Power of Banks vs Democracy


Whenever there’s a big decision to make
about the future of the UK, the news cameras will be focused on the people in Parliament. But here’s a question for you; what if those
news cameras are pointing the wrong way? Do politicians really have that much power these
days? And if they don’t, who’s making the decision that really affect the UK? You’ve probably heard the idea that money
is power. If that’s true, then imagine how much power you’d have, if you could CREATE
money.  Now this might be hard to believe, but there’s
a small number of private companies that effectively have a licence to print money. They’re commonly
known…as banks.  In fact, 97% of all the money that exists
in the UK was created by banks, effectively from nothing, through the accounting process
they use when they make loans. That might sound strange, but it’s what the Bank of
England – the government’s own bank – actually says:  “When banks make loans they create additional
bank deposits for those that have borrowed the money” Those ‘additional deposits’ are actually
just the numbers – or money – that appear in your bank account when you take out a loan. But surely it’s illegal to print money?
Well, yes – if you start printing your own £10 or £20 notes at home,  then pretty
soon you’d find the police coming through the door. But for banks it’s much easier than secretly
printing £10 notes: they simply have to type the numbers into a computer system.   It’s those numbers which make up the electronic
money that we use to pay for the vast majority of the things we buy.  So if we’re using electronic numbers that
were created by banks as money, why isn’t it illegal to create those numbers, in the
same way that it’s illegal for you or I to print paper money? Well, the law that makes it illegal to print
paper money was written way back in 1844. But that law only covers notes and coins.
It’s never been updated to take account of the fact that almost all money now is electronic,
even though those numbers now make up 97% of all the money that we use. That leaves banks with the power to create
and allocate the country’s money.  And, despite the fact that the abuse of this
power caused the financial crisis, there has been no debate in Parliament, no questions
raised by government advisors, and no action to take this ability to create money away
from the banks. So if we really want to know where power really
lies in the country, we should be pointing the TV cameras at the City of London, where
the big banks are based. Since those banks have the power to create money, they have
more power to shape the UK economy than the whole of our elected government. Let me explain. Every year the government spends a huge sum
of money; over the 5 years before the financial crisis started they spent a total of £2.1
trillion pounds – that’s £34,000 for every man, women and child in the UK. But in the same 5 years, the banks LENT a
total of £2.9 trillion – nearly 40% more than the government spent. Where the money from government goes has a
huge impact – whether it goes to schools and hospitals or paying for wars can affect the
type of country we live in. But whilst there’s 650 MPs, elected by us,
who have some power over how the government spends our money, the 5 biggest banks in the
UK have only 78 board members, and only around 20 of these actually make the key decisions.  So if these 20 people decide that they should
stop lending to businesses and entrepreneurs and instead lend as much money as possible
to people who want to buy houses, then house prices go up but the small businesses that
employ half of all the workers in the UK can’t get the investment to help them grow. And the priorities of this small group of
people can determine whether house prices soar out of reach, whether stock markets  – where
most people’s pensions are invested – are destabilised by speculators and traders, and
whether the businesses that we rely on for jobs are able to make investments…or have
to make redundancies.  Is it really a good idea to leave the power
to create and allocate 97% of all money in the hands of so few people? This doesn’t
sound very democratic. After all, banks are not concerned with the prosperity of society;
they’re obliged to be more concerned about the profits of the company. But as we’ve
seen over the last few years, what is good for the bank is not always good for everybody
else. So this is the situation today: banks have
to power to create and allocate money without no accountability to the people, and no responsibility
for the effects of their actions on our society and economy. And when the abuse of this power to create
money leads to a recession and financial crisis, the government has to step in to stop the
whole thing collapsing. This means the taxes we pay are diverted from
schools and hospitals, and instead used to rescue banks, along with their profits and
bonuses. This leaves everybody else with higher taxes, fewer services and less say in how
the country is run.  So what do we do to save our democracy from
the big banks? Well, it’s simple. We need to take back the power to create money away
from banks, because they simply can’t be trusted with it. So we need to make sure that the power to
create money is protected from abuse; that everyone knows who has this power and what
they’re doing with it. Instead of leaving that power to create money in the hands of
profit-seeking bankers, we need to make it transparent and accountable, and make it work
in the interest of ordinary people. It is possible, but it means we have to stand up
to the lobbyists working for the banks, who spent £98 million influencing government
in the last year alone. And we need to make sure that politicians don’t let democracy
fail simply because they left something as dangerous as the ability to create money in
the hands of the same banks that caused the financial crisis.

100 thoughts on “Power of Banks vs Democracy

  1. Can u fit your response in 1 post pls? Tar.

    If we take over the banks' power to create money then we leave the economy with no means of exchange, how is this going to solve unemployment? If anything it'll make things worse. Putting the state in charge of the money supply is a disaster waiting to happen, it's a recipe for inefficiency, nepotism, subsidies and shortages, if history has taught us anything it's that socialism doesn't work. I don't want a 'People's Bank', it's a very bad idea.

  2. Politicians may be made accountable for they actions through the election process, while private bankers cannot be made accountable by the democratic process. It is an old trick from Bankenstein to tell the mass that he is more accountable and responsible than the politicians…

  3. I apologise for the multi-post. I appreciate your point about state controlled money creation. In fact so do PM. They cover this in the vid "97% owend". Spending and money creation could become political. Politicians only seek short term gains so this is bad. Perhaps a 3rd party like The Cabinet Office and/or the inclusion of civic duty like a "jury for money" could work.
    Being capitalist or socialist is irrelivent. An informed system based on what works for people is needed.
    No bank monopoly

  4. We don't need to ration credit in this way though, why can't PM see this? If I'm able to produce X sacks of potatoes a year and I want to pledge my future productivity in return for something now why should a committee get inbetween me and my creditor? It's our decision, a decision that has been made in accordance with the free market: we don't need a some well meaning but annoying paternalists telling us that credit is evil etc. PM are inadvertantly illiberal, this is obvious?

  5. Again, this is covered in "97% owned".
    You'd still go to your bank to get a loan. It'd be up to the bank to say yes or no not a committee. The difference is the bank would have to loan responsibly due to their inability to create new/fake deposits. You might have to secure the loan with a guarantor or fixed assets. Fair?
    You'd need to borrow less though as the £ would hold it's value. The £ is being devalued by the current system. Printing and lending beyond "growth" to stimulate it? Come on!

  6. In you remove the banking cartel's ability to creat money out of thin air you effectively dissolve their entire business model, what good is a bank that can't expand the money supply on request? Its about as much use as a chocolate teapot as my old man would say. While I agree that securing debt to a physical asset makes sense from the bank's point of view I'd be cautious of writing this into law, there's certainly a market for unsecured loans and I wouldn't want to see this jeopardised.

  7. @cookdave if you don't stop central banks and normal banks being able to create money out of thin air and charge interest on this you will constantly have boom and bust and all the misery that goes along with it.

  8. "what good is a bank that can't expand the money supply on request?"
    A lot. As it is, liability is outsourced. Debt levels, be they personal, national or global have doubled or more in the last decade or so! The banking cartel lobbied hard for more deregulation and when they got it they let us down.
    The BOE has set interest at the all time low of 0.5% and the gov is planning a cash supply increase (on which interest is charged!). Buy more shit on credit. That'll fix it
    Psuedo-economics!

  9. I don't see your logic. Anyone can create money "out of thin air", money is just a liability or an IOU so if I write down on a piece of paper IOU 5 hour's of labour I've created money from nothing. How exactly does this process destroy the economy? On the face of it it seems very beneficial.

  10. You must be joking, other than nuclear and broadcast media finance is the most heavily regulated industry in the West, if it was as "deregulated" as you say banking licences would be 10 a penny: I believe the UK has issued 1 new one in the past 100 years. Does that sound like a market with low barriers to entry to you? Because it sure doesn't to me.

    I sure as hell know there's a problem with the economy but the source isn't the money supply: its the tax system. Fix that & banking fixes itself

  11. @cookdave It's much more than a simple IOU. When money itself is backed only buy debt you end up with the mess you have today, which is worldwide.

  12. Operating license availability? Regulation refer's to operating standards. De-reg, the lack of. Keep up mate.
    Thatcher's 1986 reforms, modernisation and deregulation of certain Exchange rules led to what is called the "Big Bang". Also US style short-termism and day trade profits replaced the old long term client based system.
    Blair/Brown created the FSA as the watchdog instead of the BOE. Meaning bankers regulating banks. Brown admits the mistake!
    A tax fix? Oh dear. You should be an MP fella

  13. Money isn't backed up by debt, money IS debt. There's nothing wrong with money being debt, it has many advantages over other monetary systems.

  14. So your solution is even more regulation to one of the most regulated industries in the West? You should be an MP with dead-end logic like that. We've been regulated to oblivion in almost every aspect of our lives, I don't see how yet more regulation solves anything. We need to start rolling back the nanny state not increasing its powers.

  15. @cookdave ok I have an open mind so convince me 🙂 What is better about a debt based money rather than one not backed by debt, for instance a full reserve fiat system?

  16. Regulation only matters if the regulation is enforced. It hasn't been. Regulation was mentioned as relating to causality not because I'm plumping for more. PM and other campaigners are after reform not tweaking of existing regs. You'd know that if you'd been paying attention which is evident you haven't. You are full of opinion yet know very little about the current system or what reformers are proposing. Again, ALL your concerns are addressed in PM's and other reformers vids/websites. Yawn…

  17. Well a minute ago you were blaming "de-regulation" and now you're saying that it the existing regulation isn't being enforced properly. How do you expect me to keep up when you keep shifting the goalposts?

    Do you actually know what you're for? As you seem very confused. Trying to fob me off with PM videos (I've seen plenty thanks) is just a lazy way of debating. Its suggests that you're unable to defend your opinions.

  18. Can you quote me please using the 'reply' button so I know you've responded? Thanks.

    There's no such thing as a riskless full reserve system because paper money derives its value from the willingness of the debtor to replay his/her debts. We can store as many pieces of paper in the vaults of banks as we like, but if the debtor find himself unable/unwilling to pay that paper becomes worthless. Money campaigners think they can offset this using 'full reserve'! Errm, no chaps. Try again.

  19. Sorry 9thebear for jumping in.

    @cookdave we've been through this whole IOU "i can create money out of thin air" shite a few days ago mate! An IOU or barter between friends is fine and should even be encouraged. But IOU/barter is not a monetary alternative. It's not a legal tender i.e. not backed up by law and not good for taxes. "IOU 5 hrs of labour on a piece of paper" is a measure of YOUR word. Your mate can't redeem it at HMV if he's got no work 4 you. HMV don't know him or you. Yawn….

  20. I think you need to go over this "shite" again as you so eloquently put it. The monetary system is debt/IOU based. I'm not talking about IOUs between friends, I'm talking about £'s, $'s and Euros etc etc.

    Do you actually understand the mechanics behind the money supply?

  21. Get a grip Dave. A cursory glance by you or anyone else over our conversation reveals your ignorance and lack of understanding of the "mechanics". Right from your very first comment which I showed to be merely just assumption on your part.
    Currency is a legal promissory note or credit valid for ALL transactions.
    An IOU, hand written as YOU put it in YOUR example, twice, once mentioning "to a friend" is only validated by your friend knowing you and your ability to honour said IOU. Clear?

  22. Is everything one dimensional to you?
    I quite obviously illustrated de-reg along with the lack of enforcement of existing regs are contributory to the greed and foul play of the last 3 decades.
    I could accuse you of shifting goal posts.
    Suggesting I'm too lazy or unable to defend my opinion is pathetic! Just view the comments.
    Fob you off with vids? This is YouTube. Why you here if not for vids?
    It's crystal I'm for reform. You're clear as mud confusing yourself and the issue. Surprise me.

  23. Full reserve banking and debt free state money issuance has a president. It works and works well.
    Abe Lincolns "greenbacks" were debt free. Jersey and Guernsey used the system well for over 100 years. Canada from 1935-74 employed debt free money issuance that worked well (/watch?v=NxD2-lQwYa8) and there's no denying the prosperity of Germany after breaking from the banks and issuing debt free state notes from 1933-39. Try again!

  24. You've managed to convince yourself that I don't know what I'm talking about but I doubt you've convinced any onlookers. I mentioned the friend IOU about a week ago in one post yet for some strange reason you keep coming back to it. Why? I undersand the difference between a handwritten IOU and a £5 note. Do you think you're being clever by pointing out the difference?

  25. Lol at the concept of "debt free notes". I suppose the wise governments of these great countries just relied on the intrinsic value of paper to give their currencies weight, did they?

    Can you explain how the "debt free note" system works using a straightforward scenario please? I would like to know.

  26. I wrote: "I quite obviously illustrated de-reg along with the lack of enforcement of existing regs are contributory to the greed and foul play of the last 3 decades."
    It's self explanatory. "contributory" being the key word. I see you're unable to grasp that problems can be multi-faceted and singular issues within that broader context "contributory".
    I wrote: "It's crystal I'm for reform". And I am. Because I'll discuss the current system doesn't mean I don't want to reform it.
    I look silly? Ha

  27. "note" pertains to the monies issuance within it's historical time frame. At the time of Lincoln or 1930's Germany for example there was no digital currency but there were notes and coins. Today we have both. I'd have thought that was obvious.
    That you need ME to explain how money issuance without the debt burden works on the comment section of a PM vid shows you haven't even watched their presentations. You're just here to mud sling. Pathetic!
    Start here perhaps: /watch?v=CrKV6bfqOck
    Yawn….

  28. You didn't explain anything, you just said that in the 1930's they used notes and coins because computers hadn't been invented yet. Yawn. Really? No shit, sherlock.

    So the German government printed up notes, magic happened, and they all lived happily ever after in their debt free world (lets just ignore the hyperinflation and the rise of Hitler, eh?)

    You havn't convinced me that you understand your subject.

  29. Hyperinflation=great depression=1920's. From '33 German economy did well. Radicalisation and militarisation of the late 30's ruined this recovery.
    Pay attention:
    Today we employ a debt based fiat currency. It works by accumulating more debt and needs constant lending/growth/inflation or we end up with little or no money in the economy. This continual debt growth carries an interest. Cue carrot and donkey analogy.
    /watch?v=lrQX4CF6Bxs&feature=channel&list=UL
    Also try Bill Still's books/vids.

  30. Lets have our money issued without the burden of interest on gov' bonds sold to the BOE etc. If we can create bonds we can create money. No middle man interest %. Lets match it's issuance to public/private sector needs and GDP/productivity so it might serve the people/economy.
    Lets take this power of issuance from banks and end boom and bust cycles, rampant inflation bubbles and economic serfdom through debt. Make them earn their money!
    Clueless and loving it.
    Now back under your bridge Dave!

  31. Maybe you need to research a little bit more. If you had a few more minutes of your time you may want to study the solutions that are offered in the website where the video originated from?

  32. Arrrrgh, Bill Shill! He posted on housepricecrash for a bit (a site with a monetary reform bias) and iirc he was torn to shreds on a daily basis. They don't like 'experts' over there.

    If you're in debt I suggest going out to work until the debt has been repayed. Radical I know, but a tad easier than refashioning the entire monetary system.

    What is wrong with my idea?

  33. It sounds like you're trying to politicise the money supply, i.e you want to ration it and then use it to achieve a particular economic end. Even if your intentions are good (you want low inflation and higher employment etc etc) you're still replacing the market with statism whichwill have a damaging effect on liberty.

    Imo the gov't should have as little influence as possible in the credit markets. Officials cannot pretend to know what people want so they can't match supply & demand.

  34. Have you really researched it? Have you seen the solution that has been offered by this company? I don't think this specific video was meant to offer it's solution, it was merely a 5 minute clip to wake people up to what is happening. And I'm glad we agree on democracy being the key. If we all, everyone, lobbied our elected M.P's about why we are really frustrated with how the current banking system is doomed to fail and that our taxpayers money was being used to support a doomed system……

  35. ….then parliament would be forced to listen. That's what I have done. And my M.P. has told me that it was interesting to hear my views. He has contacted the Treasury on my behalf and will post me, hard copy, the response from them, which is forthcoming. If I'm unsatisfied with that response then I will vote accordingly at the next election. If we all did this then government would be forced to listen to it's people and not just the rich bankers who we financially support.

  36. Good on you mate. I intend to send my MP a package regarding PM's proposal soon. I may have to wait for the new year though as I'm already engaging him in 2 other topics. If you're unsatisfied with the response you can write back i.e. requesting clarification of a specific point. Be concise too but make them answer the tough questions. They're wriggly little beauties are politicians and officials. Good luck.

  37. "Bill Still=shill" oh that's very clever. Did you come up with that yourself? Torn to shreds you say. Well they say a plan that's not open to revision is no plan at all. Reform needs it's doubters.
    Still's work has nonetheless helped many around the world look more critically at how money works. That's important.
    I personally am debt free and self employed others aren't so lucky. As I've said before "debt" in this context is not a personal loan. It's national. We all bare that burden.

  38. This is a good point and again, one we've covered before. It is perhaps the most important area for the reform proposal and worth discussion.
    Politicisation must be avoided. The "97% Owned" vid clearly states PM's proposal for this. This being the BOE or third party between the BOE/Treasury. Operating under a tight legal/constitutional framework outside Cabinet control would avoid politicisation.
    I know you don't like it but I'll continue my reply in another post to address liberty/influence…

  39. cont..
    On liberty:
    Many civil liberties have been curtailed due to terrorism. The very well referenced books of Mark Curtis reveal our (UK) continued involvement over time in the Mid East through coups/assasination/terrorism for control of resources/geo-political ends. We have colluded with and incentivised radical Islam etc.
    These ops and subsequent wars were funded by govt borrowing. A debt we all carry. The "effect on liberty" is already damaged under the current system.

  40. Someone else came up with the name 'Bill Shill' I can't take the credit!

    As I've said before I don't see a problem with the debt based money supply. Both in business and in life debt to a certain extent is inevitable: hunger pains are a form of debt as I have to work to satisfy my physiological needs, and if I want something now in return for payment later my debt will remain until I extinguish it with labour/trade.

    The debt based money system isn't responsible for debt.

  41. Our defence budget is tiny in comparison to other areas of government spending (welfare for example) and when the war began some 10 years ago the government under Labour were actually running a budget surplus! Are suggesting that war is ok as long as the state balances its books? War is a seperate issue to the money supply, just because they use money to finance war it doesn't mean money is to blame. We also use money for international aid, so should we praise bankers for this?

  42. @cookdave "The debt based money system isn't responsible for debt."
    But it is responsible for:
    Recession, boom and bust cycles, dispossession, currency devaluation, the trickle "UP" effect, costly housing, international economic pressure (ie Greece can't even afford the INTEREST on it's loans!), interest on domestic government loans (why?), short term risk taking with peoples long term obligations, rampant consumption on credit (good for us apparently)…
    uhh…I'm running out of characters!

  43. No room here to discuss Labour's brief "surplus" but as an eg, you know we were still paying USA for WWII until 2006 right? Slight of hand mate.
    Yes our welfare system is a behemoth but needed.
    I would argue war should never be waged. Defense is not an act of aggression. Reform would democratise the money supply by disallowing govt to borrow to fund proxy wars. Defense spending has doubled since 90's. Are we safer?
    Aid/bankers not linked. Aid is listed under defense spending in some reports (?)

  44. All I'm saying that is the link between debt based money and the war mongering state is a fallacious one. Take Switzerland for example, a country that enjoys quite an *ahem* healthy banking system, they're the second oldest neutral state in the world and havn't officially engaged in war since 1815. If your theory was correct the Swiss would be the most imperialist country on the planet, yet their not. So why do you and your reformist brethren insist that debt money = war and aggression?

  45. I disagree, these things are a problem but they're not the result of debt based money: they're the consequence of a political regime that socialises private income (profits and wages) and privatises social income (the rent of land). If this fundamental economic injustice was reversed most of the issues you highlight would solve themselves.

    You need to re-acquaint with classical economics and the factors of production, this neo-classical stuff is skewing our collective frame of reference.

  46. You think that's what I was saying? Debt money = war and aggression? No mate. It's an example of irresponsible money management. eg defense spending was £41bn last year. £20bn of that could be used to provide free university places for all of the current 1.5m students that want 'em and more. Or maybe reduce taxes a little, help the elderly or even not spend it at all! What with the nation being in debt, on which we owe interest…to banks…that we helped…and so it goes

  47. Yes they are the result of debt money creation by banks. Your example is reactionary not causal.
    Population growth and consumption of developing nations seeking to match our own is exceeding resource capacity. I believe this will organically come to defunk classical/neo-classical models and the banks funny money that require growth to service them well.
    This future contraction of resources and invalid supp;y/demand models could be best addressed by reform. Why wait til the next crash?

  48. So you want to get rid of defence now? At a time when the Middle East is about to kick off and the West is on the verge of economic collapse? Not great timing Stew, espcially if we're just going to waste the money sending our youngsters to university to study meeja or environmental studies.

    I thought debt money = war and aggression, was one of the reformers' key arguments, which is why you brought it up?

  49. Oh dear, as well as a monetary reformer you're a neo-malthusian too? I don't know. I thought we went over this about 2 weeks ago? Some resources are fixed in supply so no matter how much we use them they'll never run out (land, the airwaves), some resources are renewable (i.e energy) and can be produced to meet demand, some resources are truly finite (i.e oil) and others are limited in supply (i.e metals) but there's loads of it anyway. Its impossible ro run out of resources, your model is wrong

  50. Reducing defense spending by half is getting rid is it Dave? Defense should be just that. Not occupation/invasion/regime change. You know little about reform if you think military is a key issue. It's merely another one of the many I've already listed. You have no argument and have become contradictory and ridiculous.
    Education is a waste of time is it? It obviously was in your case it would seem. Who's going to design these renewable energy harvesters mentioned in your other reply? Laughable

  51. What is it with you and radio waves? Can you eat radio waves? Build a house from them? Get around on them? Heat you home with them? No. Sorry I don't see facebooking on the move as a valuable resource.
    Land will never run out? I won't even address that except with a sigh.
    I can find plenty of reports that are contrary to your view on resources. Not least as the report from the scientific community at Rio+20 this year. Show some that back your view up. Not some debunking blog. A proper report.

  52. Why do you need a report telling you something that's obvious to anyone with eyes and a brain? If I said today was Monday would you require a scientific report as confirmation for goodness sake?

    Yes land will never run out, are you suggesting that the surface area of the earth is contracting? Instead of sighing perhaps you should try and explain why England is vanishing into the ether as this is what you believe it seems, did you read it in a report?

  53. Its not immoral to have a large, well equipped standing army on hand in the same way that its not immoral to hide a baseball bat under your bed just in case. Its what you do with it that matters. Even if we cut the defence budget to £20bn p/a we could still engage in war so once again the logic behind you argument is sorely lacking. In your religious fervour to link finance with war you've lost all sense of perspective.

    A lot of what's taught at uni is a waste of time, yes. Its another scam.

  54. (sigh)……no, the land isn't contracting Dave and you know I wasn't suggesting so. Rather, our footprint on it is increasing with population growth and servicing the needs that that implies.
    The reports are important for monitoring this trend.
    We need a monetary or credit system that performs well under stability and sustainability. What we have now can guarentee neither. As you yourself said, we maybe on the verge of economic collapse. It's the right time to discuss the options.

  55. Ok, so you don't get the point with the link between finance and war either curently or historically so we'll leave it.
    Uni education is a scam eh?
    I think we should agree to disagree.my friend and move on.
    All the best
    Stew

  56. Countries sometimes declare war because they want to steal physical resources, what this has to do with debt based money or debt I don't know. The idea that we'll all evolve in2 hippy peaceniks the minute we switch debt based money 4 'positive' money sounds a little far fetched to me. We could write it in2 law that the state has 2 balance its books if it pleases u but that isn't positive money. Also what happens if a new Hitler comes along? Are we going 2 allow it rather than go in2 debt?

  57. con't You've already declared your opposition to our involvment in WW2 so presumably you think positive money trumps everything and we should just keel over if threatened by facism.

    Tbh I can't believe the PM movement attack Britain's contribution to the war effort on the gounds that we had to take on debt to liberate Europe from a fascist regime. If there's anything I would like debt to be used for its that.

  58. The monetary system is fine, we just abuse it with our stupidity. If we ran a sensible economy based on trade and productivity instead of a real life game of Monopoly based on debt and ever increasing house prices the banking system wouldn't be a problem.

  59. Yes uni is a scam, another one you've bought into hook, line, sinker and copy of angling times.

    I suppose you believe in man made global warming too, eh? Lets go for the full house while I'm here.

  60. @cookdave wrote "You've already declared your opposition to our involvment in WW2"
    Nope. I did say war should never be waged and that defense should be just that. Defense.
    I mentioned WWII as an example of ongoing national debt obligations during Labour's so called surplus.
    Further I don't represent the PM movement. I speak for myself. I can identify with our current system being broken and PM offer a potential fix.
    Your twisting of words and lack of understanding show you for what you are.

  61. You want to gum up the money supply to prevent the UK from being able to defend itself properly. Furthermore you DID argue against British involvement in WW2 earlier on the grounds that we had to take on debt to fight the Germans. I'm not twisting your words at all, you just think a little more carefully about the arguments you're making. Its not my fault if they're full of holes, I'm just exposing those holes.

  62. Again. Wrong. Here are the exact words cut and pasted.
    @stewfairweather wrote:
    "No room here to discuss Labour's brief "surplus" but as an eg, you know we were still paying USA for WWII until 2006 right?"
    To anyone with half a brain it's VERY clear what I'm saying. Not very bright are you old boy?
    Wars of aggression are wrong. Full stop. History tells us we entered WWII in defense of a ally. "defense" being the key word here. Now wipe your chin you daft git!

  63. So what happens if we can't borrow the money because 'Positive' Money have decided that debt is immoral?

    The point about debt is that it offers the economy a degree of flexibility, it gives people the OPTION to buy things now in return for timed repayments. Monetary reformers want to sweep this aside and replace it with a rigid system controlled by government agencies with the only promise being that it'll be "accountable". Democracy is no substitute for real individual liberty.

  64. That, finally, is a good point.
    We'd all still use banks to deposit so you'd still get loans and your bank would still charge interest.
    The economy would still be lubricated with £'s as now.
    We wouldn't feel the pinch of govt debt/interest obligations as there wouldn't be any over time. Taxes would be nominal as a result for wealthy and poor alike.
    It'd benefit none to either restrict or make too plentiful the £'s.
    Right now we have 97% of £'s issued as debt, with interest, to banks.

  65. So we should replace taxation with banking profits by socialising the role of credit creator? Two things:

    1) The banking system as a whole doesn't create much profit, this is why they needed multi-£bn taxpayer funded subsidies since the Credit Crunch began, so how can the banks replace the need for taxes?

    2) As I've said b4 socialism is never a good thing: you're going in the wrong direction. We need to make credit creation EASIER to erode the banks' privileged position, aka the free market.

  66. Tax isn't replaced by bank profits. Banks remain private. The govt doesn't need to borrow. It alone creates the money the economy needs. This key point erodes the need for high taxes.
    A cursory glance on the web shows banks, even bailed ones, do indeed make large profits every year. It was the "run" on monies owed that nearly toppled them.
    PM is NOT socialism. It merely makes £ issuance a state function. The economy would remain a free market!
    Easier credit? Like Wonga you mean? Not good.

  67. The gov't doesn't know how much money the economy needs! That's the whole point. They cannot second guess people's desires no matter how much information they collate or wisemen they employ so a 100% government issued currency would destroy the economy, or at the very least seriously impede it. What you are advocating is socialism, why not just be honest about?

    The state will still need to tax anyway to fund basic services, they can't just print a wad of £10's everytime they want a new school

  68. Can you hit "reply" so I know you've done so.
    £ issuence by the state is not socialism. The US issued it's own in the past, Guernsey too. These are not socialist states. Weak argument.
    The state will need to recycle some of the £'s in existence so yes some tax will be necessary. With no nat' debt to service this will be nominal. I think Guernsey ran a flat rate of 10%
    Quantity/supply is a major issue but it can and has been done. The BOE site has ALL the relevant stats @ /statistics

  69. £ issuance by the state is a form of socialism however as you're handing a key economic function over to the state, this is the worry. The U.S may have experimented with this style of reform in the 1800's but it hasn't been tested in within the context of a modern capitalist economy yet.

    The government would still have debt even if they issued the money, I could issue my own IOUs but I'd still be in debt.

  70. Money affects every aspect of life so could be deemed an essential service like access to water. As such I'd rather it wasn't issued by a company who's primary concern/bottom line is the welfare of it's investors/shareholders.
    Canada issued it's own from 1935-74 ( /watch?v=NxD2-lQwYa8)
    Bailing out the banks was a socialist move technically.
    No, govt debt would be paid down out of existence. If the economy or civil project needs £s, it is issued debt free. Personal debt is NOT govt debt!!!

  71. cont..(sorry but needed!)
    Personal IOU's are not currency and we've been through this several times. Understand the types of money and know personal debt is different from govt debt. An IOU is a contract between you and someone who knows you THE END! If you print lots it's called counterfeit, can't pay taxes and is illigal. Let this comparisson go Dave!
    Govt £'s would be good for ALL transactions. They are issued in accordence to market need. This need gives it it's usefulness, hence value.

  72. Food is a crucial part of everyday life but this isn't an argument for agricultural collectivisation, we tried that before and look what happened. Why do you assume banking would be any different? It would still be subject to the same forces that make the state a terrible provider in every other aspect of our lives. Time to take those rose tinted glasses off!

    Money needs to be backed by something, it cannot be issued debt free!

  73. Its a debt based money system Stew, an IOU as another term for debt. Please get to grips with this concept because it kind of explains how the money supply works!

  74. Lol,ok mate.
    So we're clear, currently there are 3 types of money as I'm aware. 1/ notes and coins 2/ inter bank (inc BOE) money 3/ account credits. the latter 2 of those could be EQUATED to IOU's but unlike your hand written IOU examples are legally binding. IOU's are informal and not negotiable (currency values/interest rates can change). IOU's unlike promissory notes specify the debtor.
    I like the idea of IOU use in a local system very much but it's out of context in our converstion.

  75. Looking at other options doesn't relate to wearing rose tinted glasses Dave. I think we could do better but not as long as we cling to the current failing system. Again not a rose tinted view, more objective.
    The state has and can fail us but at least we can hold them accountable.
    £'s can be issued debt free. It's spent into existence and given value by the nations use of it. We are it's stock and value. Simple.

  76. You can look at the other options, but if those options restrict individual liberty and hand even more power up to the state they'll cause more problems that they solve. Its out of the frying pan into the fire with state issued money, the state is too big and cumbersome to be able to deal with the individual economic needs of some 60 million citizens; the private banking system is in a better position to tend to those needs because the profit motive ensures efficiency.

  77. Yes, its not personal its general but the underlying the mechanism is more or less the same. Its a debt based monetary system, i.e we're backing our currency with debt or IOUs. This is much better than just spending debtless money into existence, that is a surefire way to corruption, hyperinflation and a state with too much control over the economy. Its destined to fail, spectacularly. Surely this is obvious?

  78. Exactly why does the goverment have to step in when banks do wrong? Why dosnt the goverment have to step in when the little shop at the corener goes out of business?
    If we dont want to give this money creating power to people we dont trust, we better not give it to the goverment either. We should make sure that no one group can create money while all other people cant. Shifting the monoply of money creation to the govt. will just make sure these same few people will be heading into politics.

  79. The ultimate answer is clearing houses. People should be able to come to a clearing house to trade what they have or do with various parties through a broker such that money is replaced by literal measures of the value of one good or service in relation to other goods or services.

  80. We must reduce the risk, don't increase it by giving politicians the chance to be a banker. There are really professional bankers and some corrupt politicians. We have to change regulations in order to make bankers invest more sustainabel.

  81. There is too much corruption to start with MP's. Change would have to start in communities , then city councillors, then onto mayor's. The solution would be a bottom, up, rather than a top down.

  82. EFFICIENCY?World WIDE Collapse?! A none private/profit currency is what we need.A REAL,non interest bearing/FOREVER existing money supply(as you know,bank loan 'money' is DESTROYED when repaid)Positive Money's solution is REAL money spent into the economy – Cancelling out debt 'money' – and REPLACING that debt 'money' with REAL money.So £100 of debt {'money' that WILL disappear on repayment-causing Busts} will be replaced with £100 of REAL money that will ALWAYS exist.No more FORCED growth.Peace

  83. Nice video, very well explain but I don't want to save democracy. You are trying to fixe one small part of an old corrupt system that you can't fixe.

  84. Can we get the names and titles of those 20 bankers, please: like John Smith, CEO of Citigroup?
    We need to know WHO these people are, not simply that they are some shadowy organization of bankers with a random number attached (20 or 50). Thanks!

  85. Thanks Ben—I'm encouraged that you fell short of suggesting that we should give this money creation power to the state. The power to create money should be in the hands of those who create goods and services in demand in the form of promises of future production. E.C. Reigel – New Approach To Freedom – he had all this down way back in the 40s!

  86. Jct: A B-grade overview of the problem with private banks creating they money to suit their purposes and not society's. It mentions the prime power to create and allocate but fails to mention "loanshark" at interest causing the real poverty shortage. And consent to allocation of credit rather than everyone having some so it doesn't matter who or how many create the chips as long as everyone has equal access to some. And they missed the main abuse, being able to deny one new credit and then foreclose while granting credit to another to participate in the foreclosure auction! Other than missing the prime malfunction abusing us and missing the equal access for all dimension and missing the main abuse, still pretty good  first-moan about a banking flaw.

  87. Bank of England isn't the Government's own bank, its shareholders are PRIVATE. In fact, all national banks have private shareholders. Google it up!

  88. It's a good explanation and I have a lot of time for Positive Money's message. But it doesn't look good when all that effort has been put into producing this and the word "effect" is used instead of "affect". It makes it look unprofessional. I'd urge you to change that as soon as possible. All the best…

  89. When you add in the fact that politicians are in the back pockets of this 'select few' you soon realise why the UK is simply an oligarchy. Democracy is simply a label that hasn't meant anything for decades.

  90. Why don't you talk about that The Bank can effectively control the amount of money created by changing the narrow money? But I guess it would go against your argument. And you want to give the power to the same people who put us in debt of 1.4 trillion by not being able to balance their budget? Wouldn't they just print money to pay for government spending? 

  91. Do you know what's worse? The very same people whom are trusted by their voters stab them on the back by saving the very same banks whom have created all this mess.

  92. There is no discussion here of the principles that should control the amount and means of distribution of the fresh money that is needed to sustain a vibrant economy. Major C.H. Douglas laid down these principles, in the service of personal freedom, a century ago. The policies he espoused would end conclusively the monstrous power of finance, whether privately or publicly exercised, to control the population through wage slavery–which explains why referencing his name and his Social Credit concepts has long been forbidden in the MSM.

  93. A monarch or dictator would have been more likely to stand up to the banks. Democracy in our system always risks becoming a oligarchy. The oligarchs own the money required to run for office and they own most of the media required to inform the people of your existence.

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