Not sarcasm, but sorry in advance for the mansplaining

The documentary and the Vollgeld initiative are funny for several reasons. First one is the very existence of Post Finance. Post Finance is a Swiss public institution whose core goals are savings and payments. There are prohibited by internal regulations to emit personal loans and mortgages. They cannot create money out of thin air as other private financial institutions through lending. So, anyone in CH that thinks fractional reserve banking is bad can switch to PF to support the Vollgeld initiative since more than a century ago.

The second funny thing is a bit of ideology trolling. Can you imagine an economist more neoliberal than Milton Friedman? Wait until you read about his fundamentalist narrow banking idea and you'll find he's a champion of the left....at least the Swiss left promoting the Vollgeld referendum http://www.narrowbanking.org/ I had a lot of fund showing this on my phone to the promoters once asked for a signature for the referendum.

Finally, credit is just allocating resources to what you think it's an opportunity: a home, a car, a washing machine, tools for work, who knows?. Of course, credit can be misused in gambling. Limiting credit to the amount of existing reserves would reduce the overall amount of credit and the very first consequence is that credit would be given only to the people or organizations with the soundest financial position (read about the 19th century banking). Consumer credit would disappear, credit cards would be gone, no mortgages for peasants like us, forget about loans to small business...why risk scarce capital on poor people? It would be a better world in the sense that over-indebtedness would not be a worry for poor and middle-class people, but said people would face larger challenges to buy a home or starting a business.....something that aligns very well with M. Friedman view of the world of have and have-nots.

Liked the video, but it didn't address key issues.
Non-asset backed credit is being extended in Switzerland by private banks -for whose benefit? and who will pay the price when it goes up in smoke?
An economy that depends on economic growth through increased consumption is non-sustainable with regard to climate change etc.
There is a discord between the value that society puts on key services such as healthcare/cleaning/delivery/maintenance and the wages paid in these sectors.
There is a social contract between the population and government - taxes in return for services - this contract is actively being broken down by neo-liberal policies -the UK and USA are experiencing the consequences of this beakdown.

My rent actually went down, from close to 2000 to barely above 1800...

No problem with an explanation, but it does not make sense to me. The issue is that private banks are increasing the money supply by lending money (massive amounts) that they do not have. This works fine until the bubble bursts as it did in 2008. This is a different issue to post finance not making personal loans.The video made clear the advantages (of limited) and disadvantages (of excess) credit. I did not study economics, but suffer from being interested: I can recommend:
Economics rules by Dani Rodrik. Which school does he belong to?

Post Finance is relevant because it's the 5th largest bank in CH and they operate following the Vollgeld initiative principles. A significant part of savings in CH is already not used to increase the money supply.

Back to the DW documentary.....maybe I'm wrong, but putting the blame of excess credit on banks is like blaming the brewery of my excess in beer drinking. When a theory treats adults as children, it doesn't work for me.

Don't worry. I'm something between civil engineer and hydrogeologist. I've read interviews of Dani Rodrik, if I had to put a label on him it would be "professor" (https://medium.com/conversations-wit...k-e02cf8784b9d). My initial interest on economics arose just of self-preservation instinct. Several years passed until I realized it's a tool to help others.

Breweries do not offer virtually free beer for some -which is what the private banks and many governments are doing at the moment. At this point you can blame the banks. As I understand it, the relaxation of the fiscal rules has magnified the problem that manipulating money generates vastly more short-term profit than manufacturing useful goods or supplying socially useful services. It is this meeting point of economics and politics that it is all about. Dani Rodrik may be a professor, but his experience is definitely in the real world. His book I mentioned is about choosing the appropriate model for each individual situation -something really relevant to handling the corona crisis.

Their only "solution" and "business model" is to import cheap workers in key sectors and to base their own society on a newly formed second class of citizens (the less rights these have, the better - this is one of the reasons UK wanted out of EU). UK, as well as USA, bark at and bite the hands of immigrants who actually create value there.

Easy access to credit and capital for the selected few, non-businesses, what an economic growth model. I really hope corona crisis will break this insane circle and bring things to their natural order.

Yeah, if some want to call my views anti-capitalistic, so be it. I don't give a rat's ass. I guess I conversed with entitled people here way too much, but I thank them for my present views.

Stupid and silly question:
will the interest rates for the mortgages increase in the next couple years?

Theory versus reality... Real wages is theory and everything works in theory, except in economics where the wheels often come off when dealing with the real world.

And what exactly would this natural order be?

Talk about stating the obvious! Economic opinions are two a penny and empirical evidence seems to suggest that both Keynesian and the Austrian School produce good outcomes, depending how you define good.

Last time around Ireland rejected the Keynesian model - National Debt per capita dropped from 124% at the height of the recession to about 64%. Great result, except for one little think... the social issues like an unprecedented rise in the number of homeless people, the number of children living in hotels and B&B, rise in social welfare supplement payments etc..

It seems to me that the only widely validated theory is Jim2007’s: No matter what economic model is chosen, the outcome is always the same - the weak in society always end up paying the price.

But you are right, it does depend on selecting the right model, the problem is that there is no right model for the poor and the weak in society...

__________________
"There is no passion to be found playing small - in settling for a life that is less than the one you are capable of living." - Nelson Mandela

We (humans) tend to overestimate changes on the short term. Yes, a few things have changed and a few more will change. But we may have forgotten about the issue by summer 2021.

I wouldn't say anti-capitalistic, waiting for a change driven by an event where one has no action is hopefulness. In case things really change, we are part of the system and if some parts fail, we're going into oblivion along them. Careful what you wish for.

Depends on your threshold for an increase, and the mortgage's duration.

That said, probably not. While there will be ups and downs, the probable trend is down, just as it has been for at least 40+ years.



<puts crystal ball back into the safe>

Like, for instance, food shouldn't be so cheap in the West while people who produce it barely have any social recognition or proper remuneration. Or some, even proper insurances - like, you know, like luxury things such as health or unemployment insurance. Like that.

Anything else? I'm staying at your disposal for ten more minutes.

Obvious but not observed:
Repackaging of sub-prime mortgages
Herd immunity
Trickle-down economics
and and........

What annoys me is the stubborn refusal of many to consider models/ideas/plans that fall outside of their political bubble. The mantra of private/public being good/bad is not helpful.

That and clinging to ideas that are clearly not working:
The US health system fails a huge number of its citizens and is highly inefficient in cost terms for the others
Undermining the NHS in Britain has been a disaster for the majority. Outsourcing contracts to private industry has generally not solved a problem but rather created a new one.

And when was that and what else was happening in the world around that time? I had a strange feeling it also coincided with the fall of the Iron Curtain.

Btw, speaking of Ireland. You might want to read this book
https://books.google.ch/books/about/...AJ&redir_esc=y
Good stuff. Btw, my best friend's dad has worked for this company too for a while as a pilot. Not only this company, there were quite a few he collaborated with. That's just a side argument, it came up in a recent discussion on a different thread.

Anyways. Bring me the Keynesian model any time. As opposed to whatever we have now.

Selective memory and scope of vision have both been with us since the dawn of times.

I know local produce should get pricier but will it? Will cheap imports stop, too? Who has the say, aside of consumers themselves.

What I like is the current focus on autonomy. Production, skills, competences. Even the globally imported mindsets, manifestos, movements and protest songs will have to be secondary to what people locally need. Honestly - love it. Hope it stays in the scope of vision. I hope the pressure will also improve the local offer.

So not a natural order, just a different word order that you prefer. Not that I don’t agree with you, but I very much doubt it will change that much.

Total nonsense, I’m referring the most recent recession.

So you are limited to the UK/US experience - you are talking about two very divided countries and not representative of what is going on else where. Most other countries in Europe are governed by coalitions, where parties have to find a common ground and work together.