Ritchie again

Oh dear.

Mr. Murphy advocates nationalising the banks because:

1) Bring  seigniorage back into state control for the benefit of all – which I believe will be a source of considerable future wealth for the common good;

Umm, he seems to believe that fractional reserve banking leads to seigniorage profits for the banks.

Umm, no, it\’s the Bank of England that earns such profits, not the commercial banks. Even the Scots and N Irish banks that issue their own bank notes don\’t make such profits, for they must deposit pound for pound with the BoE.

Someone who gets things this wrong really isn\’t going to have many good ideas about the banking system, is he? And to think, he has been advocating that "representatives of civil society", including such banking luminaries as himself, should be appointed to the boards of the banks.

3 comments on “Ritchie again

  1. But you see “seigniorage” is a long and rarely-used word and by using such a word the ignorant appear learned – especially to the ignorant.

  2. Pingback: Tax Research UK / Worstall - getting it wrong again

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