Friday, May 7, 2021

Totally Can't Recommend This Enough

Richard Werner: How Banks Work & Dictate the Economy — DiMartino Booth — Down the Middle with Richard Werner.

Be patient. There's a long intro on how money is created, but once he gets into banking and the economy it's riveting.

Big H/T Brother Ass:


  1. tl;dw

    The USA has a debt-based monetary system. New money is only created when someone takes out a loan, and money is destroyed when that loan is repaid.

    That's why the banks were able to hold the rest of the economy hostage in 2008. If banks stop making new loans, the whole monetary system falls apart. It also guarantees that bank profit is a fixed % of the value of the real economy.

    Since banks make a lot of money with the way things are now, and they hire lobbyists, real reform is impossible.

  2. Thank you for this. It was really interesting.

    I searched his name and found this on his website -

    Interesting to see the other “young global leaders”

    Can’t see any recent WEF mentions of him. Perhaps he has fallen out of favour.

  3. after jumping out of perfectly good airplanes in the early 1940s for some reason, my old man went to work on Wall Street in 1946. He used to tell me about the bankers he encountered and said that they were on the 3-5-7 plan: bring in deposits at 5%, loan them out at 7% and be on the golf course at 3 o'clock. Seems pretty simple in retrospect; he lived long enough to see the NYSE go from trading less than a billion shares a year to more than a billion shares a day. Needless to say, he was not happy with all the "progress" that was made during his 5 decades as a stock broker...he did not care for automated trading, he preferred personal contact with his customers, but he didn't mind the demise of ticker tape :o)

    That being said, I am reminded of Churchill's comment concerning democracy and wonder what would be a "perfect" banking system? I also think of "It's a Wonderful Life" and the role played by Mr. Potter, as nasty as it might be. I have no answers and have no clue...I've been thrifty my whole life, invested carefully, and reached a point of financial "security" I never expected to attain, but will it last? Beats me, now back to drinkin' juice, of course (vodka comes later)

    1. You can kinda tell that Werner thinks the accepted narrative of central bankers and economic policy makers working feverishly to manage super sophisticated matters is a lot of BS--mostly intended to pull the wool over voters' eyes. It's clear that the economy has in recent decades--starting with the Clintons?--been run mostly for the benefit of the big investment bankers who fund political campaigns and provide cushy retirement gigs for former politicians. Lots of people involved, but lots of money generated to be shared.

    2. Several years ago Conservative Treehouse produced an interesting argument along the lines of big bank/small bank policy and how Trump intended to (and subsequently largely did) change the dynamic. It fits into this discussion in many respects

  4. In the words of Dr Paul... "Audit the Fed". Once that domino tips, many of our problems would become painful self correcting.

    I don't think many understood what he was really getting af in trying to make that happen.