Comments for Ben Dyson

Comment on What Will Happen If We Don’t Reform The System? by K Miller

K Miller — Mon, 30 Aug 2010 13:28:52 +0000

I think pursuit of self interest has a lot to do with the lack of change. The banking industry make huge profits out of their ability to create money out of thin air. The idea of reform is nothing new. Here’s a quote from The Dying of Money “Any intelligent novice, first introduced to the workings of the money system, must find the pyramiding of money on the fractional-reserve base incredible. A few of the nation’s foremost economists, led by Henry C Simons and Irvine Fisher, were of the same mind at the depth of the depression when they urgently advocated abolishing the system. The idea was simply to require 100 % reserves for all checking account deposits, so that all true money was government money. Instituting that system would have been little more than a bookkeeping entry, but after it was done all the evils of the fractional-reserve system would disappear. The idea was called the only fundamental creative idea to come out of the depression. But the idea passed into limbo. The best economic minds were in favour of it, but the commercial bankers could be counted on to resist to the bitter end the loss of their money machine, and the people and the legislators probably did not understand what it was all about. Little was heard of the idea in later decades except occasional, and rather inaudible, reminders by a few economists. This complacency would no doubt persist until still another series of disasters came to pass with the substantial aid and comfort of the fractional-reserve system.” P.150 (The Dying of Money Jens O Parsson 1974)

Comment on Real Solutions to the Financial Crisis by K Miller

K Miller — Mon, 30 Aug 2010 13:20:07 +0000

I fully support this campaign. The current banking system is nothing more than a pyramid scheme. Although this reform will not reduce the risk of bad management of the economy by the government at least blame can be directed at that single source. The current system can do nothing but fail due to it requiring perpetual growth of the money supply, to service the debt, whilst diluting the value of the currency. There is evidence that it causes the exponential expansion of the money supply. The need to maintain the correct quantity of money in supply at all time is paramount. I recommend reading the Dying of Money by Jens O Parsons. It also supports removal of fractional reserve banking, plus a lot more. Chris Martensons web site and his crash course is also worth a look, he highlights issues such as peak oil, and the additional impact that it will cause. There is no doubt we are in a fork in the road. We need money reform, because sustainable environmental decision making is being prevented by a constant persuit of economic growth.

Comment on Stats by John

John — Mon, 30 Aug 2010 08:45:22 +0000

I had a new look at the B of E site. There is quarterly data back to 1963. This is roughly in line with your data.
From 63 to 2009 it has increased by 14,008%
http://www.bankofengland.co.uk/mfsd/iadb/fromshowcolumns.asp?Travel=NIxASxSCxSUx&FromSeries=1&ToSeries=50&DAT=RNG&FD=1&FM=Jan&FY=1963&TD=30&TM=Aug&TY=2010&VFD=Y&CSVF=TT&C=1EQ&C=1ER&Filter=N&html.x=6&html.y=8
Prices have increased by 1,461% and real income by 197%.

Comment on Some Predictions for the Future: Complete Collapse of the System by Robert

Robert — Tue, 17 Aug 2010 09:15:09 +0000

Lars

I’d just point out, too, that “over here” (ie in Finland) there can be no possibility of monetary reform for quite another reason than those you have cited (public ignorance, no indigenous tradition of debating such issues, etc). Namely, Finland’s membership of the European monetary system whereby its people and their own government forfeited any independent decision-making power in this matter for the sake of a political project conceived in Paris, Berlin, Brussels, and a few other capitals – aimed at “ever-closer union” – viz the single European currency.

That currency – like all others in use under the global monetary system we now have – is entirely debt-based. Hence the agonies now being undergone by the Greek people, as well as the much more modest cutbacks we also see in Finland, Spain, Portugal and (even!) Italy, Germany and France.

Comment on Clarification: The 100% Reserve Solution Doesn’t Require Banks to Hold 100% Cash by Robert

Robert — Tue, 17 Aug 2010 08:02:16 +0000

In principle I completely accept the logic advanced. I also accept that it would be a tactical mistake to get bogged-down too early in too much detail and overly-complicated exposition.

However, isn’t there a countervailing risk of being too cavalier about how this system would need to be policed? Great rigour would be required, I suggest. The threats are of two kinds:- outright fraud, and guile (short of fraud) – and the first is (with sufficient forethought) probably easier to deal with than the second.

History demonstrates that the capacity of human ingenuity to circumvent mere “accounting rules” is (literally) boundless and also – even worse – that regulatory mechanisms (indeed all human institutions) have an inherent tendency to become corrupted over time as vested interests continually probe for and exploit weaknesses. There’s no definitive answer to this, except “eternal vigilance”. I just think one ought to be a little less unguarded, that’s all.

Comment on Real Solutions to the Financial Crisis by Lorne Mitchell

Lorne Mitchell — Mon, 16 Aug 2010 10:21:07 +0000

I agree with your synopsis – but wonder if there are alternatives to creating another large central money-issuer at the National level?
To me, the root of the banking problem stems from the dissolution of local currencies into National and Supra-National currencies.
Re-creating the Bank of England as the only issuer of money supply is one option – but I think there are others – like allowing local councils and local authorities to create local currencies.
In this debate, I would like to challenge the assumption that re-enforcing a National entity is the only (best) solution.
In this time of coalition government, we seem to be in an economic cycle where Local is increasingly going to become the primary way to get anything done. We should align money supply to local need by re-creating local currencies that keep value much closer to the need. It would take away the need for crazy schemes like the Titan Prison idea and other national monsters of muddled-thinking that the last regime was so keen on.
Looking to the future, networks like the Transition Town Movement are surely going to drive a lot of local behaviour.
In summary, I agree it is time to challenge and re-design. But, as Einstien said “Perfection of means and confusion of ends seem to characterize our age.”
For this redesign, let’s keep the means and ends separate so we can explore the very real alternatives to fixing something that was merely a end-product of generations of muddled-thinking economic theory.

Comment on Real Solutions to the Financial Crisis by Michael Dawson

Michael Dawson — Tue, 10 Aug 2010 14:56:31 +0000

This seems rather like a return to an earlier period. Currency supply was backed by real gold deposits and banks and building societies only loaned when they had deposits to cover their loans. No country has absolute control of their own currency as it has to have exchange with other currencies. I am not sure on what basis you would control the quantity of money in existence in any particular country. I agree that we need to get away from the present system but I am not sure that you have covered everything.

Comment on The Problem by Ben Dyson

Ben Dyson — Fri, 06 Aug 2010 08:01:41 +0000

Hi Fran, I agree that changing the system is hard to do but it is the only option at the moment - it's only a matter of time. The battle now is to get the authorities to make the required changes (which can be found at BankofEnglandAct.co.uk) before the next major collapse (which won't be far off). The campaign will be launching very shortly (register at Call4Reform.org) so there's be a lot of things we can do very shortly. There's already support for this in higher places that you might imagine, and some very influential people are taking an interest, so this is going to be a huge topic over the next few years (or months!). Ben

Comment on The Problem by Ben Dyson

Ben Dyson — Fri, 06 Aug 2010 07:52:45 +0000

Hi David, the £480,000 figure is an estimate of how much keeping the current system will cost for someone who is currently around 20 years old. It’s complex but basically:

1. Housing – between 1997 and 2007 the average house price rose from £55,000 to £185,000. This rise in prices was almost all fuelled by the increase in the money supply by banks creating money when they make loans (about £612 billion between 2004 and 2007 alone, for example). So, by being able to create money and pump it into the housing market, the banking system has been able to increase average house prices by £130,000. This means that any student has to borrow an extra £130,000 in principal to buy a house. The interest repaid on a mortgage is comfortably 150% of the amount has been borrowed. So, the house price inflation will cost the average first time buyer £130,000 + £195,000 (in interest) = £325,000.

2. The cost of interest on the entire money supply. The current money supply is £2,200 billion. Because all that was created as debt, interest must be paid on the interest on £2,200 billion – say this is an average of 5% a year, that’s £110billion per year. That interest is paid by companies, mortgage holders, and individuals who have debt (remember that someone has to hold the debt in order for there to be any money in the economy). If you’re debt free, you’ll still be paying some of that interest through the price of goods and services that you buy in the shop (since the company has to pay interest on its own debts). So let’s do £110bn divided by 45 million (the electorate i.e. everyone over the age of 16) = £2,444 per year. Multiply by a working lifetime of 45 years = £109,980.

3. Taxes – when the Bank of England creates new bank notes, the Treasury gets the profit. When banks create money, the banks get the profit. As they created £1.2 trillion between 2000 and 2009, then that logically implies that the public had to be taxed by £1.2 trillion to cover that lost revenue. That would work out at £26,670 per adult in the UK over those ten years alone.

The £480,000 figures is a bit of a headline figure, but it’s probably an understatement of the real costs.

Comment on The Problem by fran ryan

fran ryan — Thu, 05 Aug 2010 10:42:17 +0000

I agree with your way of thinking and I would love to think that we could change the system……. but I think that the revolving door of personnel between political structures and big business will make it almost impossible to change. I will still try to support you but I am not optimistic.

So I am wondering what could we do that might be less radical that would also help? For example it struck me that when the FSA was proposing that mortgage limits of 3.5 times salary might be legally imposed, it struck me that that would have a dramatic effect on house prices and they would have to come down or remain unsold. But guess what the proposal disappeared without trace soon after it was mentioned and we all know why!
I am personally involved with trying to get more land into public ownership (for housing and food) via community land trusts: I see this as part of the idea of a parallel economy which might allow people to live decent and comparatively debt free lives…..

What can we each do ourselves (apart from trying to avoid bank led debt) that might help? Changing the macro economic system is just such a hard thing to do……