Thanks for the link. Intersting article. Obviously the article is learned in a way my writing is not. But I was struck by how similar their arguments were to those I have made in less learned terms over the last couple of years.

I started to reply to you here but it got too long. So please see the post above this one for the reply. I thought the article was intersting and our discussion might be of broad interst to others. Hope you don't mind.

Thanks again for the article.

I think you're right that is what someone thinks they are doing with them. But the banks haven't significantly increased their holdings have they? Not to a degree that will make any difference to the sort of thing that happened to start this whole mess. The US banks are resisiting any serious increases in their holdings.

But while this may be what they think they are doing I wonder if the main effect they are really having is to further erode any faith the public has in what governments say about financial and banking matters.

This, I think, is going to come back to hurt them. There is no way to establish confidence once the public is convinced you are an habitual liar. I think Wall Street is already suffering from this. Too many small investors are convinced the market is rigged for the big players and that they are given trading information before anyone else. I think this is no small part of why so many traders are simply staying out.

Government's are going to achieve the same thing. Market cyncism stops markets functioning.

I have followed your comments both here and at the Guardian for some time now.
I would be most interested in your opinion of this analysis of FRB. I suspect (and I am NOT an economist) that many of our current problems stem from a failure to distinguish between money titles and IOUs.
If the Austrians were right… we're in trouble!

http://www.independent.org/pdf/tir/tir_07_3_hulsmann.pdf