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