Fuddie
duddies like me have always been under the impression that if we want to make
an £Xbn investment, we have to sacrifice £Xbn of current consumption, i.e. we
have to save. But according to Ann Pettifor this is not the case (as I
understand her). At least that’s the impression I get from this, which she tweeted
today.
In other words,
@netbacker,
savings are not needed for lending. The money for a loan need not be in the
bank when the bank lends.
— Ann Pettifor (@AnnPettifor)
September
29, 2014
And
on page 26 of her book “Just Money”, there is a paragraph all on its own which
says “Savings are not needed for investment.”
And that’s repeated on p.104 where she says “Under a well-managed
banking system, and with the sagacious use of bank money, surplus wealth is no
longer needed for loans and investment.”
I’ve
contacted the Nobel prize committee to propose her for a Noble prize in
economics. Will someone second that?
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