We might not end up homeless, but homes might be the only thing we end up with… and so how do we eat homes?

Sir, Rana Foroohar writes “Central banks can’t create growth by themselves. They can only funnel money around.” “What Trump gets right” April 15.

Indeed, but the way they funnel money around can also promote obese growth, and impede muscular and sustainable growth.

If you fill a financial irrigation system with huge amounts of liquidity, QEs, and ultra low interest rates, and some of its most important canals, like the financing of entrepreneurs are, because you consider these as risky, blocked with high risk weighted bank capital requirements, there’s no doubt bad things will happen. Among other, that those channels relatively wider because they’re perceived “safer”, like sovereign and the purchase of houses, will get dangerously much credit.

Sir, just consider the role of so much the credit for the purchase of houses has had in turning houses from being homes into being investment assets. I have not done the calculations but were we to deduct from the assets of the 99% less wealthy the worth of their houses, I am sure that we would be horrified about what little savings we would find. We might not end up homeless, but homes might be the only thing we end up with… and how do you eat a home?

@PerKurowski

The selection of independent central bankers should not be politicized, but neither should the criticism of the candidates be

Sir, you argue that Stephen Moore nor Herman Cain seem to be “remotely qualified to sit in the monetary cockpit of the world’s reserve currency”, “Trump must be stopped from packing the US Fed”, April 6.

Sir, you might very well be right, I know very little about those candidates but I do know that those who have been sitting there for the last decades were perhaps not sufficiently qualified either. 

The 2008 crisis was caused by the distortions in credit allocation produced by the risk weighted capital requirements for banks. To then having central bankers to inject huge amounts of stimulus by means of QEs and ultra low interest rates, without removing those distortions, does show they don’t have a sufficient understanding of what they are up to. Sir, what they have achieved is only to kick the crisis can forward and upwards. Let us pray it will not roll back too hard on us, our children or our grandchildren.

Sir, to be sincere, I do believe that FT’ team, with its silence, has lost any right it could have to throw first stones in the matter of who are suited or not to man the Fed, or any other central bank for that matter.

You argue: “The merest hint that Mr Powell is doing Mr Trump’s bidding is enough to corrode the Fed’s independence.” Sir, for the umpteenth time, when the Fed and other central banks, in 1988, Basel I, approved of risk weighted capital requirements for banks that assigned a risk weight of 0% to the sovereign and 100% to the citizens, they went statists and gave up their independence.

In truth they did exactly what a Hugo Chavez or a Nicolas Maduro would want a Venezuelan central banker to do, namely to be act under the presumption that any bank credit to the government is managed better than a credit to the private sector.

Look back three decades; have you seen any president anywhere who objects to such a Sovereign Debt Privilege?

Greece, a Eurozone nation that takes on debt in a currency that is de facto not its domestic printable one, was even more crazily assigned a 0% risk weight, and ECB knew about it, and kept silence on it. I do not remember you thinking ECB’s bankers as inept.

@PerKurowski

Many “independent” central banks, like the Fed and ECB, are behaving as statism cronies

Sir, Michael G Mimicopoulos, when commenting on your editorial “The long bull market enters its twilight period” (October 13), writes“The debt of non-financial companies in the US, which has risen to 73.5 per cent of GDP, an all-time high… Companies have been borrowing money to buy back their own stock, to increase earnings per share rather than pay down debt.” “Fed should be viewed against its record” October 17.

Absolutely and that has been going on in front of Fed’s eyes; just like banks have been shedding assets which require them to have more capital, in order to show better capital to risk weighted asset ratios.

Fed independence? Central banks that approve of a 0% risk weighting of their sovereign with a 100% for citizens, keep interest rates ultralow, and launch quantitative easing programs purchasing loads of sovereign debt, can hardly be called independent, much more statism cronies.

@PerKurowski

Our need to concern ourselves about the use of our personal data goes much beyond what’s in the Facebook/Cambridge Analytica entanglement

Sir, I refer to Hannah Kuchler’s “The anti-social network” March 24 and all other reports that will pop up on the Facebook/Cambridge Analytica entanglement.

For a starter, why should we be so concerned with Facebook losing control of data to third-party developers, when Facebook has all that data and even more on us, and on which we have handed over the control to Facebook?

Then, if there is something that should be of the greatest concern to us citizens, that is the possibility of Facebook and similar teaming up with governments in “Big Brother is watching you, and makes profits on you all” joint ventures.

In fact that seems already to be happening as Brussels wants in on the ad-revenues.

I pray there are no secret negotiations going on between Venezuela’s Maduro and Facebook’s Mark Zuckerberg. I mean if Goldman Sachs’ Lloyd Blankfein could finance such an odious human rights violating regime, without any important social sanctioning of him, why should not Zuckerberg thinks about selling data to it too?

Sir, it is clear that we have need for independent entities such as central banks, then an ironclad independency of an Agency Supervising Our Personal Data Usage, seems to me to be the mother of the needs for independency.

Down with all "Big Brothers are watching you". And it does not matter whether these are Public, Private or PPPs (Public Private Partnerships)!

Of course the usage of our data supervisory agency must be managed by wise and common sense possessing individuals and not by dummies like those of the Basel Committee on Banking Supervision who are so not only convinced that what is perceived as risky is more dangerous to our bank system than what is perceived as safe, but also so easily manipulated by the banks.

PS. I forgot the first tweet I made on this, namely: How do we know this is not all fake news created in order to provide some polarization profiteers with new marketing material?

PS. Sir, I could be adding new comments to this post… so you might want to come back now and again to have a look at what’s in it.

PS. We must keep the ambulance chasers and the redistribution profiteers out of the business of fining the social media. All fines should go to fund a citizen’s Universal Basic Income

@PerKurowski

Draghi does not deserve independence. The shackles that most need to come off are those of the European economy.

Sir, you write: “the European economy is still dependent on large troubled banks that have little ability or inclination to boost economic activity”, “Draghi fights a battle for independence at the ECB” January 15.

Why cant’ you say it like it is? European banks are instructed, in de facto very clear terms; by means of portfolio invariant credit risk weighted equity requirements, not to care about boosting economic activity, not to finance a risky future, but to stay put financing the safer past.

The best ECB could do to help boost economic activity is to make sure the discrimination against the fair access to credit of small businesses and entrepreneurs is eliminated. But, since that would best be carried out increasing the equity requirements on what is perceived as “safe”, it would leave a tremendous hole in the banks that cannot and would not be filled fast enough by the markets. And that is where the ECB could step in subscribing important amounts of interim bank equity that is resold to the markets over time.

To do so would require explaining how regulators create the problem, and Draghi, as a former Chair of the Financial Stability Board, does not seem a likely candidate for a sufficiently expressed and explained mea culpa.

Action on this front is urgent… think of all the loans that have not been given in Europe, to those Europe most need to have credit, since Basel II was approved in June 2004.

You end concluding that “It is high time the shackles came off” Indeed, but not those of Draghi, or so much those of the ECB, most urgently those of Europe’s economy.

Should an 81 years old Scot, have had more right to vote on Scotland independency than a newborn Scot?

Sir, on your first page September 19, we saw the photo of a Jock Robertson, who from how he is dressed is undoubtedly a Scot, and who says: “I have waited all my life for this vote”.

He is 81 years old… and my first though was, I am sure he might deserve to vote, and I am truly happy for him… but, really, should an 81 years old Scot be allowed to vote for on the future of Scotland, when all those under 16, and who will be much longer affected by the outcome cannot?

And it is not that I suggest new born should vote… but I wonder if Jock Robertson, exercising a voting right in the name of perhaps a young grandchild of his, would vote the same as he voted his own vote.

In these baby-boomers’ days and when so many of those 18 to 25 year olds do not seem sufficient interested in elections so as to look up from their I-pads, I have often thought that democracy would be much more dynamic and responsible, if mothers, or fathers, were allowed to vote in the name of their children…

And I say this also because then perhaps we would be able to have governments who do not accept the risk aversion of regulators, and which have banks not financing the future but only refinancing the past.

In 2006 I published an Op-Ed in Venezuela that stated: “Whenever on television we see a desperately poor mother telling how she has been let down again by politicians, it just evidences that her voice and her vote does not count enough.

If that mother, or father, besides speaking in the name of her or his own voting rights, were also speaking on behalf of the votes of their children, her or his voice would carry much more power.

Since it is the young who will benefit, or suffer, for a longer time from what governments’ do or not do, they not only should have a vote but also perhaps have more votes than adults. In some countries, especially those who demographically are in the process of becoming real baby-boomer dictatorships, the lack of representation of youth can have serious consequences.

We see all around us how the short-term interest reigns, we even hear now about accounting in real time, while problems that are perceived as of a more long-term nature, such as protection the environment [and lack of jobs] accumulate everywhere.

To assign a voting right to the newborn, can be the most effective way to remind all other voters that there are also who are interested in what might happen in eighty years time.”

In summary, if the average life is eighty years, a new born should have 80 votes (exercised by his mother or older brother) someone like me would have 16 votes left, and someone over eighty should count his blessings and be glad if he is allowed to keep one as a memento. I do not want to owe the world to my children, I want to assure their rights as stakeholders and make it all more of a joint venture.

http://onechildonevote.blogspot.com

Do you know of any reputable Judiciary Independence Index?

Sir, you publish June 18 a long letter that signed by the Director of the Department of Information, Press Division, Ministry of Foreign Affairs, Bangkok, Thailand, purports that “Thai judiciary is independent” and I must confess I have no idea of how much credibility I should assign to it. Would you know about any reputable Judiciary Independence Index that I could use? I mean if I where able to get a grasp on where Thailand stands on this issue when compared for instance to my homeland Venezuela it would indeed be quite helpful.