Posts Tagged ‘Debt’

Treasury Spreads Misinformation

June 7, 2012

Treasury Spreads Misinformation

“Has anyone asked the Government why they allow banks to rob us? If so, what was their answers?” …somebody asked on Facebook recently.

Yes, some of our supporters are trying to get the answers from the government. Many write to their MPs and few MPs do indeed investigate further, writing to the Treasury.

And what do they get as an answer?

So far, the answers were always misleading. We’ve seen many letters like this one below, where the Minister Mark Hoban claims:

“The banks can’t create money, they can only extend credit.”

So, if you didn’t know until today, now you know it:

The money in your bank account IS NOT MONEY at all!

…according to the Treasury!

Despite the fact that they themselves accept the payments of taxes with these numbers…

Despite numerous clear statements in the Bank of England’s documents that confirm that:

The money-creating sector in the United Kingdom consists of resident banks (including the Bank of England) and building societies.

Everyone I know considers the numbers in his bank account to be money. After all, we can pay for everything with these numbers. But apparently, the Treasury doesn’t.

The Treasury keeps spreading these misleading information guiding people to believe that the claims that banks can create money are pure myths.

Read the rest of this article here



April 6, 2012

Ever Wondered Why There’s So Much Debt?

Bank of England: “Creating Money Gives you “Value for Nothing”

Here’s a quote from Paul Fisher (Executive Director of the BoE and member of the MPC) broadcast on Sunday April 1st (April Fools day !) (in a programme called “What is Money?” in the Radio 4 series “Analysis”):

Presenter: Would you mind if I printed my own money – it wouldn’t look anything like yours from the Bank of England.

Paul Fisher (Bank of England): Yes we would mind. When you start printing money, you create value for yourself. If you could issue one thousand pounds worth of IOUs, you’ve got a thousand pounds for nothing. And so we do restrict people’s ability to create their own notes in that way.

Presenter: You’re protecting us against ourselves.

Fisher: We’re protecting you from charlatans.

So if someone can create money out of nothing, they get value for nothing? And are charlatans? Does this only apply if you’re printing paper money, or does it also apply to the banks that have created over £2trillion of money out of nothing electronically? Did they get £2trillion of value for nothing? Something for us all (and especially the Bank of England) to ponder! 
Listen to the original here (29 min; right towards the end)

You can’t solve a debt crisis with more debt

January 15, 2012

But it’s something that seems to escape the experts !

The Year Ahead For Positive Money
You can’t solve a debt crisis with more debt. That much is obvious to the average Joe, but it’s something that seems to escape the experts and policy makers who are so dramatically failing to solve the current crisis. As long as we have a system in which almost all money is created as debt by private banks, and allocated for their own benefit, we’ll have an economy that reflects the needs of the big banks, skewed towards speculation and property bubbles and away from real business and job creation. We’ll also force millions of people into debt, simply because the government has given banks a monopoly on supplying money to the public. 
The work we all did last year has started to have an effect. We’ve seen the first ever conference on monetary reform to be attended by two MPs from opposing parties, we’ve had meetups in over 20 towns and cities around the UK. We’ve also seen a larger number of journalists and policy makers catch on to the fact that the question of who creates money and how they create it might just be important! 
In 2012 we’re going to focus on getting as many people as possible to understand the mess we’re currently in. We’ve got a few exciting announcements to make over the next couple of months so watch out for these emails. 
Upcoming Events
Positive Money At Occupy London Economics Working Group – Sun 15th Jan, London
Talk On ‘Debt And Positive Money’ – Wed 18th Jan, Richmond (Yorkshire)
Talk: “Long Live The Credit Crunch!”- Thu 19th Jan, Dorset
Latest from the Blog
A Revisionist Critique Of Fractional Reserve Banking

If The Solution Is So Simple, Why Is It Not Being Done?

Disrupting Banking

Sing For Change In 2012 At “Occupy Bristol”

What The Public Does Not Know About Banking, Financial Times

Our Wish List For 2012

A Debt Based Monetary System, Export Warfare & Third World Debt

Steve Keen On Max Keiser Report

Common Misconceptions About Banking

How Exactly Can We Get Out Of Debt?

The Heart Of The Matter – Part I: The Endless Cycle

Vickers Proposal Does Not Separate Safe From Unsafe Bank Activities

A Flaw In Quantitative Easing


October 7, 2011

October 7th 2011

This is copied from the POSITIVE MONEY website at

How Money is Created: A bank is able to extend more money than it actually has in its reserves. That means, that if you want to borrow £10,000, the bank can write those digital numbers into your account even though it doesn’t actually have £10,000. What it does have is faith that you will pay £10,000 back…in real money…that you’ve worked for.

Now if you don’t pay it back, if you default, then the bank has to mark that £10,000 down as a real loss. So there is a risk there! The bank can create money that doesn’t exist, but if you don’t pay it back then the amount will represent a very real loss for the banks. That is what has been happening in the last few years. Banks making big losses on bad loans.

This new money, created by the banks, exists simply as electronic digits in your account. Today, around 97% exists only in electronic format.

Created and lent electronically – in an intangible way – and spent largely with plastic cards.

Banks have created all this new money, out of nothing, and loaned it into society, but they have done so imprudently, and now they are feeling the pain as the defaults start rolling in…and the banks have to account for them as real losses.

Consequently, they are afraid to lend out (effectively create) any more.

So…to recap…banks can extend more money than they have in reserves – and this means they effectively create new money every time they make a loan…and they enjoy the privilege, profit and power which comes from creating the national money supply in this way. Every time banks extend new credit, they are effectively creating new money.

Are you sceptical of that claim?

Well, here is Martin Wolf, Chief Economics Editor at the Financial Times. He says, “The essence of the contemporary monetary system is creation of money, out of nothing, by private banks’ often foolish lending.” (The Financial Times, 9 November 2010.)

Here is President Obama: “…the truth is that a dollar of capital in a bank can actually result in $8 or $10 of loans to families and businesses. So that’s a multiplier effect…” (President Barack Obama, “Remarks by the President on the Economy”, Georgetown University, Washington, D.C., April 14, 2009.

Britain’s money supply is not, contrary to popular belief, created by the Bank of England.

It is created overwhelmingly by the High Street banks, every time they make new loans…by multiplying upon the basis of their actual real reserves.

Banks creating this electronic money out of nothing…has become the way in which virtually all money is supplied to our economy.
Now that has consequences for us all.

The first is a democratic consequence! 

The natural state of our economy is to be held hostage to the banks!

The health of our economy is utterly dependent upon the health of the banking sector.

When the banks go down, as a consequence of their “often foolish lending”, they take us with them. 

When the banks fail to lend, because they have decided they need to be more prudent…then – while that may be a sensible business decision for them, as companies – it means, for us, that no money comes into society! 

Our economy goes into recession because there is no new money being created and entering society. 

As a society we have no control over the financial decisions of these private companies. Now, if banks were like all other private companies, then that would not, necessarily, matter so much…but when these companies represent the creators of our very means of exchange, the very life blood that our economy needs to function, then that is a serious problem.

We have allowed them to be in a position where they can turn the tap on and off depending upon their own business decisions.

Fine for them as private companies, but bad for us as a society.

It is a premise of the Positive Money proposal that we should not, as a society, be so dependent upon these companies in this way. In short, the Money Supply is a democratic issue.

Let’s be clear…the Positive Money proposal here is not to nationalise the banks (that wouldn’t make any difference at all if we kept the system as it otherwise is), the proposal is to “nationalise” – which is so say, bring under public control – the money supply…and we have a fully worked out plan which will do exactly that…which I’ll get to.

And of course there are other consequences. The Positive Money website does a very good job of listing these. At present it is engaged in a research project which is detailing many of these…
So three questions arise:

1. Is there some way that the national money supply can be publicly-owned by the people and for the people – rather than by the banks and for the banks?  In effect, this means, is there some way that it can be operated by a national institution owned by the public? 

2. Is there some way this money supply process can be made subject to democratic control and accountability, which in effect means through the mechanism of elected politicians and Parliament – unlike at present where there is no democratic control over the unaccountable corporations which create the money supply as a private, profit-making venture; and

3. Is there some way that we, the people, can enjoy the profit from creating the national money supply. In effect that means some way in which the profits can go directly to the public purse at the Treasury – rather than at present where the corporate banking system enjoys the privilege and profit of that power?
And the answer, you’ll be pleased to hear…is yes, there is a way! 

Let’s summarise it in two steps… 

Step 1. Commercial banks to be forbidden from creating money out of nothing. All money to be created by a national institution accountable to us democratically through Parliament.

This money will be created “debt-free”, and accounted as such. That means, it will be created and simply spent into society by Parliament in the usual way, via spending in the public and private sectors.

That money will then circulate in society. 

Step 2. The commercial banks will then compete with themselves to attract that money so created, into their savings accounts, and lend out only that money which they have acquired in that manner.

This will not result in inflation since the banks will be unable to multiply up new loans on the basis of any new money they receive.

Our economy will be safe from the consequences of bank failure because we will no longer be relying upon the commercial health of the private banking sector for our national money supply.

In time, it is possible that overall levels of personal and national debt may decrease, rather than rise exponentially as they do at present.
Furthermore, Positive Money, as a consequence of 2 years careful work, has assembled this reform in proper legislative format, as a potential draft Westminster Bill, which they have entitled “The Bank of England (Creation of Currency) Bill”. It is an astonishing piece of work, which represents the collective work of many dedicated people, and hard copies of this 60 page A4 Manual are available for a donation to Positive Money.

It can also be read on the Positive Money website here


August 8, 2011


Understanding the reasons for the Worldwide economic meltdown are not easy. This is only because the banking world wrap even the simplest of ideas in gobbledegook language no one else outside the financial industry usually understands.

That is because they don’t want anyone else to understand it, otherwise finance would lose it’s mystique and bankers would lose their sinister hold over everyone else. So, all we have to do is unwrap all this gobbledegook and use plain language instead.

let’s get straight to the point. Amongst all that pompous financial verbiage wittered by all those self important bankers is this simple truth.

If nobody had ever borrowed a penny from anyone else, and everyone had always paid for everything they had purchased only with money already in their possession, nobody anywhere would owe any money to anyone else at all.

If that was the case, and it is only an imaginary idea just to illustrate exactly where this awful financial armageddon came from which is destroying the World economy right now, then there would be absolutely no credit crisis and no financial meltdown. It would simply be impossible ! Everybody would be in complete control of their finances !

There would be no loss of jobs and no increase in poverty and no meaningful inflation either. No governments would be going bust or falling apart at the seams in their desperate attempts to be able to pay all their debts.

Everyone – governments, businesses and individuals would be in complete control of their financial lives because they would have no debts to pay. Therefore no one else would have any control over anyone else and be able to interfere in their lives and even destroy them because they owed money to the interferer.

Debt makes the person borrowing the money beholden to the lender. The borrower immediately loses control of their own lives when they borrow money.

A government, individual, business or bank which depends for survival by always being able to borrow money from someone else is not only permanently in the control of whoever lends them money, but is always a hairsbreadth away from complete annihilation if nobody is willing to lend them money anymore.

And that is exactly what has happened. The banks have gradually engineered a vice like grip over every financial transaction. They have also successfully brainwashed most of humanity into believing that borrowing nearly all the money needed for trading with each other is the proper way to conduct financial affairs whether you are a business, government or individual.

Of course it is the banks that lend the money, which is why they want everyone to believe that borrowing money for everything is the right way to do things. It is also a curious fact that people lending others money think they have a right to tell the borrower what to do and what not to do, generally boss them about and tell them how to conduct their lives – particularly when it comes to how to organise the money borrowed.

The present financial crisis arose quite simply because with everyone borrowing more and more money as the banks wished and duly persuaded them, more and more control of everyday life went from businesses, individuals and governments into the hands of the banks. And the only thing the banks knew or cared about was making more and more money for themselves.

Then the same problem of loss of control hit the banks too. This first of all happened to Lehmann’s bank in 2008 when it suddenly discovered that it could no longer borrow money from other banks to pay for what Lehmanns owed to others.

Other banks didn’t want to lend to Lehmanns because they had observed Lehmanns becoming more and more greedy, dishonest and devious with increasing suspicions of fraud as well. Lehmanns were at the forefront of driving the concept of borrowing into an arcane stratosphere of unreality where they contrived to lend the same bit of money again, and again and again – all at the same time; Lehmanns conjured up an idea where the same money could be lent almost an unlimited amount of times all at once.

When Lehmanns discovered no one else wanted to lend them any more money, that in turn meant Lehmanns couldn’t pay money it owed to other banks. Those other banks then found they, in turn, hadn’t got enough money to pay their creditors either. And so the whole sorry merry-go-round of financial industry fictional fantasy money created out of thin air collapsed. All because everyone owed everyone else ever increasing amounts of money and no longer had any control over their own financial lives.

This whole rotten edifice has been crumbling ever since Lehmanns went bust and everyone found out mendacity, fraud and corruption were rampant in the financial industry, nowhere more so than in the banks.

Banks have effectively destroyed money by completely debasing it; turning it on it’s head and making it into debt instead of money. This has resulted in the banks controlling every aspect of all of our financial lives, taking away our own ability to manage our affairs efficiently.

This is why there is a Wordwide economic meltdown of nightmarish proportions.

Quite simply, banks have succeeded in destroying the money we all need to conduct any form of trading because they turned it all into debt instead of real money. and now everyone is finding it increasingly impossible to pay it all back as the debt just gets uncontrolably bigger and bigger.


May 27, 2011

Councils spend £100m on taxpayer-funded credit cards

By Heidi Blake, and Conrad Quilty-Harper of THE DAILY TELEGRAPH 9:31PM BST 27 May 2011

Horsham Council in West Sussex spent £1150 on two llamas to graze on communal land along with a small flock of sheep. They also spent £575 on live fish for a council pond.

Councils have spent tens of millions of pounds on taxpayer-funded credit cards with local authority executives and councillors treating themselves to first-class travel to foreign destinations and stays in five-star hotels, The Daily Telegraph can disclose.

Despite being ordered to cut spending by almost 30 per cent, town hall chiefs have continued to lavish hundreds of thousands of pounds on dinners at Michelin-starred restaurants, leisure trips and expensive gifts including iPads and video games while slashing jobs and scrapping front-line services.

An investigation by The Daily Telegraph has uncovered details of apparently questionable spending decisions by councillors and local government officials, with more than £2 million spent on travel over the last three years, including flights to Thailand, Kenya and Bermuda.

Documents obtained by this newspaper show that the councils also spent £2m on hotel bills, including stays at the famous Four Seasons in New York, the five-star Pan Pacific in Singapore, and the Athens Hilton.

Hospitality bills totalling £2.6m were paid on the cards, including dinners at Claridges, one of Britain’s most expensive hotels, hog roasts and champagne receptions, as well as tens of thousands of pounds spent booking tables at award ceremonies.

A total of another £500,000 was spent on gifts such as Tiffany jewellery, Gucci products and pure silk ties, while online shopping sprees racked up bills of more than £300,000 at Argos and £150,000 at Amazon.

Read the rest of this article here