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[Viking01]

I was going to read it, honest sir, but then the dog ate it...

Actually I did read the overview. Several times to try and make some sense of it. Seemed to be saying that banks do create money out of thin air, within limits, but no doubt I'm failing to understand many vitally important economic policies and principles in saying that.

Back to ill-informed generalities for me.

Evening.
Thanks for the reply, and your dog is no doubt suffering from indigestion ... 8-) And I understand your current predicament.

How is Money Created?
A good question. I have to say that I've yet to come across a good book or articles that concisely explains the concept and the process - and presents it in reasonably simple language.

I'm not sure whether this is because (i) both the concept and the process are complicated (ii) the authors don't actually know the process mechanics, (iii) to present such information in an easily understood format might expose some uncomfortable truths .... 8-)

I'm still on my own personal voyage of discovery about aspects of both economics and banking. I attach links to a few resources that I've come across in more recent years.

I acknowledge some of the last sources listed have a left-ward lean. I include them only because they have provided me with some light on the ongoing left - right debate. I'm not trying to push one side or the other, nor am I going to get into any political debate online. I'll leave that to others.

Definitions and Explanations
There are a number of books available that might explain both the past Fractional Banking system and the more recent Modern Monetary Theory (MMT). The book link below might be of use. Suggest that you look through the online Table of Contents ("Look Inside") to see if it covers the specific elements that you're interested in.

https://www.amazon.com/Sovereign-Mon...ustomerReviews

Explanation of Fractional Reserve System
Again, where do you find a nice concise and easy-to-read source? I attach the link below because it is not complex, and has one decent diagram.

https://courses.lumenlearning.com/bo...reating-money/

Creating Money in the Modern Economy
Two links: The first is the link to the BoE article that was posted earlier, while the second is a short (related) video clip that talks about the creation of money. The same video clip is present on the NZ Reserve Bank website.

https://www.bankofengland.co.uk/-/me...rn-economy.pdf

https://www.bankofengland.co.uk/quar...modern-economy

Modern Monetary Theory (MMT)
Around 1970, some initial thoughts on MMT were slowly coming into being (e.g. Mosler). But it was probably at least 1995 before we saw the development and progressive deployment of Modern Monetary Theory (MMT).

https://en.wikipedia.org/wiki/Modern_Monetary_Theory

A Political Perspective

https://www.counterpunch.org/2018/01...netary-theory/

Use and Abuse of MMT

https://michael-hudson.com/2020/04/t...-abuse-of-mmt/

The following link has a good diagram illustrating basic flows.

https://www.elrincondelparquet.com/n...-theory-wrong/

US Federal Reserve video on Monetary Policy
The attached video clip in the first link below was made while in the middle of the QE2 round in the US. I include it only because the Feds position at that point in time suddenly turned around soon after [and this was well prior to Covid-19 making its appearance].

https://wallstreetonparade.com/2019/...o-wall-street/

https://dissidentvoice.org/2019/02/q...ic-about-face/

[husaberg]

If they introduce capital gains tax, they better plan on all the landlord property investors leaving the market, if only in protest.
They may find they have to come up with a few more houses than they budgeted for.

I guess we could all just sit on our arses & hope to receive enough govt money to barely survive once we reach a certain age.
Or we could provide housing to the risk averse while we invest in overpriced property & have others pay the mortgage on it while pretending that we are wealthy.
I prefer to call it inflation proofing my earnings.
What do you do prefer to do, bank your earnings & find that it buys nothing in 20 years while paying off consumer goods that will also be worth nothing in 20 years while complaining that others have all the luck?

Thats a massive sweeping generalisation based far more on what you would like to believe, than actual fact.
The concept of investing in property to aviod tax has never featured in any of my thinking on that topic.
I do it to create passive income, while inflation proofing wages I have worked for in the past.
How do you invest your cash reserves? For christ sake don't say you put it in the bank.

oh really.... i had a broom and i just cleaned up the rubbish.
So the rest of the developed world does not have a CGT? minus a few well known tax havens.
Or you don't invest in property as its not taxed capital gains. well bless you bob you must be doing it out of the bottom of your heart then.........
the fact its not getting taxed for that inflation proofing of your wages at all must have escaped your attention. i sincerely doubt that.
All my moneys in property, i have mentioned that before, as there is no tax on capital gains a long as you dont turn them over to quick or buy with the intent of flogging them off quick to make a quick buck the tax man leaves you alone.
I am on the look out for a nice coastal block for myself for a retirement block in 25 years time atm as that young stroppy looking gretta girl has made them rather affordable now
You must tell me more how those inflation proofed wages are not in actuality tax free capital gains.
Also of course if you didnt invest in those property's to avoid tax ...........why it is you are so against a CGT.

[BMWST?]

I guess we could all just sit on our arses & hope to receive enough govt money to barely survive once we reach a certain age.
Or we could provide housing to the risk averse while we invest in overpriced property & have others pay the mortgage on it while pretending that we are wealthy.
I prefer to call it inflation proofing my earnings.
What do you do prefer to do, bank your earnings & find that it buys nothing in 20 years while paying off consumer goods that will also be worth nothing in 20 years while complaining that others have all the luck?

not at all .We do have a small rental,which we now own.But a lot of real estate is bought and sold without really doing sums .House values i think are completely over the top,and those who regularly trade up must pay an absolute fortune in interest and real estate agent fees.A lot of wealth is transferred directly to the banks and real estate agents

[F5 Dave]

Who are these agents of estate you talk of?

[GazzaH]

They are agents of the sellers, allegedly. Definitely not the buyers anyway.

[sidecar bob]

oh really.... i had a broom and i just cleaned up the rubbish.
So the rest of the developed world does not have a CGT? minus a few well known tax havens.
Or you don't invest in property as its not taxed capital gains. well bless you bob you must be doing it out of the bottom of your heart then.........
the fact its not getting taxed for that inflation proofing of your wages at all must have escaped your attention. i sincerely doubt that.
All my moneys in property, i have mentioned that before, as there is no tax on capital gains a long as you dont turn them over to quick or buy with the intent of flogging them off quick to make a quick buck the tax man leaves you alone.
I am on the look out for a nice coastal block for myself for a retirement block in 25 years time atm as that young stroppy looking gretta girl has made them rather affordable now
You must tell me more how those inflation proofed wages are not in actuality tax free capital gains.
Also of course if you didnt invest in those property's to avoid tax ...........why it is you are so against a CGT.

Well fill ya fuckin boots.
You're clearly doing a heap better than me & are way smarter.
Good onya bro.
Im not as smart as you think, I'm just trying to get by with the least drama & stress while not working most days.
You really are the internet police aren't you, and a bit of a fuckwit that attacks from the self appointed high ground too.

[husaberg]

Well fill ya fuckin boots.
You're clearly doing a heap better than me & are way smarter.
Good onya bro.
Im not as smart as you think, I'm just trying to get by with the least drama & stress while not working most days.

I like it better when you answer questions i asked, rather than lavish the false praise and platitudes and acknowledgements that i have a bigger willy......
property down here is cheap when we lost those 1000's of jobs after pike and he collapse of solid energy the property price really tanked here.
You remember at the same time the Nats were bailing out massive multi nationals and giving them massive perks Rio tinto and proping up finance companies owned by billionaires they were letting our own SOE's and thousands of jobs here go down the gurgler

[sidecar bob]

I like it better when you answer questions i asked, rather than lavish the false praise and platitudes and acknowledgements that i have a bigger willy......

I wont be leaving the market with the introduction of CGT but plenty will, I'm stupid, but not so stupid that i don't realise that people are in the property market for different reasons to me.

[Katman]

….I'm stupid, but not so stupid that i don't realise that people are in the property market for different reasons to me.

You're all only in it to make money, aren't you?

[husaberg]

I wont be leaving the market with the introduction of CGT but plenty will, I'm stupid, but not so stupid that i don't realise that people are in the property market for different reasons to me.

I doubt there will ever be an introduction of a CGT same as raising of the pension eligibility, its a sure election loser and no one has the balls to make the hard decisions that even if done for the good of the country will lose a election.
both have the same chances a Muller wining the majority of the seats at the next election.

[JimO]

They are agents of the sellers, allegedly. Definitely not the buyers anyway.

not the sellers either

[F5 Dave]

You're all only in it to make money, aren't you?

Yeah. Down with the man.
Let's start a commune and grow sweet potatoes.

[F5 Dave]

They are agents of the sellers, allegedly. Definitely not the buyers anyway.

Ahh, no. They are usually just parasitic sponges that don't have the sellers interest in mind. Just their own.

If you can sell a motorcycle you can sell your home.

You do however need a lawyer. As I explained to some estate twat: no I don't know that much about the legal proceedings of house sales. But my lawyer is a lot smarter than you. He shut up after that, realising that he was in fact useless.

[jellywrestler]

Ahh, no. They are usually just parasitic sponges that don't have the sellers interest in mind. Just their own.

If you can sell a motorcycle you can sell your home.

You do however need a lawyer. As I explained to some estate twat: no I don't know that much about the legal proceedings of house sales. But my lawyer is a lot smarter than you. He shut up after that, realising that he was in fact useless.

while they are parasites they have buyers on their books so most people doing private sales aren't getting access to the same number of buyers simply so often shooting themselves in the foot. Bit like those who don't want to pay trademe commission for selling their bike, yet look at how many potential customers TM reaches.
We will see a few more real estate agents come out of the woodwork as people are laid off and lean on the industry for work

[F5 Dave]

Have you heard of the internet? It's where most people search for houses. I hear Trademe is popular so estate company affiliation is pointless.

And yes sadly there will be another influx of people trying to earn a crust. If you see me wearing a red coat. Don't ask.

PS just reading the May issues of CMM. June advertises coming mag with a tasty looking MV you might be interested in seeing.