#ows Snippet: EconoMonitor : Great Leap Forward » Money and the Public Purpose: The Modern Money Theory Approach

The following is just a snippet of the article. The whole article is well worth reading and actually quite entertaining. In addition to having the whole economic fraud figured out and being educational, L. Randall Wray turns more than a few clever phrases about it.

A clever and ethically challenged banker will buy completely fictitious "assets" and pay himself huge bonuses for nonexistent profits while making uncollectible "loans" to all of his deadbeat relatives.

The bank money he creates while running the bank into the ground is as good as the government money the Treasury creates serving the public interest. And he will happily pay outrageous prices for assets, or lend to his family, friends and fellow frauds so that they can pay outrageous prices, fueling asset price inflation.

L. Randall Wray is a Professor of Economics at the University of Missouri-Kansas City and Senior Scholar at the Levy Economics Institute of Bard College, NY

L. Randall Wray is a Professor of Economics at the University of Missouri-Kansas City and Senior Scholar at the Levy Economics Institute of Bard College, NY

This generates nice virtuous cycles in the form of bubbles that attract more money until the inevitable bust. I won't go into output price inflation except to note that asset price bubbles can fuel spending on consumption and investment goods, spilling-over into commodities prices, so on some conditions there can be a link between asset and output price inflations.

The amazing thing is that the free marketeers want to "free" the private financial institutions but advocate reigning-in government on the argument that excessive issue of money by government is inflationary.

via EconoMonitor : Great Leap Forward » Money and the Public Purpose: The Modern Money Theory Approach.

  • Subscribe
  • Tom Usher

    About Tom Usher

    Employment: 2008 - present, website developer and writer. 2015 - present, insurance broker. Education: Arizona State University, Bachelor of Science in Political Science. City University of Seattle, graduate studies in Public Administration. Volunteerism: 2007 - present, president of the Real Liberal Christian Church and Christian Commons Project.
    This entry was posted in Uncategorized. Bookmark the permalink.