Yep, man’s a cretin

This is just drivel, to be polite. If banks do not need deposits to lend – and they do not – then this is total nonsense.

The Bank of England really should understand banking before they publish a book about it.

Banks need deposits to finance loans. If this were not true then no bank would ever suffer a run or go bust, would it?

It’s the P³ that needs the remedial lesson.

16 thoughts on “Yep, man’s a cretin”

  1. Tim

    That one really did cry out for fisking (hence my bringing it to your attention) – given he tends to dismiss anyoke on the comments section with a background in financial services out of hand for him to position himself as an expert on any aspect of banking is frankly absurd – as his comments here suggest

  2. So, I’m owed 14 years back dividends on my Northern Rock shares then? Clearly, them going bust was just a fevered dream.

  3. Well a bank can lend out more than than the assets it holds but only up to a finite multiple. Perhaps P3 missed class the day financial reserves were mentioned.

  4. He has been right on so many things I’ve lost count.

    But then I’ve never been good with negative numbers…

  5. I wonder if he ever reads the crap he’s written before publishing it. His understanding of finance generally is so woeful – sub-GCSE level – that’s it’s incredible he’s still employed anywhere.
    And yet, a rather far-lefty friend of mine reads his stuff with relish and believes most of it too! Insane!

  6. Technically when a bank lends, it credits your account (deposit therefore a liability) and sets up an asset (the loan which is the value of the deposit). Thus it looks like there is a magic ability to create money. The slight snag is people don’t always bank with firms they borrow from. So he’s misunderstood money creation in aggregate Where does the money come from to send out the door? From deposits and the bank borrowing from *other* people. Where do these come from? From other people still. And so on until the origin which is the Bank of England.

  7. ANDREW again said:
    “Technically when a bank lends, it credits your account (deposit therefore a liability) and sets up an asset (the loan which is the value of the deposit). Thus it looks like there is a magic ability to create money.”

    This is, I think, Murphy’s usual ‘proof’ that banks can create money from thin air.

    What he fails to consider is that there is not much point for most people in borrowing money just to leave it sat in a current account. They want to go out and spend it, and at that point – unless you’re spending with someone who happens to bank at the same bank – his neat self-cancelling double entry doesn’t work any more.

    Hence the comment that I think our host has often made, that it is the banking system that creates money, rather than individual banks.

  8. Not sure spud’s theories have anything to do with negative numbers. Pretty sure his are imaginary, much like the square root of -1.

  9. Someone should make a documentary about Spud trying to open and run a simple roadside fish-n-chips stand for a week. Would be fascinating to watch him navigate that whole process.

  10. Jesus
    Fucking
    Christ.

    The Lord High Potato
    Now Fancies Himself
    A Bit Of A
    Poet.

    Surprise!

    He’s Shit At That As Well.

  11. just saw this dialogue on Murphys “caring thread..it is absolute quality and Murphy has well and truly lost the plot..basically anyone who voted for Brexit or the Tories is a “misogynist, a abuser, an oppressor, a fascist and a racist”…presumably according to his logic if you voted for remain and anyone apart from Tory you are fine..

    Alan says:
    May 21 2022 at 8:10 pm
    Richard you frequently state that anyone voting Conservative is a fascist and anyone who voted for Brexit is a racist..I have never come across anyone who is so hostile to those who have different opinions to you. You are a very divisive. It is difficult to reconcile hostile and divisive with caring.

    Richard Murphy says:
    May 21 2022 at 8:56 pm
    If you do not understand that calling out the oppressors and abusers is the very essence of caring then I guess you are most definitely one of those who does not care

    Alan says:
    May 21 2022 at 9:07 pm
    “calling out the oppressors and abusers”..basically nearly half of the electorate voted Brexit and or for the Tories..this highlights the hostility and divisive nature I was referring to..do you really believe nearly half the population are “oppressors, abusers, racist and fascist”????..this isn’t caring it is you abusing normal, hard working people with families.

    Richard Murphy says:
    May 21 2022 at 9:23 pm
    It’s 30%, actually

    And yes I do

    I think there could be that many misogynists, homophbes, racists and more in society

    And I will call them what they are

  12. @stiv

    It’s a “verified purchase”, so he bought it from Amazon, despite many other independent, non tax-dodging booksellers being available.

    What a hypocritical cnut.

  13. @stiv

    He really is a most unpleasant person. No-one sane could believe (and state publicly) that 3/10ths of the UK population are ‘OARF’. This potato has blight.

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