March 27, 2014

Anyone interested in helping me set up this venture, becoming part of it or wanting to buy either redeemable shares or equity can email me at:


I want to devise a new and different model of home purchase and private rental for tenants. If it works as envisaged it could, hopefully, permanently cut the legs off the bankers’ stranglehold on the home purchase market & the violently extortionate private rental market.

It is a very simple idea and, on paper at least, it works. Once kickstarted it only needs consistent management to continue to make it work. I wonder if you might consider it of interest and if it was something that would be of interest to you ?


The property market has increasingly dis-enfranchised both tenants and home purchasers by the growth in various ‘rules’ & checking procedures (often spurious), mostly entirely unknown just a few decades ago.

Tenants in particular seem to be treated more like nuisance vermin than anything else and it is now almost impossible to be considered as a tenant of a private landlord if you are in receipt of any benefits, such as housing benefit etc. This means a typical pensioner with only a small or State pension, and thus relying on housing benefits if they do not own their own home, is refused the possibility of becoming a tenant in the private rental sector merely because of the ignorance of Estate Agents in blacklisting anyone in receipt of ‘benefits’. Security of tenure is also almost non-existent in what is a notoriously rapacious and underhand private rental market.

Many potential home purchasers are also dis-enfranchised by virtue of things such as utter trivialities on credit records which have no real meaning, but do prevent people from buying their own homes. Also the entire youngest entry segment to the home buying market – the younger first time buyer – usually has to remain a tenant for years and years before they have any prospect of actually buying their own home.

The banks have now taken virtually complete control of the home purchasing market from the old Building Societies which has already resulted in increasing the price of a home by about three and a half times in real terms (taking inflation into account) in just four decades. The viciously single minded pursuit of profit that banks will always pursue threaten to further increase both home purchase and rental costs for everyone. This is a ridiculous situation and needs urgent change.

Every home owner and tenant is a loser and the only winner the banks who will always have a vested interest in lending as much as possible to fund ever increasing house prices. But this has also created an opportunity for a completely different type of entry into home ownership which enables home owners to take control of the housing market away from banks and put it into the hands of the ordinary individual.


My idea is to simply set up an organisation which would seek crowdfunding (& possibly commercial mortgages) for redeemable shares offering (at present) about 3-4% which would be used to purchase rentable homes, primarily in the first time home owner end of the market. The redeemable shares would ideally be redeemable more or less on demand to enable savers currently offered laughable savings rates by the banks to be able to use this as a safe and reliable method of !savings offering much better returns than banks.

The tenants to which these homes would be rented would be hugely encouraged to be ‘good’ tenants and thereby significantly diminish the management burden, by being given tenancies on the basis of them sharing in the profit their rent ultimately generates. The principle is simply explained thus.

If the funds borrowed to 100% fund the purchase are fully repaid by means of charging rent, at the end of a term similar to an average type of mortgage of, say 25 years, then at that point the organisation would own the asset outright. It would then be able to offer a portion of the value of that asset to the tenant. The portion could be anything from the full value to any lesser amount. I would envisage considering offering half the value, subject to more detailed considerations. The remaining other half of the value would then be available to vest in the organisation.

The tenant would always be paying a ‘market’ rent the same as any other tenant. But he would be getting something back that no other tenant ever does. He will be getting back a portion of the rent he has paid which he can then use as his deposit to go and buy his own home with an ordinary commercial mortgage if he so wishes. This portion would accrue from the moment the tenant commences paying rent and would be available to the tenant whenever he leaves which could be at any time. He does not have to remain any longer than any initial short tenancy.

Put simply, over the period of paying off a mortgage in full, say 25 years, an ordinary purchaser would then own the home outright. In this case the owner of the home is the organisation which offered the tenancy and in my suggested simplistic model, the tenant would end of owning only half the home, the organisation the remaining half.

As tenants usually own nothing, ever, after paying their rent, this is a very good deal indeed for tenants.

A more extended version of this process can be devised to enable the tenant to remain long enough to convert to full freehold !or even long leasehold ownership if he so wishes.

Another very important feature would be to offer lower rents to lower income people going through periods of financial difficulty if they wish to use that option in return for suspension of the normal !part purchase model.

As long as the tenant’s rental was always funding the cost of the redeemable shares used to purchase that property, the maximum security of tenure & flexibility would be available, entirely contrary to the unforgiving commercial market.

This model would thus enable a person with no capital whatever to accrue a deposit for their own home purchase, or even use this organisation to end up either a long leaseholder or even freeholder. It could almost be viewed as a means of just turning an ordinary rental into a (different) type of mortgage for the ultimate purchase of a home.

It offers a means of home ownership which dis-enfranchises no-one and whereby any tenant turns progressively into an owner – without the need for credit checks, a deposit or injurious mortgage expenses. It effectively offers unlimited social housing in which government supplied housing benefit, which currently merely makes private landlords unspeakably wealthy at the taxpayer’s expense, would now be directed to accrue to individual home owners by means of a long lease (or even possibly freehold ownership – depending on detailed considerations).

The curious thing is, that all those hapless individuals abused and blacklisted by the commercial arena from obtaining mortgages or becoming tenants in the private rental sector, always do end up being tenants paying rent somewhere – usually in the private sector & rarely in social housing which is almost non-existent. All they experience is huge stress, insecurity of tenure, incredibly high rents and generally a completely wretched existence thanks to the venal greed of the commercial mortgage market and it’s unattractively verminous offspring – the private landlord.

This model removes all of that and potentially brings in hugely increased stability to the housing market and people’s lives.

This organisation might be set up as a Industrial and Provident Society (Co-op) or it may be more workable as a limited company, depending on further details being considered. It could either be fully mutual or only partly so with equity shareholding of some sort as well.

I have done the maths which shows just exactly how this can be made to work and I have also had years & years of experience as a landlord to possibly what most people conceive that most difficult and unreliable type of tenant – the student or young, generally irresponsible single person about town. My experience tells me that virtually every sort of tenant is unlikely to be particularly ‘unreliable’ if properly looked after – something few private landlords have a clue about doing; but it does make all the difference in tenant reliability.

I know from my own experience that the pantomime of both ‘credit checks’ and other witheringly insulting tenant checking is virtually pointless, valueless, expensive and just plain silly and simply does not replace the traditional landlord/tenant interview which does all of that, but much better. Much the same logic applies to credit checking for the purpose of mortgages.

This idea sweeps all that rubbish aside, benefiting both landlord and tenant.

Anyone interested in helping me set up this venture, becoming part of it or wanting to buy either redeemable shares or equity can email me at:

Thoughts anyone ?
I look forward to hearing from you.


February 1, 2014

Article from the Positive Money Website – the campaign to reform the corrupt and self evidently broken monetary system

Written By: Andrew Jackson and Ben Dyson 

Special thanks to: Anthony Molloy

Produced with the support of The JRSST Charitable Trust

© February 2012 Positive Money


The common misconception of how banks work is

that they take people’s savings and lend them out

in the form of loans. In this vision, banks merely

operate as the middlemen between savers and

borrowers, but this is simply not what happens.

When a bank makes a loan it does not take the

money out of anyone else’s account. Instead, it

simply creates a new account for the customer and

types a number into it.

When a customer is approved for a loan (of say

£1,000), she signs a contract with the bank obliging

her to pay back £1,000 plus interest over a period

of time. According to accounting conventions, the

£1,000 loan can then be recorded as an asset of the

bank. At the same time the bank opens an account

for the customer and types £1,000 into it. As the

bank owes the customer this money, it is recorded

on the liabilities side of the bank’s balance sheet. By

this process, the bank has simultaneously created

new money in the borrowing customer’s account

and a corresponding debt. The bank’s new asset

(the debt) balances out the new liability (the newly

created money) so that in accounting terms, the

books balance.

The customer now has £1,000 of new money to

spend on whatever they choose. No money was

taken out of anyone else’s bank account. New

money has been created out of nothing.

In the UK, over 97% of the entire money supply was

created in this way and exists in the form of ‘digital’

money, numbers in the bank accounts of members

of the public and businesses.


Unlike pension funds, banks are not required to

disclose how they will use their customers’ money.

As 97% of the UK’s money supply is effectively held

with banks, this allows them to allocate a larger

sum of money than either the entire pension fund

industry or the elected government itself. Conse-

quently the UK economy is shaped by the invest-

ment priorities of the banking sector, rather than

the priorities of society.

Just five banks hold 85% of the UK’s money, and

these five banks are steered by just 78 board

members whose decisions shape the UK economy.

This is a huge amount of power concentrated in very

few hands, with next to no transparency or account-

ability to wider society.


It is common knowledge that anyone found printing

their own bank notes can expect to find the police

kicking down the door at two o’clock in the morning.

However, it has only been illegal for individuals and

companies to create their own £5 or £10 notes since


Prior to 1844, the state had a legal monopoly only

over the creation of metal coins dating from the

time when this had been the only form of money.

But keeping lots of metal and carrying it around was

inconvenient so customers would typically deposit

their metal coins with the local jeweller or goldsmith

who would have secure storage facilities. Eventually

these goldsmiths started to focus more on holding

money and valuables on behalf of customers rather

than on actually working with gold, and thereby

became the first bankers.

A customer depositing coins would be given a piece

of paper stating the value of coins deposited. If the

customer wanted to spend his money, he could take

the piece of paper to the bank, get the coins back,

and then spend them in the high street. However,

the shopkeeper who received the coins would then

most likely take them straight back to the bank. To

avoid this hassle, shopkeepers would simply accept

the paper receipts as payment instead. As long as

the bank that issued the receipts was trusted, busi-

nesses and individuals would be happy to accept the

receipts, safe in the knowledge that they would be

able to get the coins out of the bank whenever they

needed to.

Over time, the paper receipts came to be accepted

as being as good as metal money. People effectively

forgot that they were just a substitute for money

and saw them as being equivalent to the coins.

The goldsmiths then noticed that the bulk of the

coins placed in their vaults would be gathering dust,

suggesting that they were never being taken out.

In fact, only a small percentage of all the deposits

were ever being claimed at any particular time. This

opened up a profit opportunity—if the bank had

£100 in the vault, but customers only ever withdrew

a maximum of £10 on any one day, then the other

£90 in the vault was effectively idle. The goldsmith could lend out that extra £90 to borrowers.

However, the borrowers again would choose to use

the paper receipts as money rather than taking out

the metal coins from the bank. This meant that the

bank could issue paper receipts to other borrowers

without necessarily needing to have many—or even

any—coins in the vault.

The banks had acquired the power to create a substitute for money which people would accept as being money. In effect, they had acquired the power to create money: perhaps this is when the goldsmiths became real bankers.

The profit potential drove bankers to over-issue

their paper receipts and lend excessive amounts,

creating masses of new paper money quite out of

proportion to the actual quantity of state-issued

metal money. As it always inevitably will, blowing

up the money supply pushed up prices and destabi-

lised the economy (of the many crises, particularly

galling was the Bank of England having to borrow £2

million from France in 1839). In 1844, the Conserva-

tive government of the day, led by Sir Robert Peel,

recognised that the problem was that they had

allowed the power to create money to slip into irre-

sponsible private hands and legislated to take back

control over the creation of bank notes through the

Bank Charter Act. This curtailed the private sector’s

right to print money (and eventually phased it out

altogether), transferring this power to the Bank of


However, the 1844 Bank Charter Act only addressed

the creation of paper bank notes. It did not refer to

other substitutes for money. With growth in the use

of cheques, the banks had found another substitute.

When a cheque is used to make a payment, the

actual cash is not withdrawn from the bank. Instead,

the paying bank periodically communicates with the

receiving bank to settle any net difference remaining

between them once all customers’ payments in both

directions have been cancelled out against each

other. This means that payments can be made even

if the bank has only a fraction of the money that

depositors believe they have in their accounts.

Following on in the spirit of financial innovation,

after cheques came credit and debit cards, elec-

tronic fund transfers and internet banking. Cheques

are now almost irrelevant as a means of payment

but over 99% of payments[b] (by value) are made


Today the electronic numbers in your bank account

do not represent real money. They simply give you a

right to demand that the bank gives you the physical

cash or makes an electronic payment on your


In fact, if you and a lot of other customers

demanded your money back at the same time—a

bank run—it would soon become apparent that

the bank does not actually have your money.

For example, on the 31st of January 2007 banks held

just £12.50 of real money (in the form of electronic

money held at the Bank of England) for every £1000

shown in their customers’ accounts. Even among

those who are aware that what banks do is more

complicated than merely operating as middlemen

between savers and borrowers, there is a wide-

spread belief that banks are obliged to possess a

sum corresponding to a significant fraction of their

liabilities (their customers’ deposits) in liquid assets,

i.e. in cash or a form that can be rapidly converted

into cash. In fact, such laws were emasculated in

the 1980s in response to lobbying from the industry

(although some effort is now being made to

re-impose such rules in the aftermath of the crisis).

When a run starts (like the one on Northern Rock

on the 14th September 2007) it becomes almost

impossible to stop.

Once the bank has paid out any cash which it holds in the branch to individuals (and transferred all of its reserves to other banks) other depositors will have to wait for the bank to sell off its remaining assets before they see their money.

And because the bank has to sell these assets

quickly, it will find it hard to receive a fair price.

Because of this it is unlikely the proceeds from these

sales will cover the value of their deposits and other

liabilities, and therefore most customers are likely to

lose a large proportion of their savings. Because this

type of personal ruin is a tragedy and, even more

importantly, because one bank run is likely to lead

to others (as confidence in the banking system falls

through the floor) the government insures deposits,

guaranteeing some level of payback in the event of

bank failure. Thus, because the system is inherently

unstable, and because almost all of our money

exists on banks’ balance sheets, the banking sector

has to be underwritten and rescued by the taxpayer,

all as a result of the failure of legislation to keep up

with technology and financial innovation since 1844.


When money is created, it can be put into the

economy in two ways: it can either be spent in

exchange for goods and services or lent out. When

banks create money, they put most of it into the

economy through lending. Exactly who this newly-

created money is given to is crucial because it will

determine the shape of the economy.

Over the decade leading up to the 2008 financial

crisis, the amount of money lent out by banks

tripled but this steep rise is largely accounted for by

loans advanced for the purposes of buying property

and for financial speculation. The amount dedicated

to productive investment remained more or less

constant throughout this period meaning that the

proportion of the money supply that was dedicated

to enhancing production steadily waned.


Between November 1982 and November 2006 the

banking sector increased the money supply—by

creating new money through lending—by an

average of 10% a year.

Between November 2007 and November

2008, £258 billion of new money was created. If

government were to increase the money supply

at this rate, it would be accused of following the

policies of Zimbabwe, but because few people

understand that banks create money via lending,

this is completely overlooked.

This huge growth in the money supply is hardly

surprising when we consider the incentives that

banks have to increase their lending. In confident

times, all of a banker’s incentives push him to

lend as much as possible: by lending more, they

maximise short-term profits and, more specifically

their own bonuses, commissions and prospects

of promotion and profits. There is no reward for

bankers who are prudent and choose not to lend

or only lend judicious sums. In short, the supply

of money into the economy depends on the confi-

dence and incentives of bankers rather than what is

best for society as a whole.

Investing in machinery to make factories

more efficient is productive investment whilst

lending to buy existing property through mortgages

is non-productive as it simply pushes up house

prices without increasing production.

The £1.16 trillion of new money created by

the banks over the last ten years could have been

used to: pay off the national debt (which currently

stands at around £977 billion); invest in public

transport, hospitals, schools or renewable energy;

or exempt the poorest ten per cent of the popula-

tion from tax. Instead, it has been used by the

banking sector to fuel a housing bubble that has

made buying a home unaffordable for all but the

very rich.

The last few years have proven the business model that enables banks to create money is fundamentally unstable, requiring rescue by the government from time to time.

When this happens, taxpayer funds are diverted

from public spending and spent on salvaging failing

corporations. This further reduces the power of

government to do what it was democratically

elected to do, weakening democracy in the process.

By handing the power to create money over to

the banks, the government reduces its revenue,

compromises its capacity to carry out the activities

that it has been mandated to carry out and under-

mines the potential of the democratic system to

change society for the better.


Giving banks the power to create money results in

two hidden and undemocratic ‘taxes’ being levied

on the public.

The first of these ‘taxes’ is inflation, when increases

in the amount of money in the economy feed

through into higher prices. If the money supply

is increased quickly then the new money pushes

up prices, especially in housing to where much of the new lending is destined.

Of course, it is now banks that create the vast

majority of new money. They have increased the

amount of money in the economy at an average of

10% a year between 1981 and 2007, (by lending)

and pumped this money mainly into the housing


As a result, house prices shot out of the

reach of ordinary people, whereas those who got

the ‘first use’ of the money (by borrowing first)

received most of the benefit. Meanwhile those who

were not already on the housing ladder became

significantly poorer, in real terms, because the

relative cost of housing doubled in just 10 years

(between 1997 and 2007).

Consequently, the inflation caused by allowing banks to create money is also effectively a ‘tax’ accruing to the banks (through their increased interest income on ever greater mortgages) and those who borrow early on (to buy property and other assets).

The second of these hidden taxes corresponds to

interest. Because banks create 97% of the UK’s

money supply, essentially through making loans,

the entire money supply is ‘on loan’ from the

banking sector. For every pound created, somebody

somewhere goes one pound into debt and starts

paying interest on it. By virtue of their power

to create money, banks have the right to collect

interest on nearly every pound in existence.

A hidden tax collected by private corporations

because they have a power that most people would

consider—and believe—to be a prerogative of the

state can hardly be considered democratic.

Written By: Andrew Jackson and Ben Dyson

Special thanks to: Anthony Molloy

Produced with the support of The JRSST Charitable Trust

© February 2012 Positive Money


December 31, 2013

According to the New Economics Foundation a dysfunctional financial sector led us to the brink of disaster in 2008, and yet bank reforms aren’t going far enough to tackle the root causes of the economic crisis. The New Economics Foundation goes on to explain our four big banks remain too big to fail, and continue to engage in the risky and unproductive activities that caused the crash. We need to establish a more stable, sustainable and socially useful banking system.

Key Facts

The UK government pledged 89% of GDP to bail-out out our banks.

45% of Americans are members of their local credit union, compared to 2% of Britons.

The UK banking sector is one of the least diverse in the developed world – local banks make up just 3%, compared to 67% in Germany and 34% in the USA.

Read more from the New Economics Foundation about the dysfunctional financial sector here



- All the banking problems are caused by the stranglehold, or monopoly, banks have over absolutely everyone – the Government, businesses and all individuals.

- This allows the banks to become increasingly extortionate by constantly increasing the boundaries of what they charge to their customers for handling any kind of  financial transaction and also increasing rates of interest they charge for lending money.

- As they set increasingly higher boundaries for all their charges and discover they get can actually get away with it, they also become more confident in justifying increasing bank employee ‘bonuses’ to completely obscene levels on the basis the employees made all that extra profit for the bank, therefore they deserve to get a percentage of it.

- But that also just encourages bank employees to constantly invent new ways of charging bank customers even more money as well as perpetually increase bank lending as much as possible at all times, thus making it more and more risky, dangerous, often misleading borrowers and even behaving fraudulently and downright dishonestly.

- If you look at the interest rates bank customers were paying for overdraft, or credit cards and so on about forty years ago, the rates were vastly lower than they have been now and in the past two decades.

Some bank charges today are just obscene – just look at overdraft rates at least twice as high as they used to be and credit card interest rates even higher than twice as much as they used to be, now  hurtling past 30% and surreptitiously sidling up towards 40% and all this at a time when the Bank of England  base rate has been it’s lowest in  how many hundred years ?

- If there were lots of small banking type businesses taking in customer’s money, giving them  attractive rates of interest while making sure the savings deposited were always safe, and then using those savings deposits to lend safely, reliably and carefully to small businesses and individuals, all these smaller banking operations would reduce and hopefully completely destroy the ruthlessly extortionate  monopoly of the current banking system.

- But this can’t happen because the morass of controlling regulations and bureaucracy the banks have connived at conjuring up in conjunction with the official, Government inspired regulatory authorities which were supposed to be there to help the customers of the banking system and make sure their money was looked after safely, honestly and carefully.

In fact all this regulation is cunningly used by the existing banks to stifle any possible competition by preventing anyone else from setting up a rival bank to challenge their predatory behaviour towards bank customers.

- My oh my and haven’t those industrious little dears at the regulatory authorities been ever so busy during the past century or so !

Apparently, there has only been just one new High Street Bank license granted by them in the last 150 years !

- That’s a bit funny when there are only about five banks  controllinng the entire UK market  and there is such a desperate need for probably hundreds of small, local banks, isn’t it?

Are the regulatory Authorities  just bureaucratic lunatics or have they just been stuffed with people who used to work, or even still do work within the existing banks ?

Whatever the answer is, Does that actually just mean the system is completely corrupt ?

I think so . What do you think ?

2013 in review

December 31, 2013

The stats helper monkeys prepared a 2013 annual report for this blog.

Here’s an excerpt:

The concert hall at the Sydney Opera House holds 2,700 people. This blog was viewed about 10,000 times in 2013. If it were a concert at Sydney Opera House, it would take about 4 sold-out performances for that many people to see it.

Click here to see the complete report.

The single killer question from ATOS that drove a woman to suicide

November 27, 2013

Posted by Tom Pride 

Back in January I wrote a satirical blogpost about ATOS reducing their fit for work tests to one question:-

ATOS to reduce ‘fit for work’ test to one question: “Are you alive?”

Now it looks like ATOS have decided my blogpost was a good idea.

A partially-blind and disabled woman had her benefits stopped after she attended an interview with ATOS in which she was asked just one question.

And as a result of her one word answer to the question, the woman killed herself:

Bristol woman “killed herself after benefits were stopped”

What was the single question by ATOS’s so-called ‘expert’ which trumped a lifetime of professional doctor’s opinions and supporting medical evidence?

Did you come here by bus?

A killer question indeed.


Someone remind me – just exactly how many millions are we as taxpayers paying these cowboys at ATOS for this kind of incompetent, dangerous nonsense?


Tory and Lib Dem MPs have decided terminally ill patients should work or starve

November 26, 2013

written by Tom Pride  from Pride’s Purge – an irreverent look at UK politics

Back in 2011, Conservative and Liberal Democrat MPs joined together to reject an amendment which would have exempted terminally ill cancer patients from benefit cuts.

They decided that if you are diagnosed with a terminal illness such as cancer – but have been given more than 6 months to live – you will have to work or starve.

Here’s a previous blogpost about that:

The government has finally done something so outrageous even I can’t be bothered to satirise it

This decision by coalition MPs was so outrageous that after intense lobbying, there were some concessions made by the government.

However, in a bizarre piece of upside-down DWP logic, it now seems that if you have less than 6 months to live – you will be refused benefits.

This is from the Chester and Ellesmere Port Foodbank blog:


Jenny came to the Chester and Ellesmere Port Foodbank last month, having been diagnosed with terminal Cancer. Her prognosis was three to six months. She already suffered with several chronic illnesses preventing her from working over the last two years and was in receipt of Disability Living Allowance. Having no family she was trying to “put her house in order”, ensuring all her bills were paid and saving up for her funeral. Her DLA was stopped; the reason given was that as she was not expected to survive the required time, she did not qualify for this benefit! She came to the Foodbank not for herself but to bring a neighbour who had mental health issues and short term memory problems. He had been 30 minutes late for his appointment at the Benefit office (he had forgotten the time!) and had therefore been sanctioned. He had not eaten for three days. They were both given a meal and the time to talk of their problems and referred to the appropriate agencies for food vouchers and further support and help. Several weeks later Jenny came to the Foodbank to thank everyone for the help and food that was given and the kindness and support that was shown in their time of need. Jenny died three weeks later.


So let’s be clear about this – if you are terminally ill and you don’t have the financial means to keep yourself for the remainder of your life – you will have to find work or starve.

I know some people will argue that Jenny could have appealed the decision which would have been overturned, or she made a mistake when she was filling in the forms which could have been rectified, or the DWP made an honest mistake themselves and Jenny should have gone back to them and argued her case harder. But she can’t now, can she?

Because she’s dead.


There are just 5 weeks left to reach 100,000 signatures to trigger a government debate on disability cuts. Please sign the War on Welfare petition:

War on Welfare 


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