fed oestrogen by nazis and satan-worshipers…” then I think you would find that I would get more engaged in the process. I would then be out there fighting strongly against un-needed regulation and the people trying to restrict my freedom to contract. And, as I have stated several times, I believe those fighting for those freedoms would win.
    But we are not. It may be lefty, girly talk, but I think that, unless you have some argument I have not yet seen, this one is over.

    Andrew Reynolds

    October 26, 2006 at 10:47 pm

  253. Andrew

    The quote is as clear and the brdge on a sunny day. Miss banana index is simpy trying to create another of his many distortions.

    He is a liar so he can’t be trusted.

    You know what Bird is saying is right. We ‘re in some ways trying to get the the truth and learn something from one another. You were pretty good with the zero money supply thing, and various other points. ABL was also pretty good and most of us in some way learnt something new.
    Dickface comes on with the idea that he is right and when someone proves him wrong he will do his best to lie and distort the truth.

    Reality is that it really doesnt matter when frational started as far as we are concerned, as we’re debating its affects in the present day.

    Miss banana index won’t even say that the quote looks about right but we need to investigate further. He can’t live with the rules normal people do. It is a game to the self confessed thread wrecker and it’s like trench warfare with the dickhead.

    We had a fine discussion about the possibilities about how it may have been used in earlier times yet he comes in and tries to wreck the thread. Bird is right about the prick.

    The only superior skills he has is wrecking threads.

    he needs to join that other useless idiot , nabakov in limbo.

    jc

    October 26, 2006 at 11:20 pm

  254. Andrew
    To believe there was no fractional in earlier times is to believe people couldn’t get a grasp of profit maximization.

    Seeing gold was the nearly always monetary system choice in those days the yield curve would have been quite flat -with i guess a lot more political risk than there is now if you were lending to a European kingdom or trade. This meant that lending for long periods would have meant greater returns in terms of spread espcially by running a mismatched book.

    The liar wants us to believe otherwise. Miss banana index is a joke.

    jc

    October 26, 2006 at 11:32 pm

  255. Sorry Birdy
    it goes without sayiojng that you have been excellent on this thread.

    jc

    October 26, 2006 at 11:34 pm

  256. In other wrods duration would have carried a bigger premium than it does now.

    jc

    October 26, 2006 at 11:36 pm

  257. GMB, I don’t know who you are or where you came from.

    All I know is that in my country we value FREEDOM.

    Freedom to smoke in public places.
    Freedom to open a business.
    Freedom to pursue our dreams.
    Freedom to open a bank and lend out more money than deposits.

    What kind of thug do you think you are?
    I mean, on the one hand you say things like this:

    No-one (you stupid fuck) on this forum (you fucking idiot) has ever claimed that fractional reserve (you fucking dick) is fraud…..

    But the next thing you are again claiming it is fraud. How dare you, Birdy? How dare you?

    What libertarian bans businesses they don’t like?

    Big government libertarians, that’s who.
    Libertarians who think they know better than us, that’s who.
    Leftist-“libertarians”, that’s who.
    Libertarians willing to send MEN WITH GUNS to intefere in contracts, that’s who.
    GMB, that’s who.

    So pull your head in Birdy. If you don’t want your money in a 100% backed bank that’s just fine. But don’t try and TAKE AWAY FROM ME my right to PLACE ASSETS WHERE I CHOOSE.

    My rights to INVEST.
    My rights to choose.
    My right to deposit in a fractional reserve bank.

    This is a litmus test. Either you are for freedom or you are against it. JC is for freedom. Jason is for freedom. Reynolds is for freedom. Fyodor is for freedom.

    We’d like to have you in the club.

    Are you in or out?

    JohnZ

    October 27, 2006 at 1:38 am

  258. Andrew.

    Don’t be a fucking sissy.

    You haven’t made your case. You are lost in a make-believe world where bank created money has no effect.

    Its not about agreeing to disagree.

    Its about you stopping being an idiot.

    GMB

    October 27, 2006 at 3:35 am

  259. JohnZ

    Stop with the idiot wordgames already.

    My fucking Allah you have a morons view of epistemology. And you and Fyodor are leftists so don’t bullshit me.

    Now do you understand why fractional reserve is fraud under free enterprise yet?

    Have you ever stopped the word-game JIVE to try and figure out that free enterprise reality?

    GMB

    October 27, 2006 at 3:38 am

  260. So basically JohnZ.

    You are back to the theological argument aren’t you.

    So are you an anarcho-capitalist.

    Thats the key thing here if you are still stuck on stupid. Still stuck on stupid.

    Are you or are any of the people you mentioned anarcho-captalists?

    I know you are an idiot.

    Thats what I know.

    No-ones free to committ fraud in any workable system.

    GMB

    October 27, 2006 at 3:41 am

  261. “What libertarian bans businesses they don’t like?”

    Not this one.

    Don’t change the subject. We are talking about fraud.

    And you have to ban it. And some types of fraud you have to be more then normally vigilant about to stop a runaway Greshams law effect.

    Now we’ve been over this and you are just being an idiot.

    GMB

    October 27, 2006 at 3:49 am

  262. Brilliant. Birdy and his Munnkey still clowning around.

    Munnkey can’t produce an argument to save himself and Birdy won’t listen to any argument that contradicts him.

    You two buffoons are perfect for each other. Keep up the circle jerking, lovebirds.

    Fyodor

    October 27, 2006 at 7:30 am

  263. You’ve produced no evidence to show it’s fraud. Y
    In fact, you’ve conceded that it’s possible to have non-fraudulent fractional reserve if the banker is very honest and follows the contracts exactly.

    And yet you still want to ban it. Where I come from we have a word for folks like you.

    State-worshipper.

    JohnZ

    October 27, 2006 at 9:59 am

  264. Can’t produce and argument, says fyador. Is that like you being a liar and a complete fraud?

    You’re a fraud, Fyador and “Munny’s ” little wanker.

    jc

    October 27, 2006 at 11:10 am

  265. “Andrew where did I say direct costs aren’t part of fractional reserves? Where’s the proof? You need to present evidence that Goldsmith and Co. were’t party to the early Northern Italian candle makers debasement. My link clearly shows it wasn’t.

    I continue to hold evidence that the banana index the Reserve Bank uses to measure inflation is superior to gold reserves and metalic backing even when the dutch tulip mania was the result of Russian intervention in New Caladonia.

    So unless your mother’s first name is Maggie, your lying.”

    That’s the sort of argument, Fyador produces to aid his arguments. Senseless ? You bet.

    jc

    October 27, 2006 at 11:39 am

  266. “Ook – fraud! – ook”

    Nope…still not getting it, munnkey. Are you trying to convince your handler he doesn’t know the meaning of the word “fraud”?

    Would a banana inmprove your communication skills? How about a nicely overripe mango? Papaya?

    Fyodor

    October 27, 2006 at 11:47 am

  267. Fydor
    Tells us why the RBA is now on a fruit index to set monetary policy.
    Aren’t jsut a little embarrassed with this report for the OZ only a few days ago?

    “HOME-OWNERS should brace for another rise in interest rates after the annual inflation rate came in at 3.9 per cent, fuelled by continuing high fruit prices”

    Fydor tells us that the RBA is right to run monetary policy on the CPI when most of us have told him it is senseless and dangerous.

    So Fydor is now the banana index supporter.

    What a wanker.

    John Z you may wish re evaluate what you had to say about the dickhead.

    jc

    October 27, 2006 at 12:04 pm

  268. I can’t figure out who to call a fraud and a liar, so I’ll inject a little unwelcome fact. The ancient world had fiduciary currency, little disks of bronze that were exchangeable in quantity for disks of silver or gold. The state didn’t always have enough disks of silver and gold on hand to redeem all the bronze disks it minted. Was this fractional reserve banking? why not?

    Timothy Can

    October 27, 2006 at 12:33 pm

  269. Perhaps Fydor can answer your question..

    Let’s watch this one.

    jc

    October 27, 2006 at 12:42 pm

  270. “Oo-ook! OZ! OOK-OOK!”

    What’s that – newspapers? What use can a dumb animal like you derive from newspapers?

    You’d be better off papering your cage with them, you filthy creature.

    Fyodor

    October 27, 2006 at 1:59 pm

  271. Tim, the bronze tokens you mention are fiat currency. That is, a unit of currency issued by a government, and acceptable as legal tender because of government fiat, is not an example of fractional reserve banking, but of fiat currency.

    Fyodor

    October 27, 2006 at 2:11 pm

  272. Tim
    the fraudster’s , lying again. Of course it is a form of fractional, otherwise if they would have been able to meet the committment if 100% reserved.

    The frauster can’t admit to this otherwise the lying dickheads entire argument goes down the gurgler.

    The only… note the only way they could not meet the committment is if they were running some sort of mismatched book against the precious disks. the fact they didn’t have enough means they lenjt them out and could get them back in time to fund obligations.

    jc

    October 27, 2006 at 2:22 pm

  273. Fydor

    I’ve had losts of stoushs and arguments etc. But you truly disgust me for the rotten, lying piece of filth you are. You could never ever present an argument in an honest way. When the low road is there you take it without hesitation. Fuck off, like your buddy nabs who said labor markets were a ying and yang thang.

    Get the fuck out of here you disgusting dishonest first rate pig.

    jc

    October 27, 2006 at 2:27 pm

  274. Tim

    A better way of looking at this is to ask yourself… If they had gold disks that represented the entire issue of copper disks, why did they the bother with copper disk issuance in the first place. Unless they were up to something why not use smaller gold disks?

    jc

    October 27, 2006 at 2:43 pm

  275. …….if they were running some sort of mismatched

    Shoud be

    if they weren’t running some sort of mismatched

    jc

    October 27, 2006 at 2:45 pm

  276. “OO-OOK! WAH-WAH! OOK!”

    Look, calm down, Munnkey. You’re just making yourself more excited with all these screeching hysterics.

    I don’t know what’s happened to your bananas – it’s just not my problem, you silly creature.

    Why don’t you ask Birdy? He always seems to have a banana in his pocket for you.

    Fyodor

    October 27, 2006 at 4:49 pm

  277. Fuck off Fyodor.

    You are too stupid and dishonest for this thread.

    Take your fucking *** disorder with you.

    Jason you know he’s lying outright.

    Why is he still here?

    GMB

    October 27, 2006 at 4:53 pm

  278. Jason.

    Why is this liar still here?

    What is this stupidity on YOUR PART in aid of?

    GMB

    October 27, 2006 at 4:55 pm

  279. I know what it is?

    You don’t COMPREHEND thats he lies all the time do you?

    You’re an economist and the fact that he lies all the time just goes right over your head.

    Is that right?

    Otherwise what is the purpose of his continued prescence on here.

    This is mindlessness ON YOUR PART.

    GMB

    October 27, 2006 at 4:56 pm

  280. You know when you finally DO ban this bastard its going to be a long time before I stop being angry at you for FUCKING TAKING SO LONG.

    GMB

    October 27, 2006 at 4:58 pm

  281. No Graeme, it’s because I’m not going to ban anyone if it isn’t necessary.

    But I will issue a warning to Fyodor.

    Fyodor – STOP LYING in bed with your boss’s wife …

    Jason Soon

    October 27, 2006 at 4:59 pm

  282. WHAT IS FUCKING WRONG WITH YOU MAN.

    What is fucking wrong with you.

    Are you in fact too stupid to see that he is a relentless liar. A slanderous fuck.

    I mean it ought to be embarrassing to you that you actually thought the fucker was talking sense from time to time.

    Were you playing hooky when Macro came around.

    You ban people for saying slanderous actionable stuff all the time.

    Well why are you fucking giving Gerrard so much disrespect then?

    And me for that matter.

    WHAT IS THE POINT IN KEEPING SOMEONE WHO LIES ALL THE TIME ON THE FORUM.

    WHAT IS THE POINT.

    I’M GOING TO GET A FUCKING ANSWER OUT OF YOU FOR THIS.

    GMB

    October 27, 2006 at 5:03 pm

  283. What is the point in keeping a relentless liar on the forum.

    What is this in aid of.

    You screen out spam don’t you?

    What would be the point of letting spam through for example?

    You see you MUST have a motive for this.

    What is the motive?

    GMB

    October 27, 2006 at 5:05 pm

  284. Nope, no one’s been banned.

    You may not agree with Fyodor but that’s no reason to ban him. I will be taking no further whinging about this. Get back to the topic. Piss or get off the pot.

    Jason Soon

    October 27, 2006 at 5:09 pm

  285. Why the hypocrisy and the double standards Jason?

    GMB

    October 27, 2006 at 5:21 pm

  286. “You may not agree with Fyodor but that’s no reason to ban him. I will be taking no further whinging about this. Get back to the topic. Piss or get off the pot.”

    Why the lying Jason?

    YOu know that this is not about me disagreeing.

    Its about Fyodor lying.

    And now you decide to fucking lie too.

    You see how this shizo fuck brings everyone down.

    Turns you into a fucking hypocrite two-faced liar.

    GMB

    October 27, 2006 at 5:23 pm

  287. Hey Jase, djareckon if I manage to make Birdy really angry we can get the clown up to 10 consecutive comments?

    The most I’ve managed so far is six, but records are there to be broken, right? Personally, I have a suspicion our fowl friend is the type that goes up to 11.

    Fyodor

    October 27, 2006 at 5:23 pm

  288. What is the reason for the double standard.

    WE CAN AT LEAST GET A FUCKING EXPLANATION?

    I don’t think thats too much to ask.

    And I’m not whining I’m shouting.

    GMB

    October 27, 2006 at 5:24 pm

  289. Fuck off Fyodor.

    What is the reason for keeping him on Jason.

    Lets here a fucking explanation for your hypocritical behaviour.

    Lets here it hey?

    GMB

    October 27, 2006 at 5:25 pm

  290. Sounds pretty whiny to me, birdbrain.

    But then you’re a non-stop whining wino Wiener, arentcha, Rothbird?

    Fyodor

    October 27, 2006 at 5:26 pm

  291. Graeme
    As I’ve stated repeatedly it is not my role to adjudicate the truth or falsity of arguments as long as there are no legal implications. Even assuming that Fyodor was ‘lying’ about particular facts in economics or history, it is not my role to be following every debate that goes on in every thread and banning/deleting commenters whom I think are lying subject to that proviso. That defeats the whole purpose of the forum.

    Someone can come onto a forum and say ‘socialism is better than capitalism’. To me, that is a lie. But it would be ridiculous to ask me to ban or delete that comment.

    So deal with it and stop boring me with this ranting.

    Jason Soon

    October 27, 2006 at 5:28 pm

  292. What is the reason for the double standard Jason.

    This has been going on for a very long time.

    And we ought to have some sort of explanation.

    GMB

    October 27, 2006 at 5:28 pm

  293. “As I’ve stated repeatedly it is not my role to adjudicate the truth or falsity of arguments as long as there are no legal implications”

    That wasn’t the question.

    What are you fucking talking about?

    What are you fucking talking about Jason.

    I didn’t ask you to adjudicate truth or falsehood.

    If I had wanted you to do that I would have asked.
    >>>>>>>>>>>>>>>>

    Why the double standard Jason?

    GMB

    October 27, 2006 at 5:30 pm

  294. Fydor the reason Birdy breaks down thoughts in several comments is that he’s showing separately the many lies in your comments. It’s neatness thing. 10 lies means 10 separate comments.

    You’re a neatness freak too I noticed, so you can understand Birdy’s need to show your lies and distortions in neat format.

    Hey. Tell us are you still a CPI man, Mr. Banana index?

    jc

    October 27, 2006 at 5:30 pm

  295. Its not that he’s WRONG?

    Its that he’s ALWAYS lying.

    But you KNEW that before you tried that bullshit on.

    So lets go again.

    What is the reason for the double standard?

    GMB

    October 27, 2006 at 5:32 pm

  296. “OOK-OOKA! BANANA! OO-OO-OOK!”

    Birdy, I reckon Munnkey is really gagging for that banana of yours.

    You’d better give him one before he gets really upset and has another “accident”.

    Fyodor

    October 27, 2006 at 5:33 pm

  297. Lets go again:

    1. Fuck off Fyodor. I’m going to give you the beating of your life if I get my hands on you prick.

    2.Why the fucking double standard Jason!

    This time don’t try and bullshit your way out of it.

    GMB

    October 27, 2006 at 5:35 pm

  298. Nope as I said, I can’t check every statement to verify whether he’s lying or not, If I do that I’d have to do that in every comment thread. I’d have to check everyone else. I won’t be setting a precedent for that.

    Ask c8to if he thinks Fyodor should be banned. c8to runs the physical infrastructure, If he says yes it’s his call.

    Jason Soon

    October 27, 2006 at 5:37 pm

  299. Right.

    This time Jason….

    Try giving us an answer AFTER putting all bullshit aside.

    This time just bury the bullshit. And then try and figure out the real reason.

    What is the motive for letting Fyodor continue?

    GMB

    October 27, 2006 at 5:38 pm

  300. Birdy didya notice how upset Mr. Banana Indexer was when Nabakov was told he could fuck off as he would not be missed.

    Fydor was almost in a state of total apoplexy. He almost tried that shit about he too would leave in protest. that’s of course until he realized there would be lots of cheerinhg from the benches if he did leave with his bumchum friend, never to return.

    Damn I wish he had fallen for that.

    Nabakov… I just know you will read this. You’re not being missed.

    jc

    October 27, 2006 at 5:38 pm

  301. “Nope as I said, I can’t check every statement to verify whether he’s lying or not, If I do that I’d have to do that in every comment thread. I’d have to check everyone else.”

    Are you telling me that you are so stupid you actually DON’T KNOW that he has been lying all the time?

    Is that what you are trying to tell me?

    You don’t have to check the whole thread.

    Just establish to your own satisfaction that you see the pattern of behaviour.

    GMB

    October 27, 2006 at 5:40 pm

  302. Bridy
    Do you think Fyodor works at the CBA? If you recall, you said you thought that he did when he published all the private information about that other G Brid who works there thinking he had exposed your private information.

    jc

    October 27, 2006 at 5:43 pm

  303. I suspect so.
    >>>>>>>>>>

    Jason. The leftists and thread-wreckers will wreck your threads if you LET THEM.

    We have got to consider who is the REAL Jason Soon in light of your double standards here.

    Jason Soon……… Champion of Liberty?

    or

    Jason Soon……. Blood-Sucker-Centrals loyal opposition.

    GMB

    October 27, 2006 at 5:52 pm

  304. Cozzie bro, leave Soonie alone.
    He wants an open forum. Just argue your case and forget this Fyodor joker.

    Kiwi Bird II

    October 27, 2006 at 5:54 pm

  305. Crikey. Who knew Jason Soon was a blood-sucking fifth columnist? I can’t wait to see how this fairy tale ends.

    Is there a chubby god involved in this one, Birdy? What about a fantasy island? Can your munnkey play Tattoo?

    Fyodor

    October 27, 2006 at 5:56 pm

  306. work out who I am yet, fathead whanau?

    Kiwi Bird II

    October 27, 2006 at 5:57 pm

  307. (1) It’s not fiat currency. It’s fiduciary. Fiat is money because the government says it is, fiduciary because someone promises to exchange it on demand for something of accepted value.

    (2) The reason for issuing base metal coins of nominal value greater than their metal value was probably originally convenience. Coins of gold suitable for minor everyday transactions are very small and easy to lose. OTOH, base metal is so cheap that “coins” containing their true value in metal can be unwieldy large. (The aes signatum of the early roman republic weighed 2kg!). The scope for inflation was limited by the fact that for large transactions and “international” trade, only gold and silver were accepted.

    In a sense these early coins were a form of banking in that the state took in one form of money (gold) and issued another of its own creation (bronze).

    Timothy Can

    October 27, 2006 at 6:01 pm

  308. “What about a fantasy island? Can your munnkey play Tattoo?”

    As in you and Munn?

    Christ you’re filth, Fyador. Just total filth. And a pansty too.

    jc

    October 27, 2006 at 6:04 pm

  309. Tim

    And when they didn’t have enough gold to meet the demand of convertability what does that imply?

    jc

    October 27, 2006 at 6:05 pm

  310. What’s fiduciary about it, Tim? Where is the element of trust (i.e. fiducia = trust)?

    If the government says a bronze token is worth X gold or silver, that’s a fiat decree. There’s no element of banking in what you’re describing: no lending, no depositing – simply the government stating it will swap bronze tokens for a certain amount of gold or silver.

    No government would expect to have, on hand, all the coin issued into the economy, for the obvious reasons.

    Fyodor

    October 27, 2006 at 6:12 pm

  311. It’s fiduciary because the value of the tokens comes from trust that the issuer will redeem them. Obviously the issuer of tokens (like the writer of a cheque) decides what the token will stand for, but that is not the creation of monetary value by fiat.

    Timothy Can

    October 27, 2006 at 6:18 pm

  312. Yes, Tim it is. The tokens have worth because of government fiat/decree.

    Fyodor

    October 27, 2006 at 6:26 pm

  313. Tim.

    Don’t be like every other Palooka here and be taken in by anything that Fyodor says.

    Fyodor is an idiot.

    But if you think that you are smart enought not to make a fool of yourself by being taken in by Fyodor then this is a good place to ask any question you want.

    “Yes, Tim it is. The tokens have worth because of government fiat/decree.”

    Thats not quite right.

    Government can only create value by brute force. Which is what fiat means its true. But Fyodor makes it sound like its just the wave of a hand.

    The government has set up a whole series of rules and activities to stop other monies from competing with their money.

    And on top of that they compel (by force) that taxes be paid in their money.

    And so they create this artificial demand for their cash.

    But this could never have been acheived without first having a private money being established by the market.

    GMB

    October 27, 2006 at 6:42 pm

  314. Right.

    Timothy I’ve read a bunch of your stuff and I can see you have a good handle on this stuff.

    Can you argue with Fyodor for awhile.

    And then you will be able to confirm that he is a liar.

    GMB

    October 27, 2006 at 6:44 pm

  315. Yes, Tim, can you argue with me for a while?

    Birdy’s evidently lost his puff.

    Or he’s too busy spanking his munnkey…

    Fyodor

    October 27, 2006 at 6:48 pm

  316. No we just need further confirmation that you lie all the time.

    Evidently this goes too far above Jasons head for him to know this for himself.

    GMB

    October 27, 2006 at 6:52 pm

  317. What is the justification for this lying faggot still being here Jason?

    GMB

    October 27, 2006 at 6:53 pm

  318. The same justification that allows you to stay here, state-worshipper.

    JohnZ

    October 27, 2006 at 6:59 pm

  319. Tim
    GB is right. Spend some time with the Fydor you come out thinking he’s a moron covering it up by lies.

    jc

    October 27, 2006 at 7:01 pm

  320. You know when Fyodor’s lost the argument or gets found out for lying. He reverts to gay sexual inuendo thinking that would scare the us Hetros.

    jc

    October 27, 2006 at 7:08 pm

  321. “The same justification that allows you to stay here, state-worshipper.”

    Now whats that you fucking idiot?

    Jason won’t make an accounting for his hypocrisy on this matter.

    So if you want to speak for him you confirmed idiot lets hear it.

    GO!!!

    GMB

    October 27, 2006 at 7:12 pm

  322. Defintion of fiat
    A legally binding command or decision.

    other simialr words

    edict
    decree
    order
    rescript

    The definition is almost identical to Birdy’s explanation whic is:

    Fyodor is an idiot.

    But if you think that you are smart enought not to make a fool of yourself by being taken in by Fyodor then this is a good place to ask any question you want.

    “Yes, Tim it is. The tokens have worth because of government fiat/decree.”

    Thats not quite right.

    Government can only create value by brute force. Which is what fiat means its true. But Fyodor makes it sound like its just the wave of a hand.

    The government has set up a whole series of rules and activities to stop other monies from competing with their money.

    And on top of that they compel (by force) that taxes be paid in their money.

    And so they create this artificial demand for their cash.

    But this could never have been acheived without first having a private money being established by the market.

    Compare that to the swill the liar, Fyodor presented, which is:

    If the government says a bronze token is worth X gold or silver, that’s a fiat decree. There’s no element of banking in what you’re describing: no lending, no depositing – simply the government stating it will swap bronze tokens for a certain amount of gold or silver.

    No government would expect to have, on hand, all the coin issued into the economy, for the obvious reasons.

    John Z. You wanna reassess. Don’t you see this wanker has no understanding of this subject? Don’t be a bone head and think he has anything of value to say. He hasn’t.

    jc

    October 27, 2006 at 7:19 pm

  323. My big PUKU bro, don’t let your PUKU be doing your thinking for you and leave this Soon fella alone.

    You think I don’t follow your goings on, cozzie? You been banned from sites left, right & center – even your own libertarians at STRIKE-THE-ROOT (TEE HEE) be giving you the middle finger and slam the door in your face.

    Only these fellas at Catallaxy let you hang out. Don’t make trouble for them, Big PUKU bro.
    Just forget this Fyodor nancy-boy.

    Kiwi Bird II

    October 27, 2006 at 7:32 pm

  324. I don’t need to be here man.

    But this thread represents the most important topic of all.

    And its crazy to let this disturbed lying nutball get in the way.

    I thought he was actually useful early on. So fucking dense that I thought he’d be a useful foil.

    But it didn’t turn out that way and he’s getting in the way.

    Now this monetary reform has to happen so this thing has to get done.

    But it would be a lot easier if Jason wasn’t acting so perversely by encouraging a self-described thread-wrecker.

    GMB

    October 27, 2006 at 7:43 pm

  325. Hey bro
    This Soon fella hasn’t been encouraging nobody. He just be letting you and this Russian nancy-boy roll in the mud. You keep kicking up a fuss about this red-haired sissy and you look like a fool. Just ignore him and say your piece, bro.

    And I’ll tell Devlin you say kia ora tatou next I see him, hey?

    Good luck with your fighting, bro but stop giving this Soon fella a hard time.

    Kiwi Bird II

    October 27, 2006 at 9:01 pm

  326. Yea GB, your family member is right. let’s ignore the red headed sissy boy from now on.

    jc

    October 28, 2006 at 12:50 am

  327. That was Trotsky that was the bloodnut.
    >>>>>>>
    We are getting a picture here of two types of fractional reserve then.

    The post 1670’s style. Wherein its a formalised agreement nationwide to back up eachothers debt.

    And this earlier style. Where its frowned on. Where its a breach of trust. But where it probably goes on a little bit at most banks anyhow.

    This is a strange subject. And just when you think you’ve gotten a handle on it some new information comes in and you have to turn everything on its head again.

    We might call these two:

    1. Formalised fractional reserve (Post 1670’s) and

    2. Fractional on the sly. (Pre-1670’s)

    We can already see what happened in the formalised fractional reserve. This makes banking very much like the stock market is now (I’m talking about before all the government guarantees are in place)…

    It makes it a proffession dominated by greed and fear alternatively and it sets up the familiar boom-bust cycle.

    But how would the other one work.

    I wonder if we have in existence enough information on medieval banking to really sort this out.
    >>>>>>>>>>>>>>>>>>>>>>>
    Price Data From Earlier Times

    When this thread kicked off I had thought that fractional reserve only happened somewhere round the early eighteenth century.

    But me and Fyodor have swapped positions. Me as we found out more and him as it suited his tendentious crap of the moment.

    So I had an explanation for this price data of David Hackett Fischers that didn’t involve fractional reserve.

    I now suspect that this was a mistake.

    I don’t have Fischers book in front of me but here is some information on what he found out.
    >>>>>>>>>>>>>>>

    He found out there were long multi-decadal WAVES (“waves” not “cycles” like in post 1670’s fractional reserve) of inflation and other multi-decadal periods of “price-stability” (which on average usually meant prices falling a tiny bit most years).

    He found out that the inflationary periods led to domestic and international violence and generally rotten times with falling real wages.

    And that the long periods of price stability and falling prices were the opposite. They were associated with relatively less war and with great creative acheivement.

    Long periods of inflation meant FALLING REAL WAGES except at the start.

    Whereas the long periods of price-stability and falling prices meant REAL WAGES RISING except at the start.

    The specific time periods of inflation he looks at are:

    1. The medieval price revolution 1180-1350
    average inflation about .5%

    2. The Price Revolution of the Sixteenth Century. And the crisis of the 17th. About 1470-1660

    (3. The Price Revolution of the 18th century: About 1720-1820)

    And the good times where prices were stable or falling were:

    1. The Equilibrium of the Renaissance 1400-1470

    2.The Equilibrium of the Enlightenment 1660-1730

    (3. The Victorian Equilibrium. 1820-1896)

    I’ve bracketed the ones where the new type of fractional reserve is in operation. And I think they are essentially different. And you get that feeling reading the book as well.

    The Victorian era had its booms and busts even though on the whole these were good times.

    I think these two were different but just HOW different is another thing.

    Anyway we will try and figure out how this fractional-reserve-on-the-sly would work. What dynamic it would set up.
    >>>>>>>>>>>>>

    This is all pretty important. Because as Fischer shows even a small amount of this inflation seems to change the whole dynamic of society.

    If its enough to increase the rate of violent crime a little bit or if its enough to lead to even one more war thats a helluva lot of dead people.

    And in the first case it was only inflation of .5%!!!!!!!!!!!!

    Also this points to the idea that we really want growth-deflation locked in to have a sort of capitalism which leads to “improving” distribution of wealth and income each decade without stealing great amounts off rich people.

    GMB

    October 28, 2006 at 7:31 am

  328. Sheesh! WTF is this? Bird Family Reunion Day??!!

    But thanks anyway Mr Kiwi Bird II.

    Jason Soon

    October 28, 2006 at 7:47 am

  329. Leland Yeager and 100% Gold…………

    Now bear in mind that at the time that Yeager wrote this he had made a judgement-call AGAINST 100% GOLD.

    Its the same with other people. Like with David Friedman where I have total confidence in his nuts and bolts description of how various systems operate.

    And yet we likely come down differently on the ultimate judgement call of where to go from here.

    But its important to at least understand how these things work so that you can make your OWN judgement about these things.

    Here is what Yeager said some decades ago:

    “Under a 100 percent hard-money international gold standard, the currency of each country would consist exclusively of gold (or of gold plus fully-backed ware­house receipts for gold in the form of paper money and token coins).

    The government and its agencies would not have to worry about any drain on their reserves.

    The gold warehouses would never be embarrassed by requests to redeem paper money in gold, since each dollar of paper money in circulation would represent a dollar of gold actually in a warehouse.

    There would be no such thing as independent national monetary policies; the volume of money in each country would be determined by market forces.

    The world’s gold supply would be distributed among the various countries according to the demands for cash balances of the individuals in the various countries.

    There would be no danger of gold deserting some countries and piling up excessively in others for each individual would take care not to let his cash balance shrink or expand to a size which he considered inappropriate in view of his own income and wealth.

    Under a 100 percent gold standard… the various countries would have a common monetary system, just as the various states of the United States now have a com­mon monetary system.

    There would be no more reason to worry about disequilibrium in the balance of payments of any particular country than there is now reason to worry about disequilibrium in the balance of payments of New York City.

    If each individual (and institution) took care to avoid persistent disequilibrium in his personal balance of payments, that would be enough.

    The actions of individuals in maintaining their cash balances at appropriate levels would “automatically” take care of the adequacy of each country’s money supply.

    http://www.mises.org/story/1829

    Scroll halfway down to get Yeagers comments within Rothbards essay.

    I hope you are paying attention here Mr Soon.

    GMB

    October 28, 2006 at 10:05 am

  330. Oh Ho.

    When you match up mine and Gerrards data you have a pretty good match.

    And excellent level of CONVERGENCE.

    It must be remembered that Venice was not just a city. It was an Empire.

    If banking practices of the city were spread throughout the whole Empire then we have a pretty good fit.

    But on top of that we have banking in Florence at the same time.

    Item 1: I said that

    “The specific time periods of inflation he looks at are:
    1. The medieval price revolution 1180-1350
    average inflation about .5%”

    And I got this from David Hackett Fischer.

    Who worked with price data and did not investigate bank practices. Which is great news because it gives us a CONVERGENCE TEST.

    Item 2.

    The bank of Venice was set up in 1172. Eight years prior to Fischers dating of the first great wave of medieval inflation.
    But there was many banks around before that.

    Item 3. From Gerrard. Banking in Florence as well at that time:

    “Let us begin with Florence where in the late twelfth century a banking system began to develop.

    At first these banks adhered to a 100 per cent reserve. But human nature being what it is, they started to create phony credit by dropping their reserves. (Carlo M. Cipolla, The Monetary Policy of Fourteenth Century Florence, Berkeley University of California Press, 1982).

    Surprise, surprise, Florence found itself enjoying a boom — and not a single newspaper in sight — followed by a bust that was so sever that. Cipolla compared it to the Great Depression:”

    So far we have an exellent correlation between the development of this banking and the BEGINNING OF FISCHERS FIRST GREAT WAVE.

    But what about the END OF THE GREAT WAVE.

    Item 1 Again:

    I said that

    “The specific time periods of inflation he looks at are:
    1. The medieval price revolution 1180-1350
    average inflation about .5%”

    So what happened prior to 1350 to bring this first medieval great wave to an end.

    Well it doesn’t take long to find it.

    Item 4: From Gerrard:

    “Having made loans that greatly exceeded their deposits it was only a matter of time before a crisis was triggered.

    In this case several factors came to the fore: The banks had made heavy loans to Edward III of England who was now unable to repay them; Neapolitan princes made massive withdrawals — perhaps they smelt a rat — and there was an acute drop in the price Florentine government bonds.

    From 1341-1346 the crisis deepened and a number of the great banks collapsed.”

    The crisis in Florence therefore triggers the end of the first great wave of inflation and my speculation is that the crisis is powerful enough to unravel a lot of the rest of fractional reserve through-out Europe.

    And here I was dreaming up all sorts of other alternatives to fractional reserve to explain these Medieval Great Waves.

    But now we have the answer.

    Man I’m so proud of myself for matching this seperate data up.

    JC can you tell Jackson about this and see if he thinks I’ve gotten it right?

    GMB

    October 28, 2006 at 2:59 pm

  331. This week Jim Puplava talking to a fellow called G. Edward Griffin.

    He’s written a book called “The Creature From Jekyll Island”

    Which is about specifically the centralised banking scam of the Federal Reserve.

    http://www.netcastdaily.com/fsnewshour.htm

    He describes how it is a partnership between a cartel of banks and the government.

    But it applies equally to our central bank or to any central bank under fractional reserve.

    Now to be fair there is some personification of INSTITUTIONAL TENDENCIES going on here.

    We don’t want people to think we ought to be going into banks and arresting the customer service officers. Nor do we want to be suggesting that everything Greenspan did was a total disaster.

    But there is no question that this is a dodgy system.

    It means that banks borrow short and lend long. Whereas in a better world, in order to allocate the resources represented by a decision of anyone to defer consumption…….

    In order to allocate savings to the most productive investments banks ought to borrow long and lend a little bit shorter then they are borrowing.

    They ought to be estimating their cash flows like any other business.

    If someone has supposed to have their money back in their possession by June the banks want to know that they are getting back a little bit MORE money then that a little bit EARLIER.

    So this system has reversed the entire logic of what would bring us a productive use of savings.

    And its set up choppy waters as far as information about real resources are concerned.

    Since under 100% backing a decision to postpone spending on consumer goods will lead to an equivalent demand for capital goods right away.

    Whereas fractional reserve brings a random aspect to this.
    >>>>>>>>>>

    I like this interview of Guido Hulsmann.
    He’s working on a book on this subject.

    http://www.mises.org/media.aspx?action=showname&ID=231

    Its the audio specifically called:

    “An Interview With Guido Hulsmann”

    The part I’m interested here is when he is about three quarters of the way through the interview and he starts talking about a new book he’s writing called:

    “The Effects Of Money Production”

    “….Your book really isn’t on inflation is it?”

    “Its not really on inflation. Its as the title says its on money production. And especially the ethical lessons to be derived from this essentially economic analysis but also MORAL analysis.

    And the way I present inflation, probably in original terms. In fact I define inflation as A PERVERTED WAY OF PRODUCING MONEY…….

    This is the originality of the definition. So in fact I DEFINE inflation as PRODUCTION-OF-MONEY-THROUGH-THE-VIOLATION-OF-PRIVATE-PROPERTY-RIGHTS.

    So the production of money PER SE is legitimate and useful as the production of any other GOOD……”

    Now is this worth thinking about?

    Or is it just a matter of getting nationwide money aggregates right.

    We have something to link up here. In the last post I used my data and Jacksons data to show that the first medieval Great Wave of inflation (averaging .5% in consumer-price-inflation per year for many decades) was caused by FRACTIONAL RESERVE BANKING.

    This is something I had not even expected at the beginning of the threads of doom and something David Hackett Fischer did not know.

    But Fischer has managed to show that there is a big difference between the way people acted during the inflationary waves and the stable and slowly falling price decades. There was more violence both international and domestic in the inflationary periods and things were worse in every other measure you could think of as well.

    But Hulsmanns analysis brings up an interesting point.

    Is it the price rises themselves that cause the adverse societal results.

    Or to some degree is it the PERVERSITY of the money-creation… rather then the excessive monetary creation per se.

    Is it the buried fraud hiding at the core of society… that when we attempt to hide and bury it springs out in all manner of unexpected ways.

    Now I think we cannot have a too fast deflation rate. We will come unstuck. We want the volume of spending to be growing slowly all the time. We might ideally like it most years to be growing a little bit less then the growth in real economic output.

    But if Hulsmann is right then thats not enough. Its like it might be that we cannot cheat Karma. And we will get all sorts of wicked vengeances from the law-of-unintended-consequences manifesting themselves in unexpected ways if we imagine we can skirt over property rights when it comes to money creation.

    GMB

    October 29, 2006 at 12:26 pm

  332. fractional reserve banking isn’t fraud.

    i have some money that i will want to exchange for goods sometime within the next three months.

    i could keep this in a 100% backed account and pay for the privilege of definitely having my money there when i call upon it.

    or i could take a risk and put it in a fractionaly reserve account and earn a small amount of interest on it and risk not having the money there when i call upon it.

    why should gmb choose which option i am allowed to take?

    drscroogemcduck

    October 29, 2006 at 3:13 pm

  333. Birdy (the big one, not the duck)

    most of your sources have been sound so far if nothing else. why quote from some crank who goes on about the Rothschilds? This is anti-semitic New World Order twaddle.

    I’m referring to that book, not the Austrian.

    Jason Soon

    October 29, 2006 at 4:26 pm

  334. oh and what the duck said.

    Jason Soon

    October 29, 2006 at 4:35 pm

  335. Yea

    Let’s have the bird of prey swoop down on this duck. it wanna see duck festhers fly everywhere.

    jc

    October 29, 2006 at 4:38 pm

  336. “or i could take a risk and put it in a fractionaly reserve account and earn a small amount of interest on it and risk not having the money there when i call upon it.”

    Right. This is called the IOU+Redemption Promise.

    You aren’t going to waste your time with such a product under free enterprise conditions. Nor is the bank likely to supply this product.

    Fractional reserve can THEORETICALY be supplied non-fraudulently. But its not getting off the ground except if the trail is blazed by fraud.
    >>>>>>>>>>>>>>>>>>>>

    “why quote from some crank who goes on about the Rothschilds? ”

    What did he say about the Rothschilds?

    Is there some sort of hush hush about the Rothschilds?

    I haven’t heard him talking about the Rothschilds. I only heard him talking today about the Federal Reserve.

    GMB

    October 29, 2006 at 5:30 pm

  337. ““or i could take a risk and put it in a fractionaly reserve account and earn a small amount of interest on it and risk not having the money there when i call upon it.”

    Under free enterprise conditions there is no way you would earn interest in this way.

    I suppose had their been some sustained increase in the amount of Gold in the system its at least POSSIBLE. But in that case this is the time when you really would want to make sure this sort of fractional reserve didn’t get off the ground.

    But the idea that they’d pay interest for you on such an account……. (unless fraud had already been allowed to take off) is simply erroneous.

    GMB

    October 29, 2006 at 5:34 pm

  338. You may be thinking of an account like the ING account. That pays sometimes 5% interest.

    But this just a symptom of this generalised credit expansion. If money supply growth was a lot less and we are talking a starting point of 100% backing no-ones offering interest on an on-call deposit.

    Plus under these conditions people tend to have high cash balances. So you aren’t wasting time on getting the low rate of an IOU+RP account when you can get the higher rate on a term deposit.

    GMB

    October 29, 2006 at 5:40 pm

  339. See there is a bit of a circular thing going on here.

    Like there is this POTENTIAL for such an account not being fraud from a starting 100% backed start.

    But you guys feeling that you can merely show this potential think that you’ve changed all of banking history and proved that fractional reserve ISN’T fraud.

    But all of banking history says otherwise.

    The banks are just so constituted that if we don’t audit them they will cheat. And then we have corrupted our monetary system.

    If there was out there a few perverts who decided they wanted an IOU+RP account out of sheer weirdness that isn’t going to effect anything just so long as we are always on our guard against fraud.

    GMB

    October 29, 2006 at 5:45 pm

  340. i think and IOU+Redemption Promise would be quite popular because many people have lots of trouble determining future monetary needs. maybe they should be using a combination of long term deposits and short term loans instead of demand savings but loans require much more effort.

    drscroogemcduck

    October 29, 2006 at 6:03 pm

  341. Well I doubt it. But yet it doesn’t matter if you are right or wrong.

    So long as the fraud is cracked down on with ruthless vigilance this product can’t ruin the financial system.

    You may not be factoring the higher cash balances that people have in situations where prices are generally falling.

    GMB

    October 29, 2006 at 6:10 pm

  342. For someone who relexively bashes Greenies you sure love recycling, Birdy. How many times have you abused Hackett-Fisher’s work before? Twice? Thrice?

    Say after me: “correlation is not causation”.

    Now give your munnkey a banana – he looks dejected and won’t look me in the eye, the miserable little creature. Have you been abusing him again, you beastly fellow?

    Fyodor

    October 30, 2006 at 6:41 am

  343. Fydor
    I always look you in he eye when I say something, you girly boy.

    Did you think what Kiwi Bird said about was funny? I thought it was hsyterical.

    jc

    October 30, 2006 at 9:53 am

  344. OK, Birdy, stop panicking – false alarm.

    He was only pretending to ignore me, the cheeky munnkey. It didn’t take much simple prodding to get the stupid creature begging for my attention again.

    Even for a dopey animal his lack of self-control is simply extraordinary. I hope you have your banana handy…

    Fyodor

    October 30, 2006 at 10:30 am

  345. An example of Fyadors debating style.

    See if anyone can understand what he is saying…………

    “Andrew where did I say direct costs aren’t part of fractional. Where’s the proof. You need to present evidence that Goldsmith and Co. were’t party to the early Northerna Italian candle makers debasement that my link clearly showed.

    I continue to hold evidence that the banana index the Reserve Bank uses to measure inflation is supeior to gold reserves and metalic backing even when the dutch tulip mania was the result of Russian intervention in New Caladonia.

    So unless your mother’s first name is Maggie, your lying.”

    Fyodor tell us why you support the CPI as a useful index for inflation measurement again, Mr. banana Indexer?

    jc

    October 30, 2006 at 10:49 am

  346. “Ook-Ook, ook, ook-OO-OOK, BANANA!, ook”

    He’s calling for the banana again, Birdy.

    It’s already 3pm and the munnkey’s getting very, ah, excited, waiting for you to turn up with his afternoon delight.

    Fyodor

    October 30, 2006 at 2:04 pm

  347. Fyador’s now resorting to making animal noises when he gets girl angry.

    jc

    October 30, 2006 at 2:13 pm

  348. “Oo-ook, ook-ook, wakawaka.”

    Aw, isn’t that cute? The munnkey thinks he’s a person!

    C’mon, Birdy, give our perky primate a big hug.

    Fyodor

    October 30, 2006 at 4:30 pm

  349. Fuck of you fucking faggot.

    SOON.

    I thought you got rid of this threadwrecker?

    Why did you not get rid of this thread-wrecker.

    Shame on you.

    GMB

    October 30, 2006 at 4:54 pm

  350. “Say after me: “correlation is not causation”.

    Correlation is NOT causation.

    But inflation, (at least fractional reserve inflation) CAUSES all sorts of terrible social effects.

    If it was just correlation I wouldn’t worry about it. But the fact is its CAUSATION.

    I’m not worried about correlation. Only about CAUSATION.

    GMB

    October 30, 2006 at 4:59 pm

  351. Jason.

    Why haven’t you gotten rid of this mentally retarded little faggot?

    GMB

    October 30, 2006 at 5:01 pm

  352. GMB,
    Excessive money supply growth, whatever its cause, results in inflation. From my reading of your comment, you are saying that, in some way, inflation caused by fractional reserve “CAUSES all sorts of terrible social effects”. How can you tell fractional reserve inflation from any other type? Surely, all types of inflation have the same, equally bad effects?

    Andrew Reynolds

    October 30, 2006 at 6:15 pm

  353. Well we don’t HAVE any real evidence of any other type.

    But one type is an expression of dubious property rights or the violation of property rights.

    Whereas the hypothetical inflation that you are talking about wouldn’t be a violation of property rights.

    So there could be a qualitative difference.

    Its at least possible.

    But then we don’t have examples of non-fractional reserve inflation that I know of.

    GMB

    October 30, 2006 at 6:45 pm

  354. GMB,
    How about Spain from 1501 to 1602 due to the supply of South American silver? The silver content of the coinage was constant – there was no debasement – yet inflation was occurring throughout the period. The reason was the huge influx of silver, larger than economic growth, rather than changes in fractional reserve ratios. I’m sure there are more examples, but that is one to start with.
    You might enjoy this paper (it has a real go at Keynes) and, from my brief reading, covers the area well.
    The effects were devastating on the long term economic health of Spain, and they are only now really recovering from the results.

    Andrew Reynolds

    October 30, 2006 at 7:21 pm

  355. GMB: i think fractional reserve money growth causes deflation rather than inflation. the money growth is coupled with promises of extra future production. if we discount this extra future production back to the present it would be worth more than the money. so wouldn’t this mean deflation?

    drscroogemcduck

    October 30, 2006 at 7:42 pm

  356. 1501 to 1602 hey…..

    Well lets see how that fits in:

    2. The Price Revolution of the Sixteenth Century. And the crisis of the 17th. About 1470-1660

    So you see that this inflation takes in all of that. But Fischers research shows that the massive rush to find all this treasure FOLLOWS and does not lead the begginning of the waves of inflation.

    And you see how the way the first GREAT WAVE works out. Witht the information we have we would have to assume it was due to fractional reserve.

    And no doubt the second wave is because of that too. And the actual mad dash for physical metals comes later on in the wave.

    So we just don’t have much evidence for inflation under 100% backing.

    Its almost an untried system.

    GMB

    October 30, 2006 at 7:46 pm

  357. “GMB: i think fractional reserve money growth causes deflation rather than inflation. the money growth is coupled with promises of extra future production.”

    It creates both.

    But what are these promises, promises, promises you are talking about.

    You are not keeping your eye on the ball.

    You’ve stooged yourself with that one.

    GMB

    October 30, 2006 at 7:49 pm

  358. presumably you take out a loan because you will be in a slightly better off position in the future than if you didn’t take out the loan. the promised EXTRA future production is this little bit extra + interest + original amount of the loan.

    drscroogemcduck

    October 30, 2006 at 7:55 pm

  359. Right.

    So what’s the take home story to that.

    But let me give you a tip.

    First try and suss out what would happen if the volume of spending in the economy stayed rock solid.

    Then find out what the extra money creation would do to various measures.

    But you’ll never get a handle on it if you don’t hypothesise on a fixed volume of spending for starters.

    GMB

    October 30, 2006 at 8:05 pm

  360. maybe i’m coming from unorthodox assumptions but here is my thinking:

    – all loans create monetary instruments and increase the monetary supply

    – all loans also create promises of future goods which cancel out the effect of the extra money

    – i can’t see the difference between normal loaning and fractional reserve

    – so fractional reserve must not be inflationary

    BUT

    – the fractional reserve system at the moment is underwritten by the government temporarily loaning money to the banks which is inflationary

    – the government seeking to control the economy creates and destroys money but has a long term policy goal of creating money which is inflationary

    drscroogemcduck

    October 30, 2006 at 8:40 pm

  361. Yeah well you’ve stooged yourself.

    You can’t do it with sentences. You’ve got to sort out an example and write it down.

    Do some figures and stuff.

    You’re treating it like some sort of theological mysticism.

    Get away from these airy fairy promises and concentrate on the effect on money supply.

    GMB

    October 30, 2006 at 8:49 pm

  362. So our resident Rothbird admits that correlation is not causation.

    Excellent – that’s the spurious “Great Wave” – fractional reserve “correlation” trashed, then.

    I can’t wait to see what’s next on Birdy’s cack-handed data mining adventures. How many prejudices can one ranting bird confirm with dodgy data?

    Hey, speaking of crazed animals, what’s happened to your munnkey, Birdy? The dopey creature’s gone quiet – did you stuff him too full of banana?

    Fyodor

    October 31, 2006 at 7:17 am

  363. A bit of a tangent from the current stoush, and perhaps ground that’s been covered in the however many thousand comments have been shed over these various threads but I haven’t noticed it before.

    Anyway on my site Bird said

    People use insurance more over savings when they have currency debauch.

    What I am interested in is why is this Bird? Surely they play different roles? Insurance is used to mitigate against low probability high loss events that savings can’t cope with?

    Steve Edney

    October 31, 2006 at 8:56 am

  364. Fyador

    You are starting to sound as vapid as Nabakov. If you can’t offer anything then go away.

    Bird sounds were funny 3000 comments ago.

    jc

    October 31, 2006 at 12:09 pm

  365. Cozzie bro, that little ladyboy with the spiky red hair is the one you keep getting upset about?

    That pipsqueak crossdresser?

    Tee Hee.

    Just ignore the fucker, he ain’t saying nothing is he?

    Kiwi Bird II

    October 31, 2006 at 12:13 pm

  366. Yeah, Birdy, why do you let me upset you so?

    Granted, your retarded munnkey lacks the self-control to ignore me, but you could try to set a better example for the debased creature, couldn’t you?

    Fyodor

    October 31, 2006 at 1:12 pm

  367. I think we have scientific proof that the penchant for colourful language is genetic.

    I’d like to read Bird’s answer to Edney’s question.

    Jason Soon

    October 31, 2006 at 1:13 pm

  368. Fyodor.
    You’re such a sore loser aren’t you. What a pathetic nancy boy you are.

    jc

    October 31, 2006 at 1:20 pm

  369. “Ook-ook. Oo-wa-ook. Loser! Ook.”

    That’s no way to speak to your master, munnkey.

    You should be more careful, you cheeky devil – I get the distinct impression Birdy rather enjoys spanking his munnkey.

    Jase: yairs – it seems the stupidity is congenital, too. Bird I and Bird II may be a lot more closely related than they like to admit…

    Let’s see if Rothbird can substantiate his moronic claim about “currency debauch” and insurance. It should be good fiction, if nothing else.

    Fyodor

    October 31, 2006 at 2:06 pm

  370. Ladyboy Fyodor

    Who you calling stupid bud?

    Kiwi Bird II

    October 31, 2006 at 3:11 pm

  371. “What I am interested in is why is this Bird? Surely they play different roles? Insurance is used to mitigate against low probability high loss events that savings can’t cope with?”

    You take out insurance when you can’t afford to be poorer.

    I mean no-one likes to be poorer. But thats different from simply not being able to afford to be poorer.

    Because insurance is a negative sum bet. And a rich guy who was RICH WITHOUT DEBT (to take the extreme example) doesn’t need to take this bad bet.

    But someone who has HIGH NET WORTH but with debts that are far far higher then his net wealth he is totally reliant on CASH FLOW.

    He simply cannot afford to have things go wrong. And so he must hedge against things going wrong.

    Now our tendency to hold high or low cash balances and or high or low levels of debt…. is not independent from our long-run monetary conditions.

    GMB

    October 31, 2006 at 3:31 pm

  372. Well I think I is important in more situations than that. Sure its important in the case where risk can cause disruption in cash flows. However I also think that its worthwhile to take out insurance in situations where you don’t want the risk of being poorer, so long as the total premium you are likely to pay over some sort of time period (say 5-10 years) is considerably less than the loss you will incurr in some event. (and the price is reasonable).

    I don’t see that the “currency debauch” effects this.

    Steve Edney

    October 31, 2006 at 3:47 pm

  373. Well yes it is. I didn’t want to appear to be absolutist about it.

    But you see its a matter of degree. The less debt you have and the more wealth as savings you have the less insurance you need.

    I mean averaging out over millions of people the generalisation is going to hold.

    We weren’t talking about a single fellow. If we were you should have named him. We were talking instead about the market for medical services in the United States.

    The whole industry is buggered by legislation, the legal system run wild, and currency debauch leading to overuse of insurance.

    Now we have a control for this. It is cosmetic surgery. And since you cannot get it on employer insurance then you pay for it out of straight borrowing or savings.

    And so that therefore what we see is that this market works like a competitive market is supposed to and the cost-effectiveness of it improves every year.

    Whereas they don’t have this in the pseudo-private sector which is really the socialised medical sector of the States.

    And so you don’t have the same normal free enterprise situation where services become better value for money each year.

    In fact its a situation of runaway costs.

    GMB

    October 31, 2006 at 3:56 pm

  374. Steve, you’re just not grasping the complexity of Birdy’s argument. Allow me to summarise.

    Shorter Birdy: “currency debauch” causes people to buy insurance because rich people don’t buy insurance.

    See? The illogic is unassailable, and nary a fact to be seen!

    “Ladyboy Fyodor Who you calling stupid bud?”

    You, obviously. Thanks for proving my point, as you were clearly too stupid to note that I also implied you were inbred. [“Yes” is the answer to your next redundant question, BTW].

    Now stick around and prove to us that you’re stupider than Twitty Bird.

    Fyodor

    October 31, 2006 at 4:14 pm

  375. hey ladyboy fyodor

    don’t you be messing with no farmboy. or maybe you like being roughed up? course I know what you were saying bud? that was a rhetorical question?

    shouldnt you be down in some drag club somewhere sissy?

    Kiwi Bird II

    October 31, 2006 at 4:31 pm

  376. Fuck off Fyodor.

    Soon. Just block him and he’ll go elsewhere.

    What could be more simple then that?

    GMB

    October 31, 2006 at 4:36 pm

  377. no one takes you seriously no more, ladyboy.

    now why don’t you run along …. fuckhead

    Kiwi Bird II

    October 31, 2006 at 4:36 pm

  378. cozzie bro

    Soon’s way is better. This Fyodor-fairy, he wants ATTENTION. He wants to be taken SERIOUSLY.

    Now, you just ignore his stooopid arguments ( … he has none, the shithead ..) but keep him here and keep mocking the nancy, he’ll go off and cry and stamp his feet.

    Kiwi Bird II

    October 31, 2006 at 4:40 pm

  379. Oi, Kiwi, you’re not upset, are you?

    Shouldn’t you just ignore me, moron?

    Fyodor

    October 31, 2006 at 4:43 pm

  380. Fuck off Fyodor.

    Look what a stupid fuck you are.

    My best bet is that Edney had no trouble sussing out what I was driving at.

    But you you stupid bastard.

    Admit it.

    It went right over your head didn’t it you dumb fuck.

    GMB

    October 31, 2006 at 4:59 pm

  381. Oh boy
    I don’t know how many Kiwi Birds our server can take.
    How many of these farmboy ‘cozzie bros’ do you have floating around, Graeme?

    Jason Soon

    October 31, 2006 at 5:01 pm

  382. Thousands.

    I have not way of knowing which one this gentleman is.

    But if you are worried about your server just deep-six this dumb, shizo, moronic, low-IQ, thick, twisted, sick, plays-with-his-own-faeces…… FYODOR.

    That would take two-thirds of the abuse-overhead off this particular thread.

    GMB

    October 31, 2006 at 5:10 pm

  383. Steve E
    An example of Fyador’s debating style.

    See if anyone can understand what he is saying…………

    “Andrew where did I say direct costs aren’t part of fractional. Where’ the proof. You need to present evidence that Goldsmith and Co. were’t party to the early Northern Italian candle makers debasement that my link clearly showed.

    I continue to hold evidence that the banana index the Reserve Bank uses to measure inflation is supeior to gold reserves and metalic backing even when the dutch tulip mania was the result of Russian intervention in New Caladonia.

    So unless your mother’s first name is Maggie, you’re lying.

    Fyodor tell us why you support the CPI as a useful index for inflation measurement again, Mr. banana Indexer?

    jc

    October 31, 2006 at 6:31 pm

  384. GMB:
    insurance might not be negative sum because you wager dollars that are higher in the pile to win dollars lower in the pile and marginal utility says the dollars lower in the pile are worth more.

    drscroogemcduck

    October 31, 2006 at 8:07 pm

  385. Graeme
    Are your farm boy bros all libertarians? You ever thought of taking over a small island (say NZ) or something?

    Jason Soon

    October 31, 2006 at 8:32 pm

  386. Don’t you remember, Jason? Birdy’s always taking over islands in his bizarre fantasy life. In these fantasies he also pretends he understands economics.

    BTW, Birdy, your munnkey is babbling about bananas again. Don’t you give him enough banana-action as it is?

    Fyodor

    November 1, 2006 at 7:23 am

  387. Fyodor
    Your feelings are hurt aren’t they? Well I’m sorry ,but associating with known racists, lying all the time on this and many oher threads, supporting a banana index takes its toll, Fearless. You understand that, don;t you.

    So let’s just go back to normal, sissy. You don’t even have to apologise.

    jc

    November 1, 2006 at 1:22 pm

  388. how many dollars you made last night, ladyboy fyodor? suppose it depends on how many sailors docked …

    Kiwi Bird II

    November 1, 2006 at 1:24 pm

  389. kiwi bird

    Leave Lola alone please.

    jc

    November 1, 2006 at 2:44 pm

  390. Jeez, Birdy, you really have abused your munnkey. Look at the poor little beggar, cowering in his cage – he’s fecking terrified.

    Fyodor

    November 1, 2006 at 3:21 pm

  391. “how many dollars you made last night, ladyboy fyodor? suppose it depends on how many sailors docked …”

    How’s that “ignoring” working out for you, retard?

    I suppose you’re still crying into your pillow about me making fun of your (limited) intelligence, but surely you’re used to being mocked for your stupidity?

    Fyodor

    November 1, 2006 at 3:29 pm

  392. Lola

    Please stick to the thread. If all you want to do is abuse people I suggest you take a hike and go lie, distort, cheat, and swindle somewhere else.

    Go see where your lover is these days. Nabakov would be pleased to see you.

    jc

    November 1, 2006 at 3:39 pm

  393. Cozzie bro
    what say we track this ladyboy Fyodor down and …. give him a good talking too … yeah, that’s right … GIVE HIM A GOOD TALKING TOO (tee hee).

    See don’t ask for him to be banned. Because the longer he hangs around the sooner he’ll slip up eventually and then …POW!

    Kiwi Bird II

    November 1, 2006 at 3:42 pm

  394. I was waiting for you.

    GMB

    November 1, 2006 at 3:47 pm

  395. Fyodor
    You’re playing with fire here. I’m disclaiming responsibility for anything that happens if the Bird Brothers ‘track you down’. 🙂

    Just FTR I have no fucking idea who Fyodor is and I don’t wanna know.

    Jason Soon

    November 1, 2006 at 3:54 pm

  396. BTW I’m presuming that of the two Bird Brothers, Graeme would be played by Jim Belushi.

    Jason Soon

    November 1, 2006 at 3:58 pm

  397. Poor, stupid munnkey. Likes to throw shit, but copping it? Not so much. You’re in the cage now, foolish creature. Lap it up.

    Jase, it might be hard for Dumb & Dumberer to track me down when it’s so easy to distract them with woolly jumpers. Birdy’s stupid enough as it – Kiwi joining Team Turkey increases the buffoon factor exponentially.

    Fyodor

    November 1, 2006 at 4:36 pm

  398. Lola
    The amount of filth you leftists have thrown at me recently beggers belief. And yet I’m still hanging in there.
    On the other hand, you, lola don’t seem to take it too well at all. But I guess a giutless liar, who hides behind a moniker throwing shit at anyone she disagrees with can’t be expected to take the same back. Do you recall the time fondly, when there was Nababov holding your hand in a romantic way as both of you spewed your bile? I do.

    Are you lonely now, you loathsome little sissy?

    It’s the fact that you have been caught out distorting everything people say gets you down doesn’t it?

    You know you can leave and not come back. you won’t be missed.

    jc

    November 1, 2006 at 4:48 pm

  399. Cozzie bro
    what does the ladyboy have on you?

    nothing. all he does is spew stupid insults. and you were afraid he would gyp the others? this loser couldn’t gyp a drooling retard out of his ice cream.

    you keep talking, Fyodor. one day you might wake up with a horse’s head in your bed … shit-for-brains …

    Kiwi Bird II

    November 1, 2006 at 7:58 pm

  400. Why kill a horse?

    jc

    November 1, 2006 at 8:08 pm

  401. Where do the Bird Brothers buy their insults from?

    Jason Soon

    November 1, 2006 at 8:14 pm

  402. Jason
    You have to admit that of late Fearless is just doing a nabakov. She comes into a conversation, abuses birdy then goes away. In fact this entire thread has been like that. She started up with the lies and distortions at the beginning then graduated to imitating bird sounds. So if the two birds beat up on her I would be blaming the liar in chief for creating this meass. She’s getting bitchy now.

    jc

    November 1, 2006 at 8:21 pm

  403. “OOK! OOKAOOKA! BITCHY! OOK”

    Just look at you, you filthy creature, all covered in your own excrement. That’s what happens when you play with poo, you foolish beast.

    Fyodor

    November 2, 2006 at 7:38 am

  404. “Where do the Bird Brothers buy their insults from?”

    Morons ‘R’ Us?

    No doubt they took advantage of the “one for five” sale and spent all their pocketmoney on those pearlers. Plus, they got a free magic bean!

    OK, that last bit was a fib: it wasn’t free, but they haggled the merchant down into accepting a diamond nanorod for it. A bargain at a fraction of the price!

    Fyodor

    November 2, 2006 at 7:46 am

  405. Fyodor

    Are you angry at me? You can’t blame me for your lies and loathsome distortions. Run along now. And by the way that deal is always open. You wanna make those racist comment s to may face. You can always try. But bring a straw.

    jc

    November 2, 2006 at 11:06 am

  406. “OOK-OOKA-WAKAWAKAWAKA-OOK. Ook”

    Calm down, munnkey. You’re not scaring anybody in that cage. Here, suck on a banana.

    Fyodor

    November 2, 2006 at 1:42 pm

  407. Fyodor.

    Stop derailing threads with pathetc birdsounds. It’s not my fault that you support the RBA that has recently said their going on a fresh fruit index to control inflation.

    Crikey, you’re loathsome.

    jc

    November 2, 2006 at 2:03 pm

  408. “Ooga-ooga. Ookawook-oo-ook.”

    Fruit, you say? I’d say you’re more than fruity enough, munnkey. As always, please refer all complaints to your handler.

    Oi, Birdy! The munnkey says he wants more fruit!

    Fyodor

    November 2, 2006 at 3:35 pm

  409. Can everyone cut out the silly abuse? It used to be interesting, but now it is just repetitive and not advancing the argument.

    Andrew Reynolds

    November 2, 2006 at 4:13 pm

  410. I agree, Andrew. However if you care to look at who started it, you’ll see it was the pathetic fruit indexer.

    Now what would you like to know.

    jc

    November 2, 2006 at 4:16 pm

  411. The munnkey started it, Andrew.

    Now, what would you like to know?

    Fyodor

    November 2, 2006 at 4:18 pm

  412. JC,
    If we do have a broad index (one covering all the objections you have to CPI) and on item in that index shoots up in cost and all other items remain static, do you think that inflation has occurred and why do you think the way you do?

    Andrew Reynolds

    November 2, 2006 at 5:05 pm

  413. Andrew
    The CPI is a very inadequate way to measure inflation. If it were adequate we wouldn’t need to be stripping it down to its “core”. It is an historical relic that came out of the 70’s because at that time inflation was making its way into the price of goods and services..

    For a number of reasons that isn’t happening at the moment …. China is primarily pressuring all manufacturing…. along with all the things that globalization is supposed to be do. We haven’t seen much CPI increase because the Aussie went from 50 to 77 cents over the past few years giving prices a general downward bias. Recall the Yuan is locked to the dollar so we went up against the Chinese currency about he same as we did against the US dollar.
    However that isn’t saying we’ve had no inflation. We have, it’s asset price inflation.

    We now have the almost surreal situation where the RBA is worried about its CPI based “inflation” moving over the target range because the price of fresh fruit is zooming up. You see how silly this is.

    They are moving their monetary targets every year or so to reflect different things.

    This gets us back to the core of the problem. We have now a definitional problem with inflation. Bozos like Fyodor actually think the CPI is a good measure. History is telling us it is a shocking system.

    The fruit index is now the perfect example of why we need to go back to the historical way we viewed inflation.

    jc

    November 2, 2006 at 5:21 pm

  414. “OOK-OOKA-WOOK. BANANAS! OOK”

    This banana fixation of yours, munnkey, is perfectly natural, but don’t you think it makes your view of the subject a little, well, subjective?

    Fyodor

    November 2, 2006 at 6:11 pm

  415. Hey Andrew, why don’t you ask munnkey about the OTHER parts of the CPI? You know, the ones that aren’t related to bananas?

    Perhaps you could then ask him why banana price inflation isn’t a problem, but house price inflation is? Shirley they’re both examples of the DREADED ASSET PRICE INFLATION?

    Fyodor

    November 2, 2006 at 6:15 pm

  416. Jason.

    You’ll be saving yourself a lot of thread-dilution if you just do the right thing and get rid of this fool.

    GMB

    November 2, 2006 at 6:24 pm

  417. Wow two comments? You really are angry aren’t you sissy boy.

    You’re so angry the last para doesn’t even make sense.

    What’s wrong sissy, Nababov not around to caress you?

    jc

    November 2, 2006 at 6:26 pm

  418. and Munn, birdy.

    It must be gay mardi gras. These two gals ( Munn and Fyodor) are horny it seems. All they talk about is male on male sex.

    Gals, Sorry but I’m hetro and so is Bird. You two can always meet somewhere though like a public toilet.

    They just don’t realize that hetro guys never talk about male/male sex the way these two pathetic sissies do. It’s like they’re obsessed with this stuff.

    jc

    November 2, 2006 at 6:32 pm

  419. Gays like Fyodor and Munn just don’t understand it. Hetro men can have great friendships and like one another with the thought of sex not even coming close to ones thought process or the way we think about gals. That’s why the idea of a guy/girl friendship is bogus. Sooner of later the guy is gonna try it on.

    Fyodor and Munn think that because I like how Birdy expresses himself, what he writes and that i admire him must have sexual connotations.

    It doesn’t gals. We’re hetro and don’t think like that. We’re proud hetros just like both of you are proud homos.

    Fyodor. Iook, it must clsoely resemble the way you relate to gals. Think of it like that and you’ll never accuse hetros again.

    It’s so gay, Fyodor, you big sissy.

    jc

    November 2, 2006 at 6:43 pm

  420. Munny: “Why would Joe Cambria be jealous when he can sixty-nine Birdy any day of the week?”

    Munnkey: “I do that to males, Munn.”

    Birdy, you got some explaining to do!

    I used to think this animal homosexuality shit was for the birds, but I guess you two perverts prove the case.

    Speaking of perverted birds, where’s Kiwi? Retired hurt?

    Fyodor

    November 2, 2006 at 6:44 pm

  421. Fyodor,

    You really are getting angrier and angrier aren’t you? Look sissy, you got found out for being a liar, distorter and disembler of information and now nancy boy is angry. Frig off you loatheosome little sissy.

    jc

    November 2, 2006 at 6:49 pm

  422. “OOKABOOKA-FRIG!-OO-OOK”

    I really don’t think you should be abusing the munnkey that way, Birdy. Can’t you see you’re making the animal distressed?

    Fyodor

    November 2, 2006 at 6:50 pm

  423. Sissy boy’s debating style.

    1Keep repeating, “I never said that”.
    2 Keet repeating “prove it”. ( he doesn’t).
    3 keep repeating “I won”
    4.Keep repeating “He’s a quack”
    5. Do block quotes to confuse people
    6 avoid sounding like a sissy because people get turned off
    7 make lots of bird noises for 3000 comments in the hope it passes for real economic thought.
    8 lie a ot.
    9 distort a lot more
    10 pretend up you know something about the subject.
    11 refer to the opponents comments as inadequate.
    12. call the opponents argumets pathetic.

    jc

    November 2, 2006 at 6:59 pm

  424. “OOK-OOKOOK-OOKOOKOOK-OOKOOKOOKOOK-…-OOK^12”

    Holy shit, Birdy! Did you know your munnkey had 12 fingers?! Those extra thumbs must be really handy for gripping stuff. Like bananas, f’rinstance. I bet he has one powerful grip on a banana, hey?

    Fyodor

    November 2, 2006 at 7:03 pm

  425. 13 Hope vapid nababov turns to ease the heat.

    jc

    November 2, 2006 at 7:11 pm

  426. JC,
    In 412, I specifically said that the index was not the CPI, but one that met your concerns with that particular index, adding in other categories to meet the perceived problems.
    Please answer 412 on that basis.

    Andrew Reynolds

    November 2, 2006 at 7:45 pm

  427. Andrew

    Why is it necessary to even bother with an index. If as you and I both agree, money growth should at the most only reflect estimated GDP and population growth, why would there ever be any concern with inflation?

    Inflation is outsized growth in the money supply. Control that and you don’t need an index.

    Contrary to what the RBA says, I don’t think we should be trying to control prices, as they are these days.

    So far we have seen them focus interest rate policy on the stock market (in the US), inner city apartments and now fresh fruit (hilarious). At one time they were focusing on the Aussie dollar value by targeting its value.

    They seem to have a target for all sorts of things at different times.

    Good monetary policy could simply target a specific growth in the money supply and that’s about it. The market will easily find it’s own levels.

    Fyodor. Feel free to join the conversation. Let’s leave the crap out of it for a while in deference to Andrew and Jason. Try and behave yourself

    jc

    November 2, 2006 at 7:59 pm

  428. “Ook-ook. Ooka-booka-MERCY?. OOK?!”

    Quit whining, munnkey. You’ve made your bed, now lie in it, you dumb ape.

    Fyodor

    November 3, 2006 at 7:55 am

  429. Andrew
    The sissy thread wrecker was given the chance to get back on message. Next time you ask to get back on track i’ll refer you to this comment.

    I did this to prove that this coward sissy only does this because he is monikered.

    JC.

    November 3, 2006 at 10:45 am

  430. Donno what happened to the previous comment

    Andrew

    As you can see I tried to coax sissy to get back to topic and got rebuffed. So next time, you may want to direct your frustrations towards the sissy boy whose only contribution these days is bird sounds.

    JC.

    November 3, 2006 at 11:11 am

  431. Fyodor
    You worthless piece of dung. You wanna start making some sort of contribution. The adults here are getting tired of you.
    And stop projecting your fllth onto others. I don’t care what you get up to in those public toilets, fella, but we ain’t all like you.

    Kiwi Bird II

    November 3, 2006 at 11:20 am

  432. JC,
    The reason why we need to bother with an index is that we have no operational definition of what is money. The current measures, or any of them I can think of, are either of limited value or difficult to get right.
    The old favourite, M3, for example includes cheque accounts but not savings accounts – includes banks, but not credit unions. This is plainly nonsence. Each of the currently used indicies suffers from these issues.
    Once you accept that the whole MV=PQ becomes impossible to use – although it remains a useful tool for analysis – as I (hope I)have used it.
    Essentially:
    M – difficult, if not impossible to calculate reliably
    V – probably moving only slowly over time
    P – Able to be calculated by index
    Q – data lags by 3 months, but only changes slowly.
    The measure of whether the appropriate amount of money is in the economy can therefore only be done (in this framework) by looking at P. If P is rising quickly, there is obviously too much M – so action need to be taken to pull back M growth.
    It is unfortunate, but, without an accurate knowledge of M, I cannot see any other way to control P growth in a fiat system.

    Andrew Reynolds

    November 3, 2006 at 11:32 am

  433. “OOK-ooboo. OOKA-SISSY!-Ook.”

    Now, now, munnkey, that’s no way to speak to your handler’s relative, no matter how inbred the halfwit may be.

    Fyodor

    November 3, 2006 at 11:48 am

  434. Hey, munnkey, this “Kiwi Bird II” isn’t another one of your sock muppets, is it?

    Fyodor

    November 3, 2006 at 11:55 am

  435. Ok

    Firstly I don’t accept the equation as having any validity as I mentioned before. But even assuming that it does for the moment, what you are saying is that the Ms are too difficult to measure because we don’t know what money is and therefore can’t quantify it. Well ok. I am willing to grant you that premise which I also don’t agree with.

    So here is the solution:

    We know that high-powered money is used to fund the multiplier and is a function of the RBA’s balance sheet. The RBA’s balance sheet has to grow in order for the multiplier to work. So target the growth of the money supply by limiting or at least controlling the size of the RBA’s balance sheet.

    JC.

    November 3, 2006 at 11:58 am

  436. Andrew

    I want to be clear on this. The mutliplier can only grow through the provision of high powered money. If you control that you can control the money supply. It’s like a marker that medicos use to determine illness.

    JC.

    November 3, 2006 at 12:02 pm

  437. “The reason why we need to bother with an index is that we have no operational definition of what is money. The current measures, or any of them I can think of, are either of limited value or difficult to get right.”

    The problem with using an index does not remove the problem you described. It is in fact even more removed and inaccurate.

    If you say we can’t quantify money, it is also reasonable to say that we can’t determine in a movement in the index is caused by inflation. Recent examples of large increases in the CPI have not been caused by inflationary impulses. Energy price rises were an external shock that was not the result of inflation. It is an international demand issue. The recent explanation about the cause of CPI hitting the top of the target is laughable. Pundits along with the RBA are saying it is caused by the price of fresh fruit hitting all time highs due to weather problems. These two examples are clearly not inflation.

    However even a CPI index at zero may not be a good thing either. Price falls in tech may not be reflecting the reality of the situation. Inflation could also be eating away some of the benefits of these price falls. In other words they could have been larger in real terms.

    JC.

    November 3, 2006 at 12:14 pm

  438. Fyodor,
    Can you please quit the silly noises and either go away or re-engage? Your contributions have (despite opinions to the contrary) greatly advanced the debate in the past, but the animal noises are just silly and worse than pointless (IMHO). JC is continuing the debate, please treat him as such.

    JC,
    “Inflation is always and everywhere a monetary phenomenon” (Friedman). The argument you put up is a Keynesian “cost-push” one. If I remember correctly what should happen when there is a supply shock of this nature is that either the prices of other items in the economy actually drop slightly due to transfers of purchasing power to the increased cost item and / or purchases of the increased cost item should drop due to a substitution effect. Either way, inflation should not occur. The fact that inflation has occurred indicates that this is merely the symptom, not the disease.
    On high powered money – deposits with the RBA are now an almost irrelevant part of the balance sheets of most banks. Over the last 10 years this has become less and less important to the point now where the multiplier is independent of this.

    Andrew Reynolds

    November 3, 2006 at 1:08 pm

  439. Andrew: no. Munnkey decided he wanted ad hominem, so that’s what he’s getting. If he apologises for calling me a racist (with no substantiation, I might add), I’ll consider a return to an ad hominem-free discourse. Until then, munnkey business is the order of the day. If you don’t like it, I suggest you take your discourse over to your blog, where I promise not to bother you with vulgarity.

    Munnkey, you pitiful creature, are you going to deny you’re using sock muppets again, or are we going to be treated to another “I’s not JC” assertion from this “Kiwi Bird II” persona/puppet of yours?

    Truly woeful, you sad, sad little troglodyte.

    Fyodor

    November 3, 2006 at 1:29 pm

  440. Fyodor and JC – this little sniping between the two of you is getting tiresome. You started out with good intentions too Fyodor but now you seem to be here only to snipe at JC and Bird. Quit it both of you and kiss and make up or something.

    Jason Soon

    November 3, 2006 at 1:33 pm

  441. “Inflation is always and everywhere a monetary phenomenon” (Friedman). The argument you put up is a Keynesian “cost-push” one.”

    yes, I agree with Milts explanation 100% but I am not sure if I am following Keynes with the two example as I never said or even inferred price rises were caused by inflation. In fact I was quite specific in arguing they were not the result of inflationary impulses.

    I was highlighting the weakness of the system whereby targeting the CPI can actually tilt RBA policy without inflation occurring is the system. Energy costs increases can in fact have deflationary consequences as spending is diverted to meet the increase.
    Increase cost of fresh food is also not an inflationary problem and could be deemed to be a price signal response to supply and demand.

    I don’t think you can accurately figure price falls and rises when the target is 2.5% as the top of the range. It’s too small

    “On high powered money – deposits with the RBA are now an almost irrelevant part of the balance sheets of most banks. Over the last 10 years this has become less and less important to the point now where the multiplier is independent of this.”

    I’m actually not talking about deposits with the RBA. I am talking specifically about the size of the RBA balance. Target its size and use it as a marker for money supply growth. High-powered money these days is created through Repos and permanent adds and subtractions. The Size of the balance sheet is what counts.

    JC.

    November 3, 2006 at 1:35 pm

  442. Jase

    Good point I agree. that stuff is too childish. It’s just that the animal noises are simply getting tiresome.

    JC.

    November 3, 2006 at 1:37 pm

  443. And just FTR though this blogging software doesn’t seem to be completely reliable at reading IP addresses and has come up with some really anomalous results in the past, it certainly doesn’t show Kiwi Bird II to be JC’s sock puppet. And I’ve asked Birdy myself and even he thinks Kiwi Bird is actually one of his relatives.

    Jason Soon

    November 3, 2006 at 1:42 pm

  444. JC,
    My question was (rephrased) all prices remain stable, except one – which increases. Is this inflation?
    I would argue, strongly, that the answer must be “Yes”. The general price level has increased, even if it is only manifested in one product.
    On the high powered money – at a simplistic level, the only real role left for the RBA in the monetary system is the one it does in interest rates. Sure, it prints the notes and mints the coins, but these are becoming less important. Transfers between the banks are now the main way of transferring value around the economy and, whether you think banks deposits are “money” or not, this fact cannot be ignored.
    As I said, I would agree that MV=PQ is becoming irrelevant for practical purposes, but largely because we do not know what M is.

    Andrew Reynolds

    November 3, 2006 at 2:12 pm

  445. That’s curious, Jase, because Kiwi Bird’s grammar and vocab are almost as bad as munnkey’s, and the halfwit has a habit of posting quite closely in time to our poor benighted munnkey.

    Incidentally, munnkey, have you ever looked at the RBA “balance”, by which I think you mean, in your own incompetent style, balance sheet? As Andrew says, the RBA’s contribution to the pool of “money” is small. As usual, you clearly have no idea what you’re talking about.

    Fyodor

    November 3, 2006 at 2:14 pm

  446. Fyodor,
    I do not think JC is from NZ, but Kiwi Bird II is certainly doing a great impression of a person who comes from a land where some have been alleged to enjoy the presence of shaggy sheep the land of the long white cloud.

    Andrew Reynolds

    November 3, 2006 at 2:27 pm

  447. As has already been revealed somewhere on this thread, Kiwi Bird isn’t the only one from the land of the long white cloud.

    Just sayin’

    Jason Soon

    November 3, 2006 at 2:31 pm

  448. “As I said, I would agree that MV=PQ is becoming irrelevant for practical purposes, but largely because we do not know what M is.”

    Well….. Yes “WE” do. You might not.

    The reason why MV=PQ appears to be a little bit irrelevant is because the money growth rate under fractional reserve fiat is high and unstable.

    And so the velocity under fractional reserve fiat is oscillating all over the place as well.

    Under 100% back fiat with growth deflation……

    Or under 100% backed commodity money when all transitional issues had been dealt with……

    Under these two system money growth would be lower and more stable and velocity would also be low and quite stable….. Since the demand for cash for holding would be high and quite stable.

    So its still important to get the theory right even though our dysfunctional system is so inherently unstable.

    Should we really have expected otherwise?

    GMB

    November 3, 2006 at 2:31 pm

  449. Hey! Birdy’s home from school!

    Didja learn any economics today, Birdy?

    Don’t worry, Birdy, it’s a rhetorical question – the regurgitation of that “growth deflation” crap proves you never learn.

    Fyodor

    November 3, 2006 at 2:35 pm

  450. Fuck off you fucking XXX idiot c-word.

    GMB

    November 3, 2006 at 2:36 pm

  451. Go away you retarded incontinent sodomite.

    GMB

    November 3, 2006 at 2:38 pm

  452. Now, Birdy, that’s not much of an argument, is it?

    What happened – did you get the cane again today? A Billy Madison-moron like you would test the patience of any teacher.

    Fyodor

    November 3, 2006 at 2:41 pm

  453. GMB,
    What, then (and please be precise) is money under our current system?

    Andrew Reynolds

    November 3, 2006 at 2:52 pm

  454. Cash in the publics hands.

    Plus committments to pay cash(not grant debt) (to the public) on-call in the financial sector.

    If there is slim correlation between this and aggregate demand its only because our system is inherently fucked up.

    GMB

    November 3, 2006 at 4:00 pm

  455. So, when I pay by credit card I am not using money?

    Andrew Reynolds

    November 3, 2006 at 4:21 pm

  456. No.

    Because money is something someone owns when the payment is made.

    Now we don’t want to worry too much about the overkill legal cover the banking/government partnership has evolved over the last several centuries.

    The fact is when we get our cash-card balance we regard that as money we own, no matter what you bankers think of these matters.

    So no the credit card doesn’t count.

    GMB

    November 3, 2006 at 4:30 pm

  457. GMB,
    I know several people who use only their credit cards for payments – there are certain tax visibility benefits – so the spending by these people would never hit the radar. Is that the case?
    .
    Second question – when you say “on demand” does that include funds on 11am call, 24 hour call (or longer call) or only funds I have instant access to and, if so, why is there a difference?
    .
    Another question – if I lend money to a mate and say he needs to give it back when I ask for it (i.e. it is payable on demand) why is that different from when I deposit some money in the bank?
    .
    Sorry for all the questions – it may be as simple as you think, but at the moment I am just trying to establish the bounds and the reasons for those bounds.

    Andrew Reynolds

    November 3, 2006 at 5:38 pm

  458. Andrew

    Getting back to you issue.

    You can’t readily measure inflation. CPI is not an inflation measurement although we use it.

    The one thing you can do to control inflation is to target the money supply. The best way to to do that is to target MI. Targeting MI to only allow for predetermined growth rate would enure you don’t have monetary induced inflation.

    You question: What is money?
    Don’t get confused with credit unions and credit cards ec. Also don’t become confused by referring to things you buy with money as Money. Ultimately money is cntained in MI. Target that and you dont’have a problem.

    Let market gardeners and Fyodor worry about the price of fresh fruit etc.

    JC.

    November 3, 2006 at 6:02 pm

  459. “I know several people who use only their credit cards for payments – there are certain tax visibility benefits – so the spending by these people would never hit the radar. Is that the case?”

    Well its spending. But its not money supply.

    They have to pay that money back. And they pay it back out of something that they own……. Or if you must be legally-pendantic……. out of something they can MAKE THEIR OWN… on the instant.

    So the limiting factor is still the supply of money…

    GMB

    November 3, 2006 at 6:10 pm

  460. Jase

    Can you please explain to the sissy racist that i am not Kiwi bird although I aspire to be. I had never heard of “cozzie bro” unitl this thread.

    Of course the sissy racist is trying that on for obvious reasons.

    Kiwi bird could also be Fyodor for all we know.

    JC.

    November 3, 2006 at 6:42 pm

  461. I already have JC. Fyodor – there is absolutely no evidence that JC is Kiwi Bird II.

    Graeme – maybe you could help out here. Do you think Kiwi Bird II is really your cousin or is someone trying to stooge you?

    Also, since JC aspires to be Kiwi Bird II maybe you could make him your Honourary Cozzie Bro?

    Jason Soon

    November 3, 2006 at 6:53 pm

  462. No No No Jase. I klnow I could never reach those lofty hights, so i wouldn’t even try.

    JC.

    November 3, 2006 at 6:59 pm

  463. “Graeme – maybe you could help out here. Do you think Kiwi Bird II is really your cousin or is someone trying to stooge you?”

    I have many thousands of relatives.

    They divide roughly into FIVE (5) groups.

    You have the thousands of lawyers. The many thousands of media people. The several thousands of well-armed honest-agriculturists.

    Then there is the scores of hundreds of hard-core SURVIVALISTS.

    Now those are the good guys in the extended family.

    But the closer crowd are just restrained cut-throats and blood-feud devotees.

    But one thing the whole extended clan have in common.

    And this thing they have in common is the thing that they PRAY FIVE TIMES a day about…………….

    …..And WHEN they pray… they pray that they will avenge WITH EXTREME PREDJUDICE any wrong-doing visited upon ME……………

    The whole clan lives only to avenge me of wrong-doings…..

    …. Wrong-doings

    Wrong-doings by the Chinese-Mainlander-COMMIEBASTARDS..
    >>>>>>>>>>>>>>>>>>>>>>>>
    This is all my many relatives share in common.

    And they don’t share but little else.

    And in fact its hard to get any three of them in the same room without the fist-combinations coming on or the subpoenas being handed out.

    And usually its both.

    I’ve got a couple of suspects for this fellow.

    But I don’t trust any of the people I suspect and wouldn’t know to believe any one of them no matter which way the would want to portray things.

    GMB

    November 3, 2006 at 7:20 pm

  464. JC,
    M1 excludes savings accounts, which, in practice, are now also demand accounts. It also excludes money market accounts, amounts on short term call etc. I am mystified why, if a demand deposit account is money, these are not.
    For a workable indicator (note, not definition) I would be looking more to M3 or M4 – but even these exclude stuff I can spend right now – the balance on my credit card. Why doe sit matter, in money terms, if I am spending borrowed funds or my own money?

    Andrew Reynolds

    November 3, 2006 at 9:00 pm

  465. I might also look at adding accounts I can currently draw on, even if there is a penalty – these are liquid funds as well.

    Andrew Reynolds

    November 3, 2006 at 9:01 pm

  466. M1 includes current accounts doesn’t it? And current accounts are also savings accounts aren’t they?

    I really don’t think you can count a credit card balance as money. you can spend it if they don’t turn it off but you have to pay it back. That’s credit and the money is someone elses that you’re spending.

    For money supply purpsoes that credit line you have is actually being counted, if they count the credit line it would double count is how I see it.

    Money on the other hand, money that is in your account belongs to you. That would apply even if you took it out of the credit card and moved into your chequing account.

    Money market accounts aren’t really part of the money supply as those funds are not in a bank account.

    JC.

    November 3, 2006 at 10:06 pm

  467. Fodor says:

    “As Andrew says, the RBA’s contribution to the pool of “money” is small. As usual, you clearly have no idea what you’re talking about.”

    The contribution may be small but it’s the only way money supply can be boosted unless you have thought of another way. High powered money is the only way money supply can grow. …. through the multiplier.

    Lets walk through it.

    RBA does an add for $1 billion …Buys bonds for cash. The money finds its way to the banking system and gets turned into a loan pool of $16 billion as the banking system lends out the cash.
    The RBA balance sheet would have to grow in order to create more money. The it may be small compared to the actual size, but not the effect. In other words the RBA assets grow by the size of the add… $1 billion.

    JC.

    November 3, 2006 at 10:22 pm

  468. JC, maaaaaate, maaaate

    You wanna be a part of the Bird family, you gotta be able to drink like a Bird. You up for that, fella?

    I’m sure you can drink better than that pussy Fyodor. Where is that pansy anyway?

    Kiwi Bird II

    November 4, 2006 at 11:11 pm

  469. Here’s the Von Mises transition strategy.

    http://www.mises.org/story/2365#1

    Actually I’d read a bit of this and had been turned off it by the following sentence….

    “From the point of view of monetary technique the stabilization of a national currency’s exchange ratio as against foreign, less-inflated currencies or against gold is a simple matter. The preliminary step is to abstain from any further increase in the quantity of domestic currency.”

    Now at first blush I couldn’t see how this could be right.

    Because when you freeze the currency the money supply will collapse, and then the velocity of circulation will further collapse.

    So that therefore aggregate demand would implode.

    But I should have kept reading because Mises has this all covered although he doesn’t emphasise the potential for such a collapse.

    A little bit lower he says this:

    “But this stability cannot last indefinitely. While an increase in the production of gold or an increase in the issuance of dollars continues abroad, Ruritania now has a currency the quantity of which is rigidly limited.

    Under these conditions there can no longer prevail full correspondence between the movements of commodity prices on the Ruritanian markets and those on foreign markets.

    If prices in terms of gold or dollars are rising, those in terms of rurs will lag behind them or even drop. This means that the purchasing-power parity is changing.

    A tendency will emerge toward an enhancement of the price of the rur as expressed in gold or dollars. When this trend becomes manifest, the propitious moment for the completion of the monetary reform has arrived.”

    Thats just superb. I would only add that when that moment arrives they’d better get to it or otherwise they would have a serious depression on their hands.

    Anyway he goes into great detail on his transition strategy.

    That part of it starts where it says:

    Currency Reform In Ruritania.

    http://www.mises.org/story/2365#1

    GMB

    November 5, 2006 at 8:33 pm

  470. Ha!
    Where’s that Fyodor?
    Fella decided he had bugger all to contribute didn’t he? So he’s buggered off.
    Good riddance.

    Kiwi Bird II

    November 7, 2006 at 11:28 pm

  471. Quelle fucking surprise.

    I leave this thread for two weeks and it disappears under the overbearing weight of the Three Drongos’ buffoonery: Birdy misappropriating a source in an attempt to defend his dopey theory; munnkey demonstrating yet again that he’s too stupid to construct an argument and too lazy to do his homework; and Birdy’s sheep-bothering “relative” proving beyond doubt that it IS possible to be less than halfwitted.

    Congratulations on wrecking the thread, morons.

    Fyodor

    November 21, 2006 at 6:28 pm

  472. Welcome back Fyodor. We all missed you.

    JC.

    November 21, 2006 at 7:59 pm

  473. Hmm is it just me or is it a little suspicious that Kiwi Bird II turned up yesterday after a long absence and Fyodor turned up today after a long absence? Maybe Birdy has been stooged …

    Jason Soon

    November 21, 2006 at 8:07 pm

  474. Welcome back, Fyodor.

    We got the bird to 9 consecutive posts – smashing your record of 6.

    Your move.

    JohnZ

    November 21, 2006 at 8:36 pm

  475. Jason, for me to be Kiwi Bird II I’d have to use a different IP address, which would be a trivial imposition and thus, by Birdy’s tortured reasoning, obviously impossible. Personally, I’m beginning to suspect he’s Nabs. That would be exceedingly diverting.

    JohnZ: dude, I did see that while scanning threads and I must confess I am seriously fucking impressed. I seriously doubt that record can be surpassed, and certainly not by design: there’s only so far you can push Birdy on your own – a big part of the magic is his own unhinged lunacy, which is constant but unpredictable in magnitude. Not to disparage your exceptional achievement, but timing will be important in bettering it.

    The other highlight from my wanderings was the number of times munnkey mentioned me. Anybody else get the feeling that when he’s plucking Birdy he calls my name? Obsessive doesn’t even begin to cover it.

    Fyodor

    November 21, 2006 at 9:23 pm

  476. Ladyboy Fyodor
    don’t you go comparing me to that queer arms dealer.

    Kiwi Bird II

    November 21, 2006 at 10:44 pm

  477. I wouldn’t dream of comparing you to Nabs, less-than-halfwit, as there’s clearly no comparison.

    As you’re too dense to understand simple English, I’ll clarify: I was suggesting you were a persona created by Nabs. It would be a doddle to impersonate a charmless mouth-breather like your retarded self and, as we all know, Birdy is ferociously naive.

    Fyodor

    November 21, 2006 at 11:54 pm

  478. Fella
    I’m still on your scent. Don’t be sleeping too comfortably now or you’ll be the one breathing thru your mouth.

    Kiwi Bird II

    November 22, 2006 at 12:24 am

  479. “Fella
    I’m still on your scent. Don’t be sleeping too comfortably now or you’ll be the one breathing thru your mouth.”

    “Scent”? When do you ever smell anything other than wool, you clown?

    WTF is that second bit supposed to mean? That if I sleep comfortably I’ll end up snoring? Ooh, scary. Even your threats are ridiculous.

    Battling wits with you is like high-jumping against a midget: sure, the laughs come cheaply, but one always wonders whether a sufficient (i.e. crippling) handicap might enable the little tyke to actually provide a challenge.

    I don’t wonder very long, of course – particularly when you insist on reminding me of what a world class tool you are.

    Fyodor

    November 22, 2006 at 1:46 am


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