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| Last Updated: Aug 15th, 2008 - 11:26:43 |
Newsletters
:
2007 Newsletters
:
7 September 2007
Thought for the Day
When I was involved in the banking and finance world it was a well known adage that the recipe for disaster was to borrow short and lend long. Another Finance House has discovered this recently and despite having more money owed to it than owed by it it has gone into receivership because of a "run" on its resources. People panic and queue up to get their money out. Since this is not possible the institution has to close its doors.
Now we read that banks won't lend to other banks as they are unsure of repayment. What next?
Sep 6, 2007, 11:22
Newsletters
:
2007 Newsletters
:
7 September 2007
London Banks Hoard Cash As Liquidity Crunch Worsens.
Austrian economic theory explains that easy money created from thin air by Central Banks will cause people to take risks that they would not otherwise countenance. Entrepreneurs and business people will borrow and develop new and exciting ventures. Banks, it seems, borrow and develop new and exciting financial instruments based on debt which they sell around the world to other banks and to all and sundry.
Austrian economic theory also states that at some stage this house of cards will start to disintegrate and the money created out of thin air by Central Banks will go back to thin air. This has started to happen.
To halt this process the only remedy of the Central Bank is to issue more money created from nothing to "improve liquidity". Thus exacerbating the problem for the longer term even if they manage to save the day currently.
At the moment it seems that the banks have had a good hard look at what they have produced and are concerned about it. So much so that they now don't trust other banks' instruments.
Where now?
Sep 6, 2007, 10:50
Newsletters
:
2007 Newsletters
:
7 September 2007
Conduit Risks Are Hovering Over Citigroup.
The last time I remember discussions about "off-balance sheet" items it was Enron hiding large debts where they were not obvious.
Now the banks are at it. Should we be worried?
Sep 6, 2007, 10:01
Newsletters
:
2007 Newsletters
:
7 September 2007
Russian Government May Be Taking Over Gold Mining
We know that all governments are printing paper money and adding digits into their computers to create credit. We are creating 15% new money at the moment, China is creating 20% and Russia is creating a massive 51% new paper money.
Putin knows a thing or two. He creates billions of dollars of paper money from nothing and spends it buying oil wells and now gold mines.
Sounds like a pretty good deal to me.
Aug 24, 2007, 12:00
Newsletters
:
2007 Newsletters
:
7 September 2007
The Gold Problem
On the question of inflation I thought we would do well to consider these words from the Master himself - Ludwig von Mises (1881–1973), dean of the Austrian School. He wrote this in 1965 but it is easier now, with hind-site, to see the truth of the Austrian School of Economics.
Aug 14, 2007, 10:26
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