> Links. Debt as a social connivance
Links. Debt as a social connivance
- Action! ‘the campaign to demand that the ECB publish the legal opinion it commissioned on whether its closure of Greece’s banks in 2015 was… legal’. Sign!
- Europe is waking up to its gargantuan, awkward and 100% home made bad private debts problem. Any solution requires writing down hundreds of billions of debt.
- Michael Hudson on ‘clean sheet’ debt policies in Mesopotamia. Fun fact: cuneiform records show that clerks had to master compound interest calculations.
- Low interest policies of modern central banks are not really ‘clean sheet’policies but they try to deal with the same debt problems as the rulers of Mesopotamia. The 2015 annual report of the Bundesbank shows that Germany earned 0,05% interest on its Target2 assets (p.92). Still, quite a profit: 279 million (p. 93, at the beginning of the year the interest rate was higher).
- Positive money has a model which shows that if interest received is spent again people do not necessarily have to borrow more money to be able to pay interest. But the model abstract from the problem that some debts are owed to banks and others to non-banks. If the debts to the banks are paid down – the amount of money will actually decline as borrowing from the banks is what created modern money in the first place.
- Nowadays, making a connection between low interest rates and low population growth is in vogue. Samuelson predicted this relation in his 1958 article ‘An Exact Consumption-Loan Model of Interest with or without the Social Contrivance of Money’.