The article demonstrates almost complete ignorance of the workings of financial markets; the author could have tried reading some introductory wikipedia articles on the subject before peddling conspiratorial nonsense picked up from crackpot internet blogs. There are many reasonable arguments both for a Tobin tax and for stricter regulation of derivatives which don't require these sort of tin-foil hat theories.
Not everyone uses derivatives for speculative purposes. Hedging one's stock portfolio using derivatives, in anticipation of short term downward movements for example, is a perfectly valid, legitimate and cost effective way of protecting the value of one's shares.
There was never, and is no, lax regulation of the financial industry; it is the most regulated and government controlled industries in the world. Even excluding the fully controlled and manipulated money supply through central banks, the amount of financial regulation has been increasing in the past 20 years. So the age-old argument that deregulation was at the heart of the financial mess is nonsense.There is no scintilla of doubt in my mind that our current situation arises from poor lending practices and lax regulation of the financial industry.
As already mentioned, derivatives had nothing to do with the financial crisis. The main cause of the financial crisis is lack of restraint on governments and their central banks. Yes, commercial banks lent out too much and too risky, but it was central banks that provided the ever increasing money supply and lowered interest rates; they are the ones to point blame at, and they are the ones, whose seemingly unlimeted power to intervene in economic matters, needs to be curtailed.I believe it is the unregulated use and lack of regulation or even vetting of such instruments that has us where we are today.
Onq, could you explain what you mean by claiming my attack was unprovoked? It was provoked by reading the article.
You invited comment on an article and I provided one. This is a public forum, if you only want positive feedback, I suggest you've chosen the wrong medium.
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But I will certainly avoid the name "Ellen Brown" in future when reading about financial topics.
The following quote shows a complete ignorance of the national income stats.In particular could you give evidence on - as opposed to allege - the "almost complete ignorance of the workings of financial markets" you referred to -.
The difference between GDP and National Income is an accounting adjustment for depreciation. It has nothing whatsoever to do with debt.Writing in Global Research in April 2007, he noted that the U.S. Gross Domestic Product in 2006 came to $12.98 trillion, while the total national income came to only $10.23 trillion; and at least 10 percent of that income was reinvested rather than spent on goods and services. Total available purchasing power was thus only about $9.21 trillion, or $3.77 trillion less than the collective price of goods and services sold. Where did consumers get the extra $3.77 trillion? They had to borrow it
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