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 Questions about the ECB

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PostSubject: Questions about the ECB   Fri Jul 18, 2008 2:41 am

Firstly: from wiki (http://en.wikipedia.org/wiki/Jean-Claude_Trichet)

Quote :
Banking scandal


In January 2003 Trichet was put on trial with 8 others charged with irregularities at Credit Lyonnais,
one of France's biggest banks. Trichet was in charge of the French
treasury at that time. He was cleared in June 2003 which left the way
clear for him to move to the ECB.[2]

Did anyone know about this or am I the only financial leper here.


Secondly:
Now that I have almost assured myself that the Fed is privately owned, who owns the ECB ? Who owns the CBI and who owns the BoE ?

Thirdly:

Ist the ECB a central bank of central banks ? Where did the ECB get 500 Billion reserves from ?

The more I look into banking and money, the more questions I have. Typical really...

(I'm going to post this on P.ie also, as I've sort of latched onto this subject in recent days and I wouldn't mind getting some input from a few people over there. Few being the important word)
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PostSubject: Re: Questions about the ECB   Fri Jul 18, 2008 5:33 am

EvotingMachine0197. When I said here and elsewhere that The Federal Reserve is a privately owned company did you think I just made it up for fun. You ask where did the 500 billion come from. As luck would have it once again I have the answer. Enjoy http://video.google.com/videoplay?docid=2915561145322710159&q=tommy+cooper+magic+cloak&ei=3gCASOjxGImi-QG03bCYBw&hl=en
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PostSubject: Re: Questions about the ECB   Fri Jul 18, 2008 12:17 pm

The ECB is a fiat institution, if you like. It's not 'owned' by anybody except itself - it has a budget drawn from the national central banks of the EU, and an institutional framework and legal basis drawn from the Treaties. In other words, it's an institution set up to manage Euro monetary policy.
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PostSubject: Re: Questions about the ECB   Fri Jul 18, 2008 1:24 pm

In the Irish times - link - and in El País today - link - there are reports that Trichet wants to adjust the rates of interest to help with problems across the eurozone by finding an optimum level for all Eurozone issues. It refers to economic issues in Spain, Portugal and Ireland and that he is not going to adjust the rates to address problems in these countries. Fair enough probably...

Quote :
"The ECB has to care for the superior interest of the euro area," Mr Trichet said, adding: "Our monetary policy must be optimal at the level of the whole euro area - exactly like the Fed [ the US central bank] would not look at what is in the interest of Missouri, California or Texas."

The only goal of the ECB is to ensure price stability in the medium term, Mr Trichet said. By anchoring inflation and curbing inflationary expectations, the ECB strategy underpins a financial environment favourable to job creation and sustainable economic growth.

Responsibility for solving specific economic problems confronting individual euro area members rests with national governments, parliaments and social partners, he said.

"There are numerous aspects of economic policies which are under the responsibility of the countries themselves, in particular fiscal policies, structural policies and the surveillance of the evolution of unit labour costs," Mr Trichet continued.

Does anyone know if countries can apply or lobby to affect the interest rates or is it purely an executive decision by the EBC staff?
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PostSubject: Re: Questions about the ECB   Fri Jul 18, 2008 1:32 pm

The ECB Governing Council consists of representatives from all euro are countries. These are the governors of the national central banks.

ECB Governing Council

This is the council that meets once a month and can alter interest rates. National governors can object to rate changes at thes meetings, but I don't know with what effect.

Our guy, John Hurley, must have agreed with the last rate rise, because it was reported the change was unanimous.
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PostSubject: Re: Questions about the ECB   Fri Jul 18, 2008 7:00 pm

EvotingMachine0197 wrote:
The ECB Governing Council consists of representatives from all euro are countries. These are the governors of the national central banks.

ECB Governing Council

This is the council that meets once a month and can alter interest rates. National governors can object to rate changes at thes meetings, but I don't know with what effect.

Our guy, John Hurley, must have agreed with the last rate rise, because it was reported the change was unanimous.

Do we have a veto then I wonder?
Someone made the point in a letter to the IT this week that if an Irish bank went belly up, the Irish government could not carry out a rescue and it would be down, I think he said, to the ECB whether to intervene or not.

The mythology is that interest rates are set to suit the German economy, with its intense historic fear of hyperinflation.

Trichet was telling the basket case economies to eff-off then?
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PostSubject: Re: Questions about the ECB   Fri Jul 18, 2008 9:21 pm

cactus flower wrote:


Do we have a veto then I wonder?

I don't think so. Decisions are made based on a majority of members in the Governing Council.


Quote :
Trichet was telling the basket case economies to eff-off then?

Yes, he's looking to the overall interest, and indeed a course of high interest rates could be what the basket case economies need to make them face up to their structural inadequacies.
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PostSubject: Re: Questions about the ECB   Sat Jul 19, 2008 12:08 am

And indeed to continue the ages old practice of transferring asset wealth from the ordinary folk to the mega rich....
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PostSubject: Re: Questions about the ECB   Sat Jul 19, 2008 12:44 am

Anyway, to progress this a bit towards wher I want it to go.

Is fractional reserve necessary for good economic activity, or is it a massive ungetaroundable rogue invented screwing system ?

Personally, I find it highly questionable that private individuals can profiteer using money they do not have. I don't like this at all...
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PostSubject: Re: Questions about the ECB   Sat Jul 19, 2008 2:24 am

Fractional reserve banking is very easy to understand. One hundred pound is deposited and the bank can lend out 900 pounds out of nothing. Some people are confused by this but watch this and you will understand what has happened. http://video.google.com/videoplay?docid=-3900922914606504530&q=tommy+cooper&ei=UyWBSPrtA4eIrgKy37G8Bw&hl=en
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PostSubject: Re: Questions about the ECB   Sat Jul 19, 2008 3:26 am

Yes Dan, I understand fractional reserve.

I am now 1 hour 40 minutes through MM.

My question is would the US and indeed every other economy have been better served if fr was outlawed instead of lawed ?
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PostSubject: Re: Questions about the ECB   Sat Jul 19, 2008 12:00 pm

Ard-Taoiseach wrote:
cactus flower wrote:


Do we have a veto then I wonder?

I don't think so. Decisions are made based on a majority of members in the Governing Council.


Quote :
Trichet was telling the basket case economies to eff-off then?

Yes, he's looking to the overall interest, and indeed a course of high interest rates could be what the basket case economies need to make them face up to their structural inadequacies.

Have you read Stiglitz, Ard Taoiseach? He makes a persuasive case that the IMF recipe makes things worse.
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PostSubject: Re: Questions about the ECB   Sun Jul 20, 2008 3:53 am

EvotingMachine0197 wrote:
Yes Dan, I understand fractional reserve.

I am now 1 hour 40 minutes through MM.

My question is would the US and indeed every other economy have been better served if fr was outlawed instead of lawed ?
I'm sure I've watched it before but I might spend some hours tomorrow on Silverpond unless there's some housewarming party in Hermes. Either tomorrow or monday for the money masters but I'm convinced I've seen it before.

Is fractional reserve valid as long as an economy is growing and the world economy must be growing as there are a quarter of a million more babies in it this hour than there were at the same time yesterday. By the end of the week there will be nearly two million more babogs in the world than there were last week and those hoors have a multiplier effect on all parts of the economy for good or evil.

I'm not defending fractional reserves either which is the ability for banks to lend 10 times as much as they have in there - we all thought it was that they were allowed to lend as much as they had on deposit but oh no, it's 10 or 12 times and more what they have in. I believe that some of Bear Stearns debt was 33 times their actual reserve.

I'm convinced that the fractional reserve allowance mirrors something in the real world and that would be the production dividend from mechanisation. Using mechanisation in farming might mean that less labour is required in order to do the same job - not one family one cow anymore but a higher work-yield ratio. A mechanised process like growing cows might yield the 1 to 12 or more ratio that the fractional reserve system operates on. I'd guess it might be very high with food but lower with houses and high for computers (once the robots were built) but low for vehicles. If you add up all the different mechanised processes with their different yields and ratios then maybe you'd get the true ratio.

That was an idea of the top of my head though - I'll watch the money masters soon but I must think it mirrors some real values or tries to. Often it gets it wrong.
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PostSubject: Re: Questions about the ECB   Sun Jul 20, 2008 12:03 pm

Fractional reserve banking is not too bad. Maybe a factor of ten is a bit high for comfort. The Central Bank has nothing to do with fractional reserve banking and they are the problem. The Founding Fathers understood this and the first 2 attempts at setting one up eventually failed. The 3rd attempt succeeded in 1913.
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PostSubject: Re: Questions about the ECB   Sun Jul 20, 2008 3:07 pm

I'm inclined to agree with Squire that it is a system for s****ing people - particularly when you look at the IMF that won't allow commodity producing countries like Chile to spend accumulated funds (savings) without calling it deficit spending, but will allow them to borrow this funny money.
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PostSubject: Re: Questions about the ECB   Sun Jul 20, 2008 11:09 pm

Well of course they are for screwing people. They are not there for fun.
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PostSubject: Re: Questions about the ECB   Mon Jul 21, 2008 12:37 am

The amazing aspect is that some of the people who work for such international organisations really do believe in what they are doing. I remember an intriguing conversation with one such person, over a meal in an air conditioned hotel in an African city.

He had whizzed in, on a jet, drove straight to the hotel and was going to meet the 'locals' the next day to advise them how to manage their economy, get it on the rails. God he was exuding enthusiasm and really knew all about the place, how many tons of copper were produced each Sunday, how many cattle were in the uplands and the type of grass they preferred, power production, banking system, government ministers, their wives and mistresses. All anyone could possible want to know.

I suggested a trip round the suburbs with me later in the evening to truely get a feel of the place and how most people live. He considered that unnecessary, because 'he had all the facts on his data base'. Pity really as I would have taken him on a journey through human misery and grinding poverty. Big difference between the sanitised air conditioned rooms where a night probably costs someone's annual wage, and the suburbs with open sewers, the smell, the menace, the limited electricity and dubious water supplies. The reality behind the statistics of increasing poverty and reducing income, of life expectancies that are falling.

If I were world dictator I would take a lot of these people and dump them somewhere remote with no money and no means of communicating with the world. A dose of reality would do them no harm.
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PostSubject: Re: Questions about the ECB   Tue Jul 22, 2008 2:35 am

So why is fractional reserve never mentioned anywhere except on sites like this ? Or conspiracy sites ?

If it is a wealth transfer system, why is it not being hammered in the papers everyday ?
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PostSubject: Re: Questions about the ECB   Tue Jul 22, 2008 2:42 am

EvotingMachine0197 wrote:
So why is fractional reserve never mentioned anywhere except on sites like this ? Or conspiracy sites ?

If it is a wealth transfer system, why is it not being hammered in the papers everyday ?
When I was in primary school I asked my teacher why we didn't just print more money and make everyone rich. He told me our money was tied to the amount of gold in the country. The lying bollix.

I don't think fractional reserve is that scandalous and reflects machinery, technology and the rewards of employing such in terms of productivity and all that shite.

What do you think of this idea? If you stripped the economy down to just farming and I went to the bank to buy a farm, some machinery and some cows then the bank could, on the strength of the sweat of my efforts and the use of my machinery not to mention the grace of my animals, create 12 times the amount I borrowed so yourself, Kate P, AT, cactus, ibis, your 3 kids and wife and a few feckers on the propertypin could have the money to buy my produce... and that's just on the loan .

Funny money, gold standard. ..
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PostSubject: Re: Questions about the ECB   Tue Jul 22, 2008 3:06 am

That was me teaching you Auditor. I was afraid to tell you the truth as it was coming up to Christmas. It I explained central banking to you then the next thing you would be questioning the existance of Santa
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PostSubject: Re: Questions about the ECB   Tue Jul 22, 2008 3:18 am

Good morning youngdan. That's a great thread on p.ie I read earlier with the economic crisis. That seabhcan knows his rubles from his dollars..

Expat girl and yourself. Seabhcan has a class post on page one
http://www.politics.ie/viewtopic.php?f=161&t=38802

Seabhcan's post
http://www.politics.ie/viewtopic.php?f=161&t=38802&st=0&sk=t&sd=a#p1276555

(expat girl had a brilliant one just a bit earlier and I think Akrasia might have a point about rejecting the 'free-market' ideology and using a ceiling composed of sustainable elements to control capital)
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PostSubject: Re: Questions about the ECB   Tue Jul 22, 2008 4:13 am

That is a decent enough thread but the iseq is far better. Seabhcan does not like me as he would be a socialist. Akrasia detests me as he is a total communist altogether. As things get bad I would hope to hear more from them though as nobody would say they don't make a lot of sense at times. The small guy is getting shafted but they want more power to the government who is shafting them. Capital controls is just trying to stop the tide coming in. Like rationing. If there is no rationing or price fixing then a shortage is impossible. Granted some would not be able to afford the product but pretending otherwise is denying reality

I believe it was Akrasia that suggested that vacant houses should be taxed. He doesn't get it. The stamp tax on a necessity of life is one of the causes of the disastor and it is only beginning.
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PostSubject: Re: Questions about the ECB   Tue Jul 22, 2008 10:48 am

I enjoyed some of the predictions over there.

Dollar 2.5 to the Euro and Sterling parity. That should just about kill any recovery in output. The Euro is also overvalued against Eastern currencies.

The increase of power by oil producing countries. With the exception of the usuals and Russia which to my eyes is starting to move forward (but has lots to do if you care to go up country) most oil producing countries are unstable hell holes with little diversity in the economy. What flows in flows back out.

There will be substantial movement out of oil in the next decade. There is no energy shortage the problem is we have become over dependent on one source. 10 years glory for oil rich nations and then decline.

Taxing empty buildings is one that really needs to be thought through. How does anyone acquire a large development site in a city? Imagine some guy holding a corner and holding you to ransom.

A large developer needs a land bank to keep a steady flow of work for the employees. Also what about legal problems, deeds that have problems and contested and ambiguous wills? What about people who work abroad should they sell their house here? A elderly gent in a nursing home may hope to recover and return home, should he have to sell?

Then we have the inaction of government bodies; what about delays in the planning process are you to be penalised for slow government departments. Apparently north of the boarder any reasonable sized planning application takes 1-2 years to process and there is a 2 year waiting list for Planning Appeals. You could also have problems providing power and sewerage connections to the site.

There are reasons other than land speculators that cause buildings to be empty and sites undeveloped.
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PostSubject: Re: Questions about the ECB   Tue Jul 22, 2008 11:22 am

Young Dan

There must be problems with werewolves. Take care.



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PostSubject: Re: Questions about the ECB   Tue Jul 22, 2008 12:14 pm

Here is gold and platinum






What do all these curves have in common? IMO a distinct similarity to the curve on property prices.
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