Topic: John Maynard Keynes is responsible for all that is about to happen to the world - page 2. (Read 3686 times)

What on earth are you talking about?  Banks can create credit.  But thats not printing money.  That's a balance sheet operation. 

Keynes didn't invent FRB and credit money has been around forever

the banks would have to print more because an artificially low interest rate will cause the demand for loans to outstrip supply and the banks will eventually run out of money to loan unless they print more.
commercial banks can print money, 99% of the fiat money in existence was created by the commercial banks using fractional reserve lending.
Keynes was the first one to propagate these bullshit ideas about "stimulating" the economy using both fiscal and monetary policy, without him the Chicago school bullshit monetary expansions wouldn't exist either.

The Fed can just lower the rate with a keystroke.  Why would banks have to print more? Only Central Bank can print money.

QE was first done by Japanese.  Idea from Werner but wholly supported by Friedman.  QE isn't Keynesian

The trouble with people is that they confuse marginal supply and demand with shifts in the supply and demand curves.

Take this sentence, from the Austrian Mises Institute: "The additional savings must be used to create more capital. As Hayek explains, initially, more production comes at the expense of less consumption."  (http://mises.org/daily/2804)

What's wrong with this sentence?  Nothing--during normal times.  This marginal analysis is correct then (if one goes up, the other must come down).  When the economy is at its maximum potential, indeed more production comes at the expense of less consumption.  But when there is an output gap, like today, you can actually have both more production and more consumption at the same time, as Keynes points out.  You can have your cake and eat it too.  This is because resources are just sitting around, and people are not consuming, out of fear.  If you prime the pump with some easy money, the economy goes back to its maximum potential --this is shown graphically in Econ 101 textbooks as a shift in the supply and/or demand curves-- and then (and only then) do you get the marginal relationship that Hayek is describing.

Of course figuring out when an economy is at its maximum potential and when it is not is a big issue.  Today's "liberals", like NY Times economist and Nobel Prize winner Paul Krugman, argue the US economy is less than full maximum potential, while "conservative" economists argue the opposite, that today's output gap is a result of structural changes that have been going on for years but only became apparent, suddenly, like the fabled straw that broke the camel's back, in 2008.  So, argue these conservative economists, the US economy is already at its full potential today.  Easy money will not make for more production and consumption, say these conservative economists, but may in fact do bad things like cause inflation or just add to the burgeoning national debt.

Lower interest rates increases the money supply by making it more attractive to lend/borrow and spend money. Money that was being saved now becomes money that is being spent. This is how the money supply is increased - not necessarily through QE.
    QE may be deemed necessary (in exceptional circumstances) where lower interest rates in themselves are not deemed sufficient a measure at having stimulated demand within the economy.

   When interest rates rise does the central banker cut up/burn or otherwise destroy $ bills ?

what you're saying makes no sense.
the interest rate IS the price of money.
when the banksters lower the interest rate below what the free market would dictate they have to increase the supply or they will run out of money to loan.

That doesn't follow - interest rates can be brought lower without printing more money - it just means money won't be quite as cheap as it would be if they had also increased its supply.

what about it? if the free market reduces it then its fine as it matches the demand and there is no need to print money.
when a central bankster decides it needs to be lower because he said so, he has to start printing money because demand outstrips supply the second he starts manipulating interest rates down.

What if you were in recession and the price of money was reduced because at its previous price there wasn't enough demand ?

there is nothing over simplistic about it, its simply simple.
the interest rate is the price of money, if you set it artificially low demand will outstrip supply and you will run out of money to loan.
the only way this can be sustained is if the banks are allowed to print more and more money.
hence whether Keynes understood this or not he advocated the printing of money.

Sure.  Who do you think Robert Paulson works for?

This kind of overly simplistic attitude does more to hurt 'the cause' then any 'bankster' can dream of doing.

Keynes advocates artificially lowering interest rates, there is no way to do this without having the banks print more money.

+1

Also, there is a bit of a difference in Government borrowing (in order to stimulate demand and create employment through public sector investment in for eg. infrastructure) and TBTF commercial banks operating in a deregulated market creating debt and cheap money to the masses.

These kind of arguments, whereby unemployment is caused by regulation (in what to all intents and purposes is a deregulated/"liberalised" labour market) and where credit crunches are also caused by regulation (in what to all intents and purposes is a deregulated (ineffectual regulation) banking sector) - well, it just doesn't ring true.

   Its like the man who crashes his car blaming it on the mandatory road tax he has to pay - and not the bottle of vodka he downed before setting off on his journey.

In "The General Theory of Employment, Interest and Money", Keynes advocates lowering the rate of interest, below the "marginal efficiency of capital."
this means banks have to print money or they will run out of it because they are effectively enforcing a price control on money.

https://www.youtube.com/watch?v=OYqBxEAtXZA

China is already printing houses. System is doomed, thing is they are probably to dumb to even realize.

Automation is a serious factor in the income inequality gap
Structural unemployment of the labour market meaning a signifcant rise in wages for skilled labour due to insufficient supply and a signifcant fall in wages for unskilled labour due to increasing supply as a factor of technological change is a valid critique of the system.

That said Hayek and others have mentioned ways around that just look at Foster and Catchings
http://mises.org/daily/2804

Keynes is not about printing money.  Hes all about stimulus.

Friedman is about printing money. 

Dude learn this 101 level stuff before you post

instead of advocating the abolishment of the laws that give the union workers the power to violate their contract without being fired Keynes decided that redistributing wealth by printing money is a good idea, we are suffering from those ideas to this day.

just like Karl Marx is responsible for all the misery the Russian and Chinese had to endure for almost a 100 years the west is about to taste the same medicine of institutional malinvestments.
at least until the people demand free markets and honest money again, much like their forefathers did.

You Austrians think too much.  In fact, J.M. Keynes (much as I hate him) was a genius.  He correctly saw several things. First, if you are an Austrian, he foresaw AD (Aggregate Demand) is a viable concept (feel free to disagree, but nearly nobody who is not an Austrian agrees with you).  Second, he saw that Say's Law does not work (ditto).  Third, he saw that in the economy of the 1930s (and true even today), where unions existed and monopoly power exists, that wages and prices are "sticky", hence, with most people, you can fool them by "printing more money" (they confuse nominal prices with real prices, due to sticky wages and prices).

For all of the above Keynes deserves praise.  That said, I am a gold bug and hard money advocate and I hate what he's done to modern economies (perpetual debts, savers are shafted in favor of debtors, and currency is debased every year).  But he's still a genius, much more than say Murray Rothbard of the Austrian school.