Skip to content

An advice to Central Banks

03/08/2012

I have a excellent plan to solve the monetary problems caused by sovereign debts in Europe. Most of the central banks activity is the trade with the Government trusties. Trade with these trusties is also the main source of profit of the commercial banks and source of the inappropriate behavior of the bankers. To prevent situation, when only French or Russian stile revolution can change the political social evil the activity of these institutions causes, the best would be to let the central banks to purchase all the freely marketed government securities. If this step would cause some increase in inflation pressures, the minimum reserve rate requirement should be raised accordingly. By this step could be achieved several goals.
1.Reduce the government debts and the interest payments that burden the national budgets. (The interests paid to the central bank will be registered as Government income).
2.The banks would lose a chalk of their activities, where they without risk can make profit, which is translated later to unjustified reward to the executives and managers.
3.The Central Bank would have much better control on the credit volume. It could pour directly money in the system by printing it, and sucking it out by increasing the Reserve Rate Ratio.
4.To prevent from government to misuse  the system of unlimited “free money” to spend, the government expenses and deficit should be controlled directly, by limiting it to the level of economic growth plus half of the inflation rate.
5.The only reason to increase the deficit above the mentioned limit would be war, and this should be financed directly by tax increase on the companies and wealthy. This would make wars very unpopular among the decision makers, and it is also only for good.

The only problem not solved by such a change of the system is, what will do all the unemployed bankers. 

6 Comments
  1. I think this is among the most important info for me.
    And i am happy studying your article. But want to observation on some general things, Thee
    website taste iis ideal, the articles is
    in reality nice : D. Just right job, cheers

  2. agradecido. Fala amigo! agradecido. (PNAS,
    2004:31-32). http://evitarejaculacaoprecoce.med.br/20-dicas-para-turbinar-seu-desempenho-na-cama


    https://polldaddy.com/js/rating/rating.js

  3. You are so cool! I don’t suppose I’ve truly
    read anything like this before. So great to find somebody with some genuine thoughts on this subject matter.
    Really.. thanks for starting this up. This website is one thing that
    is needed on the web, someone with some originality!

  4. I was suggested this blog by means of myy cousin. I’m now not certain whether or not this
    submit is written via him as nobody elsse rdcognize such certain about my problem.
    You’re wonderful! Thanks!

  5. I maybe wrong, but it seems to me that this is what is called “Quantitative Easing”. That brought 5 trillions to USA banks by some reckoning (of the TARP overseer).
    In any case a whole bunch of Germans (not so much Merkel herself) around the Bundesbank, have balked at more QE after BCE head Dragghi indulged in 2 bouts of it, for a trillion Euros…

    At this point the worst problem is that a whole bunch of Germans don’t understand they are playing with fire. As I explained in earlier essays, the ECB system was set-up by French Socialists who thought smart to duplicate the system installed by Pompidou, an employee of Banque Rothschild…
    PA

  6. Forget to mention one other very important result of the above proposed changes in Commercial Banks – Central Bank relation, the increased stability of the commercial banking system. This consequence is just to obvious, soi forget to mention it.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

Someone Somewhere

From Beyond the Rainbow Somewhere

Patrice Ayme's Thoughts

Morality Without Intelligence Makes As Much Sense As Will Without Mind. Intelligence Is At The Core Of Humanism.

Flip Chart Fairy Tales

Business Bullshit, Corporate Crap and other stuff from the World of Work

Uneasy Money

Commentary on monetary policy in the spirit of R. G. Hawtrey

kaleidocyte

When 140 characters isn't enough

Footnotes to Plato

because all (Western) philosophy consists of a series of footnotes to Plato

Believe or Doubt?

Is it reasonable to be a Christian these days?

Forwardeconomics

An evolutionary think tank

pshakkottai

Just another WordPress.com site

%d bloggers like this: