This Is Not A New Idea
The government has already enacted the reform that we are proposing in 1844! At that time, they were preventing banks from creating paper notes. Now they need to prevent banks from creating digital money as well.
The reform that we are proposing is not a new idea. It has already been implemented once in the UK – in 1844!
In the UK Bank Charter Act of 1844, the law was changed to prevent commercial banks creating their own paper bank notes. The government took responsibility for printing all paper money.
This was done to prevent the destabilising effects of massive paper-money creation by the commercial banks.
All that we are recommending now is a repeat of the same reform, except that this time around, the government needs to take responsibility for creating electronic money too. (This would prevent the destabilizing effect of digital money creation by the banks – effects that have become only too apparent in the last few years).
WHY THIS REFORM IS COMMON SENSE:
Money is the backbone of the economy. Without it, we can’t trade with each other – your employer can not pay you, you can’t buy bread, your family can’t buy a house, and the government can’t pay teachers, nurses or the police.
Under the current system, a small group of profit-making companies get to create the very substance (money) that we need for society to function.
Not only this, but after creating it, they lend it to the public through mortgages, business loans, credit cards and overdrafts – with interest charged on top.
It can be hard for a goldfish to realise that he is in a bowl, unless he can look at it from the outside. To appreciate the wrongness of this current system, imagine a scenario where the right to create 97% of all money is given not to the banks, but to Tesco (the large supermarket chain).
If we (the public) need money to pay wages, complete a business deal, buy bread or purchase a house, we would have to borrow that money from Tesco. Tesco would in essence be permitted to create £1.7 trillion, and then lend this money to the public with interest on top, netting itself a cool profit of around £140 billion per year!
This is the privilege that the banking system currently enjoys through its license to effectively ‘print money’. Simply replace the word ‘Tesco’ with the words ‘LloydsTSB, HSBC, Halifax, CitiBank, Northern Rock, Abbey, RBS and so on, and you should see how absurd this system is.
The result of this system is that everyone is in debt – individuals, families, companies and government. The idea that every pound borrowed is matched by a pound saved is simply a misconception – the trillions of personal debt has not been borrowed from an army of fanatical savers from a previous generation – and it hasn’t been borrowed from China either! It has been created as a result of the infinite re-lending of loans within the banking system.
Read On: What Will Happen If We Don’t Reform The System?