Richard Werner gives a talk below on “Strategic QE: Money Creation for Sustainable Investment” at the EU Parliament:
A minor point: I don’t think it is correct to say that the banks, when they create a new loan, record their liability as a “fictitious deposit.” Instead, the new demand deposit is technically and legally an IOU or promise to pay, but also a type of credit money, so that new demand deposits expand the broad money supply.
I don’t accept Werner’s “quantity theory of credit” either (you can listen to a talk on the subject here), because it concedes too much to the flawed Neoclassical quantity theory.
However, the point that our modern financial system – because it has been so poorly regulated and deregulated – is driving asset price inflation by credit bubbles is absolutely correct.
And Richard Werner has a radical solution to the below-replacement fertility rate in the Western world, namely, generous subsidies for new children:
This sounds excellent to me, and much better than the disastrous Neoliberal attempts at population replacement, which is now being pushed by the United Nations.
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