Cheers for the links Roger!

Positive Money have some really, er, positive ideas on how to reform the system – they’re holding a conference in London on Saturday although, sadly, it appears to have sold out, on the other hand it’s encouraging that there is an increasingly receptive audience for their ideas.

Am I being too simplistic here?

Let’s define money as the stuff we use to pay our bills, such as income tax, or the power-bills; or to buy things with, such as a car or the weekly shopping.

We are talking about cash and the balances of our bank accounts, which we access and use with debit cards, credit cards, cheques and bank transfers.

Only three % of the ‘money’ in circulation is cash, the rest, 97%, is the digital numbers in our bank accounts.

Banks do not ‘print money’. We know where cash comes from. Only the Royal Mint can print money legally.

Commercial banks create the other 97% of money in circulation out of fresh air by granting loans – it is digital, not cash.

When someone borrows, say £200,000 to buy a house, from a bank, the bank credits £200,000 to the customer’s account as a liability and adds the £200,000 to the bank’s balance as an asset – double entry bookkeeping. The books balance and the money came from nowhere. Think of all the loans made over the last 50 years or so.

You can call the £200,000 ‘credit’ or even ‘debt’ if you want to confuse the issue, but it’s ‘money’ because it can be used to pay bills or buy things, until it runs out,

Because the banks create the entire money supply (bar cash) they determine also who gets it and on what terms – and all the problems start from there.

Just about everything I ever read or hear about regarding ‘the financial crisis’ or ‘the economy concerns something that occurs after-the-fact.

Because banks create and control the money supply and because just about everyone,including governments, can’t survive without money, the banks control EVERYTHING, including the political process.

That’s THE FACT that needs to be dealt with – or am I mad?

On the topic of books – if anyone hasn’t read Golem’s book, ‘The Debt Generation’, here are a few selected quotes: http://bit.ly/VV88Cz

@ Golem, what we are seeing. and what I believe we are witnessing, is the neo liberal myth that those at the top need stimulus and those at the bottom need starving into submission. It only takes the shortest glance at economics tp prove this.

What people are in denial about is the cost of mass unemployment. There is simply no scale of cuts possible to to fund this. Not only that such a scale of cuts would just make the problem worse as yet more jobs and demand were taken from the economy. The social dislocation would lead to the complete break down of civilised society.

Now you can go the Ambrose Evans-Pritchard route and do it slowly, he described the UK cuts as about right, and get the same result slower. The whole concept simply doesn’t work as Greece so tragically proves.

QE is not inflationary, as predicted by MMT, if the evidence of Japan is anything to go by. Since they are currently firefighting deflation and recession it does not help ordinary people at all. It confounds utterly the more strident cries of the neo liberals.

The final analysis is simple. They need debt, we need money

A little indication of that growing moral fury and from a perhaps surprising quarter…Switzerland…. http://www.reuters.com/article/2013/01/21/us-reutersmagazine-davos-swiss-rich-idUSBRE90K0F420130121

Cheers, Joe Taylor (NatCAN)

joe41@blueyonder.co.uk

Positive Money are about to publish a book on this subject – I’ve read an uncorrected proof – it’s excellent and I would hope that anyone who shares an interest gets hold of a copy.

Don’t forget democracy was just an invention of the aristocratic elite designed to transfer debts through generations of people rather than debt dying with the individual who loaned the capital (created from nothing?). Just as wages were designed to end the costs of slavery with the punters having to look after their own food, housing and medicine.