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Rebel Economist (Free)
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Rebel Economist Institute
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21 contributions to Rebel Economist (Free)
Feb '25 •
At a loss to understand government borrowing
The article from BBC seems to explain it all. https://bbc.com/news/business-50504151 Spend first, claw back in tax. However, we all know that once the budget is agreed, the account at the central bank can open. But does it only have a month's worth of money in it? This so e.g January's tax back pays February's outgoing cash flow wise, and covers January's outgoings accounting wise? If you get the national account loaded with the ability to pay out during the year cash flow would look dodgy only at the end of the year. So why have to borrow throughout the year? Why hold back on money already decided? Any experts out there understand what is going on? I asked Richard Murphy about why Sweden borrows for every month and he said they do it because they are under a delusion. The gov debt office with 500.employees! Help me out @Demetrios Gizelis ?
0 likes • Mar '25
@Demetrios Gizelis @Stephen Hinton Yes, borrowing your own IOU/currency is absurd. But, there might be some reasons why we call it borrowing and why we account for this every month and why there are 500 people working on this in the Swedish government. First, some of the practices are inherited from the so called gold standard and mainstream economics does not understand money. So let's call it borrowing. But in reality this is like saying I need to borrow 5 thankyous today because I want to say thank you 5 times tomorrow. Second, 500 people working on this can be a way to keep track of what is going on with regard to spending and with regard to satisfying the needs of the financial sector. Just accounting(probably useful?) and financial sector welfare(maybe too much?). Unfortunately, the public, politicians and professors confuse deficit spending with "OMG we are running out of money!", instead of flipping it and saying "Now we have added to the net worth of our lovely citizens!". The central bank of Sweden is under 100% state ownership. It's role for the government is to make sure the govt always can spend when it wants in its own currency. Whether is is wise to spend or not on what can be discussed, but the central bank will one way or another always enable the government to spend. Do not go into the Schuldenbremse trap unless you want to see some populist party rise in your country.
Jan '25 •
Want to learn how the Money system really works
Hi, I've joined he group because I want to learn how the money system really works.
0 likes • Jan '25
Welcome!
Jan '25 •
Modelling Banking - What am I doing wrong?
I've had trouble recently with Ravel (MacOS) trying to model banking , just as a simple exercise, but I keep crashing Ravel and have to start again which causes me to lose my train of thought. (I'm ADD, Autistic, and Dyslexic, plus some other stuff under the hood.) Banks need initial Capitalisation -> Asset - Equity Banks hold Deposits -> Liability - Equity Banks offer Loans -> Asset - Equity Banks pay Interest on Deposits -> +Deposits -Equity? Banks charge Interest on Loans -> +Asset -Liability? Banks hold Ready Capital for Short Term Liquidity -> Assets? - Equity? Banks charge Fees for Cash Flow -> +Assets -Liabilities? What am I not understanding in this equation? What am I missing? Which (if any) are Rate statements and how do I place them in the Godley Table? Do I?
1 like • Jan '25
@Tsc Tempest Interests due: -> No increase in Bank Assets. Only a minus for the "borrower's" bank account, thus the banks liabilities goes down.
0 likes • Jan '25
@Alwyn Lewis This does not look right. See my answers above.
2 likes • Oct '24
This one too https://www.skool.com/@justyna-osowska-3637
Oct '24 •
Direct Foreign Investment?
So much talk about UK Labour courting foreign investors at the moment and it got me thinking. Are these investors using money they actually have - I suppose the right word is equity - or are they simply intending to to borrow the money from banks once they get the backing/contracts from UK government? Anyone point me in the right direction? Many thanks in anticipation.
1 like • Oct '24
Maybe we could divide it into asset manager companies (that mostly do rent and fee extraction), and real goods and services companies. Asset manager companies Blackrock or Macquarie would use pension funds and sovereign wealth funds money (from UK and from all over the world) and 1-5% of their own money. Real goods and services companies Toyota or Taiwan Semiconductor Manufacturing Company would use their own money, some borrowing and some subsidies/tax credits/government guarantees. Try to find a podcast with Brett Christophers because he talks and writes about this all the time: Maybe this on https://overcast.fm/+1TZQ0F8BA
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@rune-baggetun-4931
Former IT-professional now trying to understand economics (again).
Active 2d ago
Joined Feb 9, 2023
Norway
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