Comments on: Why Frank Field MP is talking nonsense http://liberalconspiracy.org/2009/12/02/why-frank-field-mp-is-talking-nonsense/ Left-wing news, opinion and activism Fri, 25 May 2012 20:05:24 +0000 hourly 1 http://wordpress.org/?v=3.3.1 By: chris http://liberalconspiracy.org/2009/12/02/why-frank-field-mp-is-talking-nonsense/#comment-88171 chris Wed, 02 Dec 2009 16:09:05 +0000 http://www.liberalconspiracy.org/?p=9543#comment-88171 Dave - Luis is right. The measure that has increased sharply - by 331% in the 12 months to November 25 - is banks' deposits at the Bank of England. However, money as more usually measured - non-banks' deposits with banks and building societies (the M4 measure) - has risen 11% in the year to October. And most of this growth is due to financial institutions, such as banks' subsidiaries. The bank deposits of households and non-financial firms have grown only 2.9% in the last 12 months. Dave – Luis is right.
The measure that has increased sharply – by 331% in the 12 months to November 25 – is banks’ deposits at the Bank of England.
However, money as more usually measured – non-banks’ deposits with banks and building societies (the M4 measure) – has risen 11% in the year to October. And most of this growth is due to financial institutions, such as banks’ subsidiaries. The bank deposits of households and non-financial firms have grown only 2.9% in the last 12 months.

]]> By: Luis Enrique http://liberalconspiracy.org/2009/12/02/why-frank-field-mp-is-talking-nonsense/#comment-88168 Luis Enrique Wed, 02 Dec 2009 15:48:51 +0000 http://www.liberalconspiracy.org/?p=9543#comment-88168 Dave O the money multiplier formula they still teach in 1st year Macro is: M = H/[c+theta(1-c)] where theta is bank reserves and c has to do with the demand for cash on hand in the economy. The point being that H (narrow money - banknotes) can increase 300% without M (the quantity of money) going anywhere, if theta is rising. This is what Chris is describing, I think - the BoE has been pumping H but the banks have sucked it all up in reserves and M hasn't gone anywhere. If he was talking about M being up 300%, you'd be right to be incredulous. Dave O

the money multiplier formula they still teach in 1st year Macro is:

M = H/[c+theta(1-c)]

where theta is bank reserves and c has to do with the demand for cash on hand in the economy. The point being that H (narrow money – banknotes) can increase 300% without M (the quantity of money) going anywhere, if theta is rising. This is what Chris is describing, I think – the BoE has been pumping H but the banks have sucked it all up in reserves and M hasn’t gone anywhere.

If he was talking about M being up 300%, you’d be right to be incredulous.

]]> By: Dave O http://liberalconspiracy.org/2009/12/02/why-frank-field-mp-is-talking-nonsense/#comment-88139 Dave O Wed, 02 Dec 2009 14:40:49 +0000 http://www.liberalconspiracy.org/?p=9543#comment-88139 Chris For my info - has the money supply increased by 300%? Surely that cannot be factually correct? Dave Chris

For my info – has the money supply increased by 300%? Surely that cannot be factually correct?

Dave

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]]> By: Rob Watson http://liberalconspiracy.org/2009/12/02/why-frank-field-mp-is-talking-nonsense/#comment-88163 Rob Watson Wed, 02 Dec 2009 07:34:25 +0000 http://www.liberalconspiracy.org/?p=9543#comment-88163 <span class="topsy_trackback_comment"><span class="topsy_twitter_username"><span class="topsy_trackback_content">:: Why Frank Field MP is talking nonsense http://bit.ly/56J0vc (via @libcon)</span></span> :: Why Frank Field MP is talking nonsense http://bit.ly/56J0vc (via @libcon)

]]> By: simonk133 http://liberalconspiracy.org/2009/12/02/why-frank-field-mp-is-talking-nonsense/#comment-88104 simonk133 Wed, 02 Dec 2009 05:38:05 +0000 http://www.liberalconspiracy.org/?p=9543#comment-88104 <span class="topsy_trackback_comment"><span class="topsy_twitter_username"><span class="topsy_trackback_content">RT @libcon Why Frank Field MP is talking nonsense http://bit.ly/56J0vc</span></span> RT @libcon Why Frank Field MP is talking nonsense http://bit.ly/56J0vc

]]> By: Liberal Conspiracy http://liberalconspiracy.org/2009/12/02/why-frank-field-mp-is-talking-nonsense/#comment-88097 Liberal Conspiracy Wed, 02 Dec 2009 05:30:45 +0000 http://www.liberalconspiracy.org/?p=9543#comment-88097 <span class="topsy_trackback_comment"><span class="topsy_twitter_username"><span class="topsy_trackback_content">:: Why Frank Field MP is talking nonsense http://bit.ly/56J0vc</span></span> :: Why Frank Field MP is talking nonsense http://bit.ly/56J0vc

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