WHO ARE POSITIVE MONEY • We’re a movement for a money and banking system that works for society and not against it • Combination of grass roots campaign and think tank • I’m a volunteer and got involved in 2014 after looking for a believable explanation of the banking crises
WHO HAS POWER THE TO CREATE MONEY
WHO CREATES NOTES & COINS?
WHAT HAPPENS IF YOU CREATE YOUR OWN?
WHO CREATES ELECTRONIC MONEY? 101010101111000110 101011010101011101 010110101010101101 110111010110101101 01011101
REALLY?! SHOW ME THE PROOF
WHO CREATES ELECTRONIC MONEY?
BANK OF ENGLAND “ Commercial [i.e. high street] banks create money , in the form of bank deposits, by making new loans. ” Quarterly Bulletin 2014 Q1
“When a bank makes a loan, for BANK OF example to someone taking out a mortgage to buy a house, it ENGLAND 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.” Quarterly Bulletin 2014 Q1
BANK OF ENGLAND “Just as taking out a new loan creates money, the repayment of bank loans destroys money. ” Quarterly Bulletin 2014 Q1
TRADITIONAL THEORY THE BANKS SAVINGS
ADAIR TURNER “[Most undergraduate textbooks] say ‘Well what banks do is they take deposits from households and lend money to businesses...’ As a description of what modern Chairman, UK Financial advanced economy banking Services Authority, 2008- systems do, this is completely 2013 mythological. ” Speech at INET Human after All conference, April 2015
REALITY THE BANKS SAVINGS
THE REAL BALANCE OF POWER THE THE STATE BANKS BANKS CREATE 97% OF MONEY
HOW MUCH MONEY HAVE BANKS CREATED? Lehmans 2,500 2,000 £ Billions 1,500 MONEY CREATED BY BANKS 1,000 500 Source: Bank of England Statistics (Series LPQAUYN and LPQBC69). Until September 2015 SectionName www.companyname.com
BANK DEPOSITS ARE JUST PROMISES TO PAY MONEY BARCLAYS 2007 Promises to Pay Reserves/Coins/ Notes
The System is Unstable
CONSEQUENCES OF POWER THE TO CREATE MONEY
THE CONSEQUENCES WHAT DO BANKS DO WITH THE POWER TO CREATE MONEY? FOR FOR SOCIETY? THEMSELVES? SectionName www.companyname.com
WHAT DO BANKS DO WITH THE POWER TO CREATE MONEY? CONSUMER FINANCIAL PROPERTY BUSINESS LOANS SECTOR LENDING Residential and Commercial Mortgages Trading Lending to private non- Credit cards Mergers & acquisitions financial corporations Personal loans Financial sector activity 31% 51% 8% 8% Percentage of new money created by UK banks from 1997-2007
THE CONSEQUENCES HOUSE PRICES
(Relative to 1991) Mortgage Lending House Prices Housing Stock Population Growth
Increases the Wealth Gap Less disposable income means less economic activity
THE CONSEQUENCES MORE MONEY = MORE DEBT LESS DEBT = LESS MONEY
THE CONSEQUENCES THE HIGH BANKS HOUSEHOLD DEBT FINANCIAL CRISIS HOUSE AUSTERITY PRICES INEQUALITY
WHAT SHOULD WE DO ABOUT POWER THE TO CREATE MONEY
THE BIG IDEA : #1 THE THE TRANSPARENT BANKS STATE DEMOCRATIC ACCOUNTABLE IN THE PUBLIC INTEREST
HOW WHAT FOR? MUCH? Money Creation Government Committee
THE BIG IDEA: #2 CREATE MONEY WITHOUT: PRIVATE SECTOR OR THE PUBLIC SECTOR STATE INCREASING NET DEBT
THE BIG IDEA: #3 BANKS WILL WORK LIKE WE THINK THEY SHOULD …
MONEY CREATION FOR THE REAL ECONOMY PUBLIC INVESTMENT Also known as: “QE for the People”, “Green QE”, “QE for Infrastructure”, “Monetary financing of fiscal deficits” THE STATE CITIZEN’S DIVIDEND Also known as: “Helicopter Drop ”, “Monetary - financed cash transfers”
MARTIN WOLF “[This proposal] would bring huge advantages. It would be possible to increase Chief Economics the money supply without encouraging Commentator, people to borrow to the hilt. It would end “too Financial Times big to fail” in banking. It would also transfer seignorage – the benefits from creating money – to the public.” FT, 25th April 2014
AUSTERITY IN CONTEXT
HISTORY OF GOVERNMENT DEBT
SECTORAL BALANCE Surplus/Deficit as Percentage of GDP Sectors must be balanced – austerity leads to higher household debt
But we can’t run deficits forever can we? “ A government cannot become insolvent with respect to obligations in it’s own currency. A fiat money system , like the ones we have today can produce claims without limit.” (Alan Greenspan former Federal Reserve chairman, America)
WHO LENDS TO THE GOVERNMENT QE Money Pensions (Public Debt = Private Savings)
QUANTITATIVE EASING (QE) AND ITS EFFECTS
WHAT IS QE? Started in 2009 after Banking Crises More than £6000 per person created by BoE SectionName www.companyname.com
QE EXTENDED AUG 2016 QE Programme Extended in Wake of Brexit Vote - £60B of new government debt purchase - £10B of corporate debt SectionName www.companyname.com
PUBLIC MONEY CREATION INSTEAD? SectionName www.companyname.com
QE DEBATE: 15 SEPTEMBER 2016 SectionName www.companyname.com
QE DEBATE: 15 SEPTEMBER 2016 About a dozen MPs turned up (2%) SectionName www.companyname.com
WHAT DO MPs KNOW ABOUT MONEY? SectionName www.companyname.com
HOW DO WE HAPPEN? MAKE IT
UNITED KINGDOM: LOCAL GROUPS London – Camden & Islington Aberdeen London – Geeenwich & Belfast Birmingham Lewisham London – Hackney Bournemouth London – Hammersmith Bradford London – Walthamstow Brighton London – Waterloo Bristol Cambridge Manchester Cardiff Newcastle Cheltenham and Gloucester Oxford Cornwall - Truro Reading Devon Sheffield Dorset Stroud Edinburgh Guilford Leicester London - Newham SectionName www.companyname.com
INTERNATIONAL MOVEMENT BULGARIA PORTUGAL USA CROATIA SPAIN PUERTO RICO DENMARK SWEDEN FINLAND SWITZERLAND FRANCE UK GERMANY GREECE ICELAND IRELAND ITALY NETHERLANDS AUSTRALIA ISRAEL INDIA NEW ZEALAND SOUTH AFRICA SectionName www.companyname.com
INTERNATIONAL MOVEMENT Dutch parliament debate on money creation Swiss Referendum On Money Creation Icelandic Govt Commission on money creation SectionName www.companyname.com
LEARN MORE AND JOIN US positivemoney @positivemoneyuk Edinburgh Group POSITIVEMONEY.ORG Modernising Money Book SectionName
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