Scratches to Sketches
Thursday, 5 December 2013
Why ban of England Governor Carney's Present Policy is a Crock and What He Needs to do about It.
Governor Carney must be wondering what will be the effect of structural changes in the US on the housing market there. Two institutions supporting the housing market in the YS are about to close shop. If you don't know who they are you probably would not understand what I am about to say even though it is very straight forward.
The problem with banks, per se, in any number of countries is that they cannot properly manufacture the product that they are most keen on manufacturing, namely long term loans for people to buy houses. In order to sort out the maturity mismatch between a home purchase, they borrow short and this leads to banking crises and collapse. The money market is no better.
I think that I really do know how to sort this problem out and have the credentials to do so, but need an audience of people with the right bank management skills. If you have these and are willing to listen to me, we should have a summit to sort out the present imbalances in the banks balance sheets. Governor Carney's present approach will not do it and probably will make matters worse. Email me at wuhlax@gmail.com.
The problem is simply that savings to buy houses come out income and have little to do with interest rates.
Obviously banks that operate their balance sheet at the short end will have serious issues when it comes to maturity mismatch for home loans.
What if banks were require to hold a portion of long term bonds equivalent to their long home loans? Even if governments forced the practice, it would create a market over time in long term securities for home financing. Adjusting the proportion would allow the central bank to reduce the pressure of demand when necessary.
With time people might actually start saving out of real income again?
Putin and his future death! European court is not superior to UK supreme court, says Lord Judge | Law | theguardian.com
Curious competition of legal authorities could define the next steps in evolving concepts of democracy. Big question is whether Parliamentarians / voters can / should be held accountable in the future for voting a party line that is clearly wrong, mistaken, damaging. If you contribute directly by your vote to a death dealing process should you be held accountable? How accountable should employed individuals be relative to their employers?
In a world in which it is increasingly easy to monitor your every act, is it your responsibility to be responsible? The likelihood of a permanent record of all you do is approaching at a dizzyingly fast pace. Will it be controlled by a few billionaires like Putin or will individuals seize back their power to contribute to decision making and legal processes? Will the world go towards extreme centralisation of authority in which you can do what you like except question the powers at the centre or will people force a move towards shared responsibility in which everyone is accountable including those that inherit power?
It's not surprising Putin has a fortune of $50 billion compared with Obama's small earned income. This has enormous implications for the future of a Russia which allows Putin to be an oligarch. History tells us he will die a violent death and be purged away like the Kulaks of the earlier period in Russia history. A smart Putin would be more like Bill Gates and embrace his responsibilities to help others less fortunate, and do it spontaneously. Doubtful?
Putin is a super sap really, not a man!
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Sketches from scratches is a provocative blogspot that has grown out of the Wuh Lax experience. It is eclectic, which means that it might consider just about anything from the simple to the extremely difficult. A scratch can be something that is troubling me or a short line on paper. From a scratch comes a verbal sketch or image sketch of the issue or subject. Other sites have other stuff that should really be of interest to the broad reader. I try to develop themes, but variety often comes before depth.
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