Beyond the usual disappointment

Frances Coppola was at the INET. I liked this part particularly:

I returned for a panel on debt traps, public and private - and I despaired again. Seven white males and a token woman. Admittedly, one of the white males was Steve Keen, who is original, subversive and takes no prisoners. Adair Turner (again) was also good, not surprisingly since this is his subject. But the rest.....oh dear. It went from bad to worse.

Pontus Rendahl (who is he, I hear you ask?), for example, claimed that "banks don't create money" and explained that Barclays creates its own currency "pegged at par to the central bank currency", which apparently only works if the central bank "is complicit". The Bank of England debunked this nonsense back in 2014. Why is it still being presented now? Doesn't he know that the pre-crisis Eurodollar market, made up of shadow banks and European banks, created billions of faux US dollars without the explicit backing of the Fed but priced them as if they had Fed backing? When the Fed declined to back them, the whole thing crashed - and the Fed changed its mind pretty damn quick, providing copious liquidity to shadow banks and European banks alike, some of it via swap lines to the ECB and Bank of England. The international banking system is perfectly capable of creating things it treats as money and expects central banks to honour, even if central banks have never agreed to do so.

And far more importantly - I don't care whether Rendahl thinks the digital deposits Barclays (or HSBC, or RBS) create is money, as far as I am concerned it is what I have just used to buy my coffee and porridge in this coffee shop, and therefore it is money. I have never in my life been able to pay for coffee and porridge with bank reserves, and unless central banks introduce digital wallets for ordinary people I will not be able to do so in the future, either. Did he propose CB digital wallets for ordinary people? Did he even mention ordinary people and their financial needs at all, for that matter? No, he did not. This is not "new thinking", it is the same old elite economists' voodoo in different clothes.

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