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The Coming Monetary Reform – Behind the Curtain Talk

April 27, 2018

The Coming Monetary Reform – Behind the Curtain Talk

QUESTION: Okay Marty,

You keep saying “the world monetary system will have to be reformed.”

Spill! What do you hear behind the curtain?

Cheers,

EM

ANSWER: I just returned from Europe where I had meetings with some high levels of interest. The great concern in Europe is the end of QE for there is a serious lack of liquidity. This is part of what is behind the drive to take Euro trading from London and hand it to Paris. The problem is obvious. There are those in Brussels who think that if the free markets go against them, they will be able to freeze the Euro to prevent a crash. I explained that they would not be able to take it from New York, Tokyo, Hong Kong and Sydney without ending it as a free currency. When I asked if they intended to convert the Euro to the old Russian Ruble of Soviet days, I did not get a reply.

In the USA, there is the realization that it is NOT a good thing for the dollar to be the Reserve Currency. This has made the Federal Reserve the effective world central bank. That has resulted in the Fed losing the power to control the domestic economy because of lobbying not to raise rates from Emerging Markets, Europe, and the IMF because it will hurt their economies which are in worse shape.

It is IMPOSSIBLE to pass a law and declare that the dollar is not the Reserve Currency any longer. That is not a factor of anything that Washington can control unless they convert the dollar to a restricted currency much akin to the Japanese yen. Anyone can issue a contract or borrow dollars in any country. You cannot issue a note or bond in Japanese yen without going back to the Ministry of Finance in Tokyo for their permission.

…click on the above link to read the rest of the article…

We need to end growth dependency, but how?

March 8, 2018

We need to end growth dependency, but how?

Introduction: escaping growth-dependency

It has long been understood that the standard economic prescription of economic “growth”, to fix multiple economic, social and environmental ills, is highly implausible3. This stems from the elementary observation that you cannot expand the material throughput of the economy (the materials and energy it consumes) without coming up against the limits imposed by the biophysical systems of the earth that we all rely on. There are other dimensions to the critique of “growth”, 1) the destabilising economic impacts of the reducing return on investment as materials and energy sources become scarcer, 2) the failure of economic growth to benefit those who are economically and socially disadvantaged, and 3) to deliver increases in well-being for the population as a whole (once a certain overall standard of living has been reached), which supports the idea that we need a different kind of civilisation ethic, one based on sufficiency rather than excess4. Against the implausible wager on “growth”, I and colleagues in Steady State Manchester have argued for a Viable Economy,

“… an economy that is resilient and dynamic, providing enough for all, while supporting social well-being. And it must be ecologically viable, not causing further damage to the earth’s fragile systems without which life is not possible.”5

The understanding that you cannot grow the material economy for ever was given a clear focus by the work of Donella Meadows and colleagues in the 1970s with their Limits to Growth report6. That report was criticised, largely on spurious grounds, leading to its eclipse and the dominance of the fudge of “sustainable development”, that you can continue to grow while producing environmental and social benefit. The bankruptcy of that idea is ever more clear as the earth’s ecological and biophysical systems lurch into a series of danger zones of which climate change, biodiversity loss and pressures on freshwater systems are just the most obvious ones.7

…click on the above link to read the rest of the article…

Can an Economy Advance Without Savings?

January 21, 2018

Can an Economy Advance Without Savings?

According to Frank Decker, Honorary Associate at the University of Sydney Law School, it certainly can. Not only that, but eschewing savings in favor of “monetisation of assets” will yield better results! I refer to his article in Economic Affairs–Volume 37, Number 3, October 2017–, a publication of the Institute of Economic Affairs, London.

Mr. Decker purports to answer the question “Central Bank or Monetary Authority? Three Views on Money and Monetary Reform.” The three views examined are commodity money, state money, and money as a derivative of property. All three views are explained very well, and a beginner to the study of the role of money will learn a lot in a short period of time.

Commodity money is the name Decker aptly gives to money backed by gold or some other widely accepted medium of indirect exchange. Commodity money’s proponents see two major advantages–that it ends inflation and the business cycle. He quotes Mises and Rothbard to good effect.

State money, or money as a state liability, is fiat money that all the world knows today. Its two most famous proponents are Keynes and Friedman. State money’s main advantages, as seen by Decker, are that the state can engage in countercyclical spending and the state can fund itself by printing all the money that it needs for current expenditures.

Decker’s third type of money–money as a derivative of property–sounds no different than fractional reserve banking, except that the fraction of reserves required to be held by the lending banks is so low that it is not a factor of lending restraint. Decker gives the example of a business that uses its assets as loan collateral. According to Decker, the money that the bank creates is NOT created out of thin air, because it is backed by private property; i.e., the loan collateral.

…click on the above link to read the rest of the article…

US national debt accelerating at over a trillion/year in our asset-hole ‘debt supply’ system; demanding monetary reform & public banking yet?

February 1, 2016

US national debt accelerating at over a trillion/year in our asset-hole ‘debt supply’ system; demanding monetary reform & public banking yet?

The US federal government debt is now $19 trillion, having risen over a trillion each year of the Obama administration.

This article will examine US economic status, and obvious solutions promoted by many of America’s brightest minds since Benjamin Franklin wrote a pamphlet how colonial Pennsylvania operated its government without taxes, and which we could easily do today.

Let’s examine just some of the facts of the current US economy that demonstrates it’s criminal status:

For Americans still zombiefied to “believe” in America, please embrace the reality that 40% of US children live at least one year of their lives in under-measured poverty, while oligarchs most responsible literally laugh in grandiose glee of the poverty they euphemise as “income inequality.” Please absorb this 1-minute reality check:

…click on the above link to read the rest of the article…

Interview With Dr. Emma Dawnay on the Swiss Referendum on Monetary Reform

February 1, 2016

INTERVIEW WITH DR EMMA DAWNAY ON THE SWISS REFERENDUM ON MONETARY REFORM

The following questions have been answered by Dr Emma Dawnay, on behalf of Monetäre Modernisierung, the organisation bringing the Swiss Sovereign Money Initiative (or Vollgeld-Initiative in German). The interviewer is The Cobden Centre Editor, Max Rangeley.

How does the current monetary system affect the economy? 

In several ways. The most drastic way is that the current system is inherently unstable – giving rise to gradual unsustainable build ups of debt which can turn into financial crises, as we have seen in 2007/2008. This happens because money comes into circulation almost entirely by banks making loans. In Switzerland 90% of the money supply M1 has been lent into existence by banks, and only 10% comes from the Swiss National Bank. Banks base their decision on whether to give a loan on one criterion only: do they expect it to make a profit for them? They do not have to check they have sufficient reserves, nor do they take the health of the economy in general into account. The result is that they tend to make too many loans in the economic good times, and they tend to stop lending in the bad times when boom turns to bust, which means either too many or too few projects get funded. The trouble with a financial crash is that it doesn’t just affect financial industries, but the whole economy and society.

Another way the current monetary system affects the economy comes from the fact that it is much easier for a bank to lend money into existence against collateral – either financial or real estate assets – than to lend against a business plan. This means that the way money enters the economy is more likely to inflate asset prices than to generate jobs, goods and services.

…click on the above link to read the rest of the article…

Interview With Lord Turner on Monetary Reform

November 12, 2015

Interview With Lord Turner on Monetary Reform

Max Rangeley: The cover of your book is adorned with the image of Faust and Mephistopheles. In Goethe’s Faust, the Emperor is granted the right to create money ex nihilo, whereas we currently have this Faustian pact with the banks, so before we get into the technocratic, economic aspects, does this create any moral issues? 
Lord Turner: I don’t know whether I would use the word “moral”, because I don’t think that the banks are guilty of a sort of deliberate conspiracy to create money without the populace understanding it. Indeed, it’s noticeable that many individual private bankers do not understand that, collectively with all other bankers combined, they create credit and money ex nihilo. However, while I would not use the word moral, I do think it’s striking that we have, as it were, outsourced an inherently social function, which is the increase in the level of aggregate nominal demand, and we have, relied on the banking system to do that for us, without asking searching questions as to whether, and under what conditions, they will perform that crucial macroeconomic function effectively. 
Max Rangeley: So should there always only be a small number of credit institutions that have the right to create money in such a fashion? 
Lord Turner: If we’re going to grant this power to banks, we should very tightly regulate how they are able to use it, and we can regulate the amount of money that banks create, for instance, by having reserve requirements which limit the size of the money supply relative to the size of the monetary base : and since the government and central bank together determine the size of the monetary base, if you have a system of minimum reserve requirements, you can constrain and control the ability of the banks to create money. 
…click on the above link to read the rest of the article…

3-minute video: US $18 TRILLION debt being dumped; economic endgame? If so, demand monetary/credit reform or kiss your assets goodbye

October 12, 2015

3-minute video: US $18 TRILLION debt being dumped; economic endgame? If so, demand monetary/credit reform or kiss your assets goodbye

Elliott Wave International’s 3-minute video documents US debt securities being sold by other nations’ governments (and here). This is in context of the historically ever-increasing US federal government’s $18 trillion debt. US “leadership” chose to somehow “freeze” their debt for the last 200 days, a seeming impossibility, with “debt ceiling” again addressed in Congress as ongoing theatrics.

Demonocracy’s 2-minute video to visualize the unimaginable magnitude of not millions or billions, but trillions of dollars in US federal government debt:

The so-called “developed” and “leading” nations have total central government debt pushing $50 trillion($50,000,000,000,000). This accelerating debt is directly connected to these “former” colonial nations creating what is used for money as debt through bank oligarchies. These mechanics are like adding negative numbers forever; causing ever-increasing and unpayable aggregate debt.

The Emperor’s New Clothes obvious pathway out of these mechanics is to start creating debt-free money (a positive number) for the direct payment of public goods and services. Infrastructure investment that returns more economic output than cost of investment produces triple benefits:

  1. upgraded infrastructure,
  2. employment, and
  3. falling prices because total output is greater than cost.

These mechanics have been tested and documented since Benjamin Franklin’s days in colonial Pennsylvania, and affirmed by leading American minds like Thomas Edison, and supported by 86% of US economics professors when directly asked.

I have two academic papers to walk any reader through these facts; an assignment for high school economics students, and a paper for the Claremont Colleges’ recent academic conference:

Teaching critical thinking to high school students: Economics research/presentation

Seizing an alternative: Bankster looting: fundamental fraud that “debt” is “money”

…click on the above link to read the rest of the article…

Fast-track Hands the Money Monopoly to Private Banks — Permanently

June 13, 2015

Fast-track Hands the Money Monopoly to Private Banks — Permanently

It is well enough that the 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.                                                                                                                                                                        — Attributed to Henry Ford

In March 2014, the Bank of England let the cat out of the bag: money is just an IOU, and the banks are rolling in it. So wrote David Graeber in The Guardian the same month, referring to a BOE paper called “Money Creation in the Modern Economy.” The paper stated outright that most common assumptions of how banking works are simply wrong. The result, said Graeber, was to throw the entire theoretical basis for austerity out of the window.

The revelation may have done more than that. The entire basis for maintaining our private extractive banking monopoly may have been thrown out the window. And that could help explain the desperate rush to “fast track” not only the Trans-Pacific Partnership (TPP) and the Trans-Atlantic Trade and Investment Partnership (TTIP), but the Trade in Services Agreement (TiSA). TiSA would nip attempts to implement public banking and other monetary reforms in the bud.

The Banking Game Exposed

The BOE report confirmed what money reformers have been saying for decades: that banks do not act simply as intermediaries, taking in the deposits of “savers” and lending them to borrowers, keeping the spread in interest rates. Rather, banks actually create deposits when they make loans. The BOE report said that private banks now create 97 percent of the British money supply. The US money supply is created in the same way.

…click on the above link to read the rest of the article…

Debt-damned economics: either learn monetary reform, or kiss your assets goodbye (2 of 7)

March 14, 2015

Debt-damned economics: either learn monetary reform, or kiss your assets goodbye (2 of 7)

The following is my high school teaching assignment for Advanced Placement Macroeconomics students (available as extra credit for other classes) on how money is created. I offer this for non-profit use; divided into seven sections:

***

1. Contextual orientation: seeing the past as clearly as possible

“All the perplexities, confusions, and distresses in America arise, not from defects in their constitution or confederation, not from a want of honor or virtue, so much as from downright ignorance of the nature of coin, credit, and circulation.” – John Adams, letter to Thomas Jefferson (1787-08-25), The Works of John Adams

“If all the bank loans were paid, no one could have a bank deposit, and there would not be a dollar of coin or currency in circulation. We are completely dependent on the commercial Banks. Someone has to borrow every dollar we have in circulation, cash or credit. If the Banks create ample synthetic money we are prosperous; if not, we starve. We are absolutely without a permanent money system. When one gets a complete grasp of the picture, the tragic absurdity of our hopeless position is almost incredible, but there it is. It is the most important subject intelligent persons can investigate and reflect upon.” – Robert H. Hemphill (1), Credit Manager of the Federal Reserve Bank of Atlanta, 1934 foreword to 100% Money, by Irving Fisher. Fisher was a Yale economist whose proposal for monetary reform lost to Keynes’ deficit spending plan during the Great Depression.

…click on the above link to read the rest of the article…

 

 

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