From our Whitley Bay office  ...

Here are a few news stories that catch our attention each day, examined from the money reform point of view  -  not one that you are likely to find in the mainstream press.

(For entries from February, 2008 until the end of May, 2008, see Archive 1.  For earlier entries, see Archive 2.)

The stories are becoming repetitive, so we're taking a couple of weeks' break.  Back on Monday, 15 September.

Meanwhile, the latest from the MPC:

Unemployment rate could hit two million by Christmas, Bank of England warns

Becky Barrow, The Daily Mail

Around two million people will be unemployed by Christmas as the credit crunch bites, a key Bank of England policymaker warned yesterday.

Professor David Blanchflower said he predicts 2,000 people will lose their jobs every day over the next four months.

This would take unemployment levels to their highest since Labour came to power in 1997.

For families up and down the country, redundancy would be devastating at a time of soaring household bills.

Read more  …

http://www.dailymail.co.uk/news/article-1050300/Unemployment-rate-hit-million-Christmas-Bank-England-warns.html

Whose Money? says:

"... Britain is already in a recession which is in danger of being 'very serious and long-lasting' unless urgent action is taken.".

But the only effective action would be a switch to publicly-created, debt-free money  -  and who, at the top of the financial hierarchy, is even thinking of that?

Credit Crisis II…A World Financial Armageddon?

Christopher Laird of Prudent Squirrel, on Gold Eagle

Where are we now in the credit crisis, and why isn’t the massive Fed and ECB weekly lending working to loosen inter-bank lending? Why is the credit crisis not really improving? Where is this going next? We describe what may happen next as Credit Crisis II in this article.  …

…  If it is true, as we suspect, that we are at the peak of a credit/financial bubble that started right after WW2 ended, and it is at a parabolic peak and cannot be sustained, then the world’s central banks already know this too. They probably are trying to decide when to let go…They all don’t have to agree, it only will take one major Central Bank to let go, then the others will be forced to follow.  …

…  In many respects, because of all these cross holdings of the Fannie Freddie bonds and stocks by banks everywhere, and by Central Banks, it would seem that the losses cannot really be removed from the financial system – ie purged. If Fannie and Freddie are bailed out, their stocks collapse and those losses now translate to all these other banks and central banks that hold them. It’s virtually a no win situation.

These cross linkages reveal that it is virtually impossible, even with bailouts, to purge the ever growing $500 billion and counting losses of capital from the banking/financial system. The latest numbers being speculated on are the losses will be over $1 trillion (IMF) and $2 trillion or more (Roubini).

Now, maybe $2 trillion doesn’t sound like a lot compared to the entire world economy. The trouble is, that capital is leveraged anywhere from 10 to 50 times by the financial system. Fannie and Freddie have 60 to 1 leverage.

Losing $2 trillion of capital will totally wipe out the entire world financial system for a decade because of the leverage at 60 to 1. Basically, unless those losses can be purged in some way, it has to be earned back over a period of years/decades. That essentially cripples the entire world financial system.

Read it in full here:

http://www.gold-eagle.com/editorials_08/laird082508.html

Whose Money? says:

Let’s say it again: there is absolutely no need for a crippled financial system to result in a crippled economy.

Remember the words of Aristotle? 

“(Money) exists not by nature but by law and it is in our power to change it.”

There are plenty of sane economists who have long recognised the problems inherent in creating a nation’s  -  and now the world’s  -  means of exchange and distribution as a compound-interest-bearing debt to private,  profit-making businesses.

Why should agriculture and industry, and the productive work of billions of people, be brought to a halt, just because the banks have made a mess of the financial system?  Why should we be forced, by the arcane and self-imposed rules of  finance, to suffer poverty amidst plenty?

Alternative money systems are on the increase, throughout the world.  (See, for example,  Alternative currencies and money reform advances in Italy, 
by Marco Della Luna, number 15 in our Articles section, here.)  Already, too, some businesses are experimenting with using their own currencies, to boost their liquidity.

When the final crunch comes, ordinary people should not, as at the time of the Great Depression, allow themselves to be herded like sheep to the slaughter, while the financial manipulators buy up their wealth. 

With materials, labour and ingenuity freely available, a shortage of money is easily overcome: because, unlike materials, labour and ingenuity, money can easily be created by industrious human beings, in the teeth of their recalcitrant central governments, and free of debt at source, to make the continuing exchange of goods and services possible.

Perhaps the financial powers that be are planning to use the final bursting of a 60-year bubble to impose even greater economic servitude on the rest of us.

We should make sure that this doesn’t happen.  The coming showdown offers  an opportunity for the switch to debt-free money which may never be repeated, and which must not be missed.

Middle-class families struggling with the biggest debts in Britain

James Coney, the Daily Mail

 Middle-class families have the biggest debts in the country with many borrowers owing more than £50,000, a study reveals.

Read more  …

http://www.dailymail.co.uk/news/article-1049558/Middle-class-families-struggling-biggest-debts-Britain.html

Whose Money? says:

Why did they borrow so much?

Because they fell for the myth of ever-rising house prices, and believed themselves wealthy.

Why did they fall for the myth of ever-rising house prices?

Because they were only too eager to believe what the vested interests were telling them.

And who were the biggest vested interests of all?

The banks, picking up bigger and bigger returns from money created out of nothing, as they turned a blind eye to ludicrously inflated property valuations and persuaded people to borrow way beyond what was reasonable; and the government, foolishly pursuing a boom unrelated to any increase in the nation’s real wealth.

A couple of videos from the BBC:  

Estate agent counts cost of the crunch

http://news.bbc.co.uk/1/hi/business/7543495.stm

Trader’s view of the credit crunch

http://news.bbc.co.uk/1/hi/business/7540410.stm

Whose Money? says:

Deepening economic crisis 'may trigger family breakdown'

Becky Barrow, The Daily Mail

Millions of families will be put under severe strain by the worst economic crisis since the 1970s, one of Britain's most powerful bankers warned yesterday.  …

…  Mr Bean, 54, who took over as the Bank's deputy governor last month following the resignation of Sir John Gieve, said the current situation is 'at least as challenging a time as back in the 1970s'.

He added: 'It is a pretty substantial financial shock. Some people have even said that it is as big a financial shock as the Great Depression.'

Read more  …

http://www.dailymail.co.uk/news/article-1048935/Deepening-economic-crisis-trigger-family-breakdown.html 

Whose Money? says:

So, as the curtain is gradually lifted on the full implications of the "credit crunch", it now appears to be "at least as challenging" as the 1970s.

Perhaps we should take another look at just how the "growth" of the past ten years or so was achieved: by pumping huge quantities of debt-money into circulation through raising house prices far beyond any increase in real value, and encouraging people to lie and cheat, in order to acquire a home of their own.

Here's a Google video of a television programme made some four or five years ago, when the rot was already well advanced:

Mortgage Madness

http://video.google.co.uk/videoplay?docid=-8482518243122067675&hl=en-GB

More parents to get chance of flexible working

Charles Kirkup

Employers will be told to make it easier for millions of working parents to seek flexible hours that fit around their families.

The Government will ask companies to look at ways to streamline the process of applying for flexible working. Currently, only parents of children under six years old have the right to request flexible working to help them raise their families – an estimated 3.6 million employees – as well as carers of the disabled.

Read more  …

http://www.telegraph.co.uk/news/uknews/2621571/More-parents-to-get-chance-of-flexible-working.html

Whose Money? says:

What parents need is not flexible working hours, but a return to the luxury of the post-war years, when one person in full-time employment could still support a family.

If you haven't seen it yet, take a look at this YouTube video from Elizabeth Warren, of Harvard University, who describes the insecurity and poverty experienced by increasing numbers now that it takes two people working full-time to maintain home and children:

The Coming Collapse of the Middle Class

http://www.youtube.com/watch?v=akVL7QY0S8A

City academies to take over struggling primary schools

Polly Curtis and Allegra Stratton

The government is poised to radically expand the academies programme to include children as young as four by announcing that it has given the go-ahead for the takeover of three struggling local primaries  …

Lord Adonis, the schools minister, told the Guardian that he had sanctioned the first so-called "matrix" academy, where three primaries on separate sites will feed into a secondary under a central management system to serve a total of 2,200 children.  …

…  Last week Adonis admitted that the government's weakest point in schools policy had been in addressing basic skills in primary schools. One in five children start secondary school unable to read, write or do maths at the expected level.

Read more  …

http://www.guardian.co.uk/education/2008/aug/25/newschools.primaryschools

Whose Money? says:

So what has this got to do with the debt-based financial system?

The connection is, that the use of debt as our national currency deprives ordinary people of independence and choice in such vital matters as education.

As governments, businesses and ordinary families are forced to borrow the nation's currency into existence, people’s disposable income is whittled away by the need to service all this debt: and the higher levels of taxation which result, plus interest charges  -  not only those  paid directly by the individual, but those fed into inflated prices at all levels of production and distribution  -   make us fair game for control-freak politicians herding our children into schools over whose state-planned syllabuses and orientation  parents have no control. 

It is ludicrous to think that these over-large “academies” will succeed in turning out literate and numerate children where present schools are failing.

Give people adequate purchasing power, in the form of publicly-created, debt-free money distributed as a non-means-tested national dividend to all adult citizens, and they will be able to decide for themselves how they wish their children to be educated, removing them from schools which don't come up to the mark, and even establishing small neighbourhood alternatives of their own, if necessary.

The national dividend would also provide a platform enabling low wage earners to enjoy a decent standard of living, and revitalise family life by making the single-earner family possible once more.

If we want to take the Big-Brother state out of our lives, the first essential is economic and financial democracy.  Without the power of the purse strings there can be no real freedom.

All directions possible as recession looms

David Gow, The Guardian

The EU is in as much disarray about how to handle the looming recession as it is over how to confront Russia's belligerence in the Caucasus. "Toutesdirections," the often confusing signpost at crossroads in French provincial towns, just about sums up eurozone government responses so far.

Read more  …

http://www.guardian.co.uk/business/2008/aug/20/europe.economicgrowth

Whose Money? says:

Not quite “toutes directions”.

There is one direction which these poor, confused eurocrats haven't considered: reform of our dysfunctional, debt-based financial system in favour of stable money, issued debt-free at source.

And that’s the only direction that would save ordinary people from periodic devastation by the boom-and-bust machine.

Rock monsters

Sophy Ridge, The News of the World

NORTHERN Rock is on track to throw 7,500 families out of their HOMES by Christmas —as it takes an increasingly hard line with those in mortgage arrears.

The state-owned lender is speeding up repossessions to try and recover some cash it is losing—but the move will cost the taxpayer £380 MILLION.

That’s on top of the £17.5 BILLION which has already been spent on rescuing and nationalising the crippled financial institution.

For the bank loses an average of £51,750 on EACH repossession, because of costs and the fact the houses are sold at a reduced price for a fast sale.

Read more  …

http://www.newsoftheworld.co.uk/news/article16775.ece

Whose Money? says:

What a mess!

And remember: many of these houses can no longer command the price which they were valued at when Northern Rock granted the mortgage: which highlights the idiocy of Grant Thornton's chief economist, Stephen Gifford, claiming that "there is no cause for panic as personal debt is well covered by the UK housing stock" (see our entry yesterday)!

Both individual borrowers and the nation's taxpayers are now paying the price for the bank's reckless lending  ...  and for the government's encouragement of money creation based on pie in the sky valuations, in order to give an illusion of "growth" and promote the boom that got them re-elected.

Don't listen to the "experts".  Money isn't wealth; and measuring your prosperity in terms of fluctuating "valuations" is much the same as attempting to measure the dimensions of a room with a piece of elastic.

Interview with Jim Rogers: Bigger Financial Shocks Loom

Seeking Alpha

VANCOUVER, B.C. – The U.S. financial crisis has cut so deep – and the government has taken on so much debt in misguided attempts to bail out such companies as Fannie Mae (FNM) and Freddie Mac (FRE) – that even larger financial shocks are still to come, global investing guru Jim Rogers said in an exclusive interview with Money Morning.

Indeed, the U.S. financial debacle is now so ingrained – and a so-called “Super Crash” so likely – that most Americans alive today won’t be around by the time the last of this credit-market mess is finally cleared away – if it ever is, Rogers said.

Read more  …

http://seekingalpha.com/article/91641-interview-with-jim-rogers-part-i-bigger-financial-shocks-loom

Whose Money? says:

Gradually the truth is seeping out.  But we don't have to accept long years of deprivation, in a world with enough potential wealth for all, and only money lacking.

It’s up to ordinary people to demand the publicly-created, debt-free means of exchange and distribution which would stop the agony, and provide firm foundations for long-term economic stability.

Money issued debt-free at source would ensure a decent standard of living for all, putting an end to the excessive financial gains that distort and limit production and enable a few people to buy up an unmerited share of the world's real wealth.

Personal debt exceeds Britain's GDP

The Press Association

Personal debt in the UK is higher than the income generated by the country as a whole for the second year running, research shows.

The total amount owed by consumers through mortgages, loans and credit cards rose by 7.3% during the year to the end of June to stand at £1.444 trillion, according to accountants Grant Thornton.

But during the same period gross domestic product (GDP) rose by only 5.1% in nominal terms to £1.41 trillion.

Read more  …

http://ukpress.google.com/article/ALeqM5hhVLKr0ysHTwxSG0tI2xbgqdjRy

Personal account: debt danger is felt by all

When we were young and foolish most of us were, well, young and foolish. Nothing strange there, then. But it would be more worrying were we to make the same mistakes in advanced age, when it is less easy to recover from them.

So the latest figures on soaring debt among pensioners should prompt deep dismay.

Read more  ...

http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2008/08/22/ymcowie122.xm

Bankruptcy fears for families as average debt hits £60,000

Myra Butterworth, The Telegraph

Britons are facing a growing threat of bankruptcy, as latest figures show the average household is almost £60,000 in debt.

Read more  …

http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2008/08/22/cndebt122.xml

Whose Money? says:

So “most of the debt is perfectly serviceable”, is it?

Only at the price of two people per family working full-time to service it  …  and, increasingly, not even then.

With unemployment rising, fewer and fewer of these doubly vulnerable families (doubly vulnerable, because two essential jobs are now on the line) will find it impossible to make ends meet.

To say that “this process is having a negative outcome for an increasing number of individuals” is putting it mildly.

A financial system which has to be fuelled by exponentially increasing debts shouldered by ordinary people and repaid to the banks at compound interest is not a system worth saving.

For a link to Credit Action’s website, with a full analysis of  Britain’s latest debt statistics, click here  -  where you will also be able to compare current figures with previous levels of debt, back to January, 2005.

Closing the wealth gap will take imagination

http://www.globalresearch.ca/index.php?context=va&aid=9737

Whose Money? says:

So is the refusal to acknowledge the real level of price inflation merely carelessness?  Are the techniques which have pauperised intrinsically wealthy third-world populations deliberate? 

And are those same techniques now being used  -  as suggested by the quote from Professor Dennis Brutus  -  to subjugate the developed nations?

A look at Mr Cook’s credentials (see the end of the article) suggests that he is no credulous “conspiracy theorist”, easily taken in by the more lurid internet websites.

Doesn’t it actually require a blinkered “coincidence theorist” to conclude that the clever people who run the global economy are unaware of the consequences of their actions?

We in Britain are certainly now experiencing the same dependent impotence as third-world countries which have been virtually re-colonised by wealthy corporations. 

Absorbed into the European Union without so much as a by-your-leave, our farmers and fishermen have been subjected to quotas and set-asides, to the point where we can no longer come anywhere near feeding ourselves; our industries have been destroyed by supranational laws which arbitrarily grant indulgences to = other member states, allowing them to subsidise us out of existence; and even our public utilities and infrastructure are now up for grabs.

As Mr Cook (former US federal government analyst) suggests, “doesn’t it really point to a worldwide regression to a neo-feudalist system where the rich will eventually lord it over a vastly-reduced population of debt-serfs? Is this the essence of the 'New World Order' that the international elite have seemingly been planning in earnest since the Club of Rome began talking about overpopulation in the late 1960s?”

If his assumption is correct, and western nations are now being  led like cattle to the slaughter, only the gathering resistance and power of developing countries who understand the threat to their survival seems to offer much hope of calling the plutocrats’ bluff (though these countries, too, are dominated by a ruling class of wealthy people who profit from the present financial and corporate system).

In an interesting conclusion to the article, the highly questionable nature of the recent surge in commodity prices, and particularly in oil prices, gives additional food for thought.

Of course, the coincidence theorists might just be right.  If so, as Mr Cook says, "Those who are 'big enough and smart enough' to be making so much money surely can live handsomely without these additional profits. Let them come forth, identify themselves, and donate their gains for worthwhile projects to benefit humanity.

"Absent such a gesture, let them stand indicted."

Dollar surge will not stop America feeling the effects of a global crunch

Ambrose Evans-Pritchard, The Telegraph

Two alerts landed on my desk this weekend from the elite markets team at Goldman Sachs. One was entitled "The Dollar Has Bottomed!". Those betting on an imminent disintegration of American economic and political power may have to wait another cycle. Rival hegemons are falling like ninepins  ...

...  Regrettably, I remain beset by gloom  ...

Read it here:

http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2008/08/18/ccview118.xml

Whose Money? says:

So Mr Evans-Pritchard agrees with Ellen Brown (see our entry for Saturday, 16 August) that all is not well with the US economy. 

Unfortunately, though, he doesn't diagnose the same disease, so is unable to suggest the only effective treatment: a switch to publicly-created money, issued debt-free at source.

Emerging markets will be crucial for future prosperity

Gerrard Lyons, The Telegraph

as the basi

The world economy is slowing and inflation pressures are easing. The big message, however, is that now, more than ever before, how events play out in emerging economies will have a crucial bearing on what happens here  ...

Read more  ...

http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2008/08/18/ccom118.xml

Whose Money? says:

Remember CH Douglas's talk on the causes of war (see http://douglassocialcredit.com/douglas.php, and scroll down for audio)?

Read this article, with it's unquestioning acceptance of trade warfare as the basis of the global economy, and weep! 

Don’t let a low-wage economy impoverish us all

Chris Warhurst, The Sunday Herald

THE SCOTTISH Low Pay Unit always existed to put itself out of business by ending low-wage work in Scotland. But with low pay becoming entrenched in the Scottish economy and political heat rising as pay falls behind inflation, its closure in April looks premature.

Read more  …

http://www.sundayherald.com/business/businessnews/display.var.2427132.0.dont_let_a_lowwage_economy_impoverish_us_all.php

Whose Money? says:

As this article correctly points out, “it is tax payers who subsidise the low wages paid by employers”.

But sorry, Sunday Herald: there’s no point “picking a fight” over low pay.   What needs to be tackled is the underlying cause of so many people are struggling to live on inadequate wage packets.

That cause, of course, is our reliance on debt owed at compound interest to the banks for virtually our entire money stock. 

Some Sunday reading from the ALOR Library:

Neither Do They Spin

Bryan W Monahan

The psychological damage inflicted on the peoples of Great Britain and other countries by the financial depression of 1929 and the following years probably exceeded even the psychological catastrophe of either of the 'great' wars.

Senseless and wanton as modern war is, there is yet something in it to which the ordinary man and woman can respond.
The purpose of defeating an enemy, regardless of what made him an enemy, is understandable; heroism, sacrifice of one's life that others may live, are demonstrations of the priority of spirit over matter.

There was nothing understandable about the 'great' depression.

It was absurd. Even the explanations of economists, like that which attributed the phenomena to unusual sunspot activity, were absurd.

The suicides from sheer despair had nothing whatever in common with heroism or sacrifice. They were the index of unbearable suffering. The result of this frightful experience - only terminated by the employment generated by provision for renewed war - was to create in the minds of almost everybody a virtually obsessional belief in the necessity for 'employment.'

Read it in full here: http://www.alor.org/Library/Neitherdotheyspin.htm#1a

Wag the Dog: How to Conceal Massive Economic Collapse

Ellen Brown, Global Research

Last week, Fannie Mae and Freddie Mac had just announced record losses, and so had most reporting corporations. Unemployment was mounting, the foreclosure crisis was deepening, state budgets were in shambles, and massive bailouts were everywhere. Investors had every reason to expect the dollar and the stock market to plummet, and gold and oil to shoot up. Strangely, the Dow Jones Industrial Average gained 300 points, the dollar strengthened, and gold and oil were crushed. What happened?

It hardly took psychic powers to see that the Plunge Protection Team had come to the rescue.

Read more  …

http://globalresearch.ca/index.php?context=va&aid=9828

Whose Money? says:

For more about the Plunge Protection Team, read Ellen’s book, Web of Debt: order it from her website, here, http://www.webofdebt.com, or from Amazon.

Councils snooping into residents' bedrooms

Rosa Prince, The Telegraph

More than 7.5 million people who claim a 25-per-cent discount on their council tax bill because they live alone could be forced to prove that they do not share their life with another adult by opening their home to inspectors.

Read more  …

http://www.telegraph.co.uk/news/uknews/2547763/Councils-snooping-into-residents-bedrooms.html

Whose Money? says:

Snooping of this kind is the inevitable result of increasing numbers of indebted people depending on hand-outs from an even more debt-ridden government, just to get by.

As the government struggles to cut expenditure, and taxpayers already weighed down by mortgages and credit-card debt balk at the amount being screwed out of them, scapegoats must be found.

In fact, government intrusion into people’s privacy is the inseparable price to be paid for means-tested benefits.

Coincidence theorists might believe this objectionable by-product of the “compassionate society” was just an accident.  Others note that the welfare state is the perfect excuse for a massive increase in state power.

Either way, since it’s impossible for everybody to come by adequate purchasing power in their wage or benefit packet under our present debt-based financial system, wouldn’t it be more sensible to aim for as independent a population as possible by switching to publicly-created money, issued free of debt at source in the form of a non-means-tested, untaxed national dividend to all adult citizens?

With this basic platform of security to boost their income, it would be possible for families to maintain a decent standard of living even on fairly low wages.

Bank governor's credit crunch economy warning: I'm afraid this is going to be painful

Sam Fleming, The Daily Mail

The Bank of England warned that the worst is yet to come for struggling families.

Governor Mervyn King said there will be a 'painful adjustment' and that households face a bleak period of stagnating incomes, tumbling house prices and rising unemployment.

The economy is heading into a year of zero growth or possible recession with risks of an even more 'severe downturn'.

Read more  ...

http://www.dailymail.co.uk/news/article-1044192/Bank-governors-credit-crunch-economy-warning-Im-afraid-going-painful.html

Whose Money? says:

We just have to say it again and again:

THERE  IS  NO  NEED  FOR  ALL  THIS  SUFFERING.

Plenty of things can go wrong with an economy: shortages caused by natural disasters; shortages caused by lack of skills and know-how; shortages caused by misplaced direction of effort.

But there is absolutely no reason why production and human well-being should be sabotaged by a shortage of money.

Money is a man-made convenience which can be conjured into existence as necessary  ...  as long as there is no arcane banking system whose internal logic must be obeyed against all the dictates of both common sense and compassion.

What we need, for a stable economy that puts human needs first, is publicly-created, debt-free money.

Britain on brink of recession as Bank of England predicts growth will slow to virtual standstill

A new article from Ellen Brown, on Web of Debt:

 
Fannie and Freddie: giving away the farm

Last week, Congress passed a housing bill that gave the Treasury Department a blank check to inject billions of U.S. taxpayer dollars into mortgage giants Fannie Mae and Freddie Mac, snatching them from insolvency. To accommodate this blank check, Congress obligingly raised its debt ceiling by $800 billion. Ouch! That’s nearly a trillion dollars. Why was it necessary to incur this potentially crippling public debt to bail out two completely private, for-profit behemoths, which have run themselves into bankruptcy with their own risky investment schemes?

Read it in full here:

http://www.webofdebt.com/articles/

Whose Money? says:

As Ellen rightly states, “The existing system of banking and credit creation is teetering on the brink of a collapse brought about by its own internal contradictions and corruption.”

There are plenty of sensible ideas, like those expounded in this article, for dealing with the situation.

Why, then, are those we elect to represent us unwilling to examine them seriously, and implement reform?

Credit crisis one year on: British banks claw back global losses

Myra Butterworth, The Telegraph

British banks have been accused of taking advantage of customers by making £500 million extra in the past year from the UK despite the worldwide credit crisis.

While banks have suffered billions of pounds of losses in their global businesses, they have been able to claw back money by charging British customers more on financial products, such as credit cards and mortgages.  …

…  The findings are a bitter pill to swallow for millions of families who are struggling to cope with the full impact of the credit crisis. While banks look to reverse their global losses by increasing their product rates, more than 100 home owners a day are being evicted as they fail to keep up with their payments.

Read more  …

http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2008/08/11/cnbanks111.xml

Whose Money? says:

Time for ordinary people to start clawing back their losses from the banks.

And after the banks have been properly taxed on the profits they make from lending money which they are only allowed to pretend they have by grace and favour of the electorate, time to put them in their proper place, and switch to a publicly-created national currency, issued debt-free at source.

Incidentally, why the use of the word “product” to describe financial arrangements such as mortgages? 

This is surely an abuse of language, based on the primary error of treating money as a commodity in its own right, rather than as the accounting mechanism which it was originally designed to be:  and if we’re to have a sane economic system, the first thing we should do is start using words properly, instead of twisting them to suggest that money and wealth are the same thing, or that the banking system actually “produces” anything.

Meanwhile, unemployment and inflation continue to rise:

Job prospects 'weakest for four years'

http://www.telegraph.co.uk/news/newstopics/politics/economy/2534527/Job-prospects-weakest-for-four-years.html 

and

Inflation-busting water bill rises to be announced (after the wettest summer we remember for years)

http://www.telegraph.co.uk/news/2535367/Inflation-busting-water-bill-rises-to-be-announced.html

No surprise then, with the “value” of property also plummeting, that

Britons cut back on spending as their assets sink £600bn

http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2008/08/11/cnecon111.xml

Just as we predicted, stagflation is tightening its grip.

And it’s all so unnecessary  …  or would be, if the economy were supported by a stable supply of publicly-created, debt-free money.

UK loses £600bn in credit crunch

Angela Balakrishnan, The Guardian

The credit crunch, which has dragged the UK economy to the brink of recession, has wiped £600bn from the wealth of the UK - more than £1m a minute - since the crisis began a year ago, accountants said today.

A study by PricewaterhouseCoopers showed that housing wealth has plummeted by £400bn while sharp falls in the share prices of banks and financial institutions have wiped out another £200bn.

Read more  …

http://www.guardian.co.uk/business/2008/aug/11/creditcrunch.consumerspending

Whose Money? says:

So "housing wealth" has "plummeted", has it?  What a load of nonsense!  There has been no “fall in wealth”.  People’s houses have exactly the same value now as they did before the credit crunch.  All that has changed is the amount the banks are prepared to price them at.

As a result of loose lending by the banks, people were misled into feeling that they had become wealthy overnight.

It just shows the idiocy of believing estate agents’ “valuations”, or of trusting people who persuade you to borrow far more than you can afford, in the belief that asset prices will never fall. 

Those who profit financially from a transaction, and can use those profits to acquire more wealth for themselves or their businesses, will always do their best to drive prices up, regardless of any increase in real value, since this will maximise their cut. 

You, on the other hand, are the one who pays for it when, inevitably, over-inflated prices fall: especially if you are one of those who scraped and saved to buy a house in order to live in it, rather than as a speculative venture, and who now find yourself facing repossession and financial ruin.

Bank of England's rate cut hope dashed by sky high inflation

Dan Atkinson, The Mail on Sunday

Hopes of a swift cut in interest rates will be dealt a blow this week as official figures are set to show inflation running at a 16-year high.

The rise in the Consumer Prices Index is forecast to break through the four per cent barrier - twice the Government's target - marking its highest level since May 1992.

Read more  …

http://www.dailymail.co.uk/news/article-1043233/Bank-Englands-rate-cut-hope-dashed-sky-high-inflation.html

Whose Money? says:

And of course we all know that the real rate, for most families  -  and especially for those who spend most of their income on the basics  -  is far higher than 4%.

No relief on the home front, either  …

The mortgage famine 'may go on for years'

Richard Dyson, The Mail on Sunday

…  'This is not the start of a new dawn,' says Alex Murray of national adviser network Thinc Group. 'Massive supply problems remain.'

Murray believes that until there is a return to wholesale mortgage funding - the model relied on fatally by Northern Rock - the shortage of mortgages will persist, making it hard for borrowers to find cheap finance and maintaining downward pressure on house prices.

Other brokers agree. David Hollingworth of London & Country, the biggest no-fee mortgage broker, says: 'Certain lenders appear to be jockeying again to expand their market, but only where very safe lending is concerned.'

'Safe lending' means those lucky homeowners with more than 25% equity in their home, a group that is dwindling as house prices continue to fall.

Read more  …

http://www.dailymail.co.uk/home/frame-money.html

Whose Money? says:

Heaven help us if there’s a return to “wholesale mortgage funding” as practised by Northern Rock!

What is needed is a return to sensible lending, with higher deposits, and loans based on the basic earnings of the main breadwinner  …  and old-fashioned building societies offering borrowers money which has actually been deposited with them, instead of banks inflating property prices, with their licence to create excessive sums against questionable assets.

Above all, we need the firm foundations of publicly-created, debt-free money: money which does not appear and disappear as confidence in the markets waxes and wanes.

“Front running” Against Humanity in the Oil Markets

“Front-Running" is an insiders’ term for an often illegal, always immoral practice in commodity and other markets. Here’s what happens:

A broker holding a client’s order to buy at a certain price, instead buys for himself just in “front” of it. The clients order isn’t filled and the broker has an unfair advantage over other traders because he controls the client’s order which will buy the position back from him and protect his trade from a loss.

The client loses the opportunity to gain, where his order is never filled if the market moves away from his order point. If some participants can trade with little or no risk, over time everyone else is hurt.

Because Exchange Members’ margin requirements are only about 1%, the front running brokers have a possibility of great gain quickly with almost no risk of loss.

Why is this important to “public policy?”

“Front running” is one way to view what criminal Enron executives did to California. They had the client’s non cancellable, inelastic “orders” to buy electricity and they grabbed the available supply in front of that, restricted the delivery process and extorted higher prices; blaming price rises on “market forces.”

Enron was bad enough, and Sarbanes-Oxley was passed to hold corporate officers criminally liable - a good law as judged by the corporate types screaming for its repeal. But apparently it didn’t go far enough as judged by the present bold attack against humanity taking place.

The manipulation of energy markets has widened from cheating the people of California, to a deadly attack on all humanity. That’s what allowing speculation in oil futures is doing today. These markets aren’t providing “price discovery” as apologists like to claim. They’ve driven the price of oil to destructive levels. The damage has already been immense.

We’ve seen the devastating effects oil prices have had on airlines; trucking; food delivery and production; on average families trying to keep up with living costs; on restaurants and hotels Americans can no longer afford. Add your examples. It’s the speculation and hoarding that does it. Exxon couldn’t grab 12 $billion record 2nd quarter profits if their costs of obtaining oil were rising.

And so I put aside an outline for this paper when it appeared Congress would do its job – rescue the world economy from this pernicious vandalism, by limiting speculation in oil futures to a few contracts per account. That’s all it would take to stop the nonsense.

There’s no reason to allow speculators to position themselves between the world’s limited oil supplies, and those who have to use that oil to keep the world economy functioning. Such speculation leads directly to hardship, starvation, death and warfare. “Congress will finally fulfill its responsibility to act,” I thought, but the measure failed in the Senate with 50 for, 43 against, and 7 not voting!

Why didn’t Congress act?

If this scenario is so clear and harsh, how could the Senate refuse to act? Are they a gang of demons? No, but something potentially worse – we’re confronted with a bad idea that many people believe in – the sanctity of markets!

The vote exposes a faulty methodology - an ideology based on false axioms; a false view of markets that’s been strongly promoted, not questioned; with its negative effects not understood; that view gives markets a sacred character.

Don’t try to legislate against what the market does – market forces will crush your laws. (its omnipotent!)

Don’t try to instruct market behavior; it has inputs from millions of participants and knows more than your regulators ever could! (Its omniscient.)

Do the right things and the market will reward you; misbehave and you will be punished! (Its benevolent.)

Well, omnipotence, omniscience and benevolence are attributes of a god, and Senators don’t often fight with god!

What’s sorely missing from these beliefs and assumptions is evidence!

Where’s the evidence that removing regulation from the airline industry had good effects?

Where’s the evidence that removing FCC restrictions on media ownership had good effects?

Where’s the evidence that removing government regulation from any industry has had good effects?

Of course it’s worse than that. It goes beyond a lack of evidence because there’s plenty of evidence to the contrary! Holding those beliefs requires ignoring loads of evidence: ignoring the damage done to the airlines by deregulation; the damage done by media concentration; the continuing damage done to America’s middle class; ignoring: (insert your favorite)

How can proponents of unregulated markets justify ignoring the facts? Its crazy, but it’s also a necessary part of their false methodology which loves theory but avoids experience – the facts. One of their leading “lights.” economist Ludwig Von Mises, carries it to extreme levels actually claiming that facts cannot disprove his theories! So we are dealing with momentous errors of judgment and methodology.

Though these men are in the U.S. Senate, they are thinking like scared children. But such errors belong in children’s sand boxes, not our nation’s halls of power.

This battle over methodology is an old fight. We even see it in our nation’s beginnings.  Ben Franklin’s 1729 essay “The Nature and Necessity of a Paper Currency” gave the correct methodology when he summarized the ideas used to help Pennsylvania set up its paper money system in 1723, rescuing her from a prolonged usury crisis. Franklin told the world:

“Experience, more prevalent than all the logic in the world, has fully convinced us all that paper money has been of the greatest benefit to the country.”

Maybe as some Senators voted against stopping oil speculation, perhaps a more human inner voice rebelled against what they did. Was that voice stifled by an unholy combination of greed & selfishness, assuaged by their comforting though unsupported belief in the utility of unbridled selfishness and greed? The false notion that selfishness “works?” 

The Senators are not demonic, but their ideology, summarized as “Market worship,” which ignores the human part of the resulting tragedies, certainly is.

Great Britain Limited

Unless wrecked by catastrophe, the world is on the threshold of an era in which the claims upon food, clothes, housing and the amenities of civilisation must of necessity rest upon a new basis.

Work, or employment, as we phrase it, is not to be in future the main claim upon these things, since the provision of universal economic employment will become quite automatically an impossibility.

This is not to say that the world will become idle, because I do not believe that it will. 

Read it in full here:

http://www.alor.org/Library/Great%20Britain%20Limited.htm#1a

Whose Money? says:

With such a clear diagnosis of the problem available so long ago, isn't it amazing that we're still bogged down in the same old faulty financial system?

Recession fears as economy begins to shrink

Edmund Conway, The Telegraph

Britain's economy shrank in May and June as the worst housing market slump in decades took its toll on the UK, it has emerged.

Read more  …

http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2008/07/26/cngdp126.xml

Whose Money? says:

Any government with a bit of common sense would seize this opportunity to renegotiate our relationship with the EU: a transnational entity, committed to the abolition of nation states, which, with its plans for "the whole European territory" and its competition laws, dictates what we are allowed to produce and what we are allowed to subsidise. 

And if we want to achieve genuine growth  -  ie, not the mere multiplication of financial transactions, but maximum self-sufficiency through the home-based production of the vast majority of our goods and services  -  we need the support of a publicly created money supply, issued debt-free at source, and supplemented by local and regional currencies where necessary.

And make no mistake, it’s only genuine growth which brings general prosperity  -  not frenzied consumerism, fuelled by an exponential increase in debt.  What we have been pleased to call growth, during the recent boom period, has merely concentrated more and more of the real wealth of the nation into fewer and fewer hands; while a growing underclass lives on the breadline, dependent on state benefits or on crime to survive.

Why millions of people may be just 11 days from financial ruin

Becky Barrow, The Daily Mail

More than a third of adults could survive financially for only 11 days if they were to lose their job or be too ill to work, according to a survey.

The finding gives a worrying insight into the lives of millions who are living on a financial tightrope.

Researchers looked at how much people spend every month and how much they have in savings.

It found a massive gap between the two, which means most would be crippled by a sudden change in their circumstances.

Read more  …

http://www.dailymail.co.uk/news/article-1038445/Why-millions-people-just-11-days-financial-ruin.html

Whose Money? says:

One of the main reasons why people can’t save is the family mortgage, which mops up more and more of their income. 

Why do people have such huge mortgages?

Because the banks tempted them to borrow more that was safe, by allowing loans based on two wage packets: thus making them doubly vulnerable to illness, redundancy and emergency.

And successive governments allowed the banks to do this, in order to pump money into circulation.

On top of all this debt, taxation is at record levels, as our rulers struggle to service their own borrowing.

How long will ordinary people be expected to provide the nation with a money supply at their own expense and risk?

Mortgage approvals sink to record low as prices plunge at 'fastest rate since 1950s'

Becky Barrow, The Daily Mail

Four out of ten homebuyers in some areas are pulling out of sales after losing their nerve or failing to get a mortgage, the Bank of England said yesterday.

The soaring cancellation rate - when buyers put in an offer but then back out - illustrates the dire state of the property market.

In a monthly report, the Bank said: 'In the market for established homes, more transactions were falling through, with some estate agents reporting a cancellation rate of up to 40 per cent recently.

'That was partly due to the unwillingness of many sellers to accept a lower offer.'

The report, entitled Agents' Summary of Business Conditions, also said large numbers of buyers were having mortgage offers withdrawn.

Others simply got cold feet at a time of warnings that prices could plunge up to 35 per cent in the next two years.

Read more  …

http://www.dailymail.co.uk/news/article-1037989/Mortgage-approvals-sink-record-low-prices-plunge-fastest-rate-1950s.html

Whose Money? says:

We would certainly think twice about buying, when the speed with which prices are plummeting is “staggering”, and likely, if anything, to accelerate, as confidence in the market, and in the economy as a whole, continues to drop.

It just highlights the absurdity of relying on the confidence to lend and borrow in order to produce and distribute the nation's real wealth.

But the drop back to affordable “valuations” can’t come soon enough for first-time buyers priced out of the market  -  particularly for those in rural areas who haven’t been able to compete with wealthy incomers in search of a second home  -  see this article in today’s Newcastle Journal:

90% of country homes too dear for locals

William Green, The Journal

GORDON Brown was last night told North East rural communities could die because house prices are too high for local people.

The stark warning came in a report commissioned by the Prime Minister, which revealed nearly nine out of 10 rural houses were unaffordable.

Report author Matthew Taylor said the situation could become worse in the North East, with young families forced out by ex-city dwellers moving in.

The Liberal Democrat MP called for controls on second and holiday homes, with 42% of properties in parts of Berwick borough in this category, although the Government is yet to be convinced.

Read more  …

http://www.dailymail.co.uk/news/article-1037989/Mortgage-approvals-sink-record-low-prices-plunge-fastest-rate-1950s.html

Whose Money? says:

If we want thriving rural communities, we should, just for a start, encourage agriculture, rather than allowing a supranational organisation to impose production quotas and set-aside on our farmers, driving many of them out of business.

However, as long as banks are allowed to create large amounts of debt for the wealthy to use as purchasing power, house prices will be forced up whenever interest rates are low, to the benefit of those who can be persuaded to borrow the most.

The answer is to replace debt owed to the banks with debt-free money in the form of a non-means-tested national dividend to all adult citizens, supplemented by local and regional currencies where necessary.  This would lay the foundations for more stable economic life throughout the country. 

In addition, ALL taxes should be collected and spent from the grass roots upwards by reformed, non-party-political local councils co-operating across boundaries :  with only the bare minimum passed on to Westminster for genuinely national business.

Enjoying the power of the purse strings, subject to the direct approval of those they represented, local governments would be in a position to protect the interests of those living and working full-time in the countryside.

True cost of living gets personal

Ashley Seager, The Guardian

Take a number, double it, treble that and add the number you first thought of. And then a bit more for fun.

This kind of arithmetic will be familiar to children across the country but it now seems to be the preferred way for sections of the media and lobby groups to work out what the rate of inflation is.

Read more  …

http://www.guardian.co.uk/business/2008/jul/21/inflation.economicgrowth1

Whose Money? says:

Here’s the link to the Office of National Statistics’ personal inflation calculator: http://www.statistics.gov.uk/PIC/index.html

Mr Seager is obviously quite right when he says that the official figures aren’t  being fiddled.  The problem is  -  as he also points out  -   that they simply don’t represent the expenditure of real people on low incomes.

However, we are surprised that a pensioner who spends almost exclusively on food and heating is said to be experiencing an inflation rate of only 5.4 per cent, when price rises for food, gas and electricity are all running at over 10 per cent.

As far as we're concerned, it's the inflation rate in the essentials that counts.  You can always make do and mend with clothes and luxury goods: it's starvation and hypothermia that bite.

It's good to see petrol prices falling a few pence per gallon at the big supermarket outlets  -  but will a decrease in the price of oil push down food prices as quickly as recent increases pushed them up?  We don’t think so.

With our dysfunctional global monetary system ensuring permanent, built-in  price rises which erupt intermittently as runaway inflation,  and with widespread job losses now  looming as we lurch once more from boom to bust, our only hope for long-term economic stability is to switch to money issued debt-free at source by an accountable public authority.

Hunt for buyer of seaside strip

Adrian Pearson, The Newcastle Journal

THE search is on to find a buyer for a rundown seaside promenade left out of a multi-million pound regeneration scheme.

Council bosses at North Tyneside want to find a willing developer to take over the lease of the central lower promenade in Whitley Bay.

The sea-facing properties, which include the Down Under cafe and North Sea Volunteer Lifeguards headquarters, are considered to be in a very poor structural condition and as such no new businesses have moved in for the past 10 years.

The council insists it has no money to pay for the upkeep and is looking for someone to take on the lease, a prospect critics have described as a fool’s errand.

Read more  …

http://www.journallive.co.uk/north-east-news/todays-news/2008/07/22/hunt-for-buyer-of-seaside-strip-61634-21380132/

Whose Money? says:

Also left out of the multi-million pound regeneration scheme, no doubt, is the  other lower prom, further towards Cullercoats, where the paddling pool enjoyed by generations of children has been converted by the council, without planning permission, into a dog’s lavatory and rubbish tip.

We remember when this was a pleasant place for families to gather after school and in the summer holidays, with climbing frames also available for the colder months.

For a year or so notices announced that the paddling pool had been blacked by the EU (or was it still the EC then?) for want of the kind of pump approved in Brussels, which debt-ridden North Tyneside Council was unable to afford.

Clearly, our present financial set-up is failing to do its job, as councillors desperately seek assets to sell off, in order to keep borrowing down  -  more about this here:

Cost threat to regeneration

Adrian Pearson, The Journal

REGENERATION schemes set to revitalise parts of North Tyneside could be under threat as the credit crunch forces finance chiefs to look at their sums again.

Opposition councillors have warned elected mayor John Harrison is heading towards a financial blackhole as the council continues with a multi-million pound Whitley Bay revamp.

The cost of the seafront regeneration scheme is to be met in part by the sale of some council land and assets, property that was expected to fetch £18m three years ago. The worry now is that with the property most likely to have fallen in value since then, the council may have to raise taxes and go further into debt to support the scheme.

Read more  …

http://www.journallive.co.uk/north-east-news/todays-news/2008/07/21/cost-threat-to-regeneration-61634-21374900/

Whose Money? says:

No doubt the Taxpayers' Alliance's Mark Wallace could give our cash-strapped council some useful tips on keeping down non-essential costs!

However, even the most prudent budget would hardly be sufficient, as long as there is a huge backlog of debt to service  -  not to mention the fact that residents of North Tyneside are themselves so swamped in crippling mortgage costs, credit-card bills and rising inflation that they can hardly be expected to take over any of the council’s responsibilities, even if they feel they could organise things better themselves.

The problem of maintaining essential infrastructure can never be solved without tackling the basic fault in the financial system: the fact that we allow banks to create virtually our entire money supply as a compound-interest-bearing debt to themselves.

Short of government reform to replace bank-created debt with publicly-created, debt-free money, James Gibb Stuart has suggested that councils might help themselves and those they serve by issuing vouchers acceptable in payment of council tax as part of their employees’ wages (see this article in Sustainable Economics, here: http://www.sustecweb.co.uk/past/sustec13-5/policy_proposal.htm).

After all, when Guernsey’s sea walls were collapsing, the island’s government didn’t look round to see what they could sell, in order to make the money for repairs available: they simply issued the necessary cash themselves (see http://www.michaeljournal.org/guernsey.htm).

There are common-sense alternatives to the present crazy system: but governments in cahoots with big finance and its attendant corporations, and benefitting from their patronage, are hardly likely to initiate reform as long as ordinary people are content to let themselves be exploited, and make no fuss about it.

Write to your MP now!

Meanwhile, as local and national governments carry on borrowing  regardless, adding to the millstone of public debt around our necks  …

Council chiefs' pay doubles in a decade

Robert Winnett, The Daily Telegraph

A new official report says that salaries paid to local authority chief executives have typically increased by more than 90 per cent over the past decade to an average of £150,000. At least six chief executives now earn more than £200,000 a year.

The Audit Commission said that the inflation-busting pay rises had been caused by local authorities poaching senior officials from one another. The rises outstrip most other public sector jobs and even basic salary increases for FTSE-100 executives.

Read more 

http://www.telegraph.co.uk/news/2440216/Council-chiefs-pay-doubles-in-a-decade.htm

Whose Money? says:

Reform the money system?  Why should they care?

Hundreds of thousands face job loss in UK, says top economist

Ashley Seager, The Guardian

Britain's economy is tipping headlong into a recession that could last more than a year and cost hundreds of thousands of jobs, warns Professor David Blanchflower, a member of the Bank of England's interest rate committee, in an interview with the Guardian today.

Blanchflower says the Bank must cut interest rates rapidly to prevent the downturn being too painful, and thinks the UK could be in for a worse time than even the United States, where interest rates have already been slashed and taxes cut to stimulate the economy.

Read more  …

http://www.guardian.co.uk/business/2008/jul/21/inflation.economicgrowth2

Whose Money? says:

Why don’t they include CH Douglas on university economics syllabuses?

See, for instance, this speech which he made in Newcastle, on 31 January, 1923:

The Breakdown of the Employment System

…  The unemployment problem can be solved tomorrow, exactly as it has been solved in Germany, where there is no unemployment.

If you insist on being provided with work, I feel sure you will be accommodated. But you must not complain if the solution raises up exactly the same problems as exist there, because the fundamental fact, the fact on which the whole situation turns, is that if you set the whole of the available labour to work on the available real capital (tools, land, etc.), you will have an output with which nothing but organised destruction, in the shape of war, can cope.

Read the whole speech here:

http://www.alor.org/Library/BreakdownoftheEmploymentSystem.htm#1a

We find the following particularly apposite at the present time:

“…  when we speak of an unemployment problem, we are much too apt to consider only statistics, official or otherwise, in regard to those persons who are totally unemployed, and to omit or give wholly insufficient weight to the much more important consideration of general under-employment or employment in connection with production of the most dubious utility.”

What would Douglas have thought of the employment opportunities in government regularly paraded in the Guardian?  Of the regulatory positions whose main achievement is preventing, rather that encouraging, useful production?  Or of the relentless proliferation of jobs in financial services only made necessary by the complexity and unpredictability of our monetary system.

As unemployment jostles to take precedence over inflation, the MPC appears to be in essentially the same position as governments in the inter-war period, when Douglas said:

“… the productive system is admittedly in the hands of people who say, quite openly, that its first objective is employment. They claim, and probably with justice, that, by natural selection, they are the most competent people to run the system so that it will attain its objective, and it is quite incontestable that they have failed, and will continue to fail, under a deflationist policy.

“On the other hand, a general resort to inflation, of the ordinary kind, means the end of civilisation.”

The roots of the inflation/recession dilemma, Douglas contends, lie in the financial system itself, because, “…  there exists in the world today a producing system which has an immense latent and undrawn on capacity to deliver goods (of which unemployment is only the most obvious indication), and there is, on the other hand, an immense body of unsatisfied consumers; while standing between and outside both, and run with an objective entirely separate from the interests of either production or consumption, is a money system, that is to say, a banking and financial system.”

Douglas  -  rightly, we think  -  concludes that: “No solution of the myriad of apparently unconnected social, industrial, and sociological problems can be found, unless we can bring ourselves to realise that 95 per cent. of so called crime is committed with the object of acquiring money, whether it be through the cocaine traffic or the abuse of public confidence in such cases as the failure of the City Equitable Insurance Company; that the cry for employment has no realistic basis other than an acceptance of the assumption that money can, or should only, be distributed through the agency of employment; and that, owing to its scarcity, the possession of money, in the sense of a claim on goods, confers upon its possessor the power to arrange the lives of others.”

NB:-  In the closing part of his speech, Douglas mentions "the internationalJew".  We would say, "international financiers", exerting their control in all nations, and pushing us towards the ultimate tyranny of global government.

Another great article from Web of Debt:

Let the Lawsuits Begin:
Banks Brace for a Storm of Litigation

Ellen Brown

…  the banking genie is a creature of the law, and the law can put it back in the bottle.  The imminent failure of some very big banks could provide the government with an opportunity to regain control of its finances.  More than that, it could provide the funds for tackling otherwise unsolvable problems now threatening to destroy our standard of living and our standing in the world.  The only solution that will be more than a temporary fix is to take the power to create money away from private bankers and return it to the people collectively.  That is how it should have been all along, and how it was in our early history; but we are so used to banks being private corporations that we have forgotten the public banks of our forebears.  The best of the colonial American banking models was developed in Benjamin Franklin’s province of Pennsylvania, where a government-owned bank issued money and lent it to farmers at 5 percent interest.  The interest was returned to the government, replacing taxes.  During the decades that that system was in operation, the province of Pennsylvania operated without taxes, inflation or debt. 

Read it in full here:

http://www.webofdebt.com/articles/bracing-storm.php

Whose Money? says:

Some interesting ideas for solving the present crisis, and making sure that everyone can afford  to put a roof over their head.

However, when the immediate danger is over, it will still be necessary to work out a way of distributing purchasing power in an age when automation has made universal full-time employment  in productive, well-paid jobs uneconomic.

In our opinion, CH Douglas was right.  Unless useless and overpaid government sinecures are created purely to provide everyone with a decent wage packet,  the present system cannot deliver adequate incomes.

A non-means-tested national dividend for all adult citizens, acting, for those in less skilled jobs, as a platform for further earnings in part-time or low-paid employment, must surely play a part in the ultimate solution.

City of London seeks to retain its dominant status

Louise Armitstead, The Sunday Telegraph

…  one insider insisted: "We want this review to result in radical change. One idea is to build a London Financial District with special property and tax regulations, along the lines of Dubai. Perhaps better tax rules should be introduced for foreign companies and workers. There are some things we can't control - like the fact that the money frankly is firmly in the east. The task we face is trying to ensure that people still want to run it from London." 

Read  it in full here:

http://www.dailymail.co.uk/news/worldnews/article-1036384/The-degenerates-Dubai-How-widespread-behaviour-expats-causing-backlash.html

Whose Money? says:

New York yesterday, London today, Dubai tomorrow, somewhere else next week  …  that’s the way it goes, in our rootless, globalised world, where the most important commodity is money  -  produced for nothing by the controllers of the banking system, then earning them and their parasites riches beyond the dream of the world’s actual wealth creators.

Surely we should be more concerned with getting back to the nitty-gritty of wealth production than with defending the privileges of those who produce nothing but debt!

The idea of making London virtually a separate country would, of course, fit in nicely with the EU’s proposed replacement of England with a handful of competing, and envious, regions

But do we really want our nation to be split up, dependent on subsidies channeled from its erstwhile capital city via Brussels, while relying on other countries for the very food we need to survive?  (And that's just assuming that London continues to be a big earner.)

A chasm has already opened up between the transnational world of finance, centred for the time being in the City of London, and the rest of the country: and this same chasm is now appearing in London's new rival, Dubai, where rich foreigners, most of them  producing nothing of any worth, flash their debt-created opulence, lording it over an indigenous population which they despise  -  see the article below:                                   
The degenerates of Dubai:
How the widespread behaviour of our expats is causing a backlash

David Jones, The Daily Mail

Photo: http://misteaq.blogspot.com/2008/02/amazing-dubai-photos-and-images-gallery.html

Read it here:

http://www.dailymail.co.uk/news/worldnews/article-1036384/The-degenerates-Dubai-How-widespread-behaviour-expats-causing-backlash.html

Whose Money? says:

Subject to global financial capitalism, the fate of the ordinary inhabitants of Dubai, like that of the ordinary inhabitants of London, is out of their hands.  They may get a vicarious sense of importance from seeing their home city patronised by the rich and powerful  -   just as the slum dwellers of nineteenth century Britain may have enjoyed their special status at the centre of the empire on which the sun never set.

But the sad fact is that, under the globalist régime, wealth filters down from the top very unevenly, and in some places not at all: while the price paid in terms of the destruction of communities, and in national independence, is, for the vast majority, simply not worth it.

On the other hand, under a sensible system of publicly-created, debt-free money, in a self-governing  nation state busy providing for itself by manufacturing and growing real wealth, we could manage very well, thank you  ...  even  if the world’s pre-eminent financial centre was no longer a  “region” of the UK.

Here’s a piece we missed last week:

Fannie Mae: the credit crunch meets the F-word

Paul Mason Blog

…  Fannie Mae was founded in 1938 as the monopoly provider of mortgage loans. It was privatised in 1968, Freddie set up to expand the operation in 1970: they don't issue mortgages - they underwrite them for other institutions. Together they have underwritten $5 trillion of mortgages - half of all US mortgages.

On privatisation they received a bailout guarantee from the government and a direct line of credit from the US treasury; but they were listed companies - their shares traded on the stock exchange and they made a healthy profit. So healthy in fact that pure private capitalist banks had been baying for them to be unshackled from this part-private, half-life existence.

Thus Fannie and Freddie were sustained by one of those necessary fictions that underpin finance capitalism: that this $5 trillion was not really guaranteed by the US government at all. Now that fiction is collapsing (every step of the financial crisis has destroyed a necessary financial fiction) we are confronted with the emergence of something very strange: a state backed financial capitalism.

Read more  …

http://www.bbc.co.uk/blogs/newsnight/paulmason/2008/07/fannie_mae_the_credit_crunch_m.html

Whose Money says:

Of course, he is absolutely right, what we are moving towards is “state-backed financial capitalism” , now flaunting itself openly, as money is poured into failing financial institutions at the expense of the taxpayer.  But this has long been implicit in the way legislation has promoted the interests of the big corporations and finance houses, to the advantage of  all those politicians and big businessmen slipping so easily from public office to private business and back again. The credit crunch has merely stripped what used to be glossed over of the last fig leaf of decency.

The result is not merely that “All over the world, slowly but surely, the state is becoming exposed to the debts and liabilities of the finance system”. 

Let’s get down to brass tacks, and focus on who is actually being "exposed".  Let's  differentiate between those in power and those who suffer from the excesses of that power.  Talking about "the state" being "exposed" blurs the distinction between government and governed.  After all, our rulers are, on the whole, beneficiaries of the financial system: it's not them, but ordinary taxpayers who are required to pay the bill  run up by an oppressively integrated political/business/financial oligarchy.

The outcome predicted by Mr Mason is alarming:

“I have thought for some time that the global model developed around climate change might eventually seep through the thinking of politicians about the economy. The consensus developed around Kyoto involves voluntary re-regulation, new taxes, quotas and artificially created prices. It is state intervention on a vast scale to save the world for our children - and it is done without apology.”

Leaving aside the unquestioning acceptance of the reality of man-made climate change which is being drummed in by our masters as a justification for penal taxation, we need “state intervention on a vast scale” like we need a hole in the head.

The only state intervention necessary is acceptance by governments throughout the world of their responsibility for providing national currencies debt-free.  This could be achieved via the agency of an accountable public authority, given a specific remit, along the lines of the MPC.

This debt-free money, distributed as a non-means tested national dividend to all adult citizens, would return financial and political control to the grass roots, where it belongs.  Together with reformed, non-party-political councils answering directly to genuine local communities, and drastic restriction of the powers of central government, it would nip the open acceptance of state-backed financial capitalism in the bud.

This is what we should be aiming for: a new era, in which neither the financiers, nor the state, but ordinary people, enjoy the power of the purse strings.

Photo: www.legaljuice.com/2008/03/

Gordon Brown set to re-write his own borrowing rules to avoid tax hike

Rosa Prince, The Telegraph

The Government is expected to re-write its own rules on borrowing in order to avoid forcing up taxes.

Gordon Brown's strict self-imposed "sustainable investment" rule, which limits Government debt to 40pc of national income, is likely to be ditched amid difficulties caused by the credit crisis.

Photo: BBC

Read more  …

http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2008/07/18/bcnbrown118.xml

Whose Money? says:

According to Robert Chote, the director of the Institue for Fiscal Studies, “… whoever wins the next general election will be faced with a 'toxic choice' between tax increases during an economic downturn or public spending cuts - unless the borrowing rule is broken”.

We’re all for breaking the borrowing rule which put economies throughout the world under the control of financiers.

The rule that all our money, with the exception of notes and coins, must come into existence as a compound-interest-bearing debt to the banking sector is ripe for breaking: but Mr Brown’s latest wheeze of borrowing even more, to avoid having to raise taxes, is a sick joke.

When money is borrowed, the debt has to be serviced, even if not (as in the case of the National Debt) repaid.  So when money is borrowed by the government, sooner or later ordinary people have to pay the price.

Is Mr Brown “banking” on the possibility of another boom coming to his rescue?

Why doesn't he just tell the bankers to get lost, and give the nation the benefit of an adequate, and adequately distributed supply of publicly-created, debt-free money?

Bank of England chief sees rocky ride ahead for economy

Edmund Conway, The Daily Telegraph

The Bank of England's new chief economist warned that the UK is facing its toughest economic prospects in over a decade, as unemployment increases at the fastest rate since 1992.

Spencer Dale, who succeeded the newly promoted Deputy Governor Charlie Bean this month, told the Treasury Select Committee that rising joblessness should help keep inflation and wage increases under control, but said the economy is facing a rocky ride.

It came after the Office for National Statistics said the claimant count of people out of work and claiming the jobseekers' allowance rose by 15,500 in June to 840,100. It is the biggest one-month increase in 16 years, and fuelled fears that Britain could face a 1990s-style increase in unemployment.

Read more  …

http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2008/07/17/cnecon117.xml

Whose Money? says:

The economic gurus of the mainstream press have been emphasising that at least unemployment levels are low.  Now  -  surprise, surprise!  -  it seems that yet another witness to Britain’s “robust economic fundamentals” bites the dust. 

However, even this is presented as a desirable means of holding down inflation.

Not much comfort for anyone thrown out of work and forced to get by on a pittance, though, is it?

The fact is, that many present-day jobs are unnecessary, anyway.  They were created by the government in order to keep unemployment figures down, and the people wasting their time in them would be more usefully occupied in looking after their families, or bringing back some life to the local community: working for love and fulfillment, rather than a frequently meager pay packet.

Government after government has failed to address the problem of how best to distribute incomes in an age when automation and the IT revolution have made long working hours unnecessary.  CH Douglas was already highlighting this conundrum in the 20s and 30s of the last century.

Listen to him, on the Douglas Social Credit Secretariat website, speaking of the lack of any necessity, given our present productive capacity, for universal full-time employment; and the relationship to war of the economic hardship which unnecessarily accompanies widespread unemployment, when sufficient money for decent survival can only be obtained via a regular wage packet (or, nowadays, by manipulating the benefits system).

Here's the link: http://douglassocialcredit.com/douglas.php (scroll down to “Audio”, at the bottom of the page).

Unfortunately the audio stops before the end of the talk, but a transcription of the whole is also available  -  as are other interesting articles and books by Douglas.

Photo of CH Douglas: http://www.mondopolitico.com/library/socialcredit/socialcredit.htm

It's going to be the economy, stupid

Iain Martin, The Telegraph

The pair have fought each other to a standstill, and yesterday Gordon Brown and David Cameron merely traded familiar insults at Prime Minister's Questions. The last session until October marked the end of an extraordinarily lively period and was characterised by collective exhaustion. …

…  Where Brown believes government, through its endless agencies, is the best, or only, agent capable of delivering significant improvement, the Cameroons look to free individuals and organisations to take much more of the burden.

These non-state actors will be less wasteful, more responsive to the needs of those they serve and, as decades and billions of pounds spent on big statism in Glasgow East suggests, the alternative is worth a try.

Read more  …

http://www.telegraph.co.uk/opinion/main.jhtml;jsessionid=ORKLH0IKYLAJRQFIQMFSFGGAVCBQ0IV0?xml=/opinion/2008/07/17/do1704.xml

Whose Money? says:

We agree completely that “non-state actors will be less wasteful” and “more responsive to the needs of those they serve"  …  but the fact remains that they will only be in a position to act on their own behalf, and in co-operation with their neighbours, if they have enough money to do so.

This goes beyond party politics: as long as our means of exchange and distribution is produced as a compound-interest-bearing debt to private businesses, ordinary people haven’t got a chance, whatever the government in power.

Gordon Brown is too busy blaming others when he should be taking action

David Cameron, The Daily Telegraph

The credit crunch started in the City. But it has now spread to every home and business in Britain.

Whether it's the families facing negative equity, companies which are cutting back or the pain millions feel at the check-outs, there can be little doubt of the difficult situation we face.

And, in this time of uncertainty, people are rightly asking politicians: what's your plan?

Read more  … 

http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2008/07/16/cccam116.xml

Whose Money?

So let’s take a closer look at David Cameron’s plan.

“For a start, we need to act against creeping unemployment.” 

We’d say unemployment of itself need not cause concern, under a sensible economic system in which money was distributed in line with the nation's real wealth (see CH Douglas, above).  The problem appears to be more one of depletion of our real wealth through the transfer of production to places beyond our borders.  So, for a start, we need to act against the systematic run-down of British industry and agriculture (which would necessarily require the transformation of our relationship with the EU, as it aims to control economic activity throughout "its" territory, discouraging the maximum self-sufficiency of each individual member state in order to promote identity of interest within the collective).

“At the moment, too many sound companies face liquidation because they cannot get access to credit. And we all know what liquidation normally means - closure and job losses.

That's why we will consult on taking the best aspects of the American Chapter 11 system, which gives these companies breathing space to restructure their debts and rescue their business - and their employees' livelihoods.

"Of course, we should not save all companies  …”

Hmmmm  …  so it’s going to be another case of “we who know best will pick the winners”.  If credit is short, why not simply provide an adequate, and adequately distributed, supply of publicly-created, debt-free money, and leave people to decide their own economic priorities, building their businesses in response to demand, and without excessive and intrusive regulation?  (The main place where regulation really is necessary, but which has been getting off scot free, is the financial sector.)

“…  we need to make sure our welfare system is fixed so it gets people back into work as soon as possible. And this means harnessing the power of private and voluntary providers to give people the tailored support they need to find work.”

As stated above, what we need to get fixed most urgently is our productive system, which, in terms of actual manufactured goods and agriculture, is grinding to a halt.  If we start producing for the home market again, there will be enough work for all  -  especially if debt-free money distributed in the form of a national dividend to all adult citizens made it possible for large numbers of the population to do without a wage packet, and work for love within the home and the community.

“Next, we need to address the housing market.”

Yes, we certainly do.  In particular, Dave, you might make it illegal to accept more than one person per family's wages/salary as backing for mortgages: a practice which has done more than anything to push up house prices and put a strain on domestic life.  Permitting the banks to create debt in line with illusory hikes in the “value” of property, in order to increase their profits, has allowed them to tempt countless people into the financial improvidence of making themselves dependent on two people's earnings, and thus doubly at risk to unemployment or illness. (See Elizabeth Warren's video, The Coming Collapse of the Middle Class, here:
http://bastardlogic.wordpress.com/2008/05/05/elizabeth-warren-the-coming-collapse-of-the-middle-class

The best way of addressing the housing market is to return prices to the realm of reality, by providing a stable, debt-free money supply, and regulating bank lending.

“Next, savers.”

Oh yes, David, you’ve said it: savers, soon to be an extinct species, under the two-pronged attack of rising prices and high taxation  -  both of them endemic, as long as we insist on using debt as our means of exchange and distribution. 

For a start, you could stop taxing savings altogether  …  though, of course, this is utterly unrealistic, as long as the long-suffering nation must be routinely bled in order to service an exponentially increasing  National Debt.

With a debt-free money supply, on the other hand, not only would price inflation no longer result in non-stop, across-the-board erosion of our purchasing power: governments would also be less motivated to dip ever deeper into our savings accounts, to an extent which makes thrift, even when possible, an unattractive option for hard-pressed families.

“Then we need action on the biggest concern for most people - the cost of living. Of course, there's no magic wand that will bring down the cost of food and oil. But one of the biggest burdens on people is tax.”

We’ve already pointed out that an ever-rising cost of living is inseparable from the use of debt as virtually the sole global trading medium, with interest costs feeding into prices at every stage of production and distribution.

As for lowering taxes: Mr Cameron, if and when he is in Number Ten, will no doubt discover for himself that governments with a National Debt round their necks must either squeeze the electorate until the pips squeak or cut back on essential, as well as non-essential responsibilities and services  -  though many of those responsibilities and services might be better and more economically "delivered" (as the current jargon goes) by families, individuals and genuine communities, if a reformed financial system meant they could afford to do so.

And with a supply of stable, debt-free money feeding the grass roots, and the genuine decentralization of government which this made possible, they certainly could afford to do so.

“…  after a decade of reckless Labour spending, we've got to start living within our means.”

Oh please, cut the party politics! You've all had a chance to do your worst, over the past half century!

Anyway, what, precisely, are “our means”?  We would say, they are the financial measure of the actual and potential wealth (ie, in goods and services, NOT in money) existing within this nation.

So, let's say it again: our priority should be to increase that wealth, by growing or manufacturing more of what we need for the home market, using publicly-created, debt-free money as our means of exchange and distribution.  Go on, Dave, be brave: ditch the present dogma, which, insanely, insists that we should export “services” overseas in order to get our hands on money created as a debt against people in other countries, and then use that money to import goods whose price is kept low by the use of sweat-shop labour.  Switch to debt-free money and try encouraging home production, instead!

“Our overall method is to ensure that government grows more slowly than the economy over the cycle, so bringing down the share of national income taken by the state. This gives room for cuts in taxes and debt. That's what we mean by sharing the proceeds of growth.”

An admirable aim: but we’d suggest that what's needed is not mere inhibition of the growth of central government, but the transfer of  all responsibilities apart from genuinely national business back to individuals, families and genuine local communities; with any necessary tax contributions collected at the grass-roots, for use locally, or in co-operation with neighbouring councils; and the bare minimum passed on to Westminster to cover its specifically approved, and transparently audited, costs. 

Flourishing local economies throughout the country would, of course, also require publicly-created, debt-free money, supplemented, where necessary, by equally debt-free local and regional currencies.

“…we will cut the cost of social failure - the crime, worklessness and family breakdown”.

The best way to do this is to provide the platform of a non-means-tested national dividend for all adult citizens, so  that families are in a position to enjoy a decent standard of living without both parents being forced out into “the workplace” (more jargon  - no work, apparently, takes place in the home).

“We will address the problem - and cost - of unreformed hospitals and schools, by introducing more choice and competition.”

Again, the best way to do this is through decentralisation and the economic democracy of a non-means-tested national dividend.  This would re-invigorate the grass roots, and put ordinary people in a position to make their own choices, co-operating with neighbours and across boundaries to build the institutions which best served their needs.

“Second, we need to set ourselves on the path to economic growth. We've got to stop relying on the finance and housing sectors to drive our economy forward.”

Oh yes, oh yes, oh yes, we certainly have!  And the best way to free ourselves from reliance on the financial sector, and the serial inflation of prices by vested interests in pursuit of gain, is to remove the banks' licence to create our means of exchange and distribution.  Why hand power over the economy to private, profit-making businesses, when you could, instead,  provide the nation with an adequate supply of money issued debt-free at source by an accountable public authority.  How about it, Dave?

“Instead, we must put our faith in a much broader economic base that includes science, engineering and manufacturing. We need a government that gives these industries the tools to succeed.”

Oh no we don’t!  We need a government that does its duty by ensuring that the nation has a sufficient supply of debt-free money, and then gets out of the way and leaves us free to organise ourselves, and our business activities, under the Common Law.

"...  we have a clear alternative to this bankrupt government who are bankrupting our economy. They show that it's the Conservative Party that has the ideas for sustainable growth long into the future."

We certainly do have “a clear alternative to this bankrupt government who are bankrupting our economy”.  But it's not any particular political party: it's the political and financial decentralisation that would be made possible by a switch to publicly-created, debt-free money.

Photo of David Cameron: http://www.scotsindependent.org/features/quotations/quotations_2.htm

Inflation could rise to 5% 'within months' as salaries fall and cost of living soars

Becky Barrow, The Daily Mail

Inflation rose to 3.8 per cent yesterday, its highest level for 16 years. And experts warned it could hit five per cent within months.

The prediction comes as economic confidence on both sides of the Atlantic takes a turn for the worse, with new fears for the stability of the global financial system.

Read more  …

http://www.dailymail.co.uk/news/article-1035373/Inflation-rise-5-months-salaries-fall-cost-living-soars.html

Whose Money?  says:

As far as “fears for the stability of the global financial system” goes, isn’t the whole point that it’s NEVER stable.

The first prerequisite for stable money is to issue it free of debt at source.  When you use bank-created debt, repayable at compound interest, as virtually the sole means of exchange and distribution, you have built-in inflation  …  and, sooner or later, it’s going to break out.

To calculate your own inflation rate, have a look at the website of the Office of National Statistics, here: http://www.statistics.gov.uk/cci/nugget.asp?ID=22

King turned down 30% pay rise at Bank

Kathryn Hopkins, The Guardian

The Bank of England's governor, Mervyn King, rejected a pay rise of more than £100,000 when he was re-appointed to the job earlier this year.

His decision to turn down the pay rise emerged in the bank's annual report, published yesterday, in which King warned there was little that the monetary policy committee (MPC) he chairs could do to tame inflation in the short term.

According to the report, a review of King's pay suggested he should be entitled to a salary of between £375,000 and £400,000 when he began his new five-year term last month. King, who has publicly criticised the bonus culture in the City and called for wage restraint to keep a lid on inflation, is said to have thought it would have been "inappropriate" to accept a large pay rise. Instead, he will remain on his current salary of £290,000.

Photo: The Daily Mail

Read more  …

http://www.guardian.co.uk/business/2008/jul/14/bankofenglandgovernor.executivesalaries

Whose Money? says:

Well done, Mr King!  

Some might say that it’s easy to turn down a pay raise of around 30% when you’re already earning enough to keep quite a number of ordinary families in a high degree of comfort.

But could we expect similar restraint from our MPs, whose enthusiasm for handing their responsibilities, and our liberties, into the tender care of the European Union is equalled only by their enthusiasm for feathering their own nests?

As Mr King says, the MPC “can have little impact on the path of inflation in the short term”.

We, of course, would go further, and say that there is no way of keeping inflation in check as long as we continue to use debt as our means of exchange and distribution.

And, unlike Mr King, our over-paid, expense-account MPs do have the power to to go some way towards justifying their generous pay rises by repealing the European Communities Act and initiating a new system of publicly-created, debt-free money.  (Or, at the very least, by authorising the same proportion of publicly-created, debt-free money, in non-cash form, as was provided by notes and coins in the immediate post-war years.)

Federal Reserve bails out Fannie Mae and Freddie Mac

James Quinn and David Litterick, The Daily Telegraph

The US government last night moved to provide state support to ailing mortgage agencies Fannie Mae and Freddie Mac amid heightened concern over their solvency.

The Federal Reserve took the unprecedented step of bailing out Fannie and Freddie in a move designed to prevent their collapse and with it to secure the stability of the wider mortgage market.

Read more  …

http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2008/07/14/cnmae114.xml 

See also:

Fannie Mae and Freddie Mac in the mire

David Litterick, The Telegraph

Fannie Mae and Freddie Mac had no exposure to the sub-prime market, so the idea they are in trouble suggests a new, grimmer phase in the US housing market collapse. Perhaps more worrying is the exposure the major banks have to the GSEs.

David Trone, analyst at Fox-Pitt, Kelton, estimated that Citigroup has $36bn in mortgage securities backed by the companies and $15bn in debt issued by them, while JP Morgan has $65bn of securities and $22bn of debt.

Any collapse could lead to the kind of writedowns that would make the banks' sub-prime losses look like small change.

Danny Gabay, former Bank of England adviser now at Fathom Financial Consultants, said he didn't yet buy the idea that capitalism was dead.

"When we come to look back at the decade from 1997 to 2007, it will be seen as the decade when financial markets were given the maximum amount of latitude to innovate and generate profit," he said. "But the market was unable to regulate itself. In that sense things will change.

"I don't think there will come a time when people will abandon debt as a driver of growth. That really would be the end of capitalism. But no one has come up with a convincing alternative."

Read the whole article here: 

http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2008/07/14/ccmae114.xml 

Whose Money? says:

As long as the powerful can use it to their advantage, they will do everything they can to keep the present dysfunctional monetary system afloat: see the quote from Danny Gabay, above "I don't think there will come a time when people will abandon debt as a driver of growth."

Perhaps it would be more accurate to say it’s unlikely that there will come a time when financial profiteers will willingly abandon the use of debt as money.

What is not addressed here is the fact that it’s only the use of debt as money which makes “growth”, rather than the production of those goods and services which would provide a high-quality standard of living for all, the aim of economic activity.

Capitalism, meaning the private ownership of goods, is a completely different animal from the financial capitalism which Mr Gabay has in mind; and it is, at the very least,  questionable to assume that financial capitalism, which allows debt to be used as a mechanism for the transfer of real wealth into fewer and fewer hands, is the inevitable sacrifice that must be made if people are to enjoy a better quality of life, rather than an increased turnover of disposable possessions. 

Human ingenuity, invention and hard work, not money, are the drivers of greater genuine prosperity  for all  -  ie, the kind of prosperity which increases happiness, by breaking down previous barriers and making available the  time to enjoy relationships and fulfilling leisure activities.  The fact that bankers decide where money shall go in line with the internal logic of a debt-based financial system, distorts production and enforces long working hours as a condition for survival at a time when machines and the IT revolution should have made this unnecessary. 

If governments are to bail out failing banks, they should, at the same time, make this their opportunity to begin switching to a system of publicly-created, debt-free money.

Meanwhile, for ordinary people life continues to get harder, http://www.dailymail.co.uk/news/article-1034763/Hard-pressed-homeowners-rush-extended-mortgages.html; while cabinet ministers tell them rising prices are good for them http://www.dailymail.co.uk/news/article-1034810/High-petrol-prices-good-says-cabinet-minister.html (yes, we know he’s only talking about petrol prices: but when petrol goes up, everything else gets more expensive, too); and John Major states the obvious, when he says inflation is running way above the official figures http://www.dailymail.co.uk/news/article-1034683/Dont-trust-official-inflation-rate-3-3--warns-John-Major--high-10.html (though he’s probably still underestimating it).

Globalisation is a bonus for Britain

Jim O’Neill, The Sunday Telegraph

For many, there is great temptation to blame the current evils on the world at large: to raise doubts about the benefits of globalisation. The same concerns are being voiced in the US, where there are siren calls to reverse the globalisation process and retreat into protectionism.

We must not get caught up in all of this in Britain.

Read it in full here:

http://www.telegraph.co.uk/opinion/main.jhtml?xml=/opinion/2008/07/13/do1303.xml

Whose Money? says:

As stated at the bottom of the article, Jim O’Neill is chief economist at Goldman Sachs.

More interesting than the article itself are the comments below, with more and more people apparently aware of the big scam being pulled by the “globalisation is good for you” brigade, with their umbilical link to the debt-based financial system which has made the City of London so successful  - while pricing the rest of the nation out of the market, destroying the production of real wealth, and leaving us dependent for our survival upon goods and, increasingly, services, from overseas.

Oil prices and mortgages send shares tumbling to lowest point this year

The Daily Mail

Inevestors were reeling yesterday after the FTSE 100 index of leading share entered 'bear market' territory.

This is the point at which the value of the blue-chip index has plunged more then 20 per cent from its recent peak.

More than £30billion was wiped off the FTSE 100 yesterday, which closed at 5,261.6  …

…  Last year, the FTSE 100 reached close to 6,730 but has fallen since then, dropping another 2.69 per cent yesterday. The index is now 21.8 per cent below that peak, meaning every £1 invested then is worth just under 80p. Stock markets worldwide also plunged in response to concerns over the future of American mortgage companies Fannie Mae and Freddie Mac.

Read more  …

http://www.dailymail.co.uk/news/article-1034345/Oil-prices-mortgages-send-shares-tumbling-lowest-point-year.html

Whose Money?  says:

Bye bye Bull, hallo bear!

Where is there for ordinary people to run to with their savings  -  those that actually have any savings, that’s to say, after debt and taxation have taken their toll?

We were told to invest.  We were told property was a safe bet.  We were even told that the state would provide for us from the cradle to the grave, as long as we paid our national insurance stamps.

Looks as if we’ve been suckers, on all counts.  Wonder why nobody's telling us that the safest way to provide for your future is to insist on publicly-created, debt-free money, without high built-in levels of inflation and taxation?

It’s interesting to see Fannie Mae and Freddie Mac finally hitting the headlines.  Those of us who get our information from the internet, rather than the mainstream media, have been familiar with this particular ticking bomb for some time now.  Here, for instance, is a quote from an article by Doug McIntosh, back in February, 2002:

“For the record, Fannie Mae, and also Ginnie Mae, the mortgage beasts with at least one trillion dollars in "assets", I mean mortgage debts, are called GSEs. A GSE is a government sponsored entity. I think you know, or at least your wallet should know, where I'm going with this. Looks like the ole economic swimming pool is full of Piranha to me.” 

http://www.gold-eagle.com/gold_digest_02/mcintosh020502.html

And more, from April, 2003:

“We now see Fannie Mae and Ginnie Mae, with hundreds of billions in sub-par mortgages, are reeling like drunks. All that is left is a bankrupt consumer using home equity loans. The actual value of the homes is a fantasy as recent declines in home prices are beginning to show. The last two legs sustaining the economic illusion are now being hammered by high energy prices, endless war, a savage job market and political anarchy on our streets. So, all you optimists out there in TV land…Once the American consumer stops spending, which is now happening, and stops being able to use home equity loans, what's left? I say the abyss, but then I'm a doomer. I prefer to say I'm a student of history, a realist and a shrewd judge of human character. The time of death is now upon the planet Earth I call home. If the four horsemen haven't been released, at least they are pawing the ground at the starting gate. The days ahead will not be pleasant to be sure. We may survive them or we may not. At least it's going to be interesting.” 

http://www.gold-eagle.com/gold_digest_03/mcintosh040103.html, and June, 2003:

"Unfortunately for the powers that be, Freddie Mac is a real problem. Freddie Mac is a government chartered, private mortgage corporation that has hundreds of billions in "assets." One man's assets are another man's debt, but I'm being cynical. I don't see why restating your results for 2000, 2001 and 2002 would lead anyone to think there's a problem. Why should altering and removing pages from President David Glenn's journal of daily business activities, lead to his being fired? Shredding documents is as American as apple pie these days. Besides, the President of Freddie Mac, the CFO and CEO were given the heave ho, at thirty thousand feet with no parachute. Go back to sleep, the "system" has dealt with the problem. The "experts" assure us that any fallout will be "muted." Freddie Mac's new President finds the events, "appalling." Other experts tell us, "The average guy on the street will say, "So what." Another casually says there shouldn't be any disruption to smooth functioning of the mortgage market. No doubt, Mr. Magoo, and his smoking hot printing press, stand ready to save the day. The news of Freddie Mac sent "tremors through financial markets sensitive to scandal news," I don't see why. It's not like corporate corruption is much of a surprise in these days of Pax America.

What Freddie Mac does is buy mortgages from lenders and "package" them for sale to investors, which then creates more financing for loans. While the terms Ponzi Scheme, House of Cards and musical chairs come to mind, again, I'm just be a doomer. Surely, the government would never allow home owners to be put at risk, would they? Despite Freddie Mac's 16% stock loss, everything is fine, really, trust us. Freddie Mac has merely "misapplied accounting rules." It's not like they are corrupt or anything. I'm sure the horde of investigators will find the accounting rules chained in the basement somewhere awaiting rescue. I personally find the new guys assertion of, "this is not about transactions the firm didn't know about," not to be reassuring. I guess the idea a CEO should function as a human being is a quaint relic from an earlier time in America."  http://www.gold-eagle.com/gold_digest_03/mcintosh061303.html

More recently, there’s this article from 2006, as posted by Doug on the website Tree of Liberty:

When it Raines, it Pours

by Doug McIntosh, 24 December, 2006

It is now, if not the end of economics, at least the end of economics as we know it. For many decades now the USA has been following a policy of economic insanity, with seemingly few concrete results of damage. The USA has used its status as a superpower to con the rest of the world into giving its fiat funny money a free ride, a free lunch and even a few cocktails on the tab. Well, those days are over for many reasons. One of those reasons is Fannie Mae. I first wrote about Fannie Mae and its director Franklin Raines several years back here at gold-eagle.com. I noted then the sorry state of this economic transvestite beast. Fannie Mae is neither a company, or a government agency: it is a GSE, a government sponsored entity. This means you get the greed and arrogance of predator capitalism and the incompetence and waste of a government agency. In economic terms, Fannie Mae is like going into the economic bar and picking up what you thought was a woman, only to find out later a dress does not a woman make.

Read more  …

http://www.thetreeofliberty.com/vb/showthread.php?t=22609

And here’s a link to his latest piece on Gold Eagle, last November:

Endless economic folly

Doug McIntosh

The second news story is the more immediately profound of the two, although allowing foreign ownership of the Fed will have long lasting effects. In a word, the American people's economic consumer confidence collapsed. It did not fall. It didn't shrink. It didn't recede. It collapsed. More than the economic eggheads who have lied so long thought it would. More than the politicians, the corporate and the media elite thought it would. It seems the faked numbers on inflation, minus energy and food, are actually around 25 to 50% a year. It seems the $100 oil, along with the heating oil, the natural gas, the propane, the gasoline; the diesel are all having inflationary effects. It seems the fiat dollar collapse, record lows, day after day, are all having an economic effect out there in the real world. That's the one beyond Sodom on the Potomac called Washington, D.C. in case you didn't know. It seems the long suffering American Sheeple have figured out the 25% housing price collapse Mr. Summers alluded to is only the beginning. It seems the "robust crowds" on Black Friday were merely taking a last wistful look before the economic hurricane hits. Let's see, 5% more people spend 4% less money? I would call that a negative sales event wouldn't you? It looks like 2008 is going to be one hell of an economic year.

http://www.gold-eagle.com/gold_digest_05/mcintosh112707.html

Nice to hear someone telling it like it is  -  unlike most of the columnists raking in lucrative salaries and expenses in the mainsteam media.

House prices falling at fastest rate for 50 years - and interest rates 'won't be cut until 2009'

Becky Barrow, The Daily Mail

The price of the average home in Britain has plunged £17,000 since January, devastating figures revealed yesterday.

House prices are falling at a rate not witnessed since records began in the 1950s, according to the report from the banking giant Halifax.

This suggests the current meltdown is even worse than the previous house price collapse in the 1990s.

Read more  …

http://www.dailymail.co.uk/news/article-1033925/House-prices-falling-fastest-rate-50-years--rates-wont-cut-2009.html

Whose money? says:

Well, what a surprise!  After all, we were told that the laws of supply and demand meant that the UK was a very special case.  The property bubble might be punctured in the States, but over here prices could never fall.

With every day that passes, the “experts” are revealed more convincingly as useful idiots boosting the banks’ profits with their bleating of unprecedented prosperity, and no more boom and bust  -  when, in fact, the number of people struggling to get by at the bottom of the heap has been steadily increasing, and even many of those who have been experiencing the “feel wealthy” factor have been doing so only by borrowing against illusory property prices.

Meanwhile, here in the North East  …

North housing market is thrown a lifeline

STRUGGLING homeowners and first-time buyers could be thrown a lifeline by councils in the region buying into properties.

Newcastle City Council is looking at buying part-shares in hundreds of homes to stop families being thrown out as they face rising mortgage bills.

And yesterday other councils in the North said they would be interested in the scheme.

New unsold homes could also be purchased to help first-time buyers and keep the wider property market afloat under proposals being examined by the authority.

‘Snobs’ in Whitehall holding back North

Adrian Pearson, The Newcastle Journal

EMPLOYMENT chiefs have given up on a “frustrating” battle to persuade the Government to keep its promise of relocating jobs out of London.

Whitehall bosses have been accused of taking a snobbish approach to moving well-paid and influential jobs out of the capital and into the North East. Their reluctance to invest in the region has seen thousands of jobs move out of the South East but just 750 of these have come to the region.

Read more  …

http://www.journallive.co.uk/north-east-news/todays-news/2008/07/09/snobs-in-whitehall-holding-back-north-61634-21309181/

Whose Money? says:

We agree with the quoted comment by John Shipley: “Whitehall seems to think that it is OK to disperse the back office jobs here but it is almost fundamentally opposed to seeing policy or other senior jobs leave. If we have a genuinely united country then we must see an end to this centralisation.”

So why, then, were we against an elected regional assembly for the North East?

Because such an assembly, under the present financial and political régime, would be utterly meaningless.

For genuine decentralisation to be achieved, it would be necessary:

a)      to repeal the European Communities Act, so that this nation was free once more to make its own laws and its own decisions;

     b)      to put through fundamental reforms of government, with Westminster responsible only for truly national business, such as defence, foreign affairs, and the administration of justice, leaving councils representing genuine communities (ie, those living within a specific locality) to deal with all other communal matters, co-operating across boundaries on any larger projects;

c)      to collect ALL taxes at local level, and spend them close to the grass roots on things which actually have taxpayers' approval, with transparent accounts on permanent public display, and only the bare minimum necessary to finance essential national business forwarded to central government;

     d)      to stop using bank-created debt as the nation’s means of exchange and distribution, and provide instead an adequate supply of publicly-created, debt-free money, preferably in the form of an national dividend to all adult citizens; and

e)      to permit the issue of local and regional currencies to boost economic activity in less prosperous parts of the country.

Under such a system, there would be no need to go begging at Westminster.  Financial and political power would be with the grass roots, and enjoyed by those to whom it properly belongs: ordinary people, their families, their businesses and their communities.

MPs told to back union or pay the penalty

Adrian Pearson, The Journal

UNION leaders have warned they may withdraw support for Labour constituency parties if North MPs do not back striking council staff.

Unison has written to the region’s Labour MPs to make it clear it expects them to choose between backing union members or following the Government’s strict pay offer.

One union official suggested leaning on thousands of Unison members to only vote for MPs who supported the campaign for a decent wage for council staff.

Read more  …

http://www.journallive.co.uk/north-east-news/todays-news/2008/07/10/mps-told-to-back-union-or-pay-the-penalty-61634-21315508/

Whose Money? says:

We have every sympathy with all working people struggling to cope with the present rocketing inflation in the price of essentials.

But what about those without bargaining power?  What about those on a fixed income?

The unions should be campaigning for reform of the monetary system, which would improve the prospects of all ordinary people, not just those of their members.

We also note the following:

“NORTH MPs have been dragged into the pay row which sees them stuck between union paymasters and Government whips.”

Even worse for poor Alan Campbell, MP for Tynemouth, who is himself a government whip (he likes to spell it with a capital ‘W’), and must now be torn between upsetting the unions and holding on to his lucrative public office.

Any bets which side he'll come down on?

Housebuilders Redrow and Bovis Homes to slash 40% of workers

Julia Kollewe, The Guardian

Housebuilders Redrow and Bovis Homes followed in the footsteps of rivals today when they announced they were both cutting their workforce by 40% after house sales crashed.

The cuts take the total job losses in the housebuilding sector since the start of the year to 5,150, adding to fears that the housing downturn will be deep and prolonged.

Read more  …

http://www.guardian.co.uk/business/2008/jul/09/redrow.bovishomesgroupbusiness

Whose Money? says:

This is what happens when the need to be constantly creating more money (ie, under the present system, debt) takes precedence over the production of necessary goods: a frenzy of construction, with plenty of jobs, in response to irrationally inflated prices and the opportunity for disproportionate profits which this presents: followed by an equally ridiculous slump, when people can no longer be persuaded to borrow enough to keep the ball rolling.

All this, and inflation too  …

Britain is close to recession, British Chambers of Commerce warns

Nick Allen, The Telegraph

Britain is on the brink of a recession and unemployment is set to rise 300,000 by the end of next year, according to the British Chambers of Commerce.

In a dire warning it said the economic outlook for the business sector was "grim and ominous" and the downturn could be "longer and nastier" than previously expected. The report followed a survey of 5,000 large and small businesses across the country and led to calls for an early cut in interest rates amid concerns that the economy is showing parallels with the start of the recession in the early 1990s.

Read more  …

http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2008/07/08/nborrow708.xml

Whose Money? says:

So much for the end of boom and bust  -  not that anyone with an inkling of how the present debt-based financial system works believed that fairy story anyway.

You’d think the “experts” might start questioning financial theories which have repeatedly been proved unable to offer a stable supportive basis for the production of necessary goods and services .  Yet not one of the regular economic commentators in the mainstream media considers possible connections between alternating prosperity and recession and our fixation with using debt as our means of exchange and distribution.

Perhaps they should stop reading the esoteric tea leaves of economic orthodoxy, and rely on common sense instead.  Then they’re less likely to be taken by surprise by outcomes in the real world.

Banking recruitment gloom is spreading to other sectors, says Michael Page

Emma Thelwell, The Telegraph

Recruitment specialist Michael Page warned today that ongoing pain in the banking sector is draining the confidence of its clients and candidates in other white-collar sectors. 

The group also said that the downturn in the financial sector has hit growth in its UK markets and forced it to diversify abroad  …

Howard Archer, chief UK economist at Global Insight, said: "Unemployment is a lagging indicator, and it seems inevitable that very weak economic activity and deteriorating business confidence will exact an increasing toll on the labour market over the coming months."  …

…  The company stressed that it is moving "significantly away from its origins in the UK", where it makes a third of its profits.

Mr Ingham said the group itself - which employs 5,535 people - was likely to reduce the number of its UK employees "by natural attrition" over the rest of the year. He added: "It is unlikely that our headcount will now reach 6,000 by the end of the year."

Meanwhile outside the UK, Michael Page has seen profits in EMEA (Europe, the Middle East and Africa) - which now accounts for almost half of group profits - jump 45pc to £70.3m. Since the beginning of 2005, the company has entered 12 new countries, opening 47 new offices.

(Photo: FreeFoto.com)

Read more  …

http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2008/07/07/bcnpage207.xml&CMP=ILC-mostviewedbox

Whose Money?  says:

And so much, too, for our dependence on financial wizardry in the City of London!  It may continue to bring the money rolling in for its transnational operatives, but there won’t be much joy for those thrown out of work at home, as the focus moves to the east. 

That's the trouble with an economic system which places the acquisition of money (a thing which can be produced in any quantities necessary to facilitate trade) above the actual production of goods and services to be traded.

– Thomas Jefferson, Letter to Treasury Secretary Albert Gallatin (1802)

http://www.webofdebt.com/articles/subprime_defense.php

 MPs face backlash after vote on perks

William Green, The Journal

LABOUR MPs who voted to keep controversial taxpayer-funded allowances have been accused of having their “snouts in the trough” by Liberal Democrats.

Fourteen of the region’s 28 Labour MPs joined 158 other MPs – mostly from their own party - in rejecting calls to abolish the £24,000 annual budget to buy and kit out second homes during a Commons vote on Thursday.

Read more  …

http://www.journallive.co.uk/north-east-news/todays-news/2008/07/05/mps-face-backlash-after-vote-on-perks-61634-21266729/

Whose Money? says:

Nice to know that our MPs aren’t feeling the pinch!  We only wish that those voting to keep the controversial allowances, like our own “representative”, government whip Alan Campbell, were as keen on standing up for our rights (for instance, our right to make our own laws and decisions as an independent nation state) as they are in promoting their own.

  Tynemouth constituents can see how much Mr Campbell is costing the country, in addition to his generous salary, here: http://www.theyworkforyou.com/mp/alan_campbell/tynemouth.  He comes 57^th out of 645 for total expenses notched up.  However, we congratulate him on achieving joint first position for his Additional Costs Allowance of £22,110, and joint twelfth for his Incidental Expenses Provision, which weighs in at a bumper £29,140.  (We’d love to have an itemised breakdown of exactly what this £51,250 package of expenses covers, and be given the chance to decide whether or not it offered value for money.)

Look up your own MP’s expenses on http://www.theyworkforyou.com/, and decide for yourself if there might be any connection between their level and the way he or she voted.

There can be no objection to reasonable expenses: but when MPs consistently vote themselves more money for rubber-stamping EU laws beyond their power of repeal, while imposing a debt-based money régime which increasingly pauperises those unable to borrow themselves into wealth or enjoy a pay rise on demand, it’s no wonder the public hold them in contempt!

London Tory MP gets £100,000 for 'second' home just nine miles from the Commons

Glen Owen and James Mills, The Daily Mail

A leading Tory MP has claimed more than £100,000 in ‘second home allowances’ – despite representing a seat just 35 minutes’ drive from Westminster.

Jacqui Lait, Shadow Planning Minister, represents Beckenham, Kent,  just nine miles from Parliament.

But by nominating a £1.5million Sussex farmhouse as her main home she has been able to claim up to £19,000 under MPs’ Additional Costs Allowance.

Read more  …

http://www.dailymail.co.uk/news/article-1028286/London-Tory-MP-gets-100-000-second-home-just-miles-Commons.html

Whose Money? says:

We have no doubt that there are also MPs in all the other parties who profit from over-generous expense claims on the public purse.

  (Our own Labour MP, Mr Alan Campbell, is well up on the expenses list, his current ranking being 57^th most costly MP out of the total 645, and joint first for his additional costs allowance, under which he rakes in no less than £22,110: and all this for a government whip, whose first commitment is not to his constituents, but to his masters in the ruling junta!)

What is more, as those of us on low wages or fixed incomes are told to tighten our belts, these lucky parliamentarians  enjoy a highly lucrative form of under-employment, as they pass their former responsibilities hand over fist to Brussels, while their salaries and expenses continue to climb.

Are we making this point out of envy?

Certainly not.

The problem for us, as money-reformers, is that the comparative affluence of our “representatives” makes it unlikely that they will experience for themselves the down-side of the present financial system, and acknowledge the need to switch to the more stable and and supportive alternative of a debt-free currency.

We are taking a fortnight’s break.  Back on Monday, 7 July.

Meanwhile, there's lots of interesting reading in the online summer edition of The Social Crediter, here:  http://douglassocialcredit.com/resources/tsc/2008_summer.pdf

What the BBC don't report! Brussels' Journal

Spain Gets Smacked by Economic Reality

From the desk of Soeren Kern on Fri, 2008-06-20 13:04

A national truck driver’s strike in Spain is gradually winding down, but it has managed to bring the already-troubled Spanish economy to a standstill. In doing so, it has also highlighted what happens when a welfare state goes wild.
 
Some 90,000 self-employed hauliers say they are protesting the soaring cost of diesel fuel, which has climbed to 1.30 euros/liter (about US$8 per gallon) from 0.95 euros one year ago. Skyrocketing fuel prices are, clearly, a big problem all over Europe, and many Spaniards identify with their plight.
 
But what really irks Spanish truckers is their exposure to the reality of market economics. They are angry that an economic downturn in Spain has reduced the demand for their services. There is now too much trucking supply for too little trucking demand, which according to the basic laws of economics implies lower transport prices.
 
So the truckers want the government to bail them out via artificial price supports. They are demanding that the government impose a market-distorting minimum transport tariff, a solution that would allow hauliers to continue with business as usual while passing the additional costs over to consumers.
 
The government has proposed setting aside 55 million euros to encourage early retirements from the over-saturated sector. But the striking truckers are not interested in compromise. Indeed, they are betting that the government will cave in to their demands. After all, the Spanish government always gives in to labor unrest.
 
In the meantime, the truckers have been determined to share their pain with the rest of Spain. The strike effectively shut down a large chunk of the economy because most goods in the country are shipped by lorry (due to insufficient rail-freight infrastructure). Many factories were forced to close production lines for lack of supplies. Spanish consumers panicked that they would run out of food and emptied supermarkets in towns and cities across the country. As for petrol: Some 75 percent of service stations in Barcelona ran out of gasoline within days of the strike; nearly half of the service stations in Madrid were closed.
 
Spain Complains
 
But truckers are not the only Spaniards taking some extra time off. Indeed, job walkouts protesting exposure to market economics have become a national sport in Spain.
 
•    Spanish fishermen, who have been on strike for more than two weeks, are demanding government subsidies that would limit the price of fuel to 0.40 cents per liter for the fishing sector.
 
•    Civil servants in the Spanish judiciary system went on strike for more than two months in February, March and April, with demands for higher pay. The bureaucrats, who are already among the highest salaried workers in Spain, brought the country’s justice system to a near-complete halt when the government offered to meet their demands in two stages instead of one.
 
•    In Madrid, more than 50.000 school teachers went on strike on May 7 that kept more than 700.000 students out of the classroom. Teachers are angry about the “privatization” of Spanish education. According to the OECD, Spain has one of the worst public school systems in Europe and private schools are indeed filling the demand for better educational opportunities. Some 8 out of 10 students in Madrid now attend private schools, compared with 7 out of 10 students who attend public schools in the rest of the country.
 
•    In Madrid, some 20.000 healthcare professionals at more than 400 healthcare centers went on strike in March and April with demands for higher pay. The walkouts caused the cancellation of more than 320.000 doctors’ visits and 4.000 surgeries. In Spain, more than 42.000 patients are on waiting lists for surgery; thousands of patients have been waiting for more than 2.5 years to be treated. The demands for salary increases would cost the government more than 150 million euros a year, even though the average salaries for medical workers have already increased by 63 percent during the past four years.
 
•    In Madrid, garbage collectors threatened to turn the Spanish capital into another Naples, Italy, which has become famous for its mountains of trash heaps. The garbage collectors finally returned to work in mid May after accepting a 5.3 percent pay hike. The government agreed to pay a bonus of 30 euros to those employees who are forced to work on November 3, the festival of San Martín de Porres, the patron saint for garbage collectors.
 
•    In Madrid, some 8.000 municipal bus drivers went on a 30-day strike in April that affected some 1.5 million commuters a day. The bus drivers agreed to return to work after receiving a 100 euro pay increase plus additional subsidies to pay the dry cleaning bills for their uniforms.
 
•    In Madrid, 1.800 parking meter readers are on strike for all of June after having rejected a 33 percent pay hike as “insufficient”. The walkout is costing the Madrid municipality some 400.000 euros a day in lost parking revenue.
 
•    In Madrid, some 1.500 ambulance drivers have called for a strike to begin on 18 June. They are demanding higher wages and less working hours.
 
•    In Barcelona, 2.800 municipal bus drivers have carried out repeated strikes since December 2007. They are demanding higher wages and less working hours. When the municipal (Socialist) government refused to meet their demands in April, the bus drivers began vandalizing their own buses.
 
•    In Bilbao, the largest city in the Basque Country and a major seaport and industrial center, metro train drivers and municipal bus drivers are striking for higher wages and less working hours. Bilbao already has the most expensive public transportation system in Spain after Barcelona. The strikers are believed to have sabotaged at least 60 buses since their walkout began.
 
•    In Zaragoza, Spain’s fifth-largest city which has just invested 1.5 billion euros to host the Expo 2008, more than 10.000 workers charged with cleaning public buildings, including the airport and the train station, have decided this is a good time to press the regional government for a pay raise.
 
•    In Valencia, Spain’s fourth-largest city, metro train drivers have threatened to shut down the system for 12 days in June if the regional government does not meet their demands for higher pay.
 
According to the Spanish Confederation of Employers’ Organizations (CEOE), Spanish workers held 334 strikes during the first four months of 2008, which resulted in the loss of 14.3 million man-hours of labor. These figures represent a 72 percent increase over the same period in 2007. During all of 2007, there were 852 strikes in Spain that resulted in the total loss of 22.5 million man-hours.
 
Nor is this a new trend. According to a special report published by The Economist in March 2005, Spain ranked third among developed countries (after Denmark and Canada) for the number of workdays lost as the result of labor conflicts during the previous decade. Spain lost 254 days, three times more than the EU average of 73 days (calculated as the number of days lost per 1,000 employees). By way of comparison, the UK lost 20 days while Germany lost 10 days.
 
Considering all these grievances, it seems strange that Spanish voters in March gave Socialist Prime Minister Jose Luis Rodriguez Zapatero another four-year term in office. After all, pre-election polls showed that the majority of Spaniards knew full well that Spain was not on the right track (economically or otherwise).
 
Maybe they allowed themselves to be persuaded that everything would somehow be okay, thanks to Zapatero’s post-modern relativistic political discourse (which posits that all problems are by definition imaginary). Or perhaps they were bribed by the 22 billion euros (a whopping 2.1 percent of Spain’s GDP) in handouts that Zapatero promised to bestow upon them if re-elected.
 
In any case, Spain’s myriad market disequilibriums are coming home to roost, and all at the same time.
 
For example, Spain has been reeling from the collapse of a housing bubble that for the last 15 years has enabled the notoriously uncompetitive economy to post some of the highest growth rates in the European Union. Millions of Spaniards are now struggling to accept the fact that they were lulled into a false sense of never-ending prosperity.
 
At the same time, the generous financial subsidies that Spain has received since joining the EU in 1986 are drying up. During the past 20 years, Spain cashed in on some 100 billion euros (equivalent to nearly 1 percent of its GDP every year) by way of EU Structural and Cohesion Funds, which are designed to narrow the gap between the EU’s wealthy and poor countries. But now that Spain has reached a per capita GDP of 98.5 percent of the EU average (it was 72 percent in 1986), the country will begin paying more into the EU than it receives back.
 
The implication is that Spaniards will have to strike less and work more if they want to maintain their current standard of living. But that seems an unlikely prospect. Spain recently led a bloc (that included Belgium and Greece) that sought to prohibit British workers from working more than 48 hours a week. In an interview on Spanish National Radio, Zapatero said working 65 hours a week was “unacceptable” and “retrograde”.
He is worried that if Brits may choose to work more than Spaniards, Britain will have an unfair competitive advantage.
 
And what about the nearly one million illegal immigrants that Zapatero “regularized” in 2005 with the justification that they would pay into the financially unstable social security system? Many of them are now drawing unemployment benefits, so much so that the Socialist government wants to pay them to leave Spain if they promise to stay away for a minimum of three years. 
 
Problem? What Problem?
 
Just before the March elections, Zapatero insisted that the Spanish economy would grow by 3.3 percent in 2008; since his re-election, however, the government has revised that figure downwards on an almost daily basis. Indeed, Spanish economic growth has slid to 0.3 percent in the first quarter 2008 from 0.8 percent in the last three months of 2007. The Spanish Banking Association says that Spanish growth will probably be negative in 2008. The Spanish economy grew by 3.8 percent in 2007.
 
But that’s not all. Annual consumer inflation jumped to a 13-year high of 4.6 percent in May. And according to the Labor Ministry, the number of registered jobless shot upwards to 2.35 million in May, the worst figure since post-Franco recordkeeping began in 1979. The National Statistics Institute says the unemployment rate jumped to 9.6 percent in the first three months of 2008 from 8.6 percent in the previous quarter, the biggest jump since the first quarter of 1993, when the Spanish economy slipped into recession. Some financial analysts fear the unemployment rate could spiral to 15 percent in 2009.
 
So far Zapatero’s post-modern approach to Spain’s economic crisis seems based on three reality-evading pillars: denial, passing the blame, and more denial. His Plan A has involved a pop psychology campaign advising Spaniards that “pessimism does not create jobs.” Plan B blamed “radical liberalism” which in euro-speak means the free market. Zapatero now wants to implement Plan C, a global advertising campaign in the world financial press designed to highlight his economic non-crisis management skills.
 
Spaniards, having grown accustomed to three decades of spoon-feeding by Socialist largesse, are in for a long, hot free-market summer.

A short version of this article was published by Pajamas Media on June 14, 2008. Soeren Kern is Senior Analyst for Transatlantic Relations at the Madrid-based Grupo de Estudios Estratégicos / Strategic Studies Group

Whose Money? says:

Is Spain simply being punished by the inexorable logic of the "free" market?  Or for being, like the UK, the willing victim of the banks' money-creation bonanza  -  especially where the property market is concerned?

Photos courtesy of FreeFotos: http://www.freefoto.com/index.jsp

Government borrowing soars by half

Sean O’Grady, The Independent

Government borrowing ballooned by 50 per cent in the first two months of this year compared with the same period last year, and could soon exceed £50bn.

Analysis by the independent Institute for Fiscal Studies of the latest data on the public finances reveals tax revenues are growing much more slowly than the Government expected, while public spending is still on track. Borrowing has risen in April/May 2008 to £12.7bn, against £8.4bn in the same months last year.

Read more  …

http://www.independent.co.uk/news/business/news/government-borrowing-soars-by-half-851128.html

Whose Money? says:

What is needed is publicly-created, debt free money, financing as much home-based production as possible  …  plus control of all taxes at the grass roots,

Allowing the creation of the nation’s money supply to be a lucrative profit-making opportunity for private businesses is insane.  So is permitting distant central governments to have first use of taxpayers’ “contributions”  -  see next item:

Taxpayers to bail out 2012 games village

Paul Kelso, The Guardian

The government will be forced to step in to bail out the London 2012 Olympic athletes' village as the impact of the credit crunch and the sliding domestic housing market threaten to stretch the £9.3bn budget for the games to its limit. The chairman of the Olympic Delivery Authority conceded for the first time yesterday that the village would definitely require additional public funding to cover a shortfall that could run to tens of millions of pounds.

Read more  …

http://www.guardian.co.uk/uk/2008/jun/20/olympics2012.politicsandsport

Whose Money? says:

Does anyone really imagine that most taxpayers would prefer their money to splashed about on all the expensive hullabaloo of the Olympics, rather than on providing services which they actually need (or, even better, staying in their own pockets in the first place, so that they themselves could decide, as individuals or as members of genuine  communities, how it should be spent)?

The argument that the Olympics will bring money into the country only has any strength under the present régime of bank finance, where money borrowed into existence by   foreigners (who will continue to bear the responsibility of repaying and servicing the debt even when it has gone elsewhere) is the object of fierce competition, whether it comes in the form of exports, of inward investment, or the proceeds of tourism.

Why go to these extremes in a fruitless bid to avoid the expense of borrowing, when governments are perfectly entitled to authorise the creation of sufficient debt-free money to make all this chronic insolvency unnecessary.

Brace yourselves: Bank of England boss warns of low pay rises and soaring bills in a 'difficult year'

Becky Barow, The Daily Mail

Millions of families must brace themselves for a gruelling period with finances stretched to breaking point, the Bank of England governor warned last night.

Mervyn King said they should prepare for the lethal cocktail of below-inflation pay rises, rising fuel and food bills and more expensive mortgages. 

In a bleak speech at the Mansion House, a key set piece in the financial calendar, he said Britain is facing 'the most difficult economic challenge for two decades'.

Read more  …

http://www.dailymail.co.uk/news/article-1027559/Alistair-Darling-calls-wage-restraint-admitting-Britain-facing-difficult-year-Mansion-House.html

Whose Money? says:

We reckon we’ve got the message, which is now being spelt out, in ever more gloomy terms, every day.

Mr King tells us that, “To return now to inflationary pay settlements would undermine rather than raise living standards with a damaging circle of wage increases eroded by steadily rising prices. We must never return to those days.”

Of course, he's right.  We remember the last period of stagflation only too well, and have no wish to repeat the experience. 

But is it likely that workers will stand meekly by, seeing their living standards eroded, through no fault of their own?

The problem is that, for low earners, whose wages go mainly on the essentials, there is little leeway for cutting back: and, despite media and government claims of national prosperity in recent years, large sections of the population have already seen their purchasing power struggling against the real rate of inflation, as exemplified by ever-rising taxes and housing costs, during the much-vaunted "boom" period.  Now, with recession setting in, the pace of that already considerable inflation is increasing, with food and fuel costs piling on the misery.

So what, Mr King, are those towards the bottom of the heap, but not too poor to be taxed "until the pips squeak", supposed to do? 

It’s no use lecturing people on the breadline.  The only real solution to the problem all the “experts” have landed us with is a gradual switch to a publicly-created, debt-free currency, with banks eventually allowed to lend only money which already exists.

For various suggestions on how greater economic stability might be achieved, take a look in our Websites, Books, DVDs section  …  and make sure, in particular, that you buy Mike Rowbotham’s brilliant book, The Grip of Death: read the first chapter here.

Pay inflation warning after fuel strike deal

Nick Allen, The Telegraph

The Government issued a firm warning against demands for bumper pay rises after a deal was reached with tanker drivers to end the fuel dispute.

Business Secretary John Hutton called for "discipline" in an attempt to stave off mounting inflationary pressures and a new era of strikes and spiralling wage demands.

Inflation figures released yesterday were worse than feared and hundreds of thousands of workers are threatening to demand higher salaries as the cost of living rises.

Mr Hutton said: "There needs to be discipline in public and private sector pay if we are to keep inflation under control."

Read more  …

http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2008/06/18/bcndarling218.xml

Whose Money? says:

The first people we’d like to see showing a bit of discipline in their demands for pay rises are MPs. 

After all, as Peter Lilley pointed out, with impeccable logic, in the Commons recently, now that they’ve handed most of their responsibilities over to the EU, and are now eagerly planning to pass on the few remaining ones, what they should be expecting is a hefty cut in their salaries. 

Ordinary people, on the other hand, have every right to ask for more money, with their “contributions” to the cash-strapped Chancellor becoming more burdensome, year by year; while, at the same time, they are expected to go deeper and deeper into debt in order to consume the economy into growth, and put money into circulation, at their own risk and expense. 

Alistair Darling warns of global crisis hitting Britain in first Mansion House speech

Robert Winnett, The Telegraph

  Alistair Darling, the Chancellor, is to warn that Britain is now "exposed to global events like never before" in his first Mansion House speech to the City.

In a BBC interview he urged people not to push for inflation-busting pay rises this year saying it would be "disastrous" if the current high rates of inflation became the norm.

His comments will underline the growing concern within Government over the impact of rapidly increasing food and fuel prices which have pushed inflation to a 16-year high.

Read more  …

http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2008/06/18/bcndarling118.xml

Whose Money? says:

Hmmmm  …

We’d have more sympathy with Mr Darling's plea for restraint if successive governments hadn’t destroyed food production in this country, and put huge taxes on fuel, without either attempting to conserve our own oil resources, or funding research into such promising areas as cold fusion, or the electric car.

In fact, it looks to us as if the aim of recent governments of all complexions has been to make this nation as dependent as possible upon powers beyond our control, in order to promote continent-wide, and, ultimately, global “governance” (a term which we take to mean management of the hoi-polloi by self-elected superior beings convinced that they are entitled to “lead beyond authority” in the post-democratic era).

If we are to be less vulnerable to global shocks, we need to boost, not deplete, the real wealth of the world, by maximising production of food and all other essentials goods within our own borders, using both our natural advantages and, where these fail, our ingenuity: and money  -  publicly-created, debt-free money  -  must be the servant, not the master, of our productive renaissance.

The City has got its head in the clouds if it thinks business can go on as usual

Larry Elliott, The Guardian

Banks need reining in - and to be punished for their stupidity and recklessness

We're coming up to the anniversary of the biggest financial shock since the 1930s and all of us have learned some new words. A year ago, few had heard of securitisation, let alone a collateralised debt obligation or a credit default swap. What we have discovered is that when you piece these strange words together they produce terms that are far more familiar: recession, negative equity, nationalisation, inflation.

There's nothing new in this. When Dan Atkinson and I started work on our new book, The Gods That Failed, this time last year, our sense was that things were about to go seriously wrong for the global economy, for while the terminology had changed, the behaviour of markets had not. Throughout history there have been periods of wild exuberance followed by the pricking of bubbles. The banks that lent with such joyous abandon in the good times go bust in the bad times.

What happened was that the financial markets became more and more powerful at the same time as the controls on them became less and less stringent. It was like putting a formula one engine in the family saloon and removing all speed limits.

Read more  ...

http://www.guardian.co.uk/business/2008/jun/16/banking.globaleconomy

Whose Money? says:

Very true: the banks shouldn't be allowed to get away with it: and "there has never been a better time to bring in regulatory reform".

But why on earth stick with bank credit as effectively the sole money creation mechanism?  Why insist that people should go into debt just to provide a medium for the exchange and distribution of goods and services?  

It puzzles us that the excellent Larry Elliott doesn't confront this problem head-on.  Is it just that he had it drummed into him so hard, in his impressionable student years, that no public authority can be trusted to keep inflation in check?  Or is it, rather, that no mainstream national newspaper  will  permit its columnists (and very rarely even the occasional contributor)  to broach the subject of debt-free money, beyond the control of  the banks,  as a genuine option?

It's our belief that as long as private, profit-making businesses are licensed to create a nation's money supply as a debt against ordinary people, "they will quickly dream up ways of getting round any new curbs".

Why give them the opportunity to do so?  Why not restrict them instead to lending out only money which they actually have  -  with a public authority in charge of increasing the money available, and removing it from circulation, as necessary?

It's worked in other places.  Why not the UK?

Today we hear that the unfortunate Mervyn King is to receive his second letter of disapproval from the Chancellor.

Until we stop relying on the banks to borrow our money supply into existence, a succession of Mervyn Kings will be made scapegoats of our dysfunctional financial system, to be dragged up, lectured and found guilty by the governments who allow this absurd situation to persist.

Deflation rather than inflation could soon be our big worry

Roger Bootle, The Telegraph

Stand by: it's inflation week again. The latest rate, due to be published on Tuesday, is expected to rise to 3.2pc. A rate of 3.1pc or above would oblige the Governor of the Bank to write an open letter to the Chancellor. If 3.1pc isn't reached this month, it will be in a month or two's time.

We know enough about price increases in the pipeline to know that inflation is heading sharply higher - perhaps as high as 4pc. What we do not know, however, is what will happen to all those things that are not yet in the pipeline. But financial markets are increasingly fearing the worst.

Read more  ...

http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2008/06/16/ccom116.xml

Whose Money? says:

Insecurity is built into the present system.

Mr Bootle is thinking in terms of the country as a whole,.  For those on fixed incomes, price inflation will continue to be the biggest worry.  For those thrown out of work, it's recession that's to be feared.

Why not switch to debt-free money, issued by a public authority in line with the nation's wealth, and set everyone's minds at rest?  Why not end the fixation on growth (inseparable from the use of debt as the nation's means of exchange and distribution, and focus instead on production to meet human needs  -  with money the servant of that production, rather than its master?

Can we keep stagflation at bay this time?

Heather Stewart, The Observer

For those who recall the Seventies, today's economic climate is disturbingly familiar. Heather Stewart looks at the parallels and how a new generation of politicians, bankers and economists are trying to stave off recession

Read more   …

http://www.guardian.co.uk/business/2008/jun/15/economics.inflation

Whose Money? says:

As usual, it’s the inflation versus recession argument, when it’s clear that we are experiencing both;, and that, under the debt-money system, inflation can only be stamped out by recession, and recession can only be avoided by stoking up inflation.

Bet they won’t think of switching to debt-free money …  not with the plutocracy lined up against them.

And for another look at the underhand goings-on among the plutocracy, here’s a new article from Ellen Brown, of Web of Debt  (http://www.webofdebt.com):

WHAT’S THE DIFFERENCE BETWEEN LEHMAN BROTHERS AND BEAR STEARNS?
LEHMAN’S CEO SITS ON THE BOARD OF THE NY FED ?

An earlier article by this author (“The Secret Bailout of JP Morgan” http://www.webofdebt.com/articles/banking-bailout.php) summarized evidence presented by John Olagues, an expert in options trading, suggesting that JPMorgan, far from “rescuing” Bear Stearns, was actually its nemesis.¹ The faltering investment bank was brought down, not by “rumors,” but by insider trading based on a plan drawn up much earlier. The deal was a lucrative one for JPM, handing the Wall Street megabank $52 billion in loans from the Federal Reserve (meaning ultimately the U.S. taxpayer). So how did JPM get away with it? Olagues notes the highly suspicious fact that JPM’s CEO James Dimon sits on the Board of the New York Federal Reserve.

In his latest post, Olagues discusses the fate of Lehman Brothers, the nation’s fourth-largest investment bank and the next faltering bank expected to fail.² Unlike Bear Stearns, which got decimated by the JPM buyout using Federal Reserve money, Lehman Brothers is probably in line for a massive bailout from the Fed. At least, that’s what its CEO Richard Fuld seems to believe. The June 4, 2008 Financial Times of London quoted him as stating, “The Federal Reserve’s decision earlier this year to lend directly to investment banks should take questions about Lehman’s liquidity off the table.” Whether Lehman can come up with the “liquidity” to meet its debts is no longer an issue, because it expects to be feeding at the trough of the Federal Reserve, just as JPM did when it bought Bear Stearns at bargain-basement prices. The difference between the two “bailouts” is that Lehman Brothers, unlike Bear Stearns, will actually get the money. Why is Fuld so confident of this rescue operation? Olagues notes that Fuld, like Dimon (and unlike Bear CEO Alan Schwartz), sits on the Board of the New York Federal Reserve.

Read it here:

http://www.webofdebt.com/articles/lehman_brothers.php

Whose Money? says:

Which do you think less liable to corruption: private, profit-making businesses in control of the nations’ money supply, and in a position to use their financial power to gain control of the world’s resources, through the manipulation of debt; or a national public authority, answering to the electorate through a democratically accountable government (ie, not the likes of the UK’s present masters in the EU), with the population using the debt-free money which it creates for them to build their own prosperity?

Ireland's vote leaves the euro in limbo again

  Ambrose Evans-Pritchard, The Telegraph

It is too early to tell whether Ireland's protest yesterday will inflict more damage to Europe's monetary union, already torn between North and South.

The euro's creators always assumed that Brussels would acquire the apparatus of an economic federal state - with an EU treasury to level the cyclical ups and down of different regions through fiscal transfers, and a debt union to pre-empt the risk of a sovereign default.

The Irish have halted that process yet again, if only for a while. The euro remains in limbo, an orphan currency without a state to back it up, just as the economic downturn engulfs the region.

Read more  …

http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2008/06/14/ccambrose114.xml

Whose Money? says:

Well done, Ireland!  However, as we have learned, from previous “No” votes, those who wish to impose continent-wide currencies, in anticipation of a final merging into one debt-based global currency, are unlikely to be put off by a democratic thumbs-down to greater political integration.

And as long as the financiers hold the purse strings, voices raised in protest will register only as  a feeble squeak.

The Real Cost of Living Index: 9.5 per cent

Emma Wall, The Telegraph

Rising food and fuel prices, as well as increased taxes and other household bills, mean the average family must cope with inflation that is twice as high as official estimates, according to new research by The Daily Telegraph and moneysupermarket.com, the price comparison website. Taking all these factors into account, the Real Cost of Living Index (RCLI) is rising at 9.5 per cent. 

Read more  … 

http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2008/06/13/cmcostofliving113.xml

Whose Money? says:

Pity the government doesn’t use a realistic measure of inflation!

The report concludes, “Unfortunately, hopes of tax cuts have been cruelly dashed in the recent past - and are not even on the Opposition's wish list.” 

Of course they aren’t.  Each year the cost of rolling over the National Debt goes up  -  and who, apart from the taxpayer, is available to pay the bill?

And with taxes one of the main drivers of inflation, how can we ever expect stable prices?

Emerging markets face inflation meltdown

Ambrose Evans-Pritchard, The Telegraph

Central banks across much of Asia, Latin America, and Eastern Europe will soon have to jam on the breaks or risk a serious crisis as inflation spirals into the danger zone. As the stark reality becomes ever clearer, this year's correction in emerging market bourses and bond markets has now accelerted into a full-fledged rout  …

…  There is a dawning realization that China is facing a major storm as inflation (7.7pc), the rising yuan (up 5pc this year), soaring oil prices, and an economic downturn in the key export markets of North America and Europe all combine to crush profit margins. China uses five times as much energy as the US to produce a unit of GDP. It is acutely vulnerable to the energy crisis.

A quarter of the 800 shoe factories in the Guangdong region have shut down in recent months, and several thousand textile workshops are battling to stay afloat. Hong Kong's industry federation has warned that 10,000 firms operating in the South of China may soon go out of business.

Read more  …

http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2008/06/13/cnemerging113.xml

Whose Money? says:

So much for the second wave of “tigers”.  We wonder how much the vast majority of ordinary Chinese have profited for the boom.  As far as we could see, when we were in New Delhi recently, it doesn’t seem to have done much to help ordinary Indian people, though the rich were raking it in.

If poverty in the developing countries is to be eliminated, and the growth of poverty in the developed countries checked, it certainly won’t happen under a financial régime where debt rules the roost.

But the advice from the experts in the article is to trust the system, and put your money in “stunningly cheap” corporate debt!

Most people, zapped simultaneously by falling house prices and rising inflation would say, “What money?”

Britons are unemployed because of 'lack of motivation'

The arrival of a million Eastern Europeans in the past four years has not damaged wages or led to an increase in unemployment among natives, the Department for Work and Pensions insisted.

But some Britons were on the dole because of "issues around basic employability skills, incentives and motivation", its report said.

And why do they lack motivation and employability?

Because comparatively well-paid work in agriculture and manufacturing for the unskilled has disappeared, under the combined attacks from debt-driven, nomadic corporations, bestowing and withdrawing jobs in accordance with their profit margins as they play one country off against another; and from the EU, as it dictates who shall and who shall not produce goods, enforcing political integration through economic interdependence. (Photo above:  North Shields Fish Quay, once a hub of employment.)

The result is poor quality service jobs which couldn’t keep a family above the breadline, even if both husband and wife were employed in them full-time. 

Compare this with the immediate post-war years, and the following two decades, when one unskilled wage packet was sufficient to keep a couple and two children comfortably off, with the wife only working part-time, for pin money, once the children had been at school for some years.

No wonder people lack motivation!

Given the platform offered by a non-means-tested national dividend to all adult citizens, it would be worth while putting in the hours in low-paid jobs, to boost total income.  As it is, if you work, the debt-ridden government claws back your benefits: so why bother?

Stay at home mums ARE penalised by the benefit system, economists find

Daniel Martin, The Daily Mail

Couples with children and mothers who stay at home are being penalised by the benefits system which favours lone parents, economists concluded yesterday.

The respected Institute for Fiscal Studies found that while the number of couples with children in poverty shot up last year, the numbers of poor single parents came down.

And a third more families with just one parent working are below the poverty line than when Labour came to power in 1997.

Read more  …

http://www.dailymail.co.uk/news/article-1025877/Stay-home-mums-ARE-penalised-benefit-economists-find.html

Whose Money? says: 

As Conservative spokesman, Chris Grayling, says, “'We have a benefits system that encourages people to live apart and a tax system that no longer recognises marriage. We can't go on like this.”

He is right.  Nevertheless, the fundamental reason for family poverty, the reason why so many people need benefits in the first place, is our use of debt as the nation’s means of exchange and distribution..

It is the use of debt as our national currency which has pushed up inflation and taxation, raising the basic cost of living, and forcing millions of women into full-time work.

As for “children’s minister” (and what call is there for one of those, we ask?) Beverley Hughes, who blames poverty on the failure of many women  “to maximise their ability to work”,  all we can say is, what a cheek!

There is quite enough for a young mother to do, just looking after her children, loving them and caring for them, as uniquely precious individuals, in a way which no short-term child-care employee can possibly do  -  not to mention all the time-and-energy consuming tasks involved in being that most despised creature, a housewife.

We bet most stay-at-home mums  -  especially those lumping heavy bags of shopping on foot from the nearest supermarket, and attempting to provide nourishing meals for their families on an inadequate budget  -  know a lot more about sheer hard work than Ms Hughes can even imagine!

And not much hope for the future, either:

Becky Barrow, The Daily Mail

A record number of pensioners are getting jobs or staying in work because they cannot afford to retire, official figures revealed yesterday.

There are now 1.3million Britons who have reached the state pension age of 60 for women and 65 for men but still have to get up most days to go to work.

Read more  ...

http://www.dailymail.co.uk/news/article-1025889/Back-work-OAPs-Record-number-pensioners-afford-stay-retired.html

Whose Money? says:

We wonder how many of them are still paying off their mortgages  ...

Even more to the point, with one and a quarter million pensioners seeking work, and the numbers rising rapidly (and, of course, all the married women being urged into the marketplace by Ms Hughes), we have to ask:

1)  how on earth there can possibly be enough well-paid jobs to go round, as automation and the IT revolution reduce those available;

2)  whether this won't hold wages down, especially as the OAPs will be subsidised by their pensions; and

3)  why on earth do we need mass immigration?

UK labour market is slowly weakening

UK unemployment jumped to the highest level in seven months in May as slowing economic growth prompted companies to cut more staff.

Claims for jobless benefits increased for a fourth month, rising by 9,000 to 819,300, the Office for National Statistics said today in London. Vicky Redwood of Capital Economics complains their significance.

Read more  ...

http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2008/06/11/bcnlabor111.xml

Whose Money? says:

We’re off to play Liam Tiernan’s  “Say No to the Lisbon Treaty” song   -  listen to it here http://eurealist.co.uk/
and pray that 1) the Irish vote No; and 2) that they won’t be made to keep answering the same question until they get the right answer.

No congestion fee, no transport cash

Adrian Pearson, The Journal

TRANSPORT experts in Newcastle have warned that Tyneside is unlikely to see the huge investment in public transport set for Manchester because the Government will only hand out the cash if council leaders promise to introduce road pricing.

The five Tyne and Wear authorities are working on a combined Transport Innovation Fund (TIF) project which could have seen them introduce road pricing in order to reduce congestion on city centre routes.

But when Newcastle council leader John Shipley announced in March that the council would definitely not be bringing in any form of congestion charge, the chance of accessing billions of pounds worth of transport cash was effectively lost.

Read more  …

http://www.journallive.co.uk/north-east-news/todays-news/2008/06/10/no-congestion-fee-no-transport-cash-61634-21047360/

Whose Money? says:

All the result of a debt-based economy, with financial power concentrated at the centre, instead of at the grass roots.

When will the Journal start demanding financial reform?  That, along with a fundamental renegotiation of our relationship with the EU, is the only thing that can help the less prosperous parts of the UK.

Bank of England Governor Mervyn King raises stagflation spectre

The Bank of England governor has raised the spectre of stagflation in Britain, warning that we are facing "rising inflation and falling economic growth".

Mervyn King used a closely-watched speech today to warn that families are facing the "longest period of financial turmoil that most of us can remember".

His comments - which will spark fears of stagflation, where high inflation and stagnant or shrinking growth combine to drag down the economy - come as traders bet that the Bank will be forced to raise borrowing costs a number of times in order to get a grip on rising prices. 

Read more  …

http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2008/06/10/bcnking110.xml

Whose Money? says:

Hey, Mervyn  -  you’re a bit late twigging it, aren’t you?  We’ve been warning of stagflation for months.

To be fair, you’ve mentioned it before as well.  It just took the journalists and politicians a bit longer before the penny dropped  …  or before they admitted it.

It's gone to meet its maker. It is no more

Larry Elliott, The Guardian

…  This time last year the UK economy was humming along, with house prices rising rapidly and banks like Northern Rock and Bradford & Bingley packaging up their mortgages for the securitisation market. As far as the Treasury and the Bank of England were concerned there was no reason to think that much was amiss. The economy was growing at above trend and the Bank was raising rates in an attempt to slow things down.

There was always a large element of fantasy in all this. The strength of the economy was more illusory than real, with excess lending and borrowing leading to a housing bubble similar to that in America. But last Autumn, consumers were still living in a dream-like state, confident that house prices would keep rising no matter how expensive they became  …

…  the state of the economy has deteriorated markedly over the past 12 months and it is this - far more than any supposed flaws in Brown's character - that has changed the nature of the political debate  …

Read more  …

http://www.guardian.co.uk/business/2008/jun/09/economicgrowth.economy

Whose Money? says:

A realistic account of the present state of the economy.

What a pity that he doesn’t go further, and pin the blame squarely where it lies: with the politicians who permit finance to lord it over production  ...  and with the millions of ordinary voters in democratic countries who let them get away with it.

Alliance Boots relocates from the UK

James Hall, The Sunday Telegraph

Alliance Boots, the health and beauty company, has switched its headquarters from Britain to Switzerland in a further blow to Britain's status as an international centre for business.

The move marks the end of almost a century-and-a-half of Boots having its headquarters in this country.

Read more  …

http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2008/06/08/cnboots108.xml

Whose Money? says:

“… a century-and-a-half of Boots having its headquarters in this country” ?

Isn’t that putting it rather mildly?  Not that we care much about "Britain's status as an international centre for business" :  just that we were under the impression that, until recently, Boots actually was a British company.

National identities and independent economies are being systematically destroyed by a global élite which has no loyalty to any particular country, and which uses its financial power, under the misnomer of “free” trade, to appropriate more and more of the world’s real wealth.

Ordinary people throughout the world stand absolutely no chance of asserting their own interests, as long as they continue to be duped by the deluded belief that money is the prime cause, rather than a mere by-product, of prosperity.

With an adequate supply of publicly-created, debt-free currency providing everybody with the basic means of subsistence, the nation would have a sound platform for further wealth creation: and thriving, home-grown businesses would no longer be subject to takeover by transnational speculators armed with huge “loans” of custom-made purchasing power by their cronies in the banking system.

It’s debt money, and the opportunities which it brings for enormous financial gains without any contribution to the total of real wealth, which is making impoverished slaves of billions, while a handful of profiteers exploit its idiosyncrasies to buy up the world.

Following on from yesterday’s proud announcement by central government of plans to make swimming free for all at publicly-owned pools, we came upon this news in our local paper (no link as yet, unfortunately):

Leisure facilities may face change
David Sedgwick, Whitley Bay Guardian

Leisure facilities could be handed over to an outside company in a radical cost cutting scheme, the News Guardian can reveal  …

…  Proposals are being drawn up by officers at North Tyneside Council which could see a selection of leisure facilities and attractions handed over to an outside company or a charitable trust …

...  facilities under threat include the Parks Sports Centre, Marden Bridge Sports Centre, Whitley Bay Leisure Pool, The Lakeside Centre, Burnside sports, Tynemouth Pool  … etc, etc  …

…  Engagement with residents earlier this year, where the issue was brought up, revealed concerns about increased costs while assurances were called for on prices remaining affordable and assets remaining in council ownership  …

Councillor Michael McIntyre said …  “(The Mayor) has already reduced expenditure on parks and open spaces by £500,000 and £742,000 from leisure, tourism and libraries  …”

The report then goes on to say that council spokesperson (fluent in Newspeak, we’d say*) declared:

“We are currently exploring future management options for cultural and leisure services in North Tyneside  …  In January, cabinet agreed to explore available options to deliver excellent cultural and leisure services, at best cost, that involve our communities in the design and delivery of them.

“The future management options are being measured against six key principles: improves value for money; improves satisfaction; engages communities in shaping services; maximise investment in facilities and work-force; makes sure everyone can access services easily; increases participation.”

We can be pretty sure our cash-strapped council won’t be offering any reductions in council tax to compensate for all the public amenities they're planning to sell off.  The sad fact is that North Tyneside, like every other council throughout the country, Left, Right and Centre, is sinking under the weight of its unrepayable debts.

Unfortunately, the ordinary people who have been signed up, without their explicit consent, to service all this debt, are now also sinking under the weight of  the massive personal borrowing necessary to provide the country with its money supply.

The sensible course would be reform of local government, including the abolition of all unitary authorities, in favour of small, non-party-political councils directly accountable to a strictly limited number of people, which would co-operate across boundaries, when larger projects were involved; and simultaneous reform of the financial system, to provide the nation with at least the same proportion of publicly-created, debt-fee money as was available in the immediate post-war period, supplemented, where necessary, by equally debt-free local and regional currencies.

With these reforms, consenting taxpayers would be far more likely to be able to ensure provision of the  services they actually wanted  …  and at a reasonable price.

Meanwhile, it looks as if the only free swimming we'll get in Whitley Bay and Tynemouth will be in the sea  …

* Newspeak can easily be identified from the high-minded vacuity of the sentiments expressed and a liberal peppering of approved buzz words  -  here, for instance, we have "delivery", "communities", and "participation", plus the snappily repugnant "best cost" (cf, "best practice"), and the punchy, and equally repugnant, "improves",  "engages", "increases" etc, in the list of "key principles".

Depressing, isn't it?  But then what can you expect of a council that obediently traffics in five-year plans, handed down by an authoriarian central government?  (See: Five year strategy for children and learners,  http://childrenfirst.northtyneside.gov.uk/item.asp?CID=46323)

UK inflation expectations for next 50 years soar

Edmund Conway, The Telegraph

Markets are now pricing in an inflation rate of more than 4pc for the next half-century in the latest sign that they fear the Bank of England is losing the fight against rising prices.

Read more  …

http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2008/06/07/cngilt107.xml

Whose Money?

Of course, this standard rate will not apply to all, as the National Statistics website makes clear.  You can calculate your personal inflation rate here: but, since we are all individuals (however much group-think organizations like Common Purpose would prefer it to be otherwise), even this will only be an approximation.

The fact is that, as long as we use debt as our means of exchanging and distributing the wealth of the nation, rising inflation will be a built-in basic of people’s economic life.

Yet only a handful of MPs acknowledge the problem  -  and you can be sure this will only change when sufficient people like yourself start making it a seat-losing issue.

YOU can help.  Write to your MP now!

Free swimming for all by 2012 in £130m campaign for a healthier Britain

Philip Webster, The Times

Free swimming for all will be promised today in a sports shake-up aimed at making Britain healthier and more successful in international competitions. Charges at 1,600 municipal pools are to be scrapped – initially for 20 million over-60s and under-16s.

But Gordon Brown and Andy Burnham, the Culture Secretary, will pledge that by Olympic year in 2012 swimming will be free for everyone at pools run by local authorities.

Read more  …

http://www.timesonline.co.uk/tol/sport/olympics/london_2012/article4076337.ece

Whose Money? says:

Oh thank you, thank you, Gordon! 

Isn’t it just great that our lords and masters are prepared to give us this generous concession, as we struggle to pay the taxes, service the loans and keep up with the rocketing price rises made necessary by their refusal to provide the nation with a debt-free money supply?

We can only suppose they enjoy the power the present system confers on them far too much to change it for one which would give ordinary people control over their own budgets.  Much more fun to remove 50% plus from the average income, and then play the benefactor!

“Yes, aged person, get down on your knees and thank us!  You may have free local transport, and a sop towards the payment of your heating bill; you may even go swimming for free  …  but no, sorry, you certainly may not swap these indulgences for others which you might prefer.  We, not you, are the ones who decide what’s best for you; and this wonderful debt-based money system we’ve set up with our banking friends will keep you firmly under our thumb, begging for concessions, while your children are too busy and tired earning their living to ask awkward questions!”

Give us a debt-free national dividend, created by a public authority, as a basis for our own earnings; give first use of all taxes to independent local governments, for purposes specifically approved by genuine communities (ie, people living in the same area, and willing to club together to maintain and care for that area and its population, and to promote its prosperity and well-being); and let Westminster receive only the bare minimum necessary for unquestionably national business.

Then leave us to choose for ourselves how we want to spend our money.

...  Peter Sutherland, BP Chairman and former head of GATT, said the only answer to the crisis is the creation of a supranational body like the European Commission or the World Trade Organization with the powers to enforce global action with the backing of an independent court.

Such are the debates are going on inside the elite banks in the City. There was very little dissent. Not a single member of the high-powered audience questioned the Stern assumptions. The chit-chat was purely about the best instruments for cutting CO2 emissions. (Lots of disagreement on carbon trading).

Read in full …

http://blogs.telegraph.co.uk/business/ambrosevanspritchard/june2008/climatechangedestroythiscentury.htm

We agree.  Big finance is at it again, finding ways to make us borrow and spend, for their profit, as they inflate the next big bubble: and governments, spotting the easy and self-righteous tax rip-off offered them, are quick to seize the advantage  …

See http://www.harpers.org/archive/2008/02/0081908 and http://afp.google.com/article/ALeqM5gopRs4zCBZvCvroP2-iVMzB6m_vA.

And then there are all the exciting opportunities currently taking shape in the minds of one-world financial corporatists like Peter Sutherland, no doubt to be made manifest after we have been persuaded into sacrificing the already flimsy controls of national self-government, as currently practised, and “enforcing global action with the backing of an independent court” in its place.

Welcome to a world made safe for the debt-money plutocracy  ...

Britain faces deepest slump since 1990s

Edmund Conway, The Telegraph

The economy faces one of the sharpest slowdowns in the world, the Organisation for Economic Co-operation and Development (OECD) found.

In an unusually explicit rebuke, the report blamed the Government – and by implication Gordon Brown – for borrowing and spending too much in recent years.

This “excessively loose fiscal policy” left little, if any, room to cut taxes and save the economy from a deep decline, it stated.

Read more  …

http://www.google.co.uk/search?hl=en&as_q=&as_epq=OCDE&as_oq=&as_eq=&num=10&lr=&as_filetype=&ft=i&as_sitesearch=&as_qdr=all&as_rights=&as_occt=any&cr=&as_nlo=&as_nhi=&safe=images

Whose Money? says:

And only a short while ago “experts” were telling us that Britain, with its infinitely buoyant housing market, and the unstoppable money- and job-creation activities of the City of London, was uniquely placed to go from growth to growth, with never a downturn!

The last thing we need at the moment is the advice of supranational organizations like the OECD, which aim to integrate the nations of the world into a single political unit, sharing a single interdependent economy.

What the UK, and all the other sovereign nations of the world are crying out for is democratic control over their own economic policy, not further surrender to the blueprints of  committed planners who long ago abandoned loyalty to their own country  -  whether from self-interest, or because they were dazzled by a utopian dream of peace via the “harmonizing” (in reality, the suppression) of differences under a one-world government.

The most important steps to be taken in opposing the consensus being forced upon us by the powerful (assisted by their dupes in the hundreds of  innocent-looking “charities” set up with their connivance and financial backing, all of them convinced of their right to guide and regulate other people’s lives along lines approved by themselves) are admirably set out in the manifesto of the Independent Green Voice, on the Sovereignty website: http://www.sovereignty.org.uk/features/articles/manifesto07/07manifesto.html.

Alistair Mc Connachie is a candidate for the Scottish Parliament who actually puts money reform and economic democracy high up on his agenda.  Shame he’s only up for election north of the border! 

But as we’ve said elsewhere, if people in the North East were to see a sane economic and monetary policy bringing wealth and security to our Scottish neighbours, the pressure to try those same policies for ourselves would, as James Gibb Stuart pointed out, be irresistible.

How to recognise the Hydra's heads

George Orwell taught us all about Newspeak; and the people who have ways of making us do what corporate and financial monopolies want us to do are fluent in this deceptive language.  When you  hear people chattering in it, beware!

Here are some notable examples:

“centres of excellence”:  establishment-approved set-ups;

“best practice”:  establishment-approved ways of doing things;

“stakeholders”:  carefully chosen special-interest groups/individuals courted and flattered into the belief that they are helping the powerful to shape policy;

“civil society”:  special-interest groups/individuals considered important/amenable enough to be “stakeholders”;

“governance”:  the replacement of representative government with techniques that steer tame “stakeholders” along pre-determined paths towards a desired outcome;

“consultation”:  the process by which “stakeholders” are fooled into believing that they actually wanted to go down those paths anyway; 

“facilitator”:  the stooge trained in group dynamics who makes sure the “consultation process” doesn’t go astray;

“consensus”:  the apparent unanimity resulting from the elimination of opposition by a skilled “facilitator” (see also "harmonisation");

“participatory democracy”:  the sidelining and ostracism of dissenting majorities and minorities by systematically excluding them from participation in  “civil society” and “the consultation process”;

“networking”:  collusion among  “stakeholders”  in pursuit of their own interests, without regard for those barred from participation in “participatory democracy”;

“opinion-formers”:  the supra-national political and academic establishment, plus influential “stakeholders” who have achieved “consensus” via corruption or the “consultation process”, and may now be added to the Today Programme’s safe list;

“law-makers”: an up-and-coming term, increasingly used as a synonym for “representatives”, heaven help us.

You can also expect a liberal peppering of "vibrant", "celebrate", "diversity", and "culture"  -  as in "a celebration of the vibrant diversity of our multi-cultural society".  (Interestingly, while the UK is described as "multi-cultural", "Europe", inexplicably, claims to share a single culture.)

There are literally hundreds of "not- for-profit", unelected groups and organisations sending thousands of hand-picked people on courses which train them to "lead beyond authority" (ie, to build up alliances with a "common purpose", enabling them to manipulate outcomes in areas outside their competence); charities which are linked together by funding, by mutually-supportive objectives, and by shared personnel and patronage, and which are systematically breaking down the nation's sense of identity and values, leaving it easy prey for the forces of globalisation.

And one sure way of identifying them and their dupes is by their fluent Newspeak  ... 

Northern Rock bailout: Europe demands faster downsizing

David Gow, The Guardian

The government could be forced to approve a more radical and rapid downsizing of Northern Rock if it is to win European Commission approval for its bailout of the mortgage lender, it emerged today.

The commission could also force ministers to cut short the duration of the multi-billion guarantees and loans offered to the nationalised bank, forcing it to survive on its own two feet before 2011-12 — and to pay more for the facilities.

Read more  …

http://www.guardian.co.uk/business/2008/jun/04/northernrock.banking?gusrc=rss&feed=uknews

Whose Money? says:

If  the Northern Rock situation shows us one crucial thing, it’s this: that  we’ll have to leave the EU, if we are ever to have a chance of reforming our financial system.

Once absorbed into the corporatist empire of  the euro-zone, what chance would there ever be of switching to publicly-created, debt-free money.

As far as Northern Rock itself is concerned, this seems a case of the pot calling the kettle black  …  or did I just imagine that the ECB had recently been so very busy bailing out its own?

House prices: Welcome to the bust

It will mean less reckless lending and borrowing, and - at least until memories of the crash fade - a more stable economy. The International Monetary Fund said earlier this year that 30% of the rise in house prices in the UK could not be explained by economic fundamentals: a fall in prices of that magnitude over the next couple of years is now on the cards. A crash was inevitable and - despite the wailing and the gnashing of teeth - ultimately desirable as well.

Read it in full here:

http://www.guardian.co.uk/business/2008/may/29/housingmarket.houseprices1

Whose Money? says:

We agree completely that the end of the housing boom is a desirable event, long awaited (see http://www.housepricecrash.co.uk).

But as Mr Elliott says, "Myth number 3 is that the pain will be contained to the housing market"; and since we have become dependent upon outsize mortgages for a good proportion of the debt which creates our money supply, the effects on the wider economy will cause financial hardship even to those who have no loans outstanding: people made redundant, for instance, as companies look to make savings or go out of business.

The bust will only be one hundred per cent welcome if it forces our rulers seriously to consider a switch to the publicly-created, debt-free money which would make it unnecessary to drive millions of people into borrowing more than they can afford just to provide the country with a means for the exchange and distribution of wealth.

But there’s little chance of that, is there?  Here’s an extract from Larry Elliott’s new book, written together with Dan Atkinson, which appeared in yesterday’s Guardian:

The Gods of Greed

…What was most extraordinary about all of this was not the bailing-out of City and Wall Street types who had spent decades, like surly teenagers, insisting that they wanted only to be free from the stuffy, paternal state institutions to which they now turned for help. Rather it was the failure of those same institutions to insist on any quid pro quo. In the real world, when a wild-child son or daughter comes home, tail between their legs, their "boring" parents usually require them to clean up their act in return for financial support and use of their old bedroom. Not so in the world of banking and finance. In remarks to the press in March, the British treasury actually ruled out tougher controls.

But then there is plenty of evidence that, in Britain as elsewhere, those in government could see little wrong with the system as it is  …

…  Growth under the Blair and Brown governments has relied excessively on speculation in two forms: that in the City and that by home-owners. Economically, the legacy is a debt-sodden, lopsided and unequal country in which the pay of those at the top rises at 10 times the rate of those at the bottom. Instead of taking on the City, however, the government has turned its attentions to the workforce - both blue-collar and white-collar - which has to be made ready for the global challenge from China and India by being re-skilled and re-educated and by learning how to be "entrepreneurial". Furthermore, the majority is routinely subjected to ever more illiberal, intrusive and obnoxious interference from state agencies, whether in terms of visual surveillance and the proposed identity card scheme, or in terms of being instructed to change their "attitudes" on a range of subjects.

Read it here:

http://www.guardian.co.uk/business/2008/jun/02/globaleconomy.globalrecession

Whose Money? says:

Clearly, the authors haven’t been on a Common Purpose course.  We’ll definitely be buying this one!

However, our focus is on the sixth god, Financialisation, as we believe the way money is created is what gives power to all the other distortions and injustices.

It goes back to the point CH Douglas was making years ago: what is an economy for?  Is it to create jobs?  Is it to create money?  Or is it to create the goods and services essential to human existence and well-being?

When economic activity is directed towards the sensible aim of providing for people’s needs and comfort, money falls naturally into place as a useful facilitator of exchange and distribution, rather than a valuable commodity in its own right.

As the Bible pointed out, it is the love of money (ie giving value to money itself) that is the root of the evil.

Happy Tax Freedom Day!

Negative equity hits 250,000 homeowners

David Thomas, The Telegraph

A quarter of a million homeowners have slipped into negative equity since the start of 2008 and more than a million could suffer the same fate by the end of next year as the housing crisis deepens, a leading City bank has warned. 

Read more  … 

http://www.telegraph.co.uk/news/uknews/2061751/Negative-equity-threatens-a-quarter-of-a-million-homeowners.html

Whose Money? says:

Wasn't it less than a year ago that we were still being told house prices couldn't possibly fall, because of the demand? 

The lesson is, never borrow more than you can afford, no matter how "generous" the loans you're offered.  And always remember that the two-earner family is more vulnerable, financially, to the hazards of unemployment and sickness, than those where only one person is employed outside the home, and which therefore hold a potential earner in reserve, should the main breadwinner be incapacitated.

Unfortunately, the logic of debt finance, which demands exponentially increasing borrowing just to keep sufficient money in circulation, plus cash-strapped governments dipping deeper and deeper into household budgets, has made it impossible for the vast majority of families to follow this advice, if they want to own their own home.  Before long, in fact, it's likely to make home ownership a rarity.

Unless, of course, money borrowed into existence, and owed to the banks plus interest, is replaced by a publicly-created national currency, issued free of debt at source.

Serfs did have more free time

According to "Medieval Lives", a documentary on the History Channel with Terry Jones, serfs worked a 6 day week (off on Sundays, the Sabbath). However, due to the power of the Church in medieval times, they also got all feast days off, over 100 a year. Doing the math, that is 2 feast days on average a week, plus Sundays off, which made for an average work week of 4 days. On top of that, serfs paid less in taxes. About 1/4 to 1/3 of the labor done by serfs was for their feudal lords (how they paid taxes), the rest was for themselves.

However, when you add up the federal, state, and local taxes (not just income and social security, but add property taxes, sales taxes, fuel taxes, hidden excise taxes, value added taxes, etc., plus increased cost of goods due to government regulations), tax rates come to close to 1/2 of our wages, thus we work more for our government masters than the serfs did for their lords.

I may be mistaken, but some European countries tax their subjects by an even higher proportion of their incomes. Just think how the American colonists rebelled because they paid taxes that amounted to 2 to 3% of their income, but we let our government masters take about half of our labors.