YouSaid · the spoken record

Thomas Mayer

lines on the record: 52
first: 2020-01-05
most recent: 2020-01-05
sittings or episodes: 1
sources: podcast

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“Yes, we have a website. You can find it very easily if you put it into a search machine. Or also you can type in www.fs minus r.com.”
2020-01-05 · We Study Billionaires · TIP276: The Euro & Its Impact On European Banking w/ Thomas Mayer (Business Podcast) · IDENTIFIED FROM THE TRANSCRIPT
“cross border. This is what the Greeks learned when the ECB stopped the excess of the Greek banks to its refinancing facility. The result was that if you have euro on deposits at a Greek bank, you couldn't transfer them abroad. So what did you do? We're trying to get hold of your banknotes. They were going to the cash machine, try to get out your deposit money in the form of banknotes, well, they also stopped that. You had a strict limit imposed on how many bank knows how much money in the form of banknotes you could take out. So concern is during the next year we are recession, we may see the Greek predicament of 2010 perhaps multiply and being seen in other countries people will then flee out of the euro as fast as they can. dollar, gold, maybe the haven, where they will go.”
2020-01-05 · We Study Billionaires · TIP276: The Euro & Its Impact On European Banking w/ Thomas Mayer (Business Podcast) · IDENTIFIED FROM THE TRANSCRIPT
“Taking it as the Fed was raising rates. And I think when this year downturn, we can see a flight, the safe places, the safe currencies. Now within the existing money system, usually the dollar is such a currency. Sometimes, again, people will fly out of the money system and try to gold. We've already seen quite a bit of appreciation of the gold price. And it is conceivable that like in the euro crisis of 2010, that some of the euro bank money will no longer be convertible, i.e. people cannot use it to make payments.”
2020-01-05 · We Study Billionaires · TIP276: The Euro & Its Impact On European Banking w/ Thomas Mayer (Business Podcast) · IDENTIFIED FROM THE TRANSCRIPT
“Yes, let me start with on caveat. What I'm saying is purely the view of an economist, and it is definitely no investment recommendation. I think as an economist that the next recession will put considerable strain on the banks and on the financial system. We know that we have higher debt now than we had before the last debt crisis that led to the Great Recession of 2007-2008, high debt. And in times of such stress, the weakest currencies are often the ones that suffer most. You could see this already in 2018 with some of the emerging market country currencies.”
2020-01-05 · We Study Billionaires · TIP276: The Euro & Its Impact On European Banking w/ Thomas Mayer (Business Podcast) · IDENTIFIED FROM THE TRANSCRIPT
“Let's have the euro as a non-political money created solely for the benefit of the user? Have the government do fiscal prudent policies and hopefully live within their means? But if they don't, then they can issue their own money in parallel to the euro, see whether this would get them any advantage. I doubt, but I wouldn't forbid it.”
2020-01-05 · We Study Billionaires · TIP276: The Euro & Its Impact On European Banking w/ Thomas Mayer (Business Podcast) · IDENTIFIED FROM THE TRANSCRIPT
“And of course this would be more like people presently in the capital market. They would either raise money on the capital market, existing money, or they could go to the banks where the banks would intermediate existing money to them. If there would be governments who cannot deal with this because they need money for fiscal purposes, they could, in my view, issue tokens, token money to fund their expenses. Remember that the Greeks experimented with this as a parallel currency, a fiscal currency, and the Italians are toying with the idea with so-called minibots, which are basically short-dated government debt issued as a currency because it's without interest and with infinite maturity to fund government projects. So I wouldn't be here too rigid about it.”
2020-01-05 · We Study Billionaires · TIP276: The Euro & Its Impact On European Banking w/ Thomas Mayer (Business Podcast) · IDENTIFIED FROM THE TRANSCRIPT
“GDP at present is less than 25% of GDP. And you can do this for every single country. Some would benefit more, let's say the Italians would go down from 135 to 25. The Germans would benefit less. They would go down from a little bit more than 60 to 25, but we could be generous in this regard because everyone will benefit. This would also allow the government now to engage in fiscal projects in a prudent way that they would not be bailed out anymore because they could not have the banks create new money for them. And they would not be able to force this European Central Bank in this new system to create digital money for them. So the governments would get relief, but also more room for freedom.”
2020-01-05 · We Study Billionaires · TIP276: The Euro & Its Impact On European Banking w/ Thomas Mayer (Business Podcast) · IDENTIFIED FROM THE TRANSCRIPT
“cushion, equity position, and this cushion would work like a first loss insurance. So let's say a bank has 10% equity in its balance sheet. The first 10% of the loss are insured once the equity is gone, the bank is bankrupt, you have the credit as the assets as the creditor of the bank. So that's the role of the bank. The role of the government. First of all, the governments actually get a big boost on their debt position. As I mentioned before, when you take this government bonds as a cover for the outstanding money, you can reduce the outstanding government debt because this cover is permanently needed. Presently we have a about 7 billion euros in bank money, side deposits. If you take this out and buy government bonds for this, you can actually reduce euro area government debt ratio from 85% of”
2020-01-05 · We Study Billionaires · TIP276: The Euro & Its Impact On European Banking w/ Thomas Mayer (Business Podcast) · IDENTIFIED FROM THE TRANSCRIPT
“So if I give it up, I do not use it as for consumption, I save it, I give it up, I give it to someone else to put it in my bank and the bank can give it to someone who invests with it, uses it to pay construction workers or whatever. And the construction workers put it in the bank and so forth. That's different. That's different from the situation today because it can create money for W's of real resources. If I go to the bank, take out a credit, get the money in my account, I spend it, I engage construction workers, but no one else may have saved at all. We create claims in multiple numbers, claims on the same real resource. So banks, as I said, they would collect the existing money and lend it on a good, they would be more like crowdfunding. Perhaps one difference, they have an equity.”
2020-01-05 · We Study Billionaires · TIP276: The Euro & Its Impact On European Banking w/ Thomas Mayer (Business Podcast) · IDENTIFIED FROM THE TRANSCRIPT
“combustion engine when you drive it and you do not just have a ride you may feel it so for the rider it is not such a big deal but when you drive it when you are sort of dealing with it it's very different actors have a different role take the banks as we said the banks presently create money by extending credit in such a system as I have sketched it the banks would not create money it would be the central bank that would do it only the central bank that would do it the banks not the banks would collect existing money and then the existing money on to borrowers who could use it to whatever purpose funds and investment whatever fund your house construction or purchase or whatever but it would not create it the money would always be used for one thing”
2020-01-05 · We Study Billionaires · TIP276: The Euro & Its Impact On European Banking w/ Thomas Mayer (Business Podcast) · IDENTIFIED FROM THE TRANSCRIPT
“Actually, I think if you're a consumer and you're not interested in all these things, I think you will not find much difference. You will probably still pay, probably not with the bank card, but with your mobile phone or smartphone. Or if you don't like this, you can still get your paper notes out of a cash machine. It's more for what is going on behind it. It's kind of like if you're driving a car, right, you drive and you will not necessarily, when you're sort of going along, should say when you're riding in the car, you will not necessarily find that much of a difference whether it's electric or whether it's”
2020-01-05 · We Study Billionaires · TIP276: The Euro & Its Impact On European Banking w/ Thomas Mayer (Business Podcast) · IDENTIFIED FROM THE TRANSCRIPT
“credit extension. This does not function when you have many sovereign nations using the same money and not actually being able to agree on how to ensure this because the North feels that it's paying for the south and so on and so forth. For that particular money, I think a digitalization offers change of the system. It is almost like going from the combustion engine to the electric engine. So my bottom line on this is digital central bank money will come, but whether it will come together with the change of the credit money system into 100% money. This is our Erin Fisher called 100% money. That's another question. But in my view, it would be a good opportunity to put the on a firm footing and avoided eventual collapse, which could well happen in the next CV recession.”
2020-01-05 · We Study Billionaires · TIP276: The Euro & Its Impact On European Banking w/ Thomas Mayer (Business Podcast) · IDENTIFIED FROM THE TRANSCRIPT
“Question is the digital central bank money just like the paper note and it does not replace the bank money you could think of that. You could leave the bank money as it is in place bank money created through credit extension by the banks with all the problems associated but serving certain purposes and have instead of the paper bank note just a digital money but not change the system would be one way to go about it. I can understand that when the existing system works well this may be the way to go. It's probably the way the US will go or whoever. But in the euro we have a special situation. I think the euro as it is set up is not working because in this system of credit money where we create the bank monies”
2020-01-05 · We Study Billionaires · TIP276: The Euro & Its Impact On European Banking w/ Thomas Mayer (Business Podcast) · IDENTIFIED FROM THE TRANSCRIPT
“invent the blockchain. The bigger question that I see is how the money system will run in the digital area. Presently, I think every central bank, no, that's too much, but most central banks, and they include, of course, the Federal Reserve, the People's Bank of China, the Swedish Riks Bank, which always, by the way, is a money pioneer. They were the first to bring paper money to Europe. The Bank of England. Even the ECB, even BCB, they all presently work on digital money. The BIS, Bank for International Settlement, this is the bank of the central banks, has created a working group led by Mr. Corrier, presently still an ECB governing council member, but soon just the head of the scope. So they are heading this group. So we shall see digital money, no doubt about it, and digital central bank money.”
2020-01-05 · We Study Billionaires · TIP276: The Euro & Its Impact On European Banking w/ Thomas Mayer (Business Podcast) · IDENTIFIED FROM THE TRANSCRIPT
“Yes. Of course, I come here for a certain position. And so please forgive me if I say that this pronouncement that digital money will never come reminds me a bit of the pronouncement that the hall will always be the primary means of transportation and cars are only a short-lived idea that will soon go away. No, I think digital money will come. It is like paper money that was invented in China and was brought in the 17th century to Europe and the paper money took over and simply pushed out the metal-based money because it was easier to handle. And I think we have to look at digital money as a money revolution, like paper money. And so forgive me, but I think the authorities or whoever will not be able to forbid it. You can't forbid it.”
2020-01-05 · We Study Billionaires · TIP276: The Euro & Its Impact On European Banking w/ Thomas Mayer (Business Podcast) · IDENTIFIED FROM THE TRANSCRIPT
“the equivalent of the paper money euro in cyberspace. The two would be complementary. So you take a cyberspace, a digital euro if you want, that you can trade via blockchain from person to person without having to hand it over personally. You can take this digital euro. With that, we would have ended the role of the bank as the agents for cashless payments. This is, by the way, how they came into existence, making cashless payments possible. But you don't need them when you deal with crypto money, when you can trade money on a blockchain. So you're in this, and you let them now deal in the future with taking in savings deposits and lending them on to creditors.”
2020-01-05 · We Study Billionaires · TIP276: The Euro & Its Impact On European Banking w/ Thomas Mayer (Business Podcast) · IDENTIFIED FROM THE TRANSCRIPT
“reserve money. Why not take the bank money and the reserve money that goes with it, the liability on the banking balance sheet and asset on the banking balance sheet or push it now on to the central bank? He would say, oh, God, everyone having an account with the central bank, how big would that central bank have to be? I mean, they would have miles and miles of offices to deal with the account holders here comes in digitalization. We don't need this. If you make reserve money in electronic form tradable via blockchain, then you can have peer-to-peer payments or money transfers via blockchain without any administration built around it. So you could actually, by digitizing the euro, you could actually create”
2020-01-05 · We Study Billionaires · TIP276: The Euro & Its Impact On European Banking w/ Thomas Mayer (Business Podcast) · IDENTIFIED FROM THE TRANSCRIPT
“decided not to do it for many reasons. Let's leave that out. Could talk long about it. But that's a plan that has been developed and has been around, an idea that has been around for a long time. Now, as I said, it's an old idea. But you can actually now go one step further. You can now say why have this bank money still being managed by the banks because it's covered one-to-one.”
2020-01-05 · We Study Billionaires · TIP276: The Euro & Its Impact On European Banking w/ Thomas Mayer (Business Podcast) · IDENTIFIED FROM THE TRANSCRIPT
“do to help the governments, it could buy government bonds, it already did buy government bonds. We can buy more government bonds. Take these government bonds out of the market, keep them as a stock, as a cover for the reserve money that it is huge, which backs the bank money that the banks have created to acquire the bond. So then you have a site deposit and you have taken government debt out of the market. This is actually something economists have long talked about. A group of preeminent American economists, including such big names as Erlen Fisher and Frank Knight and others, in 1933 have proposed this to the Roosevelt administration.”
2020-01-05 · We Study Billionaires · TIP276: The Euro & Its Impact On European Banking w/ Thomas Mayer (Business Podcast) · IDENTIFIED FROM THE TRANSCRIPT
“in return and the bank gives the bond to the central bank and gets reserved money in return. And in the end, the central bank has the bond as an asset, the reserve money as a liability, the bank has the reserve money as an asset, and the side deposit, the bank money as a liability. The side deposit, the euro on deposit that you have created this way, is all the way covered, basically, with a central bank. So you cannot have a euro on a bank, you cannot say this euro on the bank is one-to-one banked by a euro deposited on the central bank. That's not the case, but you can do this. Remember what I said. It's being created by the central bank buying bonds. So what could the central bank”
2020-01-05 · We Study Billionaires · TIP276: The Euro & Its Impact On European Banking w/ Thomas Mayer (Business Podcast) · IDENTIFIED FROM THE TRANSCRIPT
“create a safe deposit? How do you do this? Interestingly, the central banks have shown how this can be done through quantitative easing. They have done quantitative easing for other purposes, but it shows how it can go. When a central bank buys a bond, then it asks the commercial bank to look for the bond, or if it has it on its balance sheet, to sell this bond to the central bank. The central bank pays with central bank money for this bond. And the bank gets the central bank money in its account and it pays the bondholder to acquire this bond by creating for this bondholder bank money. So bondholder gives the money to the bank, gets bank money,”
2020-01-05 · We Study Billionaires · TIP276: The Euro & Its Impact On European Banking w/ Thomas Mayer (Business Podcast) · IDENTIFIED FROM THE TRANSCRIPT
“Stronger. And secondly, we have to overcome the difference between cash and bank money. Let's talk about the second first. Basically, you can overcome the bank and cash money if you require for every bank money that belongs to you and me, that every euro in the bank is being backed by one euro of bank reserve in the ECB's account. So if I have a euro on a bank account, the bank has one euro to back this in the ECB's account. We do this as a safety deposit. Safety deposit means even if the bank disappears, the euro that I have in this account will continue to exist because its counterparts in the ECB's account. So that would be the first step.”
2020-01-05 · We Study Billionaires · TIP276: The Euro & Its Impact On European Banking w/ Thomas Mayer (Business Podcast) · IDENTIFIED FROM THE TRANSCRIPT
“We discussed basically two-tier money union that we have. We have a cash union, but we do not have a bank money union. And we also touched upon the very high debt that some of the countries have, Italy, more than 135% of GDP. Greece, a very large number, if I remember correctly, we are now touching upon the 180% of GDP. Even France has something like touching now 100% of GDP. So we have highly indebted countries and we have a two-tier monetary union where only the cash is really of the same quality within the entire monetary union. Now, what we should do is we have to deal with two things. We have to make these countries financially”
2020-01-05 · We Study Billionaires · TIP276: The Euro & Its Impact On European Banking w/ Thomas Mayer (Business Podcast) · IDENTIFIED FROM THE TRANSCRIPT
“An instrument to cement German hegemony in Europe. It's a very contentious question of which I think you cannot really answer it objectively. Economists have tried to come up with estimates on whether a common currency is economically a good thing or a bad thing. Most interestingly, the UK administration undertoned a glare conducted every year has whether the U.S. good or bad because they have said that they might get in when they find out that it's good. And the tests are always inconclusive. So it's a very subjective issue. I guess it largely boils down to your judgment whether you think that advancing the euro Is a good idea to keeping Europe together or whether you fear that advancing the euro may actually push Europe more apart?”
2020-01-05 · We Study Billionaires · TIP276: The Euro & Its Impact On European Banking w/ Thomas Mayer (Business Podcast) · IDENTIFIED FROM THE TRANSCRIPT
“thinking that they are kind of keeping the structure up they are footing the bill and as far as Greece is concerned they don't really expect to get their money back so they say it's the others who benefit then when you are in a southern country you will see that the Nazi countries haven't given their money for free they have imposed conditions what you had to do you had to follow the rules of a program that was managed by the IMF in cooperation with the European Commission and the European Central Bank your own sovereignty was infringed other people bureaucrats would come in and tell your elected government what it has to do so you feel that the euro is largely benefiting the others and many of the others say the euro is based”
2020-01-05 · We Study Billionaires · TIP276: The Euro & Its Impact On European Banking w/ Thomas Mayer (Business Podcast) · IDENTIFIED FROM THE TRANSCRIPT
“Yeah, this is a question that you would answer differently from each country's vantage point. If you are an Italian, you will see it's the Germans who benefit most from the euro. If you would be a German, you would say it's Italian to benefit most from the euro. If you are French, you would say that it's largely, again, the Germans who benefit from the euro. If you are Danish, perhaps you would say the Greeks benefited a lot from the euro or the Italians, so the country is indebted. Why is that? The Norbik countries, they look primarily at the potential liabilities that they're accumulating by having given credit to the other countries, especially in the south, notably Greece, but also Spain, Portugal, the smaller one, Cyprus. But the Nordic ones,”
2020-01-05 · We Study Billionaires · TIP276: The Euro & Its Impact On European Banking w/ Thomas Mayer (Business Podcast) · IDENTIFIED FROM THE TRANSCRIPT
“as they simply disregarded or broke, as Madame Lagarde said, or broke rules to save the euro. And it peaked in the sentence of ECB President Draghi in Chun, I think it was June 2012, when he said, we shall do whatever it takes to save the euro. He added on within our mandate. But, I mean, most people remembered, and most people heard, they said, we shall do whatever it takes. And this disagreement of whether rules should reign or discretion should reign, this disagreement remains with us.”
2020-01-05 · We Study Billionaires · TIP276: The Euro & Its Impact On European Banking w/ Thomas Mayer (Business Podcast) · IDENTIFIED FROM THE TRANSCRIPT
“On the other hand, there are also openings somewhere else in the treaty where a government in trouble can get support from other governments. As we saw the euro crisis evolve from 2009 when the Greeks first confessed that they had a problem with their statistics. So from 2009 onward until its peak in 2012. When we look through this, there was a shift of the structure of the system of EMU from originally more on the German side towards the French side, or you could call it from the Nordic side towards the southern side. The euro was sliding from east to west.”
2020-01-05 · We Study Billionaires · TIP276: The Euro & Its Impact On European Banking w/ Thomas Mayer (Business Podcast) · IDENTIFIED FROM THE TRANSCRIPT
“central bank funds government activities. So these two ideas, these two philosophies are clashing. Interestingly, I cannot remember that there was any talk of that when the Euro was created. That is a key issue that we haven't resolved. When you look at the Maastricht Treaty, this is the predecessor of the European treaties regulating monetary union. When you look at this Maastricht Treaty, which is now the European treaty, you will find many facets they couldn't agree to on certain positions. So they touched it, for instance, there is a rule that governments must not be bailed out by other governments other than the bank when they are in difficulties. That's a rule.”
2020-01-05 · We Study Billionaires · TIP276: The Euro & Its Impact On European Banking w/ Thomas Mayer (Business Podcast) · IDENTIFIED FROM THE TRANSCRIPT
“hard money produced by an institution whose only focus is price stability, not employment, not price stability, kind of an intelligent gold mine. That's the Nordic, or you could also say German view. There's the other one, the French or the southern view. The southern view, the government has a much stronger role in managing the economy. Moreover, money is an instrument of economic policy, of government policy. So you use money or you use monetary policy to achieve certain economic objectives. This can range from stabilizing the business cycle to funding important projects of the government so that”
2020-01-05 · We Study Billionaires · TIP276: The Euro & Its Impact On European Banking w/ Thomas Mayer (Business Podcast) · IDENTIFIED FROM THE TRANSCRIPT
“That is a key issue, a really, really important issue that did not feature at all when we talked about creating of European Monetary Union. It's a cultural divide, a battle of ideas. What does it mean? It means that different ideas of the role of money and the organization of the economy. Simply speaking, there is a preference on the German side. And in that sense, the German side stands a bit for the Nordic side. There's a preference for hard money and rules. What does that mean? Rules, market economy, property rights, rule of law, and the role of the government is not to manage the economy, but to make sure that the rules are being obeyed. Money,”
2020-01-05 · We Study Billionaires · TIP276: The Euro & Its Impact On European Banking w/ Thomas Mayer (Business Podcast) · IDENTIFIED FROM THE TRANSCRIPT
“Are better off than when you're operating in jurisdiction with a weak government financially becoming or financially strong. So in that sense, we have a fragmented banking system. And we also have banks that have very different degrees of safety. So I would say we have not been able to move forward, integrate the banking markets. And an unintegrated banking market, a banking market where the banks participated in the market are handicapped by the setup of the system is, in my view, a weaker banking market than a national banking market where everyone knows the rules.”
2020-01-05 · We Study Billionaires · TIP276: The Euro & Its Impact On European Banking w/ Thomas Mayer (Business Podcast) · IDENTIFIED FROM THE TRANSCRIPT
“has not made it stronger. When we think again of how the banking system interacts with the government and the central bank, I call this a private public partnership of money production. The central bank is the manager of the money production. The government is the guarantor if something goes wrong. The government will step in. It sets also the rules for everybody. And the banks are the producers. So we have these three elements working together. But as we discussed already in the euro area, the allocation of responsibilities is diffuse. That is why the banks are operating in different areas of quality. If you're operating in a jurisdiction with a strong government,”
2020-01-05 · We Study Billionaires · TIP276: The Euro & Its Impact On European Banking w/ Thomas Mayer (Business Podcast) · IDENTIFIED FROM THE TRANSCRIPT
“Extension becomes very different and we cannot exchange this anymore as happened during the Greek crisis for instance. To sum up, the euro is really heartbaked when you compare it to the dollar. The dollar you have banknotes that are equal credit quality and you have bank accounts that are being made of equal quality through the FDIC, a federal organization. In the euro, we are half baked. We only have the banknotes of the same credit quality, but the bank accounts are of very different quality.”
2020-01-05 · We Study Billionaires · TIP276: The Euro & Its Impact On European Banking w/ Thomas Mayer (Business Podcast) · IDENTIFIED FROM THE TRANSCRIPT
“In Germany, we don't have strong banks, but we have a government which is financially pretty strong. So people feel that this is safe. However, when you have your money on a Greek bank, the Greek banks are also not strong, but on top of it, they have a government which financially is also weak. So these are two different assets, completely different of different quality. Normally, when things are fine, that's not so much of a problem we have now interest rates in Greece that are not that much above those in Germany. But when we have economic tensions, so let's say we go into a recession, companies get into difficulties, some of them cannot repay their credits. It is well possible that we see again that the bank money created by the banks who created”
2020-01-05 · We Study Billionaires · TIP276: The Euro & Its Impact On European Banking w/ Thomas Mayer (Business Podcast) · IDENTIFIED FROM THE TRANSCRIPT
“that having one money for several states creates big problems. Right now, we can say that we have a cash union. So the euro banknotes that the ECB issues signed as like a IOU signed by the ECB president, so far Mr. Draghi and now Madame Lagarde to sign the note. These notes are of common credit quality all around. One institution, same institution is USN, but when it comes to the bank money because you do not have a common insurance, the bank money, the money on deposit, is as good as the bank and the government backing the bank. And this is a very different credit quality. You have your money and account.”
2020-01-05 · We Study Billionaires · TIP276: The Euro & Its Impact On European Banking w/ Thomas Mayer (Business Podcast) · IDENTIFIED FROM THE TRANSCRIPT
“government and no common deposit insurance. Each government guarantees in its own jurisdiction to ensure the deposits up to at least 100,000 euros, but this insurance is as valuable as the financial capacity of this government. Now you can say a government can never go bankrupt because usually, or in the US, this government has a central bank and when push comes to shove, the central bank brings money for this government. Not so in the euro area. Look at Greece. The Greeks found out that the money they had on the bank couldn't get it out of the country because the banks were bankrupt in 2010 and the government as well. So you could see that”
2020-01-05 · We Study Billionaires · TIP276: The Euro & Its Impact On European Banking w/ Thomas Mayer (Business Podcast) · IDENTIFIED FROM THE TRANSCRIPT
“insurance so that if the bank disappears, the money doesn't disappear. This is why the Russian administration then created the FDIC, the Federal Deposit Insurance Corporation. What I'm saying here is in this money system in which we live, where larger parts of our money, namely the site deposits that we have in the banks, are created by the banks and are a private liability, but it is guaranteed that this private liability can be exchanged into the official currency in the system. You need a central bank to manage the system and you need a government to provide insurance. Now look at the euro. We have a central bank, the European Central Bank. So this ECB can manage the money, but we have”
2020-01-05 · We Study Billionaires · TIP276: The Euro & Its Impact On European Banking w/ Thomas Mayer (Business Podcast) · IDENTIFIED FROM THE TRANSCRIPT
“problem because the money they created with the credit may also turn sour unless the government guarantees this money and the central bank helps in guaranteeing this money. So this is why in the US we started out basically with banks back at that time taking gold and ECA notes and later on at the banks banks were easier common notes but not with any government or central bank guidelines. This created a banking crisis in 1908 which laid the foundation of the creation of the Federal Reserve and later on the depression 1930 to 33 they found out the politicians found out that you also have to have a deposit”
2020-01-05 · We Study Billionaires · TIP276: The Euro & Its Impact On European Banking w/ Thomas Mayer (Business Podcast) · IDENTIFIED FROM THE TRANSCRIPT
“is the money for this person who took out the credit. So what our bank money is, the money we have on a bank account is basically a private liability, a liability created by the bank to a deposit holder. Now, the bank, of course, has the right given to it by the state. This is why they need a license, a banking license, through a promise that they will exchange this bank money they created, this private liability always, anytime one-to-one into the official currency, so into dollars or euro. That's a promise they make, but it's also a promise they cannot always hold. When the credit turns sour, the bank gets a”
2020-01-05 · We Study Billionaires · TIP276: The Euro & Its Impact On European Banking w/ Thomas Mayer (Business Podcast) · IDENTIFIED FROM THE TRANSCRIPT
“of the banknotes issued by the central bank, which is of course an institution of the state. That's wrong. It's not how it works. In our present monetary system, the bank money, the money that we have on account at the bank is created through credit extension. So when you or I go to the bank, ask for a credit, the bank will look at whether we are credit worthy, they say yes, please sign a credit contracts in its balance sheet a claim on you and me. So credit was extended. What do they do next? They do not go out and now collect dollar bills or euro bills in order to fund this credit. No, they create the money as a book entry. They write then on their liability side of the balance sheet here.”
2020-01-05 · We Study Billionaires · TIP276: The Euro & Its Impact On European Banking w/ Thomas Mayer (Business Podcast) · IDENTIFIED FROM THE TRANSCRIPT
“The dollar is, of course, the currency of a sovereign nation. I say this without thinking much about, but it's important to recollect or to think about that currency of a sovereign nation is very different from a common currency or single currency for several sovereign nations. So why is that? Let's go back a step and explain for a moment how our money is created, how it comes into existence. I mean, we all carry around dollar bills or euro bills in our pockets. And we think that we would put these bills on deposit at a bank and they would be there and the bank would perhaps lend them out and collect them back, but our bank money, what we have in the bank, would basically be a full reflection.”
2020-01-05 · We Study Billionaires · TIP276: The Euro & Its Impact On European Banking w/ Thomas Mayer (Business Podcast) · IDENTIFIED FROM THE TRANSCRIPT
“that when we bring the economy closer together in a single market for goods and services, it would be much better to have a common money. There would be more advantage for having this common market if you also have a common money. There were arguments about reduced exchange costs and so forth. After all, we have to keep in mind that there are many small states in Europe which in the past all had their own money and then you cross border, you have to exchange and so forth. But I would think that these economic ideas will kind of add on. The real thing was political.”
2020-01-05 · We Study Billionaires · TIP276: The Euro & Its Impact On European Banking w/ Thomas Mayer (Business Podcast) · IDENTIFIED FROM THE TRANSCRIPT
“People will remember the solution of the link of the dollar to gold 1971 by Nixon administration later on collapse of the Bretton Woods system and the introduction of a floating exchange rate system in 1973 around 734 that finished this plan which had been built basically into the Bretton Woods system of fixed bilateral exchange rate. So out of that came then this exchange rate mechanism I already mentioned also to go wild to develop that and then it progressed from there further on to the European Monetary Unit. It was primarily a political project to bring together European unification, added on to that were also economic thoughts. There was the argument”
2020-01-05 · We Study Billionaires · TIP276: The Euro & Its Impact On European Banking w/ Thomas Mayer (Business Podcast) · IDENTIFIED FROM THE TRANSCRIPT
“Question. As early, I think it was 1949, there was a famous French politician, Jacques Rouff, who was advising Charles de Gaulle. And he said, Europe will be made for its money or it will not be made. So the idea to have a common money as an instrument for bringing Europe closer together actually played along all the time as the politicians thought that this would be a very big leap in bringing the European people together. There were efforts already much earlier in the early 1970s. There was a plan to build a common currency called Werner Plan. This was a Luxembourg prime minister who initiated this or who oversaw the construction of this plan.”
2020-01-05 · We Study Billionaires · TIP276: The Euro & Its Impact On European Banking w/ Thomas Mayer (Business Podcast) · IDENTIFIED FROM THE TRANSCRIPT
“among the countries that belong to this agreement. So we progressed from the two wars that tore Europe apart one, World War two, where the events that basically removed Europe from its earlier position as the global leading power. So lessons from these two wars you never ever have war in Europe again and to come closer together economically and also politically.”
2020-01-05 · We Study Billionaires · TIP276: The Euro & Its Impact On European Banking w/ Thomas Mayer (Business Podcast) · IDENTIFIED FROM THE TRANSCRIPT
“Union with the euro. Another project that came out of this getting closer together and going over the original structure of the European economic community was a single European market, truly singular market for goods and services, which was quite a revolution when you think of it, to be able to have services delivered in another country, which basically meant that the country where the services are delivered has to accept the regulatory framework of the country where the services originate. So beautiful recognition of regulatory frameworks was involved in that. And then, of course, we have the so-called Schengen area. Schengen is a small village. The Dutch border village was decided to have passport-free travel.”
2020-01-05 · We Study Billionaires · TIP276: The Euro & Its Impact On European Banking w/ Thomas Mayer (Business Podcast) · IDENTIFIED FROM THE TRANSCRIPT
“the countries closer together but also provided the members a significant economic boost. It was for everyone a big plus to be in there. Initially, the British did not join, some others neither, but because it was a very big success, also the British came in in the 1970s. And out of the European economic community involved the European Union, which was again a bit broader, it was no longer just the economic community, but there are also further areas of common structures added to it in this process of adding common structures to it. We created both a European exchange rate mechanism where the exchange rates were tied to each other, and out of that evolved European money”
2020-01-05 · We Study Billionaires · TIP276: The Euro & Its Impact On European Banking w/ Thomas Mayer (Business Podcast) · IDENTIFIED FROM THE TRANSCRIPT
“No coincidence that the European community started with coal and steel. It began as a coal and steel community. These two economic sectors were put under common rule of the members of this community, notably France and other European, why coal and steel, because back then coal and steel were important resources for waging war. Also no coincidence that it then progressed to a European common agricultural policy, also interesting, agriculture, you need food to wage more in your home country, you can't rely on imports, of course, because your adversary may cut you off. And from them on, we progressed. We progressed an European economic community that broke”
2020-01-05 · We Study Billionaires · TIP276: The Euro & Its Impact On European Banking w/ Thomas Mayer (Business Podcast) · IDENTIFIED FROM THE TRANSCRIPT
“So it was primarily French exile politicians, some of them living in Washington, DC, the Robert Marchalon, that fraught a year want to years before the end of the war on how to deal with the defeat in Germany. And they came up with the idea that it would be much, much better for the future to bind Germany into a security structure. This idea and the help of the Americans and the British then allowed the post-war post-World War II politicians to build this platform for Europe, which was opposed to end war ever after. The idea was to reconcile Germany, especially with France, but also with the other allies,”
2020-01-05 · We Study Billionaires · TIP276: The Euro & Its Impact On European Banking w/ Thomas Mayer (Business Podcast) · IDENTIFIED FROM THE TRANSCRIPT