How money is created today: The rules of the economy by Positivemoney.org.uk

 

 

1. MORE MONEY in the economy –>> MORE DEPT

Problem is :

But a damaged banking system means that today banks aren’t creating enough money. W have to do it for them

Sir Mervy King, GOvernor of the Bank of Enland.

 

2. LESS DEPT –>> LESS MONEY n the economy

When people repay existing depts, private sectores balance sheets contract. When you repay your loans, reverse process happens when you take out your loan. Take out a loan creates money, when you repay a loan that money disappears from the system. What is happening post crisis, peoples are trying repay his dept whats means less money in the economy. Money in the economy shrinks, when he money shrinks, it’s like taking the oil in the engine of a car.

What we need write now, we need less dept&more money in the economy.

3. We need: LESS DEPT & MORE MONEY in the economy

But that is impossible with the current monetary system.

WHAT WE CAN :

1) remove the power of banks to create money; because if we give to banks the initiative to create money, they are going to create too much money…. to drive much more profit by landing much more possible. Lord Turner said :

..the existing of banks as we know them today – fractional reserve banks – exacerbates these risks because banks can create credit and private money, and unless controlled, will tend to create sub-optimally large or sub-optimally unstable quantities of both credit and private money…. the impact of fractional reserve banks is thus to make the financial system and the overall economy inherently more vulnerable to instability…

Lord (Adair) Turner, Chairman of the Financial Services Authority

Also we have huge quantities of money pushing up house prices, and huge amounts of money blowing up financial markets and relatively less money going in to  real business, that actually trade jobs and provide salaries to allow people to pay these house prices.

The financial crisis caused by disability of banking system to expand the money supply .

2) return the power to create money to the state….

3) use the money in the public interest…

  • Spend more on services
  • Cut taxes
  • Pay down the notional dept
  • Just give it directly to people to stimulate the economy

“In 1999, in 1 month the banking system created £4.5bn of new money to fund mortgages and consumer finance. In july 2005, they created £7bn to finance lending, in september 2007, they created £16bn of new money. Instead of putting QE money into the something useful (school creating), we put it into the financial markets. QE £375 = 3.5 million people on £20k for 5 years..”

 

 

 

 

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