Monday, December 30, 2013

I.8 Assets and banking

(from the larger project of an introductory approach to Ecological macroeconomics)

Chapter 7 established money as a claim on exchange value. It also went through the roles money plays in the economy (medium of exchange, unit of account, and store of exchange value), and its attributes (storable, easily divisible, transportable, hard to produce, and widely accepted). Underneath it all was money’s macroeconomic role as a coordinating mechanism, the way in which items with exchange value are passed along through the production process toward becoming items of use value, and the way items with use value are distributed to various actors in the economy.

It also looked at one source of money, which is a sovereign state (a government) declaring a particular thing to be money, and then producing that form of money.

But it turns out that most money in a modern economy is actually produced by the banking system, rather than by the government. Yet at the same time, that bank money is backed by state money, through the functioning of what’s called the central bank.

The goal of this chapter is to lay out the function of the banking system and its role in creating money, but part of that functioning is the role of assets, so we’ll start with an overview of what assets are and the major types of assets.

The discussion of banking will start with the relatively simple mechanics of check-clearing, before going on to bank balance sheets, the creation of money, and the role of reserves and state-issued money.

The last two items to address in the chapter are the backing of money, and a closer look at the disposition of income that was touched on in Chapter 7.

  - Checking transactions
  - Bank balance sheet
  - Reserves
What stands behind money
Disposition of income

Thursday, December 19, 2013

Did I get that right?

I just heard that Obama has nominated Sen. Max Baucus to be our next ambassador to China.

The report described Baucus as Montana's longest-serving senator, first elected in 1978.

The 72-year-old announced earlier this year that he would not be seeking re-election, saying that he wanted to spend more time in his home state.

Which is why he accepted a nomination to be ambassador to China ...

Maybe he thought the line about "I want to spend more time with my family" was past its sell-by date, so he tried something different.

Tuesday, December 10, 2013

Best NSA response ever

This morning my 11-year-old son was making his lunch while the radio played in the background, and they mentioned the story about the NSA keeping an eye on World of Warcraft.

From the kitchen I heard, "What ...?" Then Ben came to the living-room door, cream cheese in hand, with his mouth agape in surprise. He recovered enough to observe, "Well, at least they're probably not spying on Club Penguin."

I guess ...