Hands up, baby, hands up. Marx and the National Debt

Hands up, baby, hands up. Marx and the National Debt

Why is it that few of us see the” kleptocracy”(Max Keiser) at work in our midst? Strict national accounting is not incompatible with a Growth Pact. But one fly in the ointment remains. Why are Central Banks lending to clearing  banks at 0.5% to 0.75%  per annum and governments selling the National Debt bonds to them at 2.4% yield on a three month bond as in the South (5 July 2012)..This question- simple enough to resolve- defeated the micro-mind of Karl Marx.

Marx claimed in connection with the French banking crisis of 1852 that the rules governing banking were “extremely complicated” rather than a simple case of maintaining adequate cash reserves to cover inflation and cyclical loss of confidence. In Capital (Volumes 1 to 3, 1862 to 1866) he wrote that  the National Debt played a key role in providing banks with regular funds and underpinning the banking system. He claimed wrongly that industrial capital always wins out over finance capital. The opposite is the case when people seek A Soft Seat as industry falters in the face of decline.

Bank borrowing from the State Central Banks and their lending back to the Ministry of Finance is a con-job which illustrates Marx’s ignorant probing for an answer to the fundamental liquidity of banks.

Marxism-once again found lacking!