Why is it that few of us see the kleptocracy at work in
our midst? Strict national accounting is not incompatible with a Growth
Pact. One fly in the ointment remains. Why are Central Banks lending
to clearing banks at 0.5% to 0.75% over three months and governments paying them 2.4%on the
National Debt bonds on a three month bond as in
the South (5 July 2012).This question- simple enough to resolve- defeated the early reasoning of Karl Marx in 1852 (Marx and Engels,Selected Correspondence, Progress Publishers,Moscow).
Marx claimed in connection with the French banking crisis of 1852 that
the rules governing banking were “extremely complicated” rather than a
simple case of maintaining adequate cash reserves to cover inflation and
cyclical loss of confidence.
In Capital (Volumes 1 to 3, 1862 to 1866)
he wrote that the National Debt played a key role in providing banks
with regular funds and underpinning the banking system. He also claimed
wrongly that industrial capital always wins out over finance capital.
The opposite is the case when people seek A Soft Seat as industry
falters in the face of decline.
Bank borrowing from the State Central Banks and their lending back to
the Ministry of Finance is a con-job which illustrates Marx’s ignorant
probing for an answer to the fundamental liquidity of banks.
Early Marxism-once again found lacking!
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