LEGAL BASTARDS

July 27, 2015

LEGAL BASTARDS

(that’ll be the government then, for preventing access to any form of justice for most people by denying legal aid to almost anyone needing it )

or

The Legal Aid System and Access to Justice as Explained in a Letter to My Legal Aid Lawyer, who is unlikely ever to actually work for me at all in fact.

Dear Legal Aid  Lawyer

Concerning the matter of my buy to let landlord wishing to evict me within just two months  so he can sell his house, Read the rest of this entry »

BUY YOUR HOME BY JUST BEING A TENANT

May 12, 2015

A BRAND NEW WAY OF RENTING A HOME TO SHARE IN THE PROFIT A LANDLORD MAKES.   http://www.gofundme.com/twc96d5

Criminal Courts Charge from a Criminally Inclined Government

May 5, 2015

May 5th  2015

 

It seems this country is hurtling towards being  a fascist State with most of the population denied any sort of proper justice as a corrupt Government steamrollers over citizens by tightening the screws of oppression little by little so people barely notice until it is too late.

The two articles below aptly described my own first hand experiences  and so I copied them from solicitors Clarke Kiernan website:

http://clarkekiernan.com/criminal-courts-charge

Criminal Courts Charge

The Lord Chancellor introduced a measure that will impact significantly on any person who finds themselves involved with the Magistrates’ Courts on any road traffic matter such as speeding, careless driving, or any other technical or low level breach of the law where the incident occurs after 12th April 2015. The idea was said to be ‘to make criminals pay for the criminal justice system’. He called it the Criminal Courts Charge.

In reality, the people who will be paying will be those ordinary working people who make a simple error and who, because they are normally law abiding, will have the income or assets to pay this extra cost. Regular offenders will tend not to have any income or assets to meet the payment. Non payment of this penalty is punishable by imprisonment no matter how low level the allegation.

If your case goes to court and you fight the allegation believing in your innocence or simply wanting to explain the circumstances to reduce the penatly, if the magistrates disagree with you they must order you to pay an extra £520 for the privilege of having the case tested, no matter how brief the hearing. The charges increase if the case gets to the crown court no matter how it gets there.

Nowadays ordinary law abiding people will have to make decisions on whether to accept a fixed penalty or whether to make false admissions for a police caution based on financial considerations rather than guilt due to the clear threat that now exists of a large extra financial penalty no matter how low level the misdemeanour or punishment.

Often people will not have taken legal advice and will not understand that taking a police caution for an allegation of eg common assault or petty theft will be recorded as a criminal record by the police and will disqualify you from many occupations, from helping out at your child’s school, restrict travel to other countries…

This is not an idea to make criminals pay, it is a way to make ordinary people pay for a system that is part of the State and payable by the State. It is an indirect further tax on working families. It is tarring people with the ‘criminal’ label indiscriminately. The impact is to convict more people, more easily and more cheaply whether or not they are guilty of a crime.

The item below was also copied from solicitors website : http://clarkekiernan.com/rant

Rant

Excuse us if we rant in a direction you do not agree with. A quote from Megarry J in the case of  John v Rees [1970] Ch. 345, Ch D and which was re-used in Moss v The Queen [2013] 1 WLR 3884, PC sets out a philosophy that we like:

“It may be that there are some who would decry the importance which the courts attach to the observance of the rules of natural justice. ‘When something is obvious,’ they may say, ‘why force everybody to go through the tiresome waste of time involved in framing charges and giving an opportunity to be heard? The result is obvious from the start.’ Those who take this view do not, I think, do themselves justice. As everybody who has anything to do with the law well knows, the path of the law is strewn with examples of open and shut cases which, somehow, were not; of unanswerable charges which, in the event, were completely answered; of fixed and unalterable determinations that, by discussion, suffered a change.”

If you look at what has been happening to the Criminal Justice System (as well as the civil system) for some years you ought to wonder how consecutive Governments can get away with concentrating on the administration of the systems to the undoubted detriment of Justice. It has become more important to Government to convict members of the public quickly and cheaply. Not only are defendants and their lawyers put under pressure to prepare the cases against them rather than trust the crown prosecution service and police to do their jobs. No longer are the prosecutors expected to do their job; Government seems to have given up on them and decided that the best, easiest, cheapest way of convicting people is to get the people to carrry  out sufficient work for the prosecution that they evenutally convict themselves – guilty or not.

The protection people had was with defence lawyers who would stand up for and protect the person’s rights. Government sorted that one out. The legal aid system is being destroyed so that those who cannot afford to pay for representation have to make use of lawyers who are underpaid and overworked. It might be denied by Government and by legal aid lawyers but it is simple business sense that you get what you paid for.

Not only has Government reduced remuneration for the legal aid lawyer to a ridiculous level but they intend to do the same again and also to reduce the number of firms able to carry out the work on legal aid. The service is to be reduced to a level most people will not believe until they (unexpectedly) find themselves in need of the assistance and discover that if they want to see their solicitor outside of the Court to prepare their case and take advice so that you are ready for the hearing then you will probably find you have to travel to the other end of your county where you will see a young, inexperienced, support staff member because the firm will not be able to afford to employ enough solicitors of quality to service the work at the level people will need in order to assert their rights.

In order to achieve what the government wants to see happen to criminal defence work it is essential that they not only reduce the number of firms, they also need to ensure firms have the minimum number of solicitors and maximum unqualified support staff and then to get the price even lower the firms will not be required to have any offices. Those who can afford to instruct good firms like ours will do so much better than those who have to manage on legal aid. That is not in fact the criminal justice system we like to see. It is not the system our government should be forcing upon us.

In order to see the ways in which Government has managed to increase the burdens on defendants to convict themselves you only need to study the Criminal Procedure Rules that are carefully drafted to add to burdens for defendants in a way that ignores and overrides their statutory protections. Notwithstanding that the prosecution takes months usually to bring a case to court for the first hearing, they are encouraged to give minimum disclosure of the case the defendant is expected to meet at the first hearing but the defendant is then expected (compelled) to identify all issues they will want to rely upon notwithstanding the disclosure is inadequate and there has been no opportunity to investigate matters, check availability of witnesses, seek any expert evidence or just generally give decent instructions and take good advice. There is no leeway given for people whose first language is not English or have mental health and/or learning difficulties.

CORRUPT COUNCILS ACTING ILLEGALLY BY FALSELY CLAIMING HOUSING APPLICANTS ARE ‘INTENTIONALLY HOMELESS’.

March 9, 2015

8th March 2015

http://www.dailymail.co.uk/news/article-2535136/Average-British-family-home-size-shrinks-two-square-metres-decade-increasing-numbers-forced-live-flats.html

I’ve just seen a TV programme about three single mothers being homeless and the utterly filthy way they are treated by their local councils. (BBC one March 3rd 2015 –  ‘No Place to Call Home)  see it here:

http://www.bbc.co.uk/iplayer/episode/b054dvws/no-place-to-call-home

One woman & her two kids had been forced to leave the privately rented flat she was renting because the boiler broke  and the typically nauseating private landlord simply refused to mend it. So this single mother arranged to live with her own mother in the mother’s council house.

But the council found out and told the mother she would be evicted from her own council house herself if she continued to allow her daughter & two kids to stay with her as the council said that made the council house overcrowded.

As the threat from the council now meant the mother, daughter and two kids would all be thrown out on the streets to be homeless by this spiteful and vindictive council, the mother had no choice but to tell her own daughter to leave.

This made the daughter and two kids ‘street homeless’- they had absolutely nowhere to go except live on the streets because they could not find private accommodation they would be able to afford quickly enough, if at all, as rents were nearly all far higher than they had any hope of being to afford – even if they received ‘Housing Benefit’.

Housing benefit has been cunningly arranged by this disgusting Tory Government to be too low for tenants receiving it to have much hope of finding any privately rentable accommodation.

So, this single mother is obliged to inform the council she and her young children will be on the streets, and could the council therefore re-house her as the law says it has a legal obligation to do.

No, said the council. We know we have a statutory duty where an Act of Parliament says councils have a legal obligation to house homeless parents with children, but we’re not going to. And we’re not going to because part of that same Act of Parliament says that if a person has made themselves ‘intentionally homeless’ we are allowed to refuse people we would otherwise have a legal obligation  to re-house.

So we are telling you, single mother with two young kids, that we think you are intentionally homeless and you can go F**k yourself; we’re not going to house you.

The Council used the Alice in Wonderland logic that this single mother was “intentionally homeless’ because she had ‘voluntarily’ left ‘her previous accommodation’ the privately rented accommodation with it’s broken boiler the private landlord refused to mend  with winter approaching.

The council seemed to have a convenient memory lapse in forgetting it was the council itself which had forced her own mother to evict her daughter, throw her out onto the streets with her kids  by threatening to make all of them homeless by taking the council house away from the woman’s own mother. This is a brutally corrupt piece of pure Kafkaesque wickedness on behalf of the council.

Another single mum with three kids had been evicted by her private landlord as revenge because she had asked him to do essential repairs like stop the excessive dampness which was making all the walls and ceilings covered in black mould – which is dangerous to health as it produces lung disease. She was intentionally homeless too, said the council.

I know of another single parent evicted from their house by the fraudulent USA bank Lehmans, who went bankrupt after causing the recent World wide recession by their criminally  dishonest, immoral, grasping and evil banking activities.

The council told that parent too they were ‘intentionally homeless’ on the grounds they shouldn’t have bought their house several years previously by using a mortgage as ‘they ought to have known they would be unlikely ever to work again because they were a single parent’.

I know the councils up and down the country are actually breaking the law ( I’ve checked the legislation) by using this ‘intentional homeless’ nonsense in the way they are, but more of that later.

Then I saw today’s (8th March 2015 BBC) news rabbiting on about the sixty thousand homeless people in New York right now, enduring the coldest winter weather, lots of ice & snow, for decades. New York is always very cold in winter anyway, so this must be awful if you’re living on the streets.

Then the news item featured a single mum in her early thirties working in the financial industry who still didn’t earn enough to afford the stratospheric rents of New York, so she was sharing  hostel accommodation with other homeless families.

This housing crisis is almost entirely caused by the banks ramping up the price of housing so they can lend ever larger sums of money. Housing in the UK is now about eleven times an average salary instead of the three times it was in about 1970 – before the greedy banks got into the business of mortgage lending by destroying most of the building societies.

But what should a house really cost do you think ? The average (slightly approximate) cost of building a new house is about £1200 a square metre. And the average British rabbit hutch of a new house is now only 76 sq metres, not big enough to swing  a cat, (see Daily Mail story here – http://www.dailymail.co.uk/news/article-2535136/Average-British-family-home-size-shrinks-two-square-metres-decade-increasing-numbers-forced-live-flats.html  ).

That would cost £91 200 to build, plus the extra cost of buying the land on which it stands. Agricultural land averages about £10 000 at the moment and with at least 16 tiny little rabbit hutches to the acre the land should cost a miniscule £62 or so, and it did a couple of generations or so ago.

But of course today, the bureaucracy and corruptions of the entire housing market and in particular that Orwellian gem of corruption ‘planning permission’ has made a nonsense of land value to build housing on and consequently it can cost millions per acre.

Apparently the average cost land with building permission per acre is now about £800 000 which makes one building plot to build a tiny rabbit hutch of a house on with the average of 76 sq metres for this type of house, is now about £50 000.

So after adding that extortionate £50 000 cost of the building plot to the build cost of  £91 200 we get the total cost of a new house for £141 200. Actually the average price is about twice that at present. That will be the £141 000 profit for the house builder then !

But, whatever the price new, shouldn’t the cost of a second hand house decrease at least a bit over time just like other second hand, used goods ?

Errrrrr, yes, I should think it ought to and certainly did before property started to become a good wheeze for Spivs & speculators from about 1950 onwards.

So, take my ordinary four bedroomed London terrace house of 200 square metres which would cost about £240 000 to build new today, plus the average cost of £50 000 for the plot of land, that would be £290 000 built new today. But actually the current value is about £1.4 million.

Anyway, back to the real cost of building it at £290 000. If the house lost just one half per cent a year in value ( about £1500 in the first year) the 135 year old house would have lost 67% of its original cost and would be about £194 300 to buy today. Or that rabbit hutch house costing £141 200 today would cost about £94 604 when 135 years old; (except it will never get to be 135 years old because that type of house is generally built so badly & shoddily it is unlikely to have life of barely more than 20 years).

So this example means over a theoretical life of a house off 200 years each inhabitant pays a modest half percent cost of the total building cost which  is £1 500 a year towards the building cost of the London house costing £290 000 to build in 2015. But instead, if you rent that same house today in London you will be paying the 6% of the 2015 ‘value’ the house has of £1 400 000 that landlords expect to rent homes out to tenants for and this will be a cool £84000 a year rent you will paying instead of £1500 previously mentioned.

That’s what it used to be like for centuries until the modern era, when the banks made houses repositories of value, rather than real homes to live in.

Bastards !

So, what with the builders building revoltingly cheap and nasty miniature homes too small even to contain normal necessary possessions and making extortionate profits of up to 100% and even higher, and the banks making billions of pounds out of expensive, often rip-off loans to people to buy homes, the entire country is in the icily corrupt grip of a bunch of thieving sharks really. And at the bottom are the people being forced to live on the streets or in repulsively inhumane  council ‘emergency accommodation’.

 

 

MONEY CREATION DEBATE IN PARLIAMENT

November 21, 2014

READ HOW MPs DISCUSS HOW GREEDY, DISHONEST, FRAUDULENT  AND DESTRUCTIVE THE BANKING INDUSTRY IS

 

MONEY CREATION DEBATE PARLIAMENT

COMMONS Thursday November 20th 2014

FROM HANSARD – Read the full debate from the link below:

http://www.publications.parliament.uk/pa/cm201415/cmhansrd/cm141120/debtext/141120-0001.htm#14112048000001

SOME EXTRACTS FROM THE DEBATE

HANSARD 20 Nov 2014 : Column 434

Backbench Business

Money Creation and Society

11.18 am

Steve Baker (Wycombe) (Con): I beg to move,

That this House has considered money creation and society.

The methods of money production in society today are profoundly corrupting in ways that would matter to everyone if they were clearly understood. The essence of this debate is: who should be allowed to create money, how and at whose risk?………

……One of the most memorable quotes about money and banking is usually attributed to Henry Ford:

“It is well enough that people of the nation do not understand our banking and monetary system, for if they did I believe there would be a revolution before tomorrow morning.”………..

How is it done? The process is so simple that the mind is repelled. It is this:

“Whenever a bank makes a loan, it simultaneously creates a matching deposit in the borrower’s bank account, thereby creating new money.”

I have been told many times that this is ridiculous, even by one employee who had previously worked for the Federal Deposit Insurance Corporation of the United States. The explanation is taken from the Bank of England article, “Money creation in the modern economy”, and it seems to me it is rather hard to dismiss……..

It is a criminal offence to counterfeit bank notes or coins, but a banking licence is formal permission from the Government to create equivalent money at interest…….

There is a wide range of perspectives on whether that is legitimate. The Spanish economist, Jesús Huerta de Soto explains in his book “Money, Bank Credit and Economic Cycles” that it is positively a fraud—a fraud that causes the business cycle. Positive Money, a British campaign group, is campaigning for the complete nationalisation of money production……..

We are in a debt crisis of historic proportions because for far too long profit-maximising banks have been lending money into existence as debt with too few effective restraints on their conduct and all the risks of doing so forced on the taxpayer by the power of the state. A blend of legal privilege, private interest and political necessity has created, over the centuries, a system that today lawfully promotes the excesses for which capitalism is so frequently condemned. It is undermining faith in the market economy on which we rely not merely for our prosperity, but for our lives………….

Even before quantitative easing began, we lived in an era of chronic monetary inflation, unprecedented in the industrial age. Between 1991 and 2009, the money supply increased fourfold. It tripled between 1997 and 2010, from £700 billion to £2.2 trillion, and that accelerated into the crisis. It is simply not possible to increase the money supply at such a rate without profound consequences, and they are the consequences that are with us today, but it goes back further. The House of Commons Library and the Office for National Statistics produced a paper tracing consumer price inflation back to 1750. It shows that there was a flat line until about the 20th century, when there was some inflation over the wars, but from 1971 onwards, the value of money collapsed. What had happened?…….

where did all the money that was created as debt go? The sectoral lending figures show that while some of it went into commercial property, and some into personal loans, credit cards and so on, the rise of lending into real productive businesses excluding the financial sector was relatively moderate. Overwhelmingly, the new debt went into mortgages and the financial sector…….

Money is used to buy houses, and we

20 Nov 2014 : Column 438

should not be at all surprised that an increased supply of money into house-buying will boost the price of those homes…………

My point is that if a great fountain of new money gushes up into the financial sector, we should not be surprised to find that the banking system is far wealthier than anyone else. We should not be surprised if financing and housing in London and the south-east are far wealthier than anywhere else. Indeed, I remember that when quantitative easing began, house prices started rising in Chiswick and Islington. Money is not neutral. It redistributes real income from later to earlier owners—that is, from the poor to the rich, on the whole…………

Once the Bank legitimises the idea of money creation and giving it to people in order to get the economy going, the question then arises: if you are going to create it and give it away, why not give it to other people? That then goes to the question: what is money? I think it is the basis of a moral existence, because in our lives we should be exchanging value for value. One problem with the current system is that we are not doing that; something is being created in vast quantities out of nothing and given away. The Bank explains that 40% of the assets that have been inflated are held by 5% of households, with 80% held by people over 45. It seems clear that QE—a policy of the state to intervene deeply in money—is a deliberate policy of increasing the wealth of people who are older and wealthier.

Douglas Carswell (Clacton) (UKIP): I congratulate the hon. Gentleman on bringing this important subject to the attention of the House. Does he agree that, far from shoring up free market capitalism, the candy floss credit system the state is presiding over replaces it with a system of crony corporatism that gives capitalism a bad name and undermines its very foundations?

Steve Baker: I am delighted to agree with my hon. Friend—he is that, despite the fact I will not be seeing Nigel later. We have ended up pretending that the banking system and the financial system is a free market when the truth is that it is the most hideous corporatist mess. What I want is a free market banking system, and I will come on to discuss that.

11.45 am

Mr Michael Meacher (Oldham West and Royton) (Lab):

It is unfortunate that it is so little understood by the public that money is created by the banks every time they make a loan. In effect, the banks have a virtual monopoly—about 97%—over domestic credit creation, so they determine how money is allocated across the economy. That has led to the vast majority of money being channelled into property markets and the financial sector. According to Bank of England figures for the decade to 2007, 31% of additional money created by bank lending went to mortgage lending, 20% to commercial property, and 32% to the financial sector, including to mergers and acquisitions and trading and financial markets. Those are extraordinary figures…

……the overwhelming majority of the money created inflates property prices, pushing up the cost of living.

In a nutshell, the banks have too much power and they have greatly abused it. First, they have been granted enormous privileges since they can create wealth simply by writing an accounting entry on a register. They decide who uses that wealth and for what purpose and they have used their power of credit creation hugely to favour property and consumption lending over business investment because the returns are higher and more secure. Thus the banks maximise their own interests but not the national interest.

Mr Jim Cunningham (Coventry South) (Lab): Given what my right hon. Friend has just said, is there not an argument, in this situation of unlimited credit from banks, for the Bank of England to intervene?

Mr Meacher: My hon. Friend anticipates the main line of my argument, so if he is patient I think I will be able to satisfy him. Crucially, only 8% of the money referred to went to businesses outside the financial sector, with a further 8% funding credit cards and personal loans….

…..The question at the heart of the debate is who should create the money? Would Parliament ever have voted to delegate power to create money to those same banks that caused the horrendous financial crisis that the world is still suffering? I think the answer is unambiguously no. The question that needs to be put is how we should achieve the switch from unbridled consumerism to a framework of productive investment capable of generating a successful and sustainable manufacturing and industrial base that can securely underpin UK living standards….

…Under the current system, around just 80 board members across the largest five banks make decisions that shape the entire UK economy, even though these individuals have no obligation or mandate to consider the needs of society or the economy as a whole, and are not accountable in any way to the public: it is for the maximisation of their own interests, not the national interest. Under sovereign money, the money creation committee would be highly transparent—we have discussed this already—and accountable to Parliament.

Mr MacNeil: I hear what the right hon. Gentleman says about money going into building, housing and mortgages, but is that not because the holders of money reckon that they can get a decent return from that sector? They would invest elsewhere if they thought that they could get a better return. One reason why the UK gets a better return from that area than, say, Germany is that we have no rent controls. As a result, money is more likely to go into property than into developing industry, which is more likely to happen in Germany.

Mr Meacher: 

…………………..The question at the heart of the debate is who should create the money? Would Parliament ever have voted to delegate power to create money to those same banks that caused the horrendous financial crisis that the world is still suffering? I think the answer is unambiguously no.

For all those reasons, the examination of the merits of a sovereign monetary system is now urgently needed, and I call on the Government to set up a commission on money and credit, with particular reference to the potential benefits of sovereign money, which offers a way out of

20 Nov 2014 : Column 449

the continuing and worsening financial crises that have blighted this country and the whole international economy for decades……..

12.13 pm

Mr Peter Lilley (Hitchin and Harpenden) (Con): 

…………A lot has been made of the ignorance of Members of Parliament of how money is created. I suspect that that ignorance, not just in Members of Parliament but in the intellectual elite in this country, explains many things, not least why we entered the financial crisis with a regulatory system that was so unprepared for a banking crisis……….

First, all bankers—not just rogue bankers but even the best, the most honourable and the most honest—do things that would land the rest of us in jail. Near my house in France is a large grain silo. After the harvest, farmers deposit grain in it. The silo gives them a certificate for every tonne of grain that they deposit. They can withdraw that amount of grain whenever they want by presenting that certificate. If the silo owner issued more certificates than there was grain kept in his silo, he would go to jail, but that is effectively what bankers do. They keep as reserves only a fraction of the money deposited with them, which is why we call the system the fractional reserve banking system. Murray Rothbard, a much neglected Austrian economist in this country, said very flatly that banking is therefore fraud: fractional reserve banking is fraud; it should be outlawed; banks should be required to keep 100% reserves against the money they lend out. ……….

If a bank lends a company £10 million, it does not need to go and borrow that money from a saver; it simply creates an extra £10 million by electronically crediting the company’s bank account with that sum. It creates £10 million out of thin air. By contrast, when a bank loan is repaid, that extinguishes money; it disappears into thin air. The total money supply increases when banks create new loans faster than old loans are repaid…….

spivs and crooks have a field day.”—[Official Report, 11 November 1997; Vol. 300, c. 731-32.]

Bob Stewart (Beckenham) (Con): I am listening carefully to my right hon. Friend. Does that mean that the banks are uncontrollable, as things stand?

 

 

MODERNISING MONEY

October 9, 2014

Money creation should only be used in the public interest

 

The same banks that caused the financial crisis currently have the power to create 97% of the UK’s money. They’ve used this power recklessly, putting most of the money they create into property bubbles and financial markets. And now they’re back to their old ways.

We need a change. The power to create money should only be used in the public interest, in a democratic, transparent and accountable way. The 1844 law that makes it illegal for anyone other than the Bank of England to create paper money should be updated to apply to the electronic money currently created by banks.

Banks create new money, in the form of the numbers (deposits) that appear in bank accounts, through the accounting process used when they make loans. In the words of the Bank of England:

“When a bank makes a loan, for example to someone taking out a mortgage to buy a house, it does not typically do so by giving them thousands of pounds worth of banknotes. Instead, it credits their bank account with a bank deposit of the size of the mortgage. At that moment, new money is created.” (Bank of England Quarterly Bulletin, 2014 Q1)

Conversely, when people use those deposits to repay loans, the process is reversed and money effectively disappears from the economy. As the Bank of England describes:

“Just as taking out a loan creates new money, the repayment of bank loans destroys money. … Banks making loans and consumers repaying them are the most significant ways in which bank deposits are created and destroyed in the modern economy.” (Bank of England Quarterly Bulletin, 2014 Q1)

When new money is created, it should be used to fund vital public services or provide finance to businesses, creating jobs where they’re needed, instead of being used to push up house prices or speculate on the financial markets.

 

Creating a Sovereign Monetary System

 

This proposal for reform of the banking system explains, in plain English, how we can prevent commercial banks from being able to create money, and move this power to create money into the hands of a transparent and accountable body.

 

It is based on the proposals outlined in Modernising Money (2013) by Andrew Jackson and Ben Dyson, which in turn builds on the work of Irving Fisher in the 1930s, James Robertson and Joseph Huber in Creating New Money (2000), and a submission made to the Independent Commission on Banking by Positive Money, New Economics Foundation and Professor Richard Werner (2010).

Taking the power to create money out of the hands of banks would end the instability and boom-and-bust cycles that are caused when banks create too much money in a short period of time. It would also ensure that banks could be allowed to fail without bailouts from taxpayers. It would ensure that newly created money is spent into the economy, so that it can reduce the overall debt burden of the public, rather than being lent into existence as happens currently.

PDF Download:

Download Here (Free, PDF, 56 pages)

 

BELOW IS AN EXTRACT FROM THE ABOVE PDF

 

SOCIAL & ENVIRONMENTAL BENEFITS

7. TACKLING UNAFFORDABLE HOUSING

Problem: Around a third of the money created by banks goes towards mortgage lending (and a further significant proportion goes towards commercial property). This creation of money to buy pre-existing assets (i.e. houses in limited supply, and the underlying land which is in fixed supply) leads to prices rising. Rising house prices make banks even more confident about lending further amounts for mortgages (since rising prices mean that they are unlikely to lose money even in the event of a default and repossession). This becomes a highly pro-cyclical process, leading to house price bubbles.

Sovereign money as a solution: There is a need for a number of policy and tax reforms to address the problem of unaffordable housing (particularly in the UK). However, removing the ability of banks to create money will remove much of the fuel for house price inflation. House prices that rise at a lower rate than growth in wages will mean that housing becomes more affordable over time.

8. SLOWING THE RISE IN INEQUALITY

Problem: House price bubbles have the effect of transferring wealth from the young to the old, and from those who cannot get on the property ‘ladder’ to those who can. This is a significant channel through which wealth inequality is further increased.

Furthermore, the fact that the nation’s money supply must be borrowed from banks means that we are having to pay interest on the entire money supply. Household income data surveys show that this has the effect of transferring income from the bottom 90% of the population to the top 10%. (See Chapter 5 of Modernising Money for further details).

Sovereign money as a solution: As discussed above, removing the ability of banks to create money should have a dampening effect on house price rises, which in turn will reduce the rate of growth in wealth inequality.

The creation, by the central bank, of money that has no corresponding interest-bearing debt, means that there is a stock of money that is effectively ‘debt free’, and no need for members of the public to borrow simply to ensure that there is money available in the economy. The resulting lower levels of private debt will mean that less interest is paid overall, and therefore less income is transferred to the top 10% of the population. Again, this will slow the rate of growth in inequality.

 

 


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