Whose Money?

Paying the cost of your own slavery

Sunday, 27 January, 2008

The CIA's external debt League Table

We've just received this from a fellow money reformer:

Interesting to see that the CIA Factbook publishes a list of nations' external debt, and does nothing to hide the fact that, with the exception of Brunei, Liechtenstein and Palau, all nations are in debt.

https://www.cia.gov/library/publications/the-world-factbook/rankorder/2079rank.html

Is the United Kingdonm really $10,450,000,000,000 in debT? Is this not worth bringing to the attention of the nation's MPs?

Whose Money? says:

Yes, it certainly is, and we hope you'll join us in doing so - though the matter is complicated by the fact that external debt is money owed by residents of a country to non-residents; and that according to the IMF definition, “residence is determined by where the debtor and creditor have their centers of economic interest - typically, where they are ordinarily located - and not by their nationality".

But who, exactly, do we UK nationals (with the help of UK “residents” operating from the City of London) owe all these trillions to? And why is such excessive borrowing necessary, in this age of unprecedented prosperity?

As Mike Rowbotham pointed out some ten years ago, in his ground-breaking book The Grip of Death(read the first chapter here, and order from Amazon at http://www.amazon.co.uk/Grip-Death-Slavery-Destructive-Economics/dp/1897766408), when we get down to basics these debts are not owed to other nations at all, but to specific individuals and businesses within the various nations: and this includes debts to the World Bank and the IMF (see our Third World Debt section, which is a poor resume of points made in the chapter dealing with third-world debt in Rowbotham’s book).

It would be interesting to see the names of the majority shareholders in those companies to which the bulk of "the world's" debt was owed $54,260,000,000,000, at the last count.

If the same names crop up again and again, through the agency of incestuously linked banks and corporations, then ordinary people throughout the world are demonstrably in hock to, and at the mercy of, a plutocratic elite using the arbitrary rules of a questionable financial system to stake an increasingly disproportionate claim on the wealth of nations.

And the only reason this elite holds such power is the decision of governments to make us go into debt for our money supply, rather than issuing us with a debt-free means of exchange, as a public service.

Saturday, 26 January, 2008

Stop borrowing and spending

Charles Moore, The Telegraph

However absurd the boom follies are, consumer power is more good than bad. A society where most people can borrow reasonable amounts is much more active, interesting, prosperous and free than one (think of Ceausescu's Romania) where they cannot. But the problem, as with the problem of production 30 years ago, comes when the lauded activity ceases to work properly.

Read it here:

http://www.telegraph.co.uk/opinion/main.jhtml;jsessionid=LXDIBPYMHQBM1QFIQMGCFFOAVCBQUIV0?xml=/opinion/2008/01/26/do2602.xml

Whose Money? says:

How can leading journalists write whole article like this without broaching the real reason for encouraging endless growth in the economy, and endless borrowing by those who can ill afford it?

The danger is, indeed, that “no politician can tell the truth”.

Or is it just that they are all too stupid to see that if you use debt as your means of exchange you have to induce more and more people to shoulder bigger and bigger loans, as compound interest takes its toll, raising prices and reducing purchasing power?

Mr Moore is taking a blinkered view when he limits the options available to the likes of Ceausescu’s Romania and the present debt- based consumer binge of the ‘advanced’ economies.

There is an inexplicably neglected alternative: a society where people can lead active and prosperous lives free from the burden of having to go into the red in order to trade and exchange goods and services with each other; a society, in short, where the country’s means of exchange is issued by a public authority, debt-free at source, and distributed as a non-means-tested national dividend to all adult citizens.

As for the idea that most of the ‘services’ which have sprung up to compensate for production transferred to cheap labour abroad are actually necessary - tell us another! The fact is that more and more utterly pointless jobs, or jobs that would be best done free of charge within a supportive, and sufficiently leisured, family or community environment, are being dreamt up just to provide the increasingly inadequate wage packets that are the only means of distributing purchasing power in an economy where money must be borrowed into existence (with firms, unable to rely on independent capital formation in the cut-throat struggle for money, borrowing to invest; and consumers borrowing to keep cash-strapped firms and governments in business.)

No debt equals no money supply. Insufficient debt equals recession.

What is more, many jobs in ‘financial services’ would become redundant, if we had a stable money supply capable of preserving the value of our savings, or if we could rely on the government to pay us what they promised, when we trustingly handed over our ‘National Insurance’, week by week.

When will the present crisis produce an article in the mainstream media which gets to grips with the underlying financial drivers of our inflationary, boom-and-bust, economy: an economy which can only function by finding more and more abstruse ways of borrowing money into existence?

Friday, 25 January, 2008

Le Rogue Trader: Financial world left stunned by £3.7bn fraud

John Lichfield, The Independent

The world of high finance, already shaken by the imprudent greed of some of its biggest corporate names, was stunned yesterday by the largest ever fraud by an individual "rogue" trader. …

… The massive fraud came at the worst possible time for the global finance industry. It will renew doubts about the stability, and ruling morality, of leading banks in the wake of the global recession threatened by the sub-prime crisis in the United States and beyond.

Read in full …

http://www.independent.co.uk/news/europe/le-rogue-trader-financial-world-left-stunned-by-16337bn-fraud-773856.html

Whose Money? says:

Of course, nobody in their right mind would put democratically answerable governments in charge of providing the nations with their money supply.

Far better to leave the job to the employees of those upright, impartial private profit-making business called banks.

And as the credit crunch bites deeper into our debt-based money supply, putting the screws on businesses and consumers alike, news on the inflation front continues to become more worrying:

Private sector pay rises are at their highest for 15 years

The Daily Mail

Private sector pay rises have soared to 3.7 per cent, a report revealed yesterday.

It is the biggest increase for 15 years and means a worker earning a salary of £25,000 before tax in December 2006 is now earning an extra £925. …

… The rise may be record-breaking, but it is below the RPI measure of inflation, currently 4 per cent.

It is above the Government's favourite measure of inflation, CPI, currently 2.1 per cent, but this excludes key costs such as mortgages and taxes.

Whose Money? says:

We reckon that for many people even the RPI measure is below the increases in the cost of living which they are actually experiencing.

Those whose income is largely absorbed in paying for housing, energy, transport, food and taxes are being far harder hit than those with ample to spare for cut-price clothing and cheap electronic goods, or those with enough left over to indulge in luxury items.

And with Council Tax set to rise by 4-5%, according to the BBC, the outlook is bleak.

Stagflation, here we come … unless the government sees sense, and starts providing us, at the very least, with traditional levels of around 50% debt-free money, instead of the present measly 3%.

Thursday, 24 January, 2008

Global pain is India's gain

The Times of India

In the last couple of years, foreign institutional investors (FIIs) have been the flavour of market, pumping in increasing amount of money into market. They have been buying shares in Indian companies, steadily increasing their stakes in the top 200 companies. The trend started in 2003, when inflows increased dramatically, when Indian companies were available cheap. The Indian investor stayed away from the market making a modest investment in mutual funds until 2006.

It is not surprising therefore, that in the last couple of years, foreign investors have come to own a bigger than Indian retail and institutional investors, counting out the promoters. In private sector banks like ICICI, HDFC and HDFC Bank, FIIs hold a far greater stakes than their Indian counterpart. Thanks to RBI guidelines, there is an upper limit for FII shareholding in a few sectors, like PSU banks.

Now, market analysts believe that the current global finance crunch and the growing disposable income of Indian may finally tilt the scales.

Read in full …

http://timesofindia.indiatimes.com/Global_pain_is_Indias_gain/articleshow/2726143.cms

Whose Money? says:

And isn’t that how it should be? The nation’s industries owned by people with a stake in, and loyalty to, to the nation, rather than speculators aiming not to sustain vital industries and services, but to exploit the vagaries of the market for easy financial gains?

Wouldn’t it be encouraging to see this happening in the UK too?

And from an article in the Mumbai Mirror, also published in today’s Times of India:

Brokers want to pull down BSE bull

Abhijit Sathe

If you thought fears of a global recession were responsible for the stock market crash of the last two days, think again. Putting aside all informed opinion, 300 stock brokers protested outside the Bombay Stock Exchange (BSE) for the entire day on Tuesday demanding that the bronze bull recently installed outside the BSE be knocked down as it had brought in ill-fortune and caused havoc. …

… They claimed, angrily, that ever since the bull was installed, the stock market, which was seeing an upward graph for almost six months, began to witness turbulence and ultimately crashed, resulting in massive losses for investors and panic on the market.

(No internet link available.)

Whose Money? says:

Well, they’re probably as likely to reverse the downward trend by tearing down the bull as by relying on more orthodox remedies!

Now, if they were to start demanding a shift to debt-free money and serious, long-term investment …

Wednesday, 23 January, 2008

Like the US, the Bank of England must gamble

Edmund Conway, The Telegraph

There are few weapons in a central bank’s armoury more nuclear than an emergency three-quarters of a per cent interest rate cut.

You have to go back to the dark days of the early 1980s to find the last time the US Federal Reserve slashed borrowing costs so much in one go. …

… Unfortunately, we cannot be sure that this massive dose of medicine will do the trick. …

… The decision is a gamble, not only because it might generate extra fear but also because by cutting interest rates it risks losing control of inflation.

Read in full …

http://www.telegraph.co.uk/money/main.jhtml;jsessionid=DLMYYYYP1EVLXQFIQMGSFF4AVCBQWIV0?xml=/money/2008/01/22/bcnfed422.xmlhttp://www.telegraph.co.uk/money/main.jhtml;jsessionid=DLMYYYYP1EVLXQFIQMGSFF4AVCBQWIV0?xml=/money/2008/01/22/bcnfed422.xml

Whose Money? says:

Yes, it’s a gamble for all of us, not just central banks, when a money supply put into circulation as debt is stuck between the rock of recession, and the hard place of inflation.

When countries use debt as their means of exchange, attempting to steer a course between boom and bust is always a gamble: a gamble with our savings, a gamble with our pensions, a gamble with our incomes … a gamble with people's lives.

So why are our representatives not investigating the connection between our perpetually unstable economy, and the decision to leave the job of putting money into circulation to private, profit-making businesses who can only offer us gambler's luck when things start to get out of control?

Tuesday, 22 January, 2008

When will the 'experts' understand the difference between wealth and money?

Listening to the tales of woe pouring out of the world’s stock exchanges today, it’s hard not to shake your head in disbelief.

Is it really possible that sane human beings could allow the world’s productive capacity to be at the mercy of such an unreliable source of funding?

It is nothing short of mind-boggling that grown-up, intelligent people should actually think it right that the amount of wealth, and potential wealth, in the world should be dictated by the amount of debt the banks decide to create, and the fluctuating confidence of financial markets.

The question we should be asking is this: do businesses exist merely to allow ‘investors’ to cover themselves against the deficiencies of our inflationary debt-based monetary system, and to provide the opportunity for quick speculative kills by professional financial predators? Or do they exist to produce goods and services?

We are told that buying and selling of shares ensures that money goes where it can do the most good. Stuff and nonsense.

How can pulling the rug out from under perfectly viable companies, as now frequently happens, benefit the economy?

The sooner we have a publicly-created, debt-free money supply which retains its purchasing power sufficiently for savers to stop turning to the short-term buying and selling of shares - as if they were a form of gambling chip that might protect them from the ravages of inflation and cash-strapped chancellors - the better.

Relieved of the responsibility of borrowing their means of exchange into existence, and enjoying the security of a basic income, people might even begin to see the sense in investing long-term in their nation’s own industries and businesses.

Monday, 21 January, 2008

Black Monday as biggest FTSE crash since 9/11 wipes off nearly £60bn in shares

The Daily Mail

The stock market was in meltdown today as nearly £60 billion was wiped off London shares.

A combination of poor economic figures and the worsening global credit crunch sent the FTSE 100 plunging.

At one stage the drop was the biggest since 9/11 in 2001, although the index of Britain's biggest companies later clawed back some of the losses. At lunchtime the Footsie was down 250.1 points to 5647.8.

Whose Money? says:

That’s what happens, when people don’t invest for the long-term, but shift their money around to beat the inflation that’s built into our debt-based financial system. The stock market is nothing but a glorified gambling casino … and who’s to say that the game isn’t rigged?

As for selling bonds to save Northern Rock, why should the country go even further into the red? The Government should be looking for ways to get rid of the National Debt, not to increase it.

And house prices - that other stand-by for people whose pensions have been robbed, and whose savings fail to keep up with the deteriorating value of a debt-based currency - are as unreliable as the stock market.

According to this report (by Becky Barrow, also in the Mail):

Value of a house is plummeting by £120 every DAY

The asking price of a typical home has plunged more than £11,000 since October, research reveals today.

Prices are dropping around £120 a day with experts warning that the year ahead looks bleak.

The report, by Britain's biggest property website Rightmove, reveals that prices have fallen for the third consecutive month.

They have dropped by a total of nearly 5 per cent since October, including a 0.8 per cent decrease this month. It is a cruel blow for anybody who recently stretched themselves to the limit to buy a home.

Whose Money? says:

Of course, sensible people know that it’s the price of houses, not their value, that’s plummeting.

All the same, that doesn’t help all the people encouraged by loose-lending banks to go way over their heads into debt, in the belief that house prices, since they could only go up, would be an insurance policy for their future.

What we need is neither a rising stock market, nor ludicrously inflated house prices. For a thriving economy, with a decent standard of living for all, what we need is publicly-created, debt-free money, and long-term investment in home-based industries.

And just see how the decision to borrow the nation’s means of exchange into existence results in penal levels of taxation, with as many people as possible driven into full-time employment outside the home in order to help service the National Debt monster with contributions to the Inland Revenue, and ‘National Insurance’ contributions:

How Labour's tax system punishes couples for being married

James Chapman, The Daily Mail

Married couples are being brutally punished by Labour's tax and benefit system, according to research to be published tomorrow.

Experts say that couples where one partner works and the other stays at home are the worst affected, paying a far higher proportion of their incomes to the taxman than in almost any other civilised country.

Britain is almost alone in failing to reward couples that stay together, according to the first international study of its kind.

Whose Money? says:

When are MPs going to show a bit of courage, and start demanding reform of the financial system in the House?

Sunday, 20 January, 2008

As the mainstream media speculate over the same old stories, without ever getting to the root of our economic and political problems, we’ve decided to take a day off.

Meanwhile, why not take a look at this recent article by Ellen Brown, focusing on the real reasons behind the drive for a war with Iran:

Why is Iran still in the cross-hairs?

Clues from The Project for a New American Century

The story has been widely circulated that when Albert Einstein was asked what the most powerful force in the universe was, he replied, "compound interest." The story is probably apocryphal, but it underscores the force of the concept. Compound interest has allowed a private global banking cartel to control most of the resources of the world …

… Could the "viable economic alternative" that threatens the Western economic model be one that declares the collecting of interest to be illegal? That is the model Iran is now holding out to the world.

If you haven’t already got it, order Ellen’s book, The Web of Debt, here: http://www.webofdebt.com/order.php

Whose Money? says:

And talking of wars, and the immense profits they rake in for the financial and corporate powers of 'the New World Order' and their political allies, isn't it interesting that JP Morgan, the very same private money-lending business that benefitted so much from the Iraq war, should now be offering Tony Blair, one of the people who made it all possible, a salary of $5,000,000?

Saturday, 18 January, 2008

Just look at this!

Read the full stories in the Independent: http://www.independent.co.uk

Are the mainstream media finally getting the message we amateurs have been broadcasting for months?

Everything suggests that Gordon Brown got it badly wrong, and that boom and bust will remain a permanent feature of our economic life until we stop using debt as our means of exchange.

And with British Gas raising their prices 15%, to boost inflation even further, we're still predicting stagflation as the most likely outcome in the immediate future.

Former health secretary Patricia Hewitt takes lucrative job with Boots

The Daily Mail

Former Health Secretary Patricia Hewitt has landed lucrative jobs with Boots and a company that owns 25 private hospitals.

During her time in office Miss Hewitt was accused of "back-door" privatisation of primary care services by paving the way for NHS GPs and consultants to be available in branches of Boots.

Whose Money? says:

As we’ve mentioned before, our politicians slip with the greatest of ease from business and finance to government and back again.

No wonder they’re not interested in introducing publicly-created, debt-free money!

Why should people so favourably placed to profit from the present debt-based monetary system - a system which favours exactly the kind of business so keen to employ them, after they leave office - wish to kill the goose that lays their golden eggs?

Friday, 18 January, 2008

Buy gold when governments print money

Jeff Randall, The Telegraph

" ... some argue that the soaring gold price has been driven by temporary anxiety over global stability. But answer me this: when was the last time the world felt like a cosy hideaway? Ever since mankind turned up, planet earth has never been a safe place. ...

" ... the gold price's journey towards $1,000 is a resounding vote of no confidence in authority."

Whose Money? says:

But most of the money supply isn't actually printed any more, is it? Most of it comes into existence as loans from banks to those private customers they think most likely to boost their profits: and governments are now reacting to the past ten years or more of unbelievably loose lending by what are supposed to be sober, prudent businesses.

Of course, nowadays it's hard to draw a line between government and big finance/big business. They're all in bed together, with members of our ruling oligarchy slipping almost imperceptibly from a comfortable niche in one to a comfortable niche in the other - as we have recently seen from Our Late Beloved Leader's appointment to his $5,000,000 post with JP Morgan.

With the political, corporate and financial powers all ganged up against the rest of us like this, is it any wonder that people are registering their "resounding vote of no confidence in authority" and buying gold to protect themselves?

So is a return to the gold standard the answer?

We think not.

Gold may protect those well-off enough to buy it from the depradations of government and banking malpractice: but it also has its downside - witness the words of William Jennings Bryan, when he said, loud and clear, at a time when American industry and agriculture had been brought to a virtual halt because the amount of money in circulation was tied to the amount of gold available, "You shall not crucify mankind upon a cross of gold". (See the article on The Wizard of Oz by Alistair McConnachie, http://www.prosperity.co.uk, and Ellen Brown, http://www.webofdebt.com).

Besides, it has been known for governments to confiscate gold held by their citizens.

But if governments and their friends in the banking system can't be trusted, and gold has all too often proved destructive to the real needs of the economy, what is the answer?

The root of the matter is our mistaken confusion of wealth with money, whether in the form of precious metals or paper. The fact is that when Delhi taxi drivers buy up gold, they aren't necessarily "accelerating the shift of wealth from west to east". How could they, since they are not in any way diminishing the west's productive capacity?

The truth is, that there is no need to cripple the real economy for lack of either gold or paper money. Real wealth lies not in our means of exchange, but in the resources available to the nation in terms of materials and labour, and the ability to use them to create necessary goods and services.

What is required is both monetary and political reform: monetary reform, with a switch from using bank-created debt as our means of exchange to an adequate supply of debt-free money; and political reform, to transfer both financial and decision-making power back to the grass roots, with taxes collected locally and only passed on to central government for genuinely national purposes which taxpayers approve.

Gold is fine as a temporary means of conserving purchasing power: but in the long run, only financial and political reform can release us from the treadmill of boom and bust, and endemic inflation

Thusday, 17 January, 2008

The banks' £4bn protection racket

Martin Hickman, The Independent

A new scandal is brewing in the personal finance industry that could dwarf the revolt against overdraft charges which has tarnished the reputation of the banks and won customer refunds of £1bn. As the Office of Fair Trading begins a court case against those bank charges, thousands of customers are seeking, and winning, refunds of premiums for payment protection insurance (PPI).

PPI is meant to cover mortgage, personal loan and credit card borrowers if they lose their jobs or fall ill but the policies are riddled with exemptions and are often considered a waste of money. Taking out a policy can add £3,000 to the cost of a £7,500 loan.

Whose Money? says:

Another way of squeezing maximum profit out of the lucrative business of ‘lending’ people money which has only come into existence because they’ve had to borrow it.

As we’ve said before, slapping the banks on the wrist for exploiting their customers isn’t the answer.

The answer is to stop the banking system from exploiting the nation as a whole, by allowing it to create our means of exchange in the form of interest-bearing loans owed to itself, and to provide the country with publicly-created, debt-free money instead.

Wednesday, 16 January, 2008

House prices drop 'at fastest rate in 15 years'

Edmund Conway, The Telegraph

Britain's property market is in the midst of a full-scale slump with house prices falling at their fastest rate in 15 years, according to a new study.

As well as higher interest rates, which are causing difficulties for many families, the report blamed the fall in prices on the introduction of the Government's controversial Home Information Pack scheme.

Whose Money? says:

Not so much news as a steadily snowballing confirmation of what anyone with any common sense has known all along: that house prices, like any other prices, cannot rise beyond the level which people can afford to pay.

Government profiteering on Stamp Duty and Home Information Packs doesn’t help: but the real damage was done by the banks, which made the affordable level higher than it should have been with their loose lending, and which have now pulled the rug out from under the market - and from under the feet of many people who were encouraged to borrow way beyond what their income could support.

That’s how it is, when you use debt as your means of exchange: the borrowing has to be constantly increased, by hook or by crook, or the whole system collapses.

The Telegraph also has reports on increases in food and energy prices … and no doubt the tax juggernaut will continue to roll on, with governments, both national and local, as deep in the red as more and more ordinary people and businesses.

And still there’s no talk, either in parliament or in the media, of the connection between the present financial impasse and the decision to allow the banks to create our money supply as a debt!

Why not?

Tuesday, 15 January, 2008

Food cost increase adds £750 to annual bill

James Kirkup, The Telegraph

Food prices are accelerating at their fastest rate since records began, fuelling a rise in the average family's shopping bill of £750 a year.

The increase - the highest since the Office for National Statistics (ONC) began keeping records in 1992 - has driven the cost of a consumer's average basket of groceries up by 12 per cent in a year.

Experts said the rate of food price inflation was making life increasingly difficult for the millions of families already struggling to make ends meet under the weight of rising council tax bills, mortgage repayments and energy costs.

Whose Money? says:

What this report doesn’t mention, is that it’s now more lucrative to produce biofuels, to burn, than food or fodder crops.

Also, while mentioning the failure of Australia’s grain harvest as a result of “global warming” and predicting more of the same, it ignores the far less debatable effects of the globalised economy, and, in particular, universal debt finance, which encourages reliance upon a limited number of areas to produce the bulk of the world’s food, pricing out small national producers and mixed farming for the local market.

What sense does it make - other than in purely financial terms - to put all your eggs in one basket - even if “global warming” on the scale predicted is just a modern myth? Ask any farmer: weather has always been unpredictable. The more food sources we have, and the greater the facilities to store surpluses against the less productive years, the better.

However, under a financial system which borrows its money supply into existence, with indebted producers raising their prices to cover their loans, and indebted consumers finding their disposable incomes seriously inadequate, the only thing that counts is immediate cost-cutting, to keep ahead of your competitors … even, contradictorily, at the risk of food shortages and consequent rising prices.

Sensible food production demands a sound, debt-free money supply to support it.

Why do we think frugality is a waste of time?

Andrew O’Hagan, The Telegraph

… it now has to concentrate much more on the basic issue of waste production: it is not merely a question of what people do with their waste, and giving them sensible options, but of asking why people in this country allow themselves to create so much of it.

Big supermarkets will never help with this - they rely on people buying more than they need, hence multi-packs, special offers, and 10-for-the-price-of-two. If you look at American firms such as Wal-Mart, you begin to comprehend the general assumption: entice people to buy some product by offering them more than they need, with the expectation that some will be thrown away.

Read in full …

http://www.telegraph.co.uk/opinion/main.jhtml;jsessionid=PWMN4PG0JIIWBQFIQMGCFFOAVCBQUIV0?xml=/opinion/2008/01/15/do1501.xml

Whose Money? says:

We think he’s put his finger on it, in the quote above. Basically, the supermarkets use every trick in the book to induce us to buy more. That, and the modern big, weekly shop, as opposed to the traditional daily one of the full-time housewife, are probably at the root of it - perhaps, too, the fact that people plan to eat healthily, and cook for themselves, but then resort to the take-away, or don’t bother to cook the veg with their ready-dinner, when both partners come home exhausted from a day’s full-time employment.

All largely the result of a financial system which has so raised prices and eroded incomes that the two-wage-earner family is now the norm, with nobody to focus on running the household and feeding the family as a first priority.

None of this explains the apparent resistance of other countries to the same trends. Are traditions of good food on the continent harder to erode? Has the debt binge loose-lending banks have unleashed upon this country, giving those with soaring “equity”, at least, the illusion of riches, not been duplicated across the channel?

At any rate, to look on the bright side, it seems that we can actually cut back on our grocery bills quite a bit, despite the rise in food prices, without going short of nourishment. However, if we buy less, it will hit retail profits, raising prices still further.

And, of course, nothing is going to keep the tax bill down ...

Monday, 14 January, 2008

Detached house prices plummet as property market enters slowdown

Daily Mail

The price of detached homes has fallen by 2.4 per cent as the property market enters a slowdown.

House prices fell by 0.8 per cent during November, while annual growth slowed to its lowest level for 12 months, Government figures showed today.

Whose Money? says:

Lower house prices plus tighter bank lending equals less debt being taken on … which means a shrinking money supply … which means more firms going under, or cutting back on staff and investment, in order to keep abreast of the competition for custom … which means a recession …

And now we have the worst of all worlds, with inflation in food and energy prices too!

The government, already up to their ears in debt, aren’t going to help out by borrowing any more.

Looks like stagflation to us - or do the banks have some new tricks up their sleeves, to keep the debt-based system going ?

Sunday, 13 January, 2008

France now £70bn richer than Britain, overtaking us in World rich list

Simon McGee, The Sunday Mail

Britain has sunk from fifth to sixth place in the 'rich list' of world economies - and, to add insult to injury, it is France that has overtaken us.

The often sluggish French economy is now worth £70billion more than the UK's, following the dramatic fall of sterling against the euro.

Whose Money? says:

What kind of silly non-news is this? What sense is there in reducing a nation’s aspirations to positions in league tables?

What counts is surely quality of life in people’s actual experience - and that doesn’t change overnight just because of fluctuations in the value of currency.

The fact is that while Britain was enjoying a boom it made very little difference to the majority of people. Those who chose to tap into their housing “equity” may have lived it up; but with steep increases in taxation, and in the cost of energy, disposable incomes for the majority went down: only the debt unleashed by the banks’ prolonged loose-lending spree went up.

Besides, GDP is itself no measure of either wealth or well-being. It is merely a measure of how much money changes hands (See http://www.unm.edu/~econ/Binder/What's%20Wrong%20With%20the%20GDP.pdf).

When the media stop focusing on irrelevant comparisons and start to take a serious look at how our debt-based financial system actually affects the country’s over-all prosperity, they will finally be getting to grips with the heart of the problem - and it’s up to money reformers to pressure them into doing so.

Write to your local paper now. The nationals will probably ignore you.

Friday, 12 January, 2008

'India in no position to strike bargain with China'

The Times of India

… Take a look at some basics of the two economies. China's gross domestic product, adjusted to the purchasing power of its currency, was $5.33 trillion in 2005, the last year for which comparable data was available. This was more than double India's GDP of $2.34 trillion. China has 1.3 billion people compared to India's 1.12 billion, and the per capita GDP works out to $4,091 for China, way ahead of India's $2,126.

India exported goods worth $126.4 billion last year, while China's exports were nearly eight times more at $969 billion. China's exports exceeded its imports by over $178 billion, while for India, it was the other way round — imports exceeded exports by over $60 billion.

This sustained trade surplus has led China to accumulate an enormous foreign exchange reserve pegged at about $1.6 trillion, almost 6 times that of India's $276 billion reserves.

Read in full …

http://timesofindia.indiatimes.com/India_in_no_position_to_strike_bargain_with_China/articleshow/2693958.cms

Also:

Govt backs Indian industry on Chinese exports

The Times of India

NEW DELHI: Bilateral trade between India and China is growing rapidly and the target of $40 billion by 2010 may be realised earlier. But so has India's trade deficit with China.

Besides, the Chinese renminbi is pegged to the dollar and is not a free floating currency. With an artificially pegged currency and subsidies, many of which are hidden, the government feels merit in the case of the Indian industry that Chinese exports have an unfair advantage, even if the infrastructure situation in India is not factored in.

And this leading article, from the same paper, by Amit Mitra:

An Unequal Relationship

… The challenge before Manmohan Singh is how to match the burgeoning Chinese exports to India and diversify our export basket beyond iron ore and other non-renewable resources.

Our trade with China went through a dramatic increase from $2.5 billion in 2000-01 to a whopping $25 billion in 2006-07. However, what is deeply worrisome is the rising trade deficit in favour of China. Equally worrying is the near-monopoly of Chinese exports to India in certain critical sectors. India’s trade deficit with China climbed to $9.2 billion in 2006-07 while with US we had a surplus of $7.1 billion. Interestingly, the trade deficit with China during the first six months of this financial year has already mounted to $8.7 billion. And we may end up with a $12 to $14 billion deficit by the end of the financial year.

Read in full …

http://timesofindia.indiatimes.com/Opinion/Editorial/LEADER_ARTICLE_An_Unequal_Relationship/articleshow/2693753.cms

Whose Money? says:

So much for the myth of ‘free’ trade! This is little more than Newspeak for trade carefully managed in the interests of transnational corporations and finance … though these powerful manipulators are happy to turn a blind eye - as, for instance, in the case of China - to any infringement of the rules by nations not yet completely amenable to their control, or which they prefer, for purposes of present gain, to leave, at least for the time being, on a long leash.

We have seen what ‘free’ trade of this kind - that is to say, trading patterns determined by the priorities of debt finance, rather than the needs of human beings - has done for British industry and agriculture. The last thing India needs, with its already gigantic underclass, is to follow us into a future of ever-widening disparity between the haves and the have-nots.

It is our debt-based financial system that makes exports, rather than home-based production of goods and services, the supreme goal of present-day economies. When money is created as a debt to the banking system, the only way to acquire more of it, without saddling the country with yet more borrowing to service and repay, is to get your hands - either through inward investment or through a preponderance of exports over imports - on some of the stuff that other people, beyond your borders, have mortgaged their future to bring into existence.

Hence the grim battle to secure a trading surplus, even if this means cash crops to sell abroad taking precedence over the pressing needs of your own population.

What is more, it seems, from these articles, that India, like so many other developing countries, is exporting its wealth in finite resources - that is to say, irreplaceable goods of real value - in return for nothing but money: which as CH Douglas pointed out long ago, can be created at any time, without the sacrifice of wealth, or the need to go into debt, by a public body democratically authorized to undertake this task.

For the sake of all the millions in the subcontinent who will suffer if they should fail to do so, we can only hope that the Indian government will put the interests of their population above the free-trade dogmas which have already ruined the economies of the West.

Friday, 11 January, 2008

Great article by Jeff Randall, in today's Telegraph (http://www.telegraph.co.uk/money/main.jhtml;jsessionid=JYIWUJO2UPCXDQFIQMFSFF4AVCBQ0IV0?xml=/money/2008/01/11/do1101.xml) highlighting the idiocy of a financial system which can only survive on endless growth, and the cut-throat competition which this implies.

Whose Money? says:

Poor old Mark & Sparks, down to a mere billion in pre-tax profits! But, as Mr Randall, says, "A decline in the rate of growth, even though the business is still expanding, is often regarded as a failure"; and Managing Directors are now booted out not for making a loss, but for failing to make significant gains.

With more and more families in the UK on the breadline or, worse, deep in the red, it would certainly be "Hugely irresponsible for the Bank to encourage them to take on more debt" by lowering interest rates.

But if "it isn't the banks' role to shore up every High Street operation in need of a cash injection", neither should it be the banks' role to provide the economy with its money supply ... issued as a debt to the banking system.

It is our use of debt as our means of exchange which makes growth essential, and turns retail operations, like production, into a game of beggar my neighbour - whether than neighbour is the business competition, or the unfortunate consumer.

And incidentally, Gordon Brown's "biggest blunder" wasn't his "failure to save for a rainy day": it was his failure to put money reform at the top of the political agenda.

Thursday, 10 January, 2008

Cracks behind the facade

Ian Buruma, The Times of India

… To come back from near destitution and bloody tyranny in one generation is a great feat, and China should be saluted for it. But China's success story is also the most serious challenge that liberal democracy has faced since fascism in the 1930s. This is not because China poses a great military threat — war with the United States, or even Japan, is only a fantasy in the minds of a few ultra-nationalist cranks and paranoiacs. It is in the realm of ideas that China's political-economic model, regardless of its environmental consequences, is scoring victories and looking like an attractive alternative to liberal democratic capitalism. And it is a real alternative. Contrary to what some pundits say, Chinese capitalism is not like 19th century European capitalism. True, the European working class, not to mention women, did not have voting rights 200 years ago. But even during the most ruthless phases of western capitalism, civil society in Europe and the US was made up of a huge network of organisations independent of the state — churches, clubs, parties, societies and associations that were available to all social classes.

In China, by contrast, while individuals have regained many personal freedoms since the death of Maoism, they are not free ...

Whose Money? says:

In fact, China’s success goes to show that the Western business model it has adopted is neither dependent on, nor productive of, political and personal freedom of choice. As we now see, financial capitalism can flourish quite happily in a one-party state, controlled by a tiny elite.

But that’s no surprise. Isn’t it precisely the same in the West?

Nominally, the developed countries are democracies - which, in itself, implies little more than majority government, determinined by intermittent elections; but with prospective representatives hand-picked by the major parties for their compliance with manifestos in which the public have no say, neither MPs or policies are permitted to stray outside a strictly limited political agenda: one which toes the line set by the big-business and financial interests which have governments all over the world in thrall, and which are far more powerful than the ordinary people whose needs and priorities parliament should respect.

No wonder the Chinese Communist Party and African dictators are delighted with a financial system which offers such rewards to a powerful minority, while side-lining or silencing the concerns of the vast majority, by insisting that only this particular financial system can bring them better standards of living!

Forget all the pious talk about freedom and human rights. The rock-bottom truth is that there can be no political democracy without economic democracy: and we won’t get that until we renounce the use of debt as our means of exchange, and replace it with publicly-created debt-free money, issued at the grass-roots, and passed on to higher levels of government only for projects to which taxpayers have given their whole-hearted approval and consent.

Blair takes advisory position at JPMorgan

By David Wighton in New York

Tony Blair is joining one of the Wall Street’s best-known banks in what the former prime minister told the Financial Times would be the first of a series of positions he expects to take in the private sector.

Mr Blair, who stepped down as prime minister last year, is to become a part-time adviser to JPMorgan, where he will use his experience and contacts to provide political and strategic advice to the US bank and participate in some client events. Mr Blair’s income from the job has not been disclosed. However, one New York recruitment consultant said it was likely to be more than $1m (£500,000) a year.

... Mr Blair’s move comes a month after Jonathan Powell, his former chief of staff, landed a full-time job with JPMorgan’s rival, Morgan Stanley.

Whose Money? says:

"Nowadays, the intersection between politics and the economy in different parts of the world, including the emerging markets, is very strong," says Mr Blair.

Yes, indeed, that’s our corporate oligarchy - no lines left between finance, big business and so-called “democratic” governments!

Wednesday, 9 January, 2008

Marks & Spencer shares suffer in retail rout

Angela Monaghan, The Telegraph

Shares across the retail sector tumbled today, as the revelation that Christmas trading at flagship retailer Marks and Spencer was worse than expected deepened the gloom enveloping the high street.

Whose Money? says:

As the report states, it’s probably those “without much money” who have been the first to look for cheaper outlets than Marks and Sparks.

Those who can still draw upon their supposed “equity”, or other forms of credit, are still managing to do their bit of patriotic spending for “growth” … for the time being.

Persimmon sales hit by mounting gloom

Sophie Brodie, The Telegraph

Persimmon, the UK's largest housebuilder, has reported a drop in forward sales amid increasing pessimism in the sector.

The company said forward sales into this year were £603m, down 14pc from £701m in the same period last year.

Whose Money? says:

So more bad news for those relying on endless house-price rises to provide them with an immediate boost to their income, let alone keep them in their old age, as the property market continues its downward slide, dragging jobs and purchasing power with it.

All the signs are that the debt-based financial system has entered its cyclical bust period - made worse, this time round, by the simultaneous appearance of price inflation, hitting the basic essentials of the household budget.

Tuesday, 8 January, 2008

House prices suffer biggest quarterly fall in 10 years

The Daily Mail

New figures have revealed the biggest quarterly drop in house prices since the second quarter of 1995, although December saw a slight increase in prices.

The figures from Halifax, Britain's biggest mortgage lender, said that despite a surprise 1.3 per cent rise in prices last month after three successive months of falls, the overall picture remained one of cooldown.

Whose Money? says:

Sounds to us as though the vested interests are trying to talk the market up. It seems more likely that buyers will be increasingly reluctant to pay unarealistic asking prices, now that they've seen the beginnings of a fall in the going rate.

Not to mention the fact that banks are finally reining in on their loose lending ...

So with houses raising less opportunity for money creation, who will be doing all the borrowing necessary to keep the economy supplied with a half-ways adequate means of exchange? After all, under the present system, for every loan repaid, the same amount, plus a little bit more, has to be borrowed, just to keep things on an even keel.

If we want an end to 'boom and bust', the issue of money should have nothing to do with loans made by the commercial banking system to its private customers. Let the banks restrict themselves to lending out, and profiting, from money which they actually have.

Monday, 7 January, 2008

Interest rates have been hijacked by politics

Liam Halligan, The Telegraph

… You may feel it's cynical to focus on the politics of our "independent" monetary policy process. I'm afraid, though, that politics is often the deciding factor. I wish it wasn't so - but it is. And political issues are particularly potent now, given that the Bank's remit is being changed, lots of MPC members are themselves up for reappointment and even the future of the Governor, Mervyn King, is uncertain now that the Treasury is openly blaming him (wrongly) for Northern Rock.

But it should be the economics that counts. And, the economics strongly indicates that lower rates could well unleash UK inflation. The economics also says that the credit crunch - and high inter-bank rates - will only be fully solved once the big banks, having revealed their true sub-prime exposure, start trusting each other again. Lower base rates will delay that happening.

Whose Money? says:

But the way in which money is supplied to the economy must always be a highly political question; and, as such, it should be an open and transparent process, comprehensible to the ordinary people who rely upon a stable medium of exchange for fair trade among themselves, and under the control of their accountable representatives (ie, not our present MPs and councillors, who increasingly answer only to the political parties which sponsor them and which can de-select them, should they diverge too far from the party line).

The claim that monetary policy is best removed from the political arena, leaving millions at the mercy of those special interests best able to manipulate it to their own advantage, is highly debatable, to say the least.

The present impasse, where we’re damned if interest rates are raised, and damned if they’re lowered, shows only too clearly the impossibility of satisfying the long-term requirements of both producers and consumers by the use of such crude methods.

Our aim should be to work towards the use of money as a neutral accounting system, designed to serve the needs of human beings, rather than a commodity which can be exploited to acquire the real wealth of the productive economy, gain, in line with the priorities of the banking system and the speculative opportunism of its clients in finance and big business.

Credit crunch hits financial incomes

Sean Farrell, The Independent

Business levels in the financial sector fell at the fastest pace for more than 16 years at the end of last year as the credit crunch drained confidence from the industry, a closely watched survey showed.

Banks, building societies and securities traders were the main casualties as income slumped and transactions dropped in the fourth quarter of 2007, the Confederation of British Industry/ PricewaterhouseCoopers survey revealed. Conditions are expected to stay tight for at least the first half of this year. Income from fees, commissions and premiums fell in line with expectations but revenue from net interest, investment and trading plunged at the quickest pace since the survey began in 1989. Both sources of income are expected to fall more in the next three months.

Whose Money? says:

Though we sympathise with the ordinary workers lower down the scale who will suffer most from the downturn in "financial incomes", it is impossible to regret an “industry” which feeds on the insecurities of life under a debt-based monetary system, while leeching off the productive economy and draining talent and resources away from more constructive and humane activities.

If a grotesquely large financial sector really were the only way of financing the production of goods and services, it would be silly to criticize it. But if we didn’t use debt as our means of exchange, we could get by with a lot less in the way of “financial services”.

And with publicly-created money distributed as a non-means-tested national dividend to all adult citizens, the loss of jobs in the City need not be regretted. Quite the opposite: with steadily increasing automation, and many people now able to work part-time or job-share without threat to their standard of living, there would be no need to be constantly creating ever less productive forms of employment simply in order to distribute purchasing power.

Sunday, 6 January, 2008

Slowdown in job market increases Bank's woes

Heather Stewart and Nick Mathiason, The Observer

Evidence will emerge this week that the credit crunch is already having an adverse effect on the British job market. This will add fresh fuel to demands from business for the Bank of England to cut interest rates on Thursday for the second time in as many months, or risk courting recession.

Whose Money? says:

The problem is - as this other Observer report points out, http://www.guardian.co.uk/money/2008/jan/06/isas.interestrates - that lower interest rates will hit savers, while not necessarily solving the problem of the credit crunch.

As long as we choose to use bank-created debt as our means of exchange, we will continue to suffer from unstable economic conditions. It is extraordinary that economists, by and large, failed, until the very last minute, to see any threat in running the country on endless financial proliferation - with money generated by an ever-less-realistic assessment of the value of our houses, plus massive additional debt creation to fund takeovers and speculation in the City of London.

Debt-based economies will always deliver profits for the financier, at the long-term expense of the rest of the economy.

If we want an end to boom and bust, and built-in inflation, finance must be put in its place, as the servant of production, instead of its master.

Saturday, 5 January, 2008

ICICI plots push into overseas markets

Philip Aldrick, The Telegraph

India's largest publicly listed bank is planning a $3bn (£1.5bn) push into overseas markets both this year and next to cash in on the number of foreign deals being struck by Indian companies.

Whose Money? says:

This article echoes recent interviews with Indian business leaders, who state that they are going for “aggressive growth”.

Why don’t they take a look and see what the aggressive pursuit of growth has done to developed nations? It’s hardly succeeded in improving the quality of life - as opposed to increasing consumption - in the UK.

Contrary to popular dogma, lavish consumption of luxury items by the big earners does not filter wealth down evenly to the rest of the population. What we are seeing in the UK and other western countries is a widening gulf between the haves and the have-nots, with growing numbers of people dependent on state benefits, in one form or another, to survive.

What a pity that India isn’t ditching the use of debt as its means of exchange, and issuing its own publicly-created money to finance production for the home market! What a pity that it’s joining the frenzied rush into economic warfare, “plotting” overseas expansion, and “targetting” foreign companies for takeover!

Meanwhile, the Times of India reported this week that people living on the streets of Delhi are facing night-time temperatures as low as 3 degrees, without any protection. Thousands of only slightly luckier ones are living in tents on the rooftops or at the roadside, or building makeshift shelters wherever they can get away with it (despite notices saying, “Stop unauthorized construction - Avoid demolition and severe action”).

How does entering the international battlefield in hope of capturing foreign companies and markets help them?

As CH Douglas pointed out, nearly a century ago, producing money isn’t the job of the economy: the job of the economy is to deliver goods and services.

Why resort to the beggar-my-neighbour activities pursued obsessively by the Western oligarchies, just to get your hands on stuff that (unlike goods and services) could be created almost effortlessly by a public authority answerable to the electorate?

Developing countries should be putting first things first, issuing debt-free currencies, and focusing on producing the goods their people need, not copying the grievous mistakes of the western oligarchies.

Friday, 4 January, 2008

Economy at risk from 'debt famine'

Edmund Conway, The Daily Telegraph

Whose Money? says:

It's getting repetitive, isn't it? But what a long while it's taken for the mainstream media to face the facts!

And as for going from "feast to famine", a good proportion of ordinary people - those without assets to cash in on, or access to the bank "credit" (ie debt) necessary to purchase them - didn't have much of a chance to feast, even when the boom was at its peak.

But there is no reason whatsoever to subject the "real economy" to decimation, just because the banks have made a mess of things with their loose lending, and are now trying to cover their own backsides.

When the banking system threatened to grind to a halt during the First World War, the bankers begged the Government to issue publicly-created, debt-free money, to help them out of their fix.

To help them out, please note, not to ensure the well-being of the country. As soon as the crisis was past, they insisted that the remainder of the war should be fought entirely on bank-created debt.

But the fact that these notes were issued, with such success, offers yet more evidence that no country need be dependent upon debt for its means of exchange.

Here's what CH Douglas had to say about the episode, in his address at Auckland Town Hall, New Zealand, on 5 March, 1932:

'Now what happened when the war of 1914 broke out? There was a panic, and everybody went to the banks and tried to draw out the money that was standing to their credit in gold, which they had a perfect legal right to do. That was the contract they had implicitly entered into with the banks.

'There were nine hundred millions of deposits in the joint stock banks in England. About two hundred and forty millions, or a little over, were drawn out in gold and the whole of the banks in England were bankrupt. There was no more gold.

'The difference between that two hundred and forty millions and nine hundred millions was represented by book entries, which were not represented by gold anywhere. In other words, they were a duplicate of receipts for value.' (Applause)

'Well there was a moratorium for about four days, and the banks reopened, and people went to draw out their money, and were presented with little white bits of paper which said "This note is legal tender for one pound sterling" If you took that note to the bank of England and asked for one pound in exchange, they said: "Yes, certainly," and they gave you another bit of paper just like it, and said: "There is your pound." Well, people, in effect, said: "Let us give it a trial, and see what happens," and they took the pound to a grocer and they got a pound's worth of groceries for it, and they said: "Alright, that is a pound."

'Now, what did that pound represent really? It represented the willingness of the general community to supply goods and services in return for it. It did not rest upon anything the bank possessed. It represented something that the general community possessed, the power to produce goods and services. That was what that note represented, and the modern financial system rests entirely upon the willingness of the general public to validate, to make of value those claims upon it which are created by the financial system.' (Applause)

The productive capacity of this nation in no way depends upon the willingness, or otherwise, of the banking system to plunge us all into debt.

In the face of the credit crunch, isn't it time to keep the wheels of the economy turning by replacing bank-created debt with publicly-created, debt-free credit, to supplement the notes and coins which are already issued by the Treasury as a debt-free basis for the money supply?

Thursday, 3 January, 2008

Bank of England issues gloomy credit forecast as high street shops suffer

Ashley Seager, The Guardian

The supply and price of credit to both businesses and households has already tightened and the situation is likely to get worse in the early months of this year, the Bank of England warned today.

As it released its quarterly credit conditions survey, DSG International, owner of Currys and PC World, said it had suffered bad Christmas sales and warned that its profits would fall sharply during 2008 while Next warned that it was "extremely cautious" about the year ahead.

Whose Money? says:

And this “latest survey was considerably worse than had been envisaged in (the Bank’s) previous survey.”

We find it astonishing that any additional “concrete evidence that the effects of the credit crunch are spreading to the wider economy including households” should have been needed.

After all, when you rely almost exclusively on people going into debt to provide the country with its money supply, it shouldn’t take that much intelligence to deduce that a significant drop in the amount of debt being created must inevitably lead to a widespread reduction in both business investment and general purchasing power.

On the same day, it’s announced that:

Oil price hits $100 a barrel for the first time

Larry Elliott, The Guardian

Petrol prices were heading for new record levels last night after the price of oil broke through the $100-a-barrel barrier for the first time in New York trading.

With motorists already paying more than 103 pence a litre on forecourts in the UK, the AA warned that the $4 increase in crude prices yesterday signalled even dearer fuel in the weeks ahead.

Whose Money? says:

Nor is it a question of “peak oil” being at the root of it. As the report states, “Strong speculative buying of oil has been pushing prices higher over the past few weeks … Analysts said investors had responded to the seizing-up of credit markets in recent months by seeking other outlets for their funds.”

So yet again (as with house prices) the overall prosperity of the nation is being put at risk by those with assets at their disposal. Not that you can blame the average person, unsure of their future, as the state changes the rules on taxes and introduces new legislation at will, for attempting to secure their future in any way they can.

With credit tight, a huge backlog of debt, and food and energy prices both rocketing, the most likely prospect before us would appear to be a severe dose of stagflation ... while the gulf between haves and have-nots grows yet wider.

Wednesday, 2 January, 2008

Interest payments soar to £93bn

Sean Poulter, Daily Mail

Britain's interest repayments have soared by £12.7bn to a record £93bn a year - raising fears that many families' finances are spinning out of control.

The figures suggest millions of Britons already struggling with rising household bills could be left unable to cope with the mounting cost of their debts.

Nearly one in four admits that repayments on their current debts are unmanageable, according to a study.

Whose Money? says:

Yes, it seems that the party is over: time for boom to change to bust, as the debt-based financial system pursues its inexorable course.

Under this system, less borrowing means less money in general circulation. And less money in circulation means less growth, since the GDP is a measure of the financial transactions taking place.

But why on earth should the “real economy”, upon which the well-being of millions depends, be sacrificed to the internal logic of an arbitrarily-imposed financial system?

When were the people of this, or any other, country asked if they wished to produce their money supply by going into debt to private, profit-making businesses?

Where are the MPs, of any party, who are prepared to join Austin Mitchell, MP for Grimsby, and a handful of others in demanding a review of our present monetary arrangements?

Credit crunch? What credit crunch? UK spends like there's no tomorrow

Matthew Taylor, The Guardian

The credit crunch and dire predictions of job losses and a new year economic slowdown seemed to have little effect on bargain hunters yesterday as shops across the country reported no let-up in the frenzied pace of sales.

The rush, which started on Christmas Day, when armchair shoppers spent £84m online, continued with thousands of people joining the singer Lily Allen for the opening of the Harrods sale in central London.

Whose Money? says:

Looks like the penny hasn’t dropped yet. Or is it a last, desperate rush to stock up with cheap goods, as inflation in the cost of basics threatens to leave less left over for luxuries in the future?

And look at those price cuts! Either the stores were grossly overcharging before the sales, or they will now be making a huge loss - a loss which may leave many of them struggling to meet intransigent demands for interest on money previously borrowed to invest.

At any rate it must be hard for either businesses or ordinary people to plan ahead, as they react to the twists and turns of a financial system which is essentially unstable, and unpredictable.

Councils face £2.8bn bill for equal pay

Polly Curtis, The Guardian

Council bosses across England are having to remortgage their town halls and raid reserves to meet a £2.8bn bill to pay back a generation of women who have been discriminated against, the Guardian can reveal.

Schools are to be told to find up to a third of the bill out of their reserves to compensate classroom assistants and cleaners who have been systematically underpaid. There are fears they could be forced to lay off other workers to pay women back.

Whose Money? says:

What a load of nonsense!

There is no need for councils to wade even deeper into debt.

There is no need for councils to lay off workers.

The problem could be solved with the issue of vouchers acceptable in payment council tax, as a regular part of council employees’ wage packets. These vouchers would act as a local currency, being spent freely in local shops, with the added advantage of boosting the local economy.

They're doing it in Canada (see http://saltspring.gulfislands.com/money/welcome.htm).

They’re doing it in Germany (see http://www.newmediaexplorer.org/sepp/2004/03/12/euro_or_chiemgauer_alternative_currency_to_support_waldorf_school.htm, with some interesting links following the article). They’re doing it in Italy (hear all about it from Marco Della Luna, in our Article 3, here).

Why not in the UK?

New Year's Day, 1 January,

2008

A very happy - and debt-free - New Year to all our readers!

To start it off, the Telegraph has predictions from the City’s ‘great and good’ on financial and economic prospects for the next twelve months.

What’s the point of reading them, if your concern is for a stable financial future, rather than to make a quick profit on fluctuations in the markets?

If the past months of running this website have convinced us of anything, it’s that most expert prognostications are about as reliable as the horoscopes in your daily paper.

Above all, not a single mainstream economic journalist makes a serious attempt to discuss the prime cause of the economic ‘boom and bust’ cycle - which is, of course, the fact that elected governments all over the world choose to use debt as their countries’ means of exchange; and that uninformed electorates continue to allow them to do so.

What we can be sure of is that, whatever stop-gap first aid is applied to keep the present debt-based system afloat, it will only succeed in leaving huge swaths of the world’s population in penury. Even in the developed nations, the gap between rich and poor steadily increases, as decently-paid job prospects for ordinary people are cut back by cash-strapped employers, and wealth at the top fails to filter down to those without the assets necessary to acquire that all-important‘credit’ … or the income to service and repay the debt loose-lending banks see fit to grant them.

So let’s hope 2008 will be the year when the need for money reform finally hits the headlines.

You can help, by telling your friends and family about this and other websites (see our Websites, Books, DVDs section) that discuss the problem. We may not all see things exactly the same way, and we may not agree on solutions: but what unites us is the conviction that the present financial system is the root of incalculable harm to millions of people, and that the time for reform is long overdue. When the time comes, various alternative proposals can be discussed in parliament, and put to a democratic vote.

Our first task, though, must be to exert all the combined pressure we can to get this issue on the political agenda, by pestering MPs, introducing the subject on website forums concerned with the state of the economy, and writing to the press - especially local and regional newspapers - pointing out the connection between the present debt crisis and the way we create our money supply.

If we can't make progress at a time when more and more people are being forced into insolvency by a financial system which can only create a pound of money by simultaneously creating a pound of debt, when will there ever be any hope of change?

Until ordinary people see how they’re being had, and begin to demand publicly-created, debt-free money, things can only get worse for the vast majority of human beings.

Christmas Day, Tuesday, 25 December, 2007

Happy Christmas!

We are taking a break until the New Year . Back 1 January, 2008.

Christmas Eve, Monday, 24 December

Ministers threaten countryside, says Bill Bryson

Caroline Gammell, The Telegraph

Bill Bryson, the American writer turned champion of the English countryside, has launched a stinging attack on the Government over its attitude towards the environment …

Looking back over the year, he said: “Planning decisions were increasingly driven by economic gain at the expense of local communities and the environment in a year when the need to consider environmental capacity was highlighted by the destruction and misery caused by flooding ...”

Whose Money? says:

Thank you, Bill Bryson, for standing up for the things whose value can’t be measured in money.

Increasingly, over recent years, we have seen public amenities sold off to service national and local government debt - witness, for instance, the disappearance of playing fields, whenever a developer makes a lucrative offer.

Even when local residents are in favour of development, they frequently don’t get the kind of development they are asking for.

In Whitley Bay, for instance - a town which has always depended very much on day trippers and summer visitors for its livelihood - North Tyneside Council chose to ignore residents’ wishes, obliterating the Spanish City fairground and amusement arcades, plonking a school down in the prime sea-front site which they had occupied, and providing lavishly for extra housebuilding in the surrounding area.

What council tax payers had wanted was to see the town properly refurbished and maintained, with eyesores like the neglected paddling pool and playground on the lower prom - once a favourite spot for families with small children, now a dogs' lavatory and rubbish tip - restored to attractive working order. What they got was a reorganization of the sea-front area aimed primarily at raking in the maximum amount of money from sale of land and subsequent council-tax revenues.

As Bill says, planning decisions are “driven by economic gain at the expense of local communities and the environment”. But what he doesn’t say is why government and councils are obsessed with financial priorities, rather than committed to preserving people's environment and amenities.

The reason, of course, is that they have to keep on feeding the insatiable debt monster which, if it goes hungry, threatens to rampage through the economy, bringing the whole financial system down.

Crazy, isn’t it?

Photo of Bill Bryson: Daily Mail

Sunday, 23 December, 2007

Crisis may make 1929 look ‘a walk in the park’

The Business

As central banks continue to splash their cash over the system, so far to little effect, Ambrose Evans-Pritchard argues things are rapidly spiralling out of their control

Twenty billion dollars here, $20bn there, and a lush half-trillion from the European Central Bank at give-away rates for Christmas. Buckets of liquidity are being splashed over the North Atlantic banking system, so far with meagre or fleeting effects.

As the credit paralysis stretches through its fifth month, a chorus of economists has begun to warn that the world's central banks are fighting the wrong war, and perhaps risk a policy error of epochal proportio

Whose Money? says:

We perked up when we read Thomas Jordan quoted as saying, “The sub-prime mortgage crisis hit a vital nerve of the irrational financial system.” At last, we thought, financial "experts" are beginning to recognise the stupidity of basing the world’s monetary transactions on debt owed to private, profit-making businesses!

But no - we’d merely misread ‘international’.

This article, like so many others, highlights the impenetrable complexity which now reigns in high finance, with contradictory factors threatening disaster, whatever policy is pursued.

And this complexity results, essentially, from the decision to use debt as our means of exchange, thus giving the banking system control over how much money is put into circulation, and who shall have first use of it - and opening the door to all kinds of speculation and undue risk.

Unfortunately, it’s rarely the speculators themselves who suffer, when they over-reach themselves. It's the vast mass of ordinary people who are hit the hardest - particularly those without assets, at the bottom of the heap.

Isn't it amazing, with the deficiencies of the debt-money system currently thrown into such sharp relief, that no voices are being raised, either in parliament or in the media, demanding reform of the financial system itself?

Saturday, 22 December, 2007

High Street stores slash prices in attempt to lure Christmas shoppers

Sean Poulter, The Daily Mail

High Street shops are resorting to starting their sales early as the credit crunch bites.

Prices have been slashed by up to 75 per cent at some of the country's biggest chains in a last-ditch effort to get consumers spending.

Many families have been squeezed by the impact of higher interest rates and household bills, particularly for food and transport.

Retail analysts say desperate measures are needed to counter the fact that shopper numbers this week have been running below last year.

Whose Money? says:

And on the same day we also read that the number of first-time buyers have fallen to their lowest level for thirty years (http://www.dailymail.co.uk/pages/live/articles/news/news.html?in_article_id=504134&in_page_id=1770).

With the credit crunch biting harder all the time, how is a county that relies almost exclusively on debt to create its means of exchange going to provide its population with adequate purchasing power?

Friday, 21 December, 2007

Lending adds to housing market gloom

Edmund Conway and Harry Wallop, The Telegraph

Experts warned about the state of Britons' finances yesterday after figures showed households setting aside more cash for debt payments than at any time since 1991.

Whose Money? says:

So Citibank’s spokesman says that “The picture keeps getting worse”?

It only goes to show up the experts’ amazing inability to put two and two together, if they really thought there could be a happy ending to a bout of loose lending which disregarded all the normal precautions, and encouraged people to borrow beyond their means, believing that prices could go on rising forever.

Rational people have always understood that an economy built on financial proliferation and speculation, without a proportionate increase in the production of real wealth, was “highly vulnerable”, and have been expecting the present scenario for some time.

The materials and labour necessary to produce necessary goods and services remain just as available, regardless of the credit squeeze.

The absurdity is that we allow the debt-based financial system to dictate whether or not they may be put to use.

From our New Delhi correspondent:

Sacred Cows

On a wander through the streets of Delhi today, I came across a lot of these animals, whose protected status among the traffic of a modern city tends to be regarded by foreign visitors as either an interesting photo opportunity or a dangerous obstruction to their progress.

But we in the West do, of course, have our own equally dangerous and obstructive sacred cows: one of which is the irrational belief that an economy can only thrive if it uses debt as its means of exchange.

India, and other growing economies, would be wise to sacrifice this particular sacred cow, if they want a financial system which facilitates trade and exchange, rather than one which holds the population to ransom.

Photo: BBC

Thursday, 20 December, 2007

Ministers plan to take key powers from Bank during financial crisis

Greg Hurst and Gary Duncan

Plans by ministers to wrest key powers from the Bank of England for use during any future crisis in the banking system emerged yesterday amid fresh signs of tensions with the Treasury.

Alistair Darling, the Chancellor, is considering reforms that would allow him to take control of all decisions during an emergency such as the one that triggered the run on Northern Rock.

Read more …

http://www.timesonline.co.uk/tol/news/politics/article3060230.ece

Whose Money? says:

Wouldn’t it be better to have a transparent system , with a democratically accountable authority regularly putting publicly-created, debt-free money into circulation in accordance with the needs of the economy, rather than giving the likes of the present government the chance to issue extra as they saw fit whenever the banks made a hash of things?

Wednesday, 19 December, 2007

China, India buying power less than estimated: World Bank

Xinhua, Washington

The economies of China and India are much smaller than previously estimated when measured by buying power in dollars, the World Bank has said ...

Under the old calculation, China had a GDP of $8.8 trillion in 2005, about 15 percent of global GDP of $59 trillion, while according to the new measure, China's economy shrank by 40 percent to $5.3 trillion, which is about 10 percent of global GDP of $55 trillion.

Whose Money? says:

Which all goes to show what a lot of rot GDP is, anyway! What's important is surely not to obsess about how much money is changing hands, but to make sure that the economy delivers sufficient goods to give all the population a decent standard of living.

As yesterday's article in the Times of India indicated, this is something that 'growth', however it is measured, is failing to do.

As a reminder of why GDP isn't the ideal way to assess the well-being of a nation, click here:

http://www.unm.edu/~econ/Binder/What's%20Wrong%20With%20the%20GDP.pdf

Tuesday, 18 December, 2007

Are commodities a bubble ready to burst?

Ambrose Evans-Pritchard, The Telegraph

Peak oil, peak metals, and this year peak food. Every bookshop has a corner warning that mankind will soon outrun the basic resources of the globe.

It was ever thus. Variants of the theme emerge at the top of each commodity super-cycle, only to be deferred for another 20 years or so as new supply comes on-stream and technology outwits the pessimists. Shortage can turn to glut very fast once inflation forces central banks to hit the brakes.

Whose Money? says:

We were told that house prices in the UK would never fall, because of pressure of demand. As this article says, let’s wait and see what happens when the credit tap is switched off.

Indian consumerism on decline, dips 6%

Times of India

MUMBAI: It's a well-known fact that the Indian economy has been booming over the past five years. Salaries are rising substantially in certain pockets of the country and the per capita gross domestic product (GDP) has almost doubled from $451 in 2000 to $897 in early 2007. So with more money to spend it's obvious that Indian consumers are on a buying spree.

… The study showed that consumer spending as a percentage of India's GDP has come down from 64.2% in 2000 to 57.9% in 2006, and is projected to dip further to 56% by 2015. Interestingly rising affluence is driving demand for comforts and luxuries higher, while consumer spending on necessities has dropped significantly.

In 2000, while consumer spending on necessities was 42.1% of the country's GDP, it dropped to 30.2% in 2006 and is expected to fall further to 23.9% by 2015. The data has been sourced from CMIE, a recent McKinsey report and MOFSL's internal database.

Whose Money? says:

What this suggests to us is that the same pattern is repeating itself in India as in the developed countries - ie, far from filtering down to those at the bottom of the heap, the new affluence attendant upon the global proliferation of debt-money is boosting the lifestyles of those already comfortably off, while leaving those without assets in a poverty made even more abject by comparison.

What a difference publicly-created, debt-free money might have achieved in a country whose poor, in their filthy makeshift huts or living on the streets, make our own have-nots appear fortunate! Even discounting the material benefits which a basic income would bring them, imagine the increased sense of dignity the “untouchables” would feel, if they, like everyone else, were entitled to a basic income!

Under the present international money regime, this is, of course, impossible.

Monday, 17 December, 2007

Credit crunch hits: a million in trouble

Sam Fleming, Daily Mail

Nearly a million families are struggling to pay off their mortgages, an alarming report reveals today. Another 1.8 million people say they have hit problems 'at least occasionally'.

Also:

Food prices hit new high

Philip Scott, Daily Mail

The world's top economies are set to be hit by soaring food prices as benchmark costs for cereals are increased.

And:

Npower shocks with 17% price hike

Npower has hiked the price of gas and electricity for new online customers and experts are warning that the rise will be the first of many throughout next year.

Whose Money? says:

The outlook doesn’t improve, then, as the basic cost of living for millions rises, with food, energy and fuel all eroding people’s purchasing power.

And all because we choose to run our economy according to the logic of debt-based finance, rather than putting first things first, and providing enough publicly-created money to ensure the production and delivery of sufficient goods to meet human needs!

The fact that all the "experts" refuse to face is that steady output and stable prices are impossible, as long as we use debt as our means of exchange.

12 December, 2007

We are taking a short break - back next Monday.

Tuesday, 11 December, 2007

Dresdner set to axe more than 200 jobs

Jonathan Sibun, The Telegraph

Dresdner Kleinwort, the German investment bank, is set to make more than 200 staff redundant in the wake of the meltdown in the global credit markets.

The first job cuts were made yesterday in the largely London-based credit business. Up to 60 members of the credit team are expected to be laid off - days before they were to receive news of their annual bonus.

Dresdner Kleinwort, owned by German insurance giant Allianz, is expected to make at least a further 150 people - including traders - redundant from other departments in the weeks ahead. …

The lay-offs are the latest round of mass redundancies in the City. UBS has already revealed it is axing 1,500 jobs across its investment banking division.

Also:

Banks freeze recruitment as credit crisis bites

James Rossiter, The Times

Banks throughout the City have frozen recruitment for middle office jobs as the full force of multi-billion pound writedowns are felt.

Over the past month there have been few or no new posts for risk analysts, financial controllers, audit and treasury experts, in banks such as Barclays Capital, Morgan Stanley, ABN Amro, Bank of America and Citi-group, City sources said.

Bankers working in these areas are also likely to receive minimal or no bonuses. Cash that would normally have gone to mid-office workers will be diverted to senior managing directors in equities or mergers and acquisitions as a way of retaining them and their client relationships.

Whose Money? says:

Rocketing food and energy prices … and now redundancies spreading from manufacturing into the much-vaunted financial sector.

A good time to recognize the inadequacies of an economy geared to the logic of finance, rather than to the production of necessary goods.

With the inadequacies of privately controlled debt finance laid bare, and recession looming, we need to switch to publicly-created, debt-free money, abolishing boom and bust, and ensuring a decent, and stable, standard of living for all.

Decoupling dies as half the globe hits crunch

Ambrose Evans-Pritchard, The Telegraph

The rising economies of Asia are too small and deformed to rescue world growth as America, Britain, Australia, and Club Med face their day of debt reckoning. China may make matters worse, not better.

Whose Money? says:

Speaking of US Treasury Secretary Paulson’s “pushing through a rescue plan … that amounts to a flagrant abuse of contract law and capitalist principles”, Mr Evans-Pritchard asks, “Would free marketeers rather see the whole edifice of capitalism burned to the ground to make their point?”

But why should capitalism be equated with the present financial system? Surely capitalism means an economy built upon the acknowledgement of private ownership of property: but when privately owned companies are granted ownership of the public means of exchange as an interest-bearing debt owed to themselves, what results is not the protection of property, but the opportunity for privileged financial interests to loot the property of others.

To function efficiently and fairly, capitalism needs a proper accounting system: publicly-created, debt-free money.

As this article states, “The root cause of this staggering debacle lies in errors made long ago” … Yes, indeed: it all started when governments reneged on their responsibility to provide the country with a stable money stock, and handed the job over to private, profit-making businesses, who proceeded to create “credit” (ie, debt) at their own discretion (or lack of it).

We do not need “a strong draught of socialism”. We need sound, debt-free money, and a return of financial and political power to the grass roots.

Monday, 10 December, 2007

Quote for today:

Money is an abstraction. Money is a thing of no value whatever. Money is nothing but an accounting system. Money is nothing worthy of any attention at all, but we base the whole of our actions, the whole of our policy, on the pursuit of money; and the consequence, of course, is that we become the prey of mere abstractions like the necessity for providing employment. - CH Douglas.

Read a review of the book, Major Douglas - The Policy of a Philosophy, by John W Hughes, here: http://www.social-credit.com/reviews.html.

And here's another relevant observation - this time by Albert Einstein:

Not everything that can be counted counts, and not everything that counts can be counted.

Hard choices are crucial for soft landing

Larry Elliott, The Guardian

Ever since the world's financial markets were plunged into crisis as a result of their own reckless stupidity, the cry has gone up: "Turn those machines back on." And they have been. The problem is that the solution doesn't seem to be working.

Read in full here …

http://www.guardian.co.uk/business/2007/dec/10/economics.economy

Whose Money? says:

As usual, Larry Elliott tells it like it is … only perhaps he might go further, and be more precise about why “the financial sector and the housing market are pivotal to growth in the United States and Britain”.

It is, of course, because the mass borrowing generated by an out-of-control property market, and the opportunities presented by enthusiastic financial speculation, are now our main means of putting money into circulation.

Without mass borrowing of ever more ludicrous sums, liquidity disappears. In other words, if everyone paid off all their debts, we would have no means, other than barter, of exchanging goods and services with each other.

It would be helpful if this fact were clearly pointed out by financial journalists - particularly the best ones, like Mr Elliott.

Or is it against editorial policy to make the nature of our present monetary system explicit?

Sunday, 9 December, 2007

Wobbly Woolworths faces tough Christmas

Helen Power, The Sunday Telegraph

Struggling high street retailer Woolworths is under pressure to renegotiate its debt mountain as it goes into make-or-break Christmas trading.

Whose Money? says:

And as the link to “High street horror story” (http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2007/12/09/ccom109.xml#3 and scroll down) emphasises, they’re not the only big names struggling under a debt mountain.

The trouble with the present financial system is that lenders make their money by positively encouraging trading practices that don’t add up ... in the boring old tradition of one and one making two, at any rate.

As James Hall points out, in his comment on chain store woes, “This probably says more about the banks than it does about the retailers”.

In the fight for survival prices may be cut, but over the interest-charge component to those prices businesses have no control; and, as Mike Rowbotham wrote already, over ten years ago (The Grip of Death, pp 22-23), “while the level of commercial debt compared to personal debts such as mortgages has declined, the total of commercial debt has never been higher in real terms, as measured against profitability, commercial incomes, GDP or any other standard of comparison.”

The statistics he gives, (Grip of Death p40, quoting Robert Fleming Securities as his source) state that the percentage of business income required to service debt rose from 7% in 1963 to 28% in 1990.

We dread to think how much it must be now …

How about sending one of your indebted friends Mike Rowbotham's brilliant account of just why so many people and businesses are in the red?

Read the first chapter of The Grip of Death here, and order from Amazon,
http://www.amazon.co.uk/Grip-Death-Slavery-Destructive-Economics/dp/1897766408/ref=pd_sim_b_img_1

Or do you know someone who is concerned about global poverty? In that case, Rowbotham's other book, Goodbye America! would be a good choice. Read a review in our Websites, Books, DVDs section, and order here, http://www.amazon.co.uk/Goodbye-America-Globalisation-Dollar-Empire/dp/1897766564/ref=pd_sim_b_img_1

Banks make millions from rate cut

Clare Francis, The Sunday Times

HIGH STREET banks are already making millions from last week’s interest-rate cut, having sneakily slashed savings rates up to six weeks ahead of the announcement while mortgage rates for some borrowers will not come down until the new year.

Savers now face a second round of reductions, while experts warn that millions of borrowers are unlikely to see their repayments fall by the full quarter point – giving banks’ profits an instant boost.

Whose Money? says:

So the banks are in a win/win position, while the rest of us (and the unfortunate Bank of England MPC) lose, whichever way the dice falls.

As usual, the goal of the banks, which, naturally, is to maximise their profits, is at odds with the needs of the economy, exacting as much interest as possible from businesses, families and individuals, while cutting back on the interest paid to small depositors.

The problem is, that we are dependent upon these private businesses for the creation of our money supply: but the need for there to be sufficient purchasing power, distributed throughout the economy, if businesses are to sell their products, and consumers are to satisfy their needs, simply does not concern them.

When banks have a monopoly on creating our non-cash currency, and can pick and choose how much money to put into circulation, and for whose benefit, the country’s medium of exchange is increasingly monopolised by privileged sections of the population, and the economy ceases to function efficiently, with some people unable to secure a decent standard of living, while others glut themselves on luxury goods.

So are we advocating redistribution of incomes, along socialist lines?

No: what is needed is not the imposition of financial equality, but a money supply which cannot be manipulated by the few to the detriment of the many: a money supply created free of debt by an accountable public authority, and distributed in the form of a non-means-tested basic income to all adult citizens.

The aim would not be to equalise incomes - an idea which is not only unattainable but very silly. It would, however, go a long way towards eradicating poverty, with even those on low wages finding it worthwhile to work, since the extra they earned would be enough to support themselves and their families comfortably, if not luxuriously.

But the eradication of poverty can never happen as long as we remain in thrall to a banking system which, by its very nature as a profit-making enterprise, must put human well-being far below the proliferation of figures in computerised account books.

Saturday, 8 December, 2007

Blair's former chief of staff joins Morgan Stanley

Jill Treanor, The Guardian

Tony Blair's former chief of staff is joining Morgan Stanley to help the US financial firm pitch for take over deals across Europe.

Jonathan Powell is taking up the post as a managing director in its investment banking arm only months after Jeremy Heywood left to become head of domestic policy in Gordon Brown's government. Heywood had been private secretary to Blair before becoming co-head of the UK investment banking division at Morgan Stanley.

Whose Money? says:

Why bother to vote?

As C H Douglas said, political democracy without economic democracy is dynamite.

We do not have government by the people for the people. What we have is government of the people by a corporate oligarchy, with politicians, financiers and big-businessmen increasingly indistinguishable.

Consumer woes to prompt US rate cut despite jobs data

Sean O’Grady, The Independent

The US Federal Reserve remains likely to cut American interest rates next week, despite better-than-expected job growth figures which yesterday eased concerns that the housing slump will push the economy into a full-blown recession.

Whose Money? says:

Things aren’t so bad, then! Employment holding up …

And then you see that this is only because “Recruitment in education and health services, retail and the professions …” has been “... offsetting losses in construction, manufacturing and financial services.” So manufacturing continues to sink, while the property crash effectively cripples one of the main opportunities for money-creation.

Do “the prospects for the US economy remain uncertain”, with a hope of full recovery? Or is this “THE END OF A 300 YEAR PONZI SCHEME”?

Read Ellen Brown’s article, here http://www.webofdebt.com/articles/market-meltdown.php. Better still, buy her book, The Web of Debt: order here.

Friday, 7 December, 2007

Cheer for borrowers as rates cut to 5.5%

Adrian Lowery, The Daily Mail

The Bank of England today appeared to admit the UK's economic situation is much worse than it had thought, as it cut interest rates despite concerns over inflation.

Read more ...

http://www.dailymail.co.uk/pages/dmstandard/frame.html?in_bottom=http://www.thisismoney.co.uk/news/article.html?in_article_id=427295&in_page_id=2&ct=5

Whose Money? says:

Presumably banks will continue to restrict lending, so that the benefits of any cuts in the interest rate are restricted to previous borrowers in the property market, and future money creation is channelled into wealth-producing, rather than money-proliferating, enterprises.

With food and energy costs going through the roof, at least this rate cut may save some people from repossession, and bring a little relief to hard-pressed small businesses.

The £186,000 bill for raising a child to 21

Andrew Levy, The Daily Mail

Anyone who tells you their children are worth their weight in gold is probably not far off the truth.

The cost of raising a child from birth to the age of 21 is £186,000 - £24.30 a day, according to a survey.

The figure has shot up by a third over the past five years and is predicted to be £265,000 by 2012.

Childcare is the biggest single cost, with parents forking out just over £50,000 on average for the first 14 years of nursery fees, after- school clubs and holiday clubs.

Whose Money? says:

So “Childcare is the biggest single cost”.

And why is all this “professional” childcare necessary? Mostly, because both parents are full-time wage-earners outside the home.

And why are both parents forced to take on outside employment? Because this is the only way they can afford to pay the bills and put a roof over their heads.

But at least the State is prepared to pay a proportion of child-care fees, in return for the higher tax take generated by two working parents per family, and the extra employment (and taxes) afforded by all those jobs for child minders and nursery nurses.

Far worse is the cost of “university” education, with parents supplementing student loans, so that their offspring may be armed with the necessary “degree” in subjects which would frequently be better learned in technical colleges, or on the job, and at an earlier age.

When our debt-sodden Government isn’t prepared to pay for keeping as many young people as possible off the unemployment figures until they’re twenty-one, the fees for higher education must either be found by the parents, or borrowed into existence by the students themselves.

What it comes down to, is that the country’s finances are in a complete mess, with more and more people short of purchasing power, and struggling to get by: and things aren’t likely to change, while we insist on running the economy with a view to producing an ever-less-adequate supply of money and jobs, rather than taking full advantage of automation, and focusing on the production of real wealth - even if this means that earnings must be boosted by publicly-created money, and that we all (oh horrors!) only need to work half the hours for our wages.

Thursday, 6 December, 2007

Innumeracy is pushing the economy off a cliff

Boris Johnson, The Telegraph

… The educational problems of the minority can help to trigger an economic catastrophe for the whole of society. That is because mathematics - whether we like it or not - affects all of us, and our economy depends on all income groups having a basic understanding of numbers.

Read in full here …

http://www.telegraph.co.uk/opinion/main.jhtml;jsessionid=ODKLKHJYYYHHDQFIQMFSFGGAVCBQ0IV0?xml=/opinion/2007/12/06/do0602.xml

Whose Money? says:

“… The educational problems of the minority can help to trigger an economic catastrophe for the whole of society.”

Yes, indeed!

But the minority we’re thinking about is a different, and far more powerful one: that tiny oligarchy which runs the country, and which, though quick to condemn public ignorance, is unable to understand the inexorable logic of compound interest, when applied to a (totally unnecessary) National Debt.

What is the single biggest financial decision a nation has to take?

It’s about how the country chooses to create its means of exchange. It involves understanding concepts of percentages and interest; and there is abundant evidence that generation after generation of British politicians either do not care about the debt they are undertaking on taxpayers’ behalf, or do not really understand the meaning of these squiggly figures for the nation's future prosperity.

On the other hand, there are lots of intelligent and well-educated people who are passionately committed to helping the country out of its present hole. They want to give us all not only decent infrastructure and services, but that liberating array of personal choices which depends on families and individuals having adequate purchasing power.

These people - commonly known as money-reforming cranks - have been amazed at the deals governments are willing to accept when they hand money-creation powers over to the banking system, and at the risks innumerate politicians are willing to run with ordinary people’s lives.

Are our rulers stupid? Or is it that they just haven't been educated to understand the maths? They don't see what compound interest, snowballing inexorably over the years, can do. They say, “Never mind the rate, just add a bit on to the Public Sector Borrowing Requirement.”

It's ignorance. And the consequences of this ignorance can be profound, not only for the economy as a whole, but for the individual debtor.

Because it’s not just the Government that has to borrow, when publicly-created money, in the form of debt-free notes and coins, has fallen to the pathetic level of a mere three per cent of the whole. When an economy depends on mass borrowing to provide a medium for trade and exchange, each generation must go deeper into the red than the last (see the Bank of England figures for total lending and total deposits, with the gap between the two figures growing exponentially over the years).

As Boris points out, "Some may say that this is all the fault of the sharks and the money-grubbing lenders, and that we need new regulation to stop the British people from mainlining credit."

However, if everyone paid back their crippling loans, there would be no money in circulation.

Surely what we need to do is give people the confidence - and the intellectual tools - to challenge their financially incompetent rulers, and force them to kick the debt habit; and that means driving home the message, before Britain disintegrates into a third-world economy, that maths really matters … even for politicians, and even when applied to the National Debt.

The difference between creating the country’s means of exchange as a debt - a debt against the nation, and a debt against ordinary people - and creating it as a debt-free input to the economy is the difference between happiness and misery for millions. Without a basic understanding of the nature of money, innumerate politicians will continue to drag the country deeper and deeper into debt, ruining individuals, families and businesses in the process

The tragedy in Britain is that the most economically vulnerable are being failed by the inability of our politicians to grasp the arithmetic of debt, when applied to the creation of money; and it is that arithmetical failure that is now putting our economy in jeopardy - and that hits all of us.

Wednesday, 5 December, 2007

Rate cut reasoning

The Financial Times

There is an imperative in any crisis: to do something, anything, to respond to it. In the case of the credit squeeze, central banks have most of the tools, hence vocal demands, especially from market participants, that they cut interest rates. The Bank of England’s monetary policy committee meets on Thursday, yet if it is to cut, it can only be as an indirect response to the credit markets.

Whose Money? says:

There is no way that any set of clever people at the Bank of England will ever manage to keep the economy on an even keel for any length of time, as long as the financial cart is attached to the front of the productive horse, and impeding its progress.

This report says, “There are fears that a collapse in credit creation and broad money growth could have a devastating effect on the real economy.”

The words “the real economy” are frequently bandied about. Why, then, if a distinction can so easily be made between the real (productive) economy, and the illusory (financial) one, can’t the “experts” bring themselves to admit that it’s the goods and services which actually matter, not the manipulation of figures which only have meaning when used to measure those goods and services?

Remember what C H Douglas had to say on the subject, back in 1929 (see our Article 17, here)?

What, he asked, is the objective of the economy?

Is it to produce money? Is it to produce jobs? Or is it to deliver goods and services|?

Any sensible person would, naturally, plump for the third alternative.

We can only pity the MPC, who have been taught that the main objective of economic activity is to preserve the present inflationary, debt-sodden financial system, which they must now somehow keep afloat, while saving the country from both rising prices and recession.

Stagflation seems the most likely outcome … resulting in an even wider gap between the haves and the have-nots, as millions in housing “equity” disappears into thin air, unemployment increases and the tax take falls: all against a backdrop of soaring food and energy costs.

Tuesday, 4 December, 2007

House prices 'will drop 10% in a year'

Sam Fleming, The Daily Mail

The housing market is on the brink of a record slump, one of the country's leading experts warned. Morgan Stanley's chief UK economist David Miles warned that prices will drop 10% next year.

That would be the biggest full-year decline since records began in 1969. A drop on that scale could plunge thousands of people into negative equity and recall the worst days of the recession of the 1990s.

Whose Money? says:

Mr Miles says, “'I don't think house prices falling is in any sense a bad thing. There's a natural tendency for people to view it as bad for the economy, as unhealthy.”

Of course, he’s quite right that it’s no bad thing for house prices to re-enter the real world of affordability, so that young people can once again hope to own their own home.

However, a drop in prices will certainly not contribute to the health of an economy which depends on people taking out large amounts of debt to put money into circulation.

Under our present financial régime, less debt equals a shrinking money supply, as Michael Rowbotham pointed out in his eye-opening book, The Grip of Death (see here); and the lower property valuations which are likely in the future will result in less debt, and less debt-financed consumption, as people see their housing equity fall.

Unless borrowing in other areas increases, to compensate, a recession is likely: but with banks themselves in trouble, will the necessary loans be forthcoming?

Monday, 3 December, 2007

Secrets of the Plunge Protection Team

Michael Edward

There are just four people who control all of the U.S. markets through their use of dangerous and explosive DERIVATIVES. They are risking the assets and retirement funds of all Americans. Because of their manipulations, especially since 2001, U.S. financial markets are now based on the gambling whims of a special fraternity of Federal Government DERIVATIVE dealers.

Whose Money? says:

Ellen Brown has a lot to say about the Plunge Protection team and related matters in her recently published book, The Web of Debt - order it here: http://www.webofdebt.com/.

One we missed last week:

Why banking is an accident waiting to happen

Martin Wolf, The Financial Times

Why does banking generate such turmoil, with the crisis over securitised lending the latest example? Why is the industry so profitable? Why are the people it employs so well paid? The answer to these three questions is the same: banking takes high risks. But the public sector subsidises this risk-taking. It does so because banks provide a utility. What the banks give in return, however, is gung-ho speculation.

Whose Money? says:

All very much to the point.

However, governments don’t only “guarantee banks because the latter provide a social utility: a safe haven for money, and a payment system”. The main reason they guarantee them is surely because they provide the country with its money supply. When banks go bust, so does the economy, and the taxes it generates.

So, if banking is to be “viewed as a profit-seeking industry that operates in accordance with the laws of the market, including, if necessary, mass bankruptcies”, it will have to be deprived of its lucrative rôle as principal generator of the nation’s medium of exchange.

The nation simply cannot afford to have its industries and businesses periodically destroyed by the failure of purely financial concerns.

As usual, this article fails to tackle the heart of the matter: the need for stable, publicly-created, debt-free money.

Its only when we've switched to using a supportive currency of this kind that banks can safely be allowed to sink or swim.

Sunday, 2 December, 2007

Fertiliser at a price – if you can get it

Howard Walsh, Farmers Guardian

A LOGISTICAL supply problem with fertilisers in spring 2008 is now a reality not a possibility, say fertiliser companies.

World demand is outstripping supply and farmers are being advised not only to make sure they have ordered what they need, but to take delivery and make sure they have it.

"This coming season, the most likely situation is a shortage,” said Yara’s England and Wales business manager Steven Chisholm.

World demand for grain production for both feed and biofuel was currently outstripping supply and that was driving the demand for fertilisers.

Whose Money? says:

With food prices pushed up by these shortages, people are going to be even less able to support a miracle economy based on borrowing money into existence and spending it on highly taxed goods. Inflation, here we come …

Perhaps at least we shall now see some investment in the production of necessary goods, instead of the production and maldistribution of money … all owed to banks which look no further than financial profit in their selection of suitable borrowers.

Of course, it would be far better to invest publicly-created, debt-free money in the country’s agriculture, and aim to produce as much food as possible on home ground for the home market: with a steady increase, as time goes on, in the number of mixed farms and traditional methods.

And, with a basic income to supplement part-time earnings in paid employment, many more people would be able to grow at least some of their own food, and keep small livestock. Think of all those people in the East End of London, for instance, who kept chickens and rabbits in their back yards, to supplement their food supplies …

One touch commerce

Stepping off the Tube at the major financial outpost of London’s Canary Wharf, commuters in recent weeks have been assaulted by a marketing campaign of military proportions. From the underground exit gates to the top of the vertiginous escalators and on to the pedestrian forecourt, every available surface is plastered with advertisements for a new, “revolutionary” technology that promises to transform the world of cash payments: the contactless card.

And:

E-wallet watch

E-payments systems have long been a favourite for analyst forecasts. Alongside the wide acceptance of online banking, we have – at various times in the past – been treated to predictions of how infra-red mobile handset payments or SMS-based transactions will dominate the high-street. All have been tipped as the technology that will eradicate cash, and transform the wallet into a base for seamless electronic transactions.

Whose Money? says:

“The end of cash”?

Under the present monetary régime, the end of cash would mean the end of debt-free money circulating in the economy. Even that last meagre 3% created debt-free by the Bank of England would go.

Yes, plastic is convenient: but as non-cash currency has taken over from cash, debt and inflation have become endemic.

At the moment, only cash money, in the form of notes and coins issued by the Bank of England, is legal tender: so presumably the law would need to be changed if cash were to be consigned to history.

Does it make sense to put the issue of the country’s legal tender entirely in the hands of private money-lending businesses? If cash is to go, it should be replaced by non-cash money issued exclusively, or, at the very least, predominantly, by a public authority accountable to the people of this country.

The question of what we use for money is highly political, and a fundamental change in the nature of our currency to 100% debt at source should be argued in parliament, not from the billboards of commercial advertisers.

In our opinion there will always be a place for cash in any economy (think how you’d feel if you lost that all-important card, and had no alternative means of purchase); and it should be largely supplemented not by debt to the banks, but by publicly-created, debt-free money.

See also our entry for 20 October, About Seigniorage.

Saturday, 1 December, 2007

Rock borrowing - the facts

Robert Peston’s BBC News blog

You’ll have read around the place this morning that Northern Rock has now borrowed almost £30bn from the Bank of England.

That’s wrong. The Rock has in fact borrowed just over £25bn from all of us in the form of taxpayer-backed loans.

Whose Money? says:

As Mr Peston says, “Inevitably, (the Bank of England’s) silence has fuelled the conspiracy theories, even within the Rock itself – whose executives have persuaded themselves that other banks must be in receipt of secret emergency help from the Bank of England, which somehow it has managed to keep quiet.”

Yes - we’ve been picking up on some of those rumours, and it certainly is “a bit odd and troubling”. As the comment from Peter Bench (9.17am, 20 November) says, “… why is the BBC not asking this question very publicly?”

(Why, indeed, money reformers might ask, is the BBC not asking a whole lot of questions about the functioning - or rather, the malfunctioning - of the entire financial system?)

Interesting comments from Chris Cook, which we’ll quote in full:

(5.11pm, 30 November) It's not surprising Mr Peston is having difficulty with the inner workings of the Bank of England ...

These are the facts.

The Bank of England loans to Northern Rock are not "tax-payers' money". This money has never been anywhere near a tax-payer.

It is the virtual equivalent of bank-notes, and like them, has been created "ex nihilo" by the Bank of England, but without printing and distribution costs.

If you don't believe me: this is what Tim Congdon had to say in the FT a few weeks ago:

"The explanation is that the Bank of England can create money "by a stroke of the pen". Parliament has made it the UK's only issuer of legal-tender notes, and it can expand the note issue or credit a balance convertible into notes at virtually nil cost.

Because of these special powers, the Bank does not need to borrow in the interbank market at a positive interest rate.

Instead the interest cost on its £21bn loan (and indeed its £30bn loan if it reaches that level) is zero. So the Bank's profit on the operation in the circumstances discussed would amount to about £2bn (that is, 6¾ per cent on £30bn. "

The fact of the matter is that - as Congdon points out - it is in the tax payers' interests for these loans to Northern Rock to stay outstanding as long as possible, because it represents a gain to the Bank of England of 5.75% per year (at current base rate) in respect of all outstanding balances.

The "penal" element of a further 1.25% is actually not being paid by Northern Rock but is instead being rolled up as a "subordinated" loan, which, if and when it is repaid, will represent pure profit to the taxpayer.

In the event of losses and/or defaults, the shareholders will take the first hit, and the subordinated loan will be next ie "tax payers" will only lose a "gift" from the Bank of England", and only then will other creditors be affected.

In that case, although it is hard to believe, the surreal fact of the matter is that taxpayers will no more be losing money than when the Bank of England burns time-expired bank notes.

This ability of the Bank of England to create credit = money which may be used to retire secured debt could actually form the basis of a rational monetary system.

Instead of the unsustainable system of interest-bearing credit manufactured by private banks even now breaking down before our eyes.

A great article from another Mr Cook - this time Richard C Cook, on the Global Research website:

“Market Fundamentalism” and the Tyranny of Money

In the midst of the most productive economy in history, the U.S. and much of the world today are in crisis, with stagnant or falling incomes, rising prices, and skyrocketing debt. Many experts are predicting an economic collapse, and people with money are scrambling for safe places to protect it. No one in an official capacity has provided a convincing explanation; few have even tried.

We are taught that economics is a “science” and that it operates under unchangeable laws that are understandable only to specialists. People speak with reverence of “market forces” as existing beyond the reach of human intelligence and will.

Read it in full here:

http://www.globalresearch.ca/index.php?context=va&aid=7427

Whose Money? says:

We like his emphasis on “monetary reform, combined with the realization that science and technology have removed the need for everyone to work all the time just to survive. We have earned the “leisure” and “peace” dividends that are often mentioned but have yet to be realized.”

We also agree whole-heartedly with his prescription for public creation of credit by: “1) direct issuance of credit to citizens through a basic income guarantee, a periodic National Dividend, and low-interest bank lending; and 2) direct spending by government for essential services—i.e., restoring the Greenback” (or, in our case, the pound) “combined with public low-interest financing of infrastructure investment.”

As he so rightly says, “Taking these steps would also allow us to reduce much of the onerous burden of taxation at the federal, state, and municipal levels.”

Richard C Cook’s website, with more articles, is here: http://www.richardccook.com/ .

EDM 265, Green Credit for Green Growth

A new Early Day Motion, EDM 265, Green Credit for Green Growth, sponsored once more by Austin Mitchell, MP for Grimsby.

So far, it has ten additional signatories. You can read it in full, and see if your MP is one of those supporting it, here: http://edmi.parliament.uk/EDMi/EDMDetails.aspx?EDMID=34372&SESSION=891.

Naturally we wish the EDM success - though, as we’ve made clear, we are unconvinced by evidence currently put forward (and exaggerated by the kind of computer modelling that gave us the foot and mouth disaster) that climate change is a man-made phenomenon, and that modifications in our way of life can bring forces originating in the cosmos to heel.

However, we certainly would like to see a huge reduction in waste and pollution, which is impossible under our current financial system, dependent as it is upon exponential growth; so we wish that emphasis had been placed upon these concerns, rather than hitching the powerful environmental case for money reform to the global warming bandwagon - which, however loud the claims that "the science is settled" (science settled?) remains highly controversial.

As money reformers, we need to secure support from as wide a base as possible; and an emphasis on more generally agreed environmental concerns would be more effective than insistence upon the doomsday scenario, which, quite frankly, turns many people off.

Of course, it may be that couching the EDM in the current fashionable idiom will succeed in attracting the attention of MPs keen to prove their green credentials. But it seems a pity not to go for wider support among those who, though they may be cast as heretics by the global-warming fraternity, nevertheless have the good of the environment at heart.

Thursday, 30 November, 2007

Taxpayers' support for Northern Rock soars to £30bn

Philip Inman, The Guardian

The crisis surrounding Northern Rock intensified last night when it emerged the amount lent by the taxpayer to the bank had soared to almost £30bn. Opposition MPs called for the government to seriously consider nationalising the beleaguered bank to put a brake on the government's loan and limit potential losses to the exchequer should it collapse.

A private sector rescue for the bank has also run into trouble as angry shareholders attempted to block an offer from Sir Richard Branson's Virgin Group to buy the company for what they believe would be a knockdown price.

Thursday, 29 November, 2007

House prices suffer sharpest fall since 1995

Angela Monaghan, The Telegraph

November has seen the steepest monthly fall in UK house prices for 12 years, according to the latest survey from mortgage lender Nationwide.

Prices dropped by 0.8pc in November, the largest decline since June 1995, as weakening consumer sentiment, higher interest rates and the turmoil in financial markets all tightened their grip.

The November figures bolster Nationwide's warning earlier this month that the decade of rising house prices in Britain has come to an end.

Whose Money? says:

So what is now balancing the debt created by all those 100% plus mortgage valuations that proclaimed this country’s unprecedented wealth?

And what new fad will be pushed, tempting people to shovel their remaining financial solvency into the black hole of debt, as they borrow the nation’s means of exchange into existence … if, that is, the banks are even willing to lend them anything?

World economy heading for 'perfect storm'

Alex Brummer, Daily Mail

One of the world's leading financial experts has warned that a 'perfect storm' could be about to hit Western economies.

There is rising concern that the US economy will slip into recession next year dragging many economies - including Britain - down with it as the global credit crisis worsens.

Whose Money? says:

Note that what is getting worse is “the credit crisis”.

Not the production crisis. Not the wealth crisis. Not the human potential crisis: the amazing capacity of human beings to adapt, to invent, to push beyond the frontiers of knowledge, remains intact.

What we are short of is the bank credit which serves as money - ie, new debt.

But why on earth should we be reliant upon debt, with all the misery which it entails, just to exchange goods and services with each other?

Why not get to the root of the problem, recognize the fact that bank credit is failing to do its job (as it inevitably must fail, being incapable of putting money into general circulation without taking even more out again, as debts are repaid at interest) and switch to a more efficient and less wasteful medium of exchange: the publicly-created, debt-free kind?

Credit crisis reveals widespread accounting manipulation by top US banks

Joe Kay, World Socialist Web Site

… The pervasiveness of accounting manipulation is closely linked to the increasingly dominant role that speculation has come to play in the American economy. Vast sums of wealth—including tens and hundreds of millions of dollars to top executives and hedge fund managers—have been made through mechanisms that are largely divorced from any relationship to actual production. The importance of these forms of speculative wealth accumulation has increased as the underlying health of the American economy has decreased.

The housing market has been a case in point, as a small layer of the population has made billions through high-risk loans to working class Americans who are now bearing the burden of a crushing level of debt. The loans have been used to transfer wealth into the hands of the ruling elite, and at the same time became a means of speculation.

Entities such as CDOs and SIVs were set up as a means for Wall Street to extract enormous profits, while at the same time cloaking the extremely fragile foundation for this supposed economic growth. As the housing market deflates, this whole structure is beginning to unravel.

Read in full here:

http://www.inteldaily.com/?c=139&a=4370

Whose Money? says:

The received wisdom is that governments can’t be trusted, and that only the brakes imposed by balancing the money supply with an equal quantity of debt owed to private creditors can keep inflation in check.

Is it really so much better, on the evidence highlighted in this report, to entrust private, profit-making businesses with the provision of our means of exchange - especially when those businesses are increasingly hand-in-glove with giant, monopolitistic corporations, and have lethally indebted governments pinned firmly under their thumb?

Easier - and far better for the economy - to opt for debt-free money under public control, than allow the banks to decide how much repayable, interest-bearing "credit" to issue in lieu of legal tender ... and who shall have first use of it!

Wedneday, 28 November, 2007

10m Britons falling into black hole of debt

Sean Poulter, The Daily Mail

More than ten million adults are teetering on the brink of the financial abyss because they cannot cope with rising mortgage payments and other debts.

A study paints an alarming picture of a large section of the population that is gripped by money troubles. Almost one in four - 23% - fear their current borrowing is already unmanageable or is about to become so.

Meanwhile 12% - 5.4m - have missed payments on debts and bills in the past six months. Around 10% had a direct debit, cheque or payment bounced by their bank over the same period. About 3% even fear they are about to lose their home.

So what’s new, then? The statistics on Credit Action’s website (here) have been warning of this for months now.

Gordon’s miracle has been achieved entirely on the back of consumer debt, government-created non-jobs, and the City of London … all of which are now looking decidedly dodgy.

Isn’t it time we returned to a productive economy - and insisted on publicly-created, debt-free money (both cash and non-cash) as its sole legal tender?

Tuesday, 27 November, 2007

Gordon Brown to push unemployed into work

Robert Winnett, The Telegraph

In a speech to business leaders, the prime minister said that private companies and charities would be offered new "incentives" for getting the long-term unemployed back to work and pledged to close loopholes in the benefits system.

There will also be changes to benefit rules to allow people to study and train without losing state handouts.

Whose Money? says:

Yes, of course it’s a good idea for everyone to be able to earn enough money to live while doing productive and satisfying work.

Yes, of course young people will be far happier if they have useful skills to offer: starting with the ability to read, write and do arithmetic.

But the implication here is that everyone should be aiming to support themselves solely through full-time paid employment; and this, in the present high-tech, increasingly automated world, is not possible, or even desirable.

Why aren’t we rejoicing that most jobs can now be done in a fraction of the time, and sharing out what are left more evenly, instead of giving the majority of people the choice between paid employment with little free time, or too many idle, penny-pinching hours on their hands for their own good?

What we should be aiming for is a well-educated, highly-skilled population who can afford to spend far fewer hours outside the home in paid employment, with ample leisure time available for family, hobbies and voluntary work - areas of life which have fallen into neglect, as we march increasingly to the beat of finance.

In any case, under the present global régime of debt-money, with cut-throat competition driving down production costs, there is no guarantee that even the highly-skilled jobs Mr Brown wants young people to aim for won’t be exported, as the transnational companies mopping up our home industries seek out cheaper labour overseas (see ‘Amicus fight to save highly skilled jobs’, http://www.amicustheunion.org/default.aspx?page=5749 and ‘New threat to skilled US workers’, http://seattletimes.nwsource.com/html/opinion/2003668844_harrop17.html).

It is not a law of nature that money can only come into existence as a debt owed to the banking system, nor that it can only be distributed via a treadmill of over-production and wage-slavery.

It would be perfectly possible for an adequate means of exchange to be issued, free of debt at source, as a public service, and distributed as a non-means-tested basic income to all adult citizens. People might then, if they chose, settle for part-time work and a more satisfying and unpressured lifestyle, without sinking beneath the poverty line. (See our articles 16 and 17, here).

We do not have an “unemployment problem”. We have uneven access to the country's wealth, because of a dysfunctional monetary régime, dependent upon systemic debt.

I fought the Lloyds

If you've not already heard this song, by a customer who successfully recouped unfair charges from the Listening Bank, here's a link:

http://www.moneysavingexpert.com/site/bank-charges-song

Whose Money? says:

Great that people are standing up against unfair bank charges - but the banks will simply get their act together, and charge more for their genuine services. And if we want those services, we’ll have to pay up.

How much better it would be if the lethal charges paid by the whole economy, at every moment, as a result of allowing banks to control the nation’s money supply, were the target of the rebellion!

Then “Us against the banks” would really have some meaning …

Still, any refusal to just sit back and take the punishment is progress - especially as more and more people are getting the hang of how banking actually works.

Perhaps it won’t be so long, after all, before ordinary people throughout the world can say, “We fought the banks, and we won!”

Monday, 26 November, 2007

Virgin on a deal?

Sam Marsden, the Journal

A CONSORTIUM led by Sir Richard Branson’s Virgin Group is today set to be named as the preferred buyer for Northern Rock.

It is understood the crisis-hit bank will announce that it favours the Virgin bid.

And there were reports last night that the Govenment will endorse the deal.

But this will not resolve all the questions about Northern Rock’s future as investors – large and small – may still try to block the deal.

The Treasury is said to be growing impatient with the sales process and wants the issue resolved before Christmas.

Whose Money? says:

According to the national dailies, it’s all over bar the shouting. And the BBC reports, “If the bank's shareholders resist the deal, he said the bank would most likely be put into administration.”

We just wonder, like this poster on House Price Crash (http://www.housepricecrash.co.uk/forum/index.php?showtopic=62030), “What’s the deal?” for Branson ... and think it’s a pity Northern Rock ever ceased to be a friendly local building society, catering for the needs of the region on a sound basis, and started dabbling in creative accounting … getting more than its fingers badly burned in the process.

Cartoon: http://home.iae.nl/users/lightnet/world/moneygame.htm

Where death by water is part of daily life

Larry Elliott, The Guardian

… The government's first attempt at increasing coverage for sanitation was a failure; it committed scarce resources from its budget, bought the sanitary hardware, delivered it across the country, and then saw nothing happen.

Things only started to change once power was devolved to a lower level, raising awareness of the benefits of sanitation at a community level and obliging every family, no matter how poor they were, to make a contribution, perhaps through free labour, to the installation of their own toilet. Richer families subsidised poor ones, and children were mobilised to put pressure on anybody who decided that the new-fangled latrines were no match for defecating in the open. In a village close to Jamalpur, a five-hour drive from Dhaka, there is now 100% sanitation coverage. Women, in particular, say having their own toilets has given them privacy, safety and better health for their children. Laily Begum, a mother of three, says: "The children used to suffer badly with diarrhoea. Now there is no diarrhoea, no sickness. In the past many of us were frightened to go out when it was dark for fear of being attacked."

Read in full here …

http://www.guardian.co.uk/business/2007/nov/26/economics.naturaldisasters

Whose Money? says:

Local initiatives, with people taking control over their own lives and surroundings, obviously works better, then, than any amount of state supervision. With publicly-created, debt-free money, supplemented by local and regional currencies, these people would also have the power of the purse strings, and things could be even better.

What we need in the UK, too, is economic decentralisation - and that includes the decentralisation of financial resources, with properly answerable local government (ie, not the kind we've got now) keeping central government firmly under its thumb, by controlling its spending money.

Sunday, 25 November, 2007

Bet your bottom dollar tensions will follow

Liam Halligan, The Sunday Telegraph

The weak dollar used to be an economic issue. But the greenback has now dropped so far, and has so much further to fall, that its decline is of profound political importance. The dollar isn't any old currency. And it isn't just the currency of the biggest economy on earth. The dollar is the world's "reserve currency" - which means central banks everywhere use it to stockpile wealth. No less than two-thirds of all sovereign foreign exchange holdings are denominated in dollars.

Whose Money? says:

What has been “playing havoc with the broader US economy”, so that it is “now slipping into recession” is - as in the UK, and throughout the world - the practice of using debt as the country’s means of exchange.

Many factors “which have nothing to do with traditional deficit-funding concerns” are now “dragging down the dollar”, says Mr Halligan.

But far, far worse (since, after all, the creation of a stable currency is well within the capacity of any government sincerely concerned for the well-being of those it claims to serve), many factors which have absolutely nothing to do with the advanced productive capacity of the modern world are dragging down the lives of ordinary people, and the local economies on which they depend: plunging individuals, regions and whole nations into inexcusable poverty, in order to service the destructive internal logic of an unaccountable private banking system.

If the fall of the dollar, now well underway, coincided with the rejection of any further moves to preserve a monetary system based on debt, it would be a blessing not only to the growing American underclass ,who have gained nothing from being the proud possessors of the world's über-currency, but to all those people in underdeveloped countries slaving away to pay back what they have borrowed hundreds of times over, in terms of real wealth, while freqently going short of food.

Unfortunately, though, unless people en masse begin to demand publicly-created, debt-free money, the dollar’s demise will simply open the door to continental-scale currencies, with the amero next to join the euro in the run-up to an eventual global medium of exchange: one that will, of course, be owed 100+ per cent to the supranational finance houses which created it: with the backing of all those servile governments travelling on the bankers’ gravy train … or living in fear of their displeasure. (For more about the amero, see http://wordpress.com/tag/amero/2/.)

And yes, Mr Halligan is right: what is happening is of the greatest political significance, since politics is largely a side-issue of economics (which, as a discipline, used after all to be known as ‘political economy’.

As Mayer Amschel Rothschild said: “Let me issue and control a nation’s money, and I care not who writes the laws.”

Perhaps, as the present system of wealth extraction by financiers crumbles, “upstart nations” will unite to reject the even less desirable substitutes already in the pipeline.

Will Europe impose exchange controls to head off disaster?

Ambrose Evans-Pritchard, The Sunday Telegraph

The die is now cast. As the euro brushes $1.50 against the dollar, it is already too late to stop the eurozone hurtling into a full-fledged economic and political crisis. We now have to start asking whether the EU itself will survive in its current form.

Read more ... some good comments following the Blog, too) …

http://blogs.telegraph.co.uk/business/ambrosevanspritchard/nov07/europe-exchange-control.htm

Whose Money? says:

So will it be fortress Europe, encouraging the emergence of similar one-currency zones, as in the blueprint for the “New World Order”?

Or will people begin to rebel, with rifts in the eurozone deepening, and increasing numbers of regional currencies emerging, giving people the opportunity to experience for themselves money whose main purpose is not to make more money, but to achieve the efficient distribution of resources, by acting as a reliable accounting system? (See Marco Della Luna's article, here; and information about the Chiemgauer, in Germany, here, http://en.wikipedia.org/wiki/Chiemgauer).

More about complementary currencies on this South African website: http://www.sane.org.za/pubs/complementary.htm

Another interesting website we've just found:

Peaceful Revolution Network

We believe that the way wealth is being distributed throughout the World is grossly unfair. In response, XAT is attempting to bring people together and show that, through the power of mass participation, this can be put right.

Look it up here: http://www.xat.org/

Saturday, 24 November, 2007

A different slant on the Northern Rock story, from this audio link on the House Price Crash website: http://www.housepricecrash.co.uk/forum/index.php?showtopic=61831

In the words of Muhammad Rafeeq:

"And the only things that’s being helped out at the moment are the banks. There is money from the central banks, from the Fed and from the government, only for banks. They’ve now turned round … you know Northern Rock was bailed out recently by Mr Darling, the new Treasury supremo, for want of a better phrase - he actually put £25 billion of government money up. The bank has still gone insolvent and they’ve turned round and said that they actually can’t afford to honour any of their obligations. Now what’s really happened here, for people to understand what’s gone on, the Bank of England can’t be seen to be propping up third party institutions, and propping up all sorts of people, other types of financial institutions; so what it’s done is, it’s gone out with one that was holding a lot of bad paper, put the money up for all that bad paper and all those bad debts to all the counterparties of Northern Rock, 25 billion, and then writing off Northern Rock, and leaving that 25 billion extra cash in circulation, but making it look like they haven’t inflated the money supply. It’s a sleight of hand by the Government.

"Look at what Alistair Darling did when he gave Northern Rock that 25 billion: he took taxpayers’ money, not Bank of England money this time, but taxpayers’ money, this is from the state purse, lent it to a bank that a has collapsed and now can’t repay the Government, so he’s lost 25 bn of taxpayers’ money bailing them out. He cannot be seen to be doing what he was really doing, so the whole thing is one big con, it’s one big scam, where they told everybody, oh, look, we’re just bailing out one company here, when the plan was always to let it fold, and to let Northern Rock honour its debts to maybe eight or nine big companies, so that they can balance their books better … In the meantime we don’t have money for education, we don’t have money for medicines, we don’t have money for all these different things: but when it comes to the banks we can prop them up."

Friday, 23 November, 2007

Thousands may lose their meals on wheels

Sarah Womack, The Telegraph

Meals on wheels are to be stopped for tens of thousands of people, figures show.

By next spring the vulnerable and elderly across three quarters of the country may have lost the chance of having hot food delivered to their home.

According to information from the Commission for Social Care Inspection, 73 per cent of local authorities in England are changing their criteria to exclude many from getting the help they need.

Whose Money says:

More cuts. And if it “isn't the end of meals on wheels” it "could be the start of the end."

So what will happen to the old people who are denied help? How will their friends and relatives manage both to fulfill the Government’s requirements by going out to work all day, so that more taxes can be collected and more debt undertaken, and fit in the necessary time to provide care?

Or are our rulers simply planning to adopt the former practice of native Americans, leaving the nation's elderly discards to starve in isolation, while the rest of the tribe get on with their business? (Understandable, maybe, when too many infirm old people would have put the survival of the tribe itself at risk: but inexcusable when it's only a lack of money, rather than available goods and services, which prevents needs being met.)

Those with their own houses, of course (fewer and fewer, as time goes on) will be forced to sell up in order to pay the fees of a residential home …

Look at it whatever way you like, the sums don’t add up.

Despite all the billions routinely created for speculative purposes, there is simply not enough money being distributed to ensure that socially necessary, but financially unproductive, work is done; and however many cuts are made, those in taxable employment will be progressively less able to bear the cost of meeting lower and lower standards.

Sooner or later the basic problem of a dysfunctional financial system will have to be tackled.

And from yesterday's Guardian:

'Probable' new foot and mouth leak from laboratory

Haroon Siddique, The Guardian

There has been a "probable" new leak of foot and mouth disease (FMD) virus at the Merial Animal Health facility at Pirbright, the environment secretary, Hilary Benn, said today. And from yesterday's Guardian:

The virus is believed to have escaped through a leaking valve last week but inspectors have been assured the virus has not been released into the environment, Benn said in a Commons written statement.

Whose Money? says:

A couple of interesting comments, here, http://www.housepricecrash.co.uk/forum/index.php?showtopic=61758, from someone who has worked at Pirbright:

(23 November, 9.25am)

I worked there for 3 years as a post doc.....

The people try hard, but you really would not believe how chronically underfunded and run down the place is. Really, you wouldnt.

Buildings that (even inside) look like one of those movies '25 years after the apocalypse', where the weather has had its way on the fabric of the building for decades with no intervention, you know, ceilings falling in, plaster falling off walls, puddles or rain water inside. One particular gem which shows how dated the facilities are are the doorways marked 'officers' and 'men'.

Much as with the military (ibid), the govt likes the idea of having this sort of facility but is simply not prepared to pay for it. Propping up dodgy banks, though, that's different.

(And again, at 9.40am)

The commercial facility (for making vaccines) is completely contained within the govt facility (for researching the vaccines and epidemiological surveillance). Dont know about this leak, but the last leak was in the infrastructure (pipe) taking waste to the GOVT RUN treatment plant. Also note that this is not a business with a big return, as we dont vaccinate for FMDV. If I remember rightly, in the time I was there it went through about 3 owners. So blaming the company is a bit like blaming a tennant in a flat because the communal boiler has never been serviced, is 45 years old, and has just blown up..... Very much like, in fact. - General Melchett

Once more,then, lack of money, this time risking animals’ health, and farmers’ livelihoods.

But (it bears repeating): “Propping up dodgy banks, though, that’s different.”

Thursday, 22 November, 2007

Hearing is told why region lost out on £1bn bid

Adrian Pearson, The Journal

THE first official inquiry has been held into why a £1bn energy research project went to the Midlands instead of the North-East or Scotland.

Read more ...

http://www.journallive.co.uk/north-east-news/todays-news/2007/11/22/hearing-is-told-why-region-lost-out-on-1bn-bid-61634-20142867/

Whose Money? says:

Bicker, bicker, bicker. The same old arguments, the same old shouts of "Unfair!"

Why not focus on the basic unfairness of a system which demands a pound of debt for every pound created? Why not reform a system which, in the teeth of technological advances, demands full-time wage-slavery from as many debt-saturated people as possible, just in order to keep the treadmill of money creation going, as loans flow out of the banks and are repaid at interest?

The very fact that the total dependence of the economy upon bank lending is never questioned in the mainstream press is enough to make any thinking person uneasy.

So let's have a break from the papers, to take a look at what people outside the paid-up media are thinking. Here’s a short, but interesting, thread from the House Price Crash website:

Banks Sworn to Secrecy

At the weekend I bumped into friend who works in one of the big city banks, I'm not going to say which one as he's a good friend.

I questioned how his bank was coping with the credit crunch. He was very confident that his bank wasn't in any trouble at but there are expecting some losses. However, he did say that the government is insisting that all employees must not leak bad news in general. Basically they are being told not to talk about how this might effect the economy and what other banks might be experiencing difficulty.

Here are a couple of follow-up posts:

It is working, they are keeping the worst news out of the mainstream media. Most people know about the crunch but don't expect it to hurt that much ... coz that's what the tele says. What they don't realise is that things are happening that could force unemployment up millions.

The news is coming out in drips.....and often hidden in other more sensational bad news. Look at share prices....they really deserve more news than they’re getting. Falling on average 1-2% a day.

I spoke to a chap who runs an online retail company....they are dead and he's said that they are writing off Christmas. - Dubsie, 21 November, 11.35pm

The City of London and Canary Wharf have been silent for the last couple of months. They are preventing runs on banks, however they aren't very successful at preventing runs on their stocks. How many times have financial stocks been halted in London the last month? Stockholders aren't stupid - apart from the daytraders who are playing with these stocks right now.

No, their silence is very telling. No news on bonuses or layoffs or hirings or anything. Not a PEEP. These clowns are the first to shout their mouths off when things are going their way. - Pluto, 22 November, 1.07am

Hmm not so sure, I've been picking up more and more anecdotals from the banking front line recently, but the only common denominator is that they are all in the dark, both as to how banks work, and what their bank is exposed to - 'keeping things quiet' only needs limiting to a few people in the know - and they have obviously known about all this for months - you only need to look at bank and financial share prices to see that.

Take Lloyds TSB for example, very little has been made of their huge exposure to NRK shares, and Paragon, who only announced on Tuesday they were having problems raising capital in the financial markets. - mSparks, 22 November, 1.31am

Read the whole thread here:

http://www.housepricecrash.co.uk/forum/index.php?showtopic=61664&st=15

Whose Money? says:

We can be quite sure that the news we’re getting on the financial crisis is carefully doctored. Since the system depends for its survival on public confidence, everything must be done to maintain that confidence.

The most telling point made comes from mSparks, noting the ignorance of bank employees - an ignorance which only gets deeper among those employed (or unemployed) in other sectors.

And this ignorance means that, if millions should be thrown out of a job and plunged into poverty, they will, by and large, submit themselves meekly to the disaster, as if it were an act of nature, rather than identifying it as a wholly unjustifiable outcome of using bank-created debt as our means of exchange, and demanding reform.

Wednesday, 21 November, 2007

Darling's woes pile up

Larry Elliott, The Guardian Alistair Darling, MP

Northern Rock calls into question Labour's economic record, the bedrock on which it has built its formidable electoral majorities of the past decade … Northern Rock grew its business very rapidly using a business model that proved to be flawed. There are those who now say that the economy under Labour - reliant on increasing levels of consumer debt - displays all the same weaknesses.

Whose Money? says:

And at the same time, the rug is pulled out from underneath Gordon’s “miracle” economy: a miracle of financial engineering and get-rich-quick schemes masquerading as prosperity beyond the reach of boom and bust.

Tuesday, 20 November, 2007

Mardi Noir: France faces 'Black Tuesday'

John Lichfield, The Independent

Strikes. Sabotage. Student unrest. Transport, schools and hospitals disrupted. National newspapers halted. Factories running out of raw materials …

… tens of thousands of other public sector workers – teachers, nurses, air-traffic controllers, postal workers – will go on strike for 24 hours today over pay claims and job cuts …

… All the disputes have been provoked, to one degree or another, by President Sarkozy's plans to make France more competitive, to make France … To President Sarkozy it is a first step towards establishing the principle that France must work harder. Early retirement and the 35-hour week mean that France works less than other nations: an average of 617 hours a year per man, woman and child, according to OECD figures, compared to 800 hours in Britain … work harder, to roll back some social benefits

… On this occasion, 70 per cent or more of French people have supported the government.

Read in full here …

http://news.independent.co.uk/europe/article3176996.ece

Whose Money? says:

So even the French are now knuckling under, as they are brainwashed into believing that, in the real world, you have to work longer hours for fewer benefits (even if there aren’t enough worthwhile, full-time jobs to go round).

Yet in fact, it is only in the fantasy world emanating from our debt-based financial system that everyone has to work long hours to pay back exponentially increasing debts and exorbitant taxes if they want to survive.

In the real real world, as opposed to the one we are taught to accept as real, rapidly advancing technology is making more and more jobs - even highly skilled jobs - redundant, while constantly raising the potential for a good quality of life for all, in both developed and developing nations.

It may be true that in Mr Sarkozy’s France, as in Mr Brown’s England systemic debt means that growth must remorselessly be pushed beyond the limit, with people forced (in defiance of the facts of automated production and the IT revolution) to work for long hours in paid employment outside the home just to bring home the two wage packets per family that keep them abreast of their debts and taxes and the expenses of daily living.

But in the real world this wage slavery - not to mention the wanton waste of resources and pathological consumption which it entails - is simply not necessary.

And there are people in France - as in the UK, and Italy, and most other places - who can no longer be fooled, and who are spreading the message of money reform: see, for instance, this website: http://www.fauxmonnayeurs.org/ (which includes a translation of James Robertson's proposals - see under Propositions and Etranger, in the bar on the left).

As we are put under more and more pressure by a system which increasingly robs our lives of meaning and joy, the protests against using debt as the world's means of exchange can only grow.

From the French money-reform website Les Faux-Monnayeurs:

"Essentially - I don’t hesitate to say this, so that people fully understand what is at stake here - the creation of money out of nothing, as practised by the banks, is akin to the counterfeiting of money by criminals: something which is, quite rightly, forbidden by law. Materially speaking, the results are the same. The only difference is that different people profit from it." - From The Present World Crisis, Maurice Allais, Nobel prize winner in Economics 1988, Ed Clément Juglar, 1999

The indispensable first step if we want to change the basis of our economic, social and ecological policies is to get out of a feudal monetary system.

On 7 February 1992 Europeans abandoned the State’s “sovereign” right to create its money supply for the sole profit of the banks. While debate was focused on the euro, what was at stake was the decision whether or not to cut loose more than ever before, indeed completely, from the capitalist system’s main means of "hoovering up" power.

But reform of the statutes of the Banque de France had already ensured that advances to the Treasury - targeted in the Act of 3 January 1973 - had been suppressed.

Subsequently, Article 104 of the Maastricht Treaty, made applicable to France in the Act of 4 August 1993, forbade Central Banks to authorise overdrafts, or to grant any kind of credit to the Public Exchequer, or to any other public organisation or undertaking.

Yet at the same time, private banks are allowed to allocate as much credit as they wish, more or less, by creating money on demand, and charging interest on it.

This system has numerous disastrous consequences.

We shouldn’t put up with it: and not only because it allows bank shareholders to draw unjustifiably large dividends on money created from nothing and then lent out to the public.

On top of that, and crucially, it implies a status quo which ensures the domination of market forces way into the future: the current volume of loans always exceeding the amount of money available to repay them.

This is why both nation states and an increasing number of individuals are overloaded with debt (and disempowered); and its the reason, too, for the unstoppable accumulation of power by those who control the main pools of capital: purchasing power, the power of shareholders, the power to decide which way the economy will go.

It's why we have a régime in which high interest rates don’t harm those who have first use of newly borrowed money: in fact, quite the opposite.

It's why we have excessive flows of money feeding speculative bull markets - the engines of an economy condemned to grow forever, if it is to survive. An excess of money which isn't measured by inflation - now nothing more than an ideological mantra, leading a growing number of its victims, foolishly, to preach the cause of a small number of shareholders.

As the “rate controllers” of the Central European Bank steer the interest rates which control bank lending, these rates set the level for interest charges throughout the financial system. And those interest charges weigh down upon us oppressively as we go about our daily lives.

- They weigh upon us as consumers: reflected in all prices, at all levels of infrastructure, development and production, they reduce our purchasing power by more than 30%.

- They weigh upon us as workers: without underestimating the many contributory factors introduced by unrestrained globalisation, it has to be remembered that capital can’t be the dominant element in any undertaking unless the entrepreneur is forced to go in search of that capital … and pay for it at interest.

- Finally, they weigh upon us as citizens as we share, through direct or indirect taxation, in the running of public services. Thus, between 1980 and 2006, public debt rose by 913 (US) billion euros, while we paid 1,176 (US) billion euros in interest. If we hadn’t had to borrow those 913 billion euros from the money markets, that’s to say, if we had been able to create our own money, to do exactly what private banks have the right to do, the national debt, which stood at 229 billions at the beginning of 1980 would have been repaid in full in 2006, thanks to the 263 billion euros saved, and we would now, additionally, have at our disposal a Treasury surplus of 263 billion less 229 billion: 34 billion euros ...

It’s well known that globalisation has destroyed our taxation system. But even if the recovery of assets which have been spiphoned off were a feasible proposition, it still wouldn’t give the nation back quality control over its growth - that is to say, control over its destiny. Contrary to received wisdom, yesterday’s taxes don’t pay for tomorrow’s public services.

In a collapsed economy, do people ask for a block on funding for education, research, Parliament, a free press? And when society’s outcasts are becoming more violent, do they demand a cut in police wages?

In a society bursting at the seams with useless goods, yet where one quarter of the able-bodied population of working age are unemployed, do people ask whether we should stop building, keeping the peace, educating our children?

Are they still asking, in 2007, why human beings are anticipating a time when the natural environment will be suffocated by the absurdities of the dominant ideology, when they don't even know what it is that forms the bedrock of that ideology ?

Whoever controls the creation of money decides, more than anyone else, what the nation will produce.

The nation should be able to issue as much money as it needs, in line with its development. And it should be able to assign this money to future projects of its choice, instead of using it to pay for those imposed upon it here and now by its impotent and indebted condition.

But although it is no longer willing to tolerate a system enshrining the helplessness of its political institutions and the death of the socially oriented State, in a blind drive for growth, and although it is dominated without respite by the god of the market, this nation remains utterly unaware of the force which feeds its executioner: money. This nation, which believes money is a neutral medium, and that all forms of privilege were wiped out two hundred years ago, has long been unconscious of the privileges still enjoyed by bankers.

We demand …

At national level:

The restoration of the public (national) right to issue money (eventually by issuing a complementary currency, in addition to the euro ... ) and to receive payment of interest on this money.

In the absence of this, at euro-zone level:

1 - As regards everything concerning the provision of funding for collective euro-zone projects, it should be possible to make the Central European Bank provide centrally-issued, interest-free money, as decided by representatives of euro-zone countries in the European Parliament in response to a demand either from the Commission, or from the European Council (that is to say, the heads of State), or from European representatives of euro-zone countries.

2 – The Maastricht criteria should be reviewed and the following points specified:

a) that member states’ budgets should be balanced ... by the tax system. No euro-zone state should be exempt from this rule.

b) that member states should be able to fund their infrastructure and services (their budget for investment) by calling for the creation of an interest-free sum of money by the ECB. All the same, the representatives of the euro zone countries in the European Parliament would have a majority right to veto a state’s demand if they consider a project to be ill-founded or if it goes against the general direction of EU policy.

http://www.fauxmonnayeurs.org/

(Apologies for any inadequacies in the translation.)

Whose Money? says:

The conclusion of this intro to the website, acknowledging the ultimate power of the Central European Bank, and the need for all member states to give their approval to any request for money before it is granted, makes us even more convinced that we should stay well clear of the euro, and campaign for a renegotiation of our relationship with the EU, if we are to regain control over our economy.

Scots offer hope on high-speed rail link

Adrian Pearson, The Journal

SCOTTISH transport chiefs could hold the key to bringing an ultra-high-speed Maglev rail system to the North-East.

As the Government edges towards backing plans for a high-speed rail link from London to Manchester, transport departments in Scotland and the North-East are to look at the economic benefits of linking the two regions with a 300mph Maglev train.

Whose Money? says:

Just the sort of project publicly-created money could fund without all this fuss.

Monday, 19 November, 2007

New test to crack down on 'sick note culture'

Laura Clout, The Telegraph

From October, claimants will be asked to prove they can sit at a desk and work with a computer keyboard and mouse.

"Currently, there are many people sitting at home in the belief that they are unemployable, with no life choices or long-term prospects because they do not think their illness or medical conditions can be catered for in the workplace," Mr Hain said.

Whose Money? says:

This would be fair enough if there were loads of necessary work out there needing to be done, and nobody to do it. But many of these people will be driven into government-created, paper-shuffling jobs which fail to produce anything worthwhile.

Isn’t it crazy that, at a time when the need for boring, repetitive work has been decimated by technological advances, governments are desperate to get two full-time earners per family out into the workplace, paying taxes and clocking up debts? (And they call this two-wage-packet slavery, with the kids farmed out to a nursery in infancy, “liberation” for women!)

Why is this happening?

Read The Application of Engineering Methods to Finance, CH Douglas’s presentation to the World Engineering Congress in Tokyo, in 1929, to understand the idiocy of economic activity aimed primarily at creating jobs and money, with goods and services a mere by-product of financial necessity. It’s the latest addition to our Articles Section, here.

And here’s someone else who’s got the right idea:

The free-market way to express demand for more leisure: call in sick.

...there is one demand in our work-obsessed society that undoubtedly does appear rational, individual and self-interested - the demand for more leisure.

In order for "supply and demand" to function properly, demands must be expressed and registered in the marketplace. Unfortunately, employees are usually too afraid to express their demand for more leisure. And if they do express this demand, it tends to go unregistered (eg the boss simply ignores it). Therefore, people express and register their demand for leisure in the only way open to them: they phone in sick.

Phoning in sick is the responsible way to participate in an economy which is unable to register demand for leisure in any other way.

Read in full here:

http://www.anxietyculture.com/sick.htm (Lots of other interesting stuff on this website, too.)

What more can we say?

House prices fall, but will level out in 2008

Rightmove said it expected further falls during December and the early part of next year, before some minor price rises later in the year. Prices will remain flat across 2008 as a whole, the company said.

Read here ...

http://www.telegraph.co.uk/news/main.jhtml?xml=/news/2007/11/19/necon319.xml

Whose Money? says:

Predictions, predictions ... all hot air.

Farmers' anger at £40m disease control levy

Farmers face having to pay an extra £40 million a year to the Government to offset the costs of dealing with animal diseases such as foot and mouth, bluetongue and bird flu, it has been confirmed.

The proposed levy comes on top of heavy losses which farmers have already suffered by not being able to sell livestock.

Sunday, 18 November, 2007

Is it time to panic?

Anushka Asthana and Ned Temko, The Observer

Heading to the petrol pump? Your tank of unleaded may be pricier than usual. Renegotiating your mortgage? Expect a rise in your monthly payments. Time for the weekly supermarket run? Better carry a little extra cash.

Mervyn King, governor of the Bank of England, has sent out a stark warning: the British public should prepare to economise …

Whose Money? says:

Not to worry, then! You may lose your job, have your house repossessed, struggle to meet the basic costs of living, but never mind: it’s a small price to pay, for a “healthy” global economy.

It’s unlikely that ordinary people, here or anywhere else, give a monkey’s for the global economy. What they want is a healthy local economy, over which they exercise some degree of independent control.

So what exactly is going on?

Until very recently, most of the “experts” were telling us there was no need to worry: growth was robust, the economy was in rude health, and our fundamentals were sound.

More and more people in this country, we were told, were “wealthier” than ever before. Now, suddenly, we’re on the breadline, struggling to get by. It all goes to show the idiocy of equating wealth with dodgy financial “valuations” - especially when you then turn round and blame it all on sub-prime mortgages in the States.

What about all the loose lending that's been going on here, then?

We are just as wealthy today as we were a year ago. The flip side of this, unfortunately, is that we were no more wealthy then than we are now. We were just enjoying an illusion of wealth, as we spent the country into “growth” with money conjured up against the highly suspect collateral of rocketing house prices.

That’s the problem, when you base your economy on money, rather than the delivery of goods and services.

Inflating the paper value of assets doesn’t actually increase wealth. It just allows those in possession of the assets to tap into their “equity” and go on a spending spree, while those without assets sink down further into the underclass.

Food shortages, because of drought in Australia?

So why have we done so much to curtail food production in this country over the past half century, with set-aside more profitable than growing crops, and farmers forced into letting out cottages no longer inhabited by agricultural workers just to get by?

Yes, the EU has framed the policies which have destroyed our agriculture and fisheries: but they could not have been so ruthlessly implemented without the deliberate acquiescence of successive British governments.

Surely it’s more sensible, in a world where weather patterns are, and always have been, unpredictable, for every country to produce as much as is possible for themselves, to offset the effect of disastrous harvests in particular parts of the globe?

Oil shortages, leading to massive price rises?

Well, the petrol tax certainly doesn’t help, does it, Gordon?

And why all the focus on things like wind power, which is never going to solve our energy problems?

What about the electric car, which could be an enormous help in cutting costs for hard-pressed families? (Watch the video "Who Killed the Electric Car?" here: http://www.videosift.com/video/Who-Killed-The-Electric-Car-1)

What about funding research into cold fusion?(Many links here: http://www.pureenergysystems.com/news/2005/04/03/6900077_Leslie_Pastor_on_ColdFusion/index.html)

And why do we hear so little about abiotic oil? (Links here: http://freeenergynews.com/Directory/Theory/SustainableOil/index.html)

Banking crisis?

This is the most feeble excuse of all for throwing people into penury. You can only ask why we’ve dug ourselves into this hole.

Banks are not the sole, sacred fountainhead from which financial liquidity may gush forth. In fact, the stream of bank-created “credit” (ie debt) has always flowed erratically and unpredictably, parching some areas while flooding others.

Publicly-created money, especially if distributed as a non-means-tested dividend to all adult citizens, would be a far more reliable way of keeping all parts of the economy adequately provided with liquidity.

As for the loss of jobs in the city: while sympathising with the small fry on comparatively low incomes who may be made redundant, it’s impossible to regret the curtailment of smart-alec financial activities which warp and manipulate the accounting system - ie, money - without which there can be no fair trade.

And if even chaos on this scale fails to convince our government that it's time to make a switch to stable, debt-free money, then yes: it certainly is time to panic.

Saturday , 17 November, 2007

Warning over rate rise by 'devious' lenders

Harry Wallop, The Telegraph

Nearly five million home owners are facing dramatic increases in their monthly mortgage bill next year, as "devious" lenders raise their rates despite the Bank of England signalling that it will cut interest rates.

And:

Elderly sell homes to cover care bills

Sarah Womack, The Telegraph

Nearly one in five people has to sell all their assets, includingthe family home, to fund their place in a care home, according to new research.

Whose Money? says:

No end, then, to the expense that ordinary people are subjected to, as businesses and government attempt to cover their own costs in a debt-driven world.

You may have little sympathy for home owers who bit off more than they could chew, believing - since "house prices never go down" - that they were on the path to an eternal unearned income.

But what encouragement is there for people to save?

Those that do, as the second report makes clear, are simply regarded as sitting targets, and end up subsidising the spendthrift, paying through the nose to make up costs that neither central government (which raked in their National "Insurance" Contributions year after year) nor councils are willing to meet. (They have more pressing obligations, such as debts, wars and propaganda to attend to.)

How can people plan sensibly for the future when they are systematically fleeced by government throughout their lives? When pensions are considered fair game for cash-strapped chancellors? When inflation is endemic, even without the unpredictable effects of shortages, hoarding and taxation ? When interest rates fluctuate beyond the ordinary person's control, and jobs which appeared secure vanish overnight?

Our present financial system doesn't only multiply the natural risks and insecurities of life: it has raised the cost of insuring oneself against them way beyond the means of most ordinary people, already reduced to the condition of wage slaves just to get by.

If the government wants us to save so that we can look after ourselves, they should provide us with the means to do so: a means of exchange issued by a democratically-accountable public authority as a free input to the economy.

This would keep both debt and inflation in check, enabling us not only to pay our current bills as we go, but to put something by for the future.

Friday, 16 November, 2007

A letter from Stephen Zarlenga, of the American Monetary Institute, author of “The Lost Science of Money”

(for chapter summary, reviews and how to order, see here: http://www.monetary.org/lostscienceofmoney.html)

Dear Friends of the American Monetary Institute,

Three things -

First - a Brief Report on the AMI 2007 Conference and

Second - AMI has launched a blog and

Third - you are invited to a talk I'm giving in Manhattan, Friday, November 16th and again in Philadelphia on December 5th.

FIRST:

Well, the AMI had another outstanding Monetary Reform Conference at Roosevelt University, September 28-Oct.1. Participants remarked how informative, even fascinating, the presentations were. There is really nothing to compare these presentations to, except our previous conferences. Thats because such conferences, well meaning as they might be, often descend into:

"How to make more money" advice, of little importance to the development of humanity;

"We need gold money" exhortations, based on a mistaken history of that supposed standard that bears no relationship to its actual poor historical results and flawed theory;

"We can't trust the evil government" rhetoric, which was invented to keep the populace subservient to a privatized monetary plutocracy.

OR??

.....or...other stuff that goes nowhere!

Instead, our conferences are designed for thinking grown-ups, with the confidence that a better world, utilizing better government can be created. Men and women with the intelligence to see through the propaganda strewn monetary landscape when presented with the facts, and with the ability and optimism to begin that creative process. Because most of the speakers stay for the whole conference, participants have a chance to meet and ask them about their views in more detail. Speakers also have a chance to mix with and challenge each other and its not unusual to see such interactions.

That leads to an energizing and satisfying group experience. Our challenge is to keep improving it each year, and frankly that is very difficult to do; but we'll keep working at it.

Just a few of the many highlights:

ROBERT POTEAT, leader of the AMI Chapters in Portland, Seattle and Centralia, WA, gave a groundbreaking talk on inflation, successfully challenging the general belief that our present inflation results from too much money chasing too few goods. He showed that while the goods are there, and the money is not, we are still experiencing strong inflation due to our faulty money system.

Prof. MICHAEL HUDSON, Chief Economic Advisor to the Kucinich campaign Made a presentation on the Monetary Transparency Act, and what it would do.

RANDALL BURNS discussed the relation between the Federal Reserve System and the increasingly important immigration issue.

STEVEN WALSH, Chicago Educator and Co-ordinator of the AMI Chapter presented his research on the Pennsylvania colonial money system.

Prof. KRISTIN KUCSMA, advisor to the NY Federal Reserve Bank, discussed methodology for teaching "difficult" economic/monetary subjects.

Prof. PAUL DAVIDSON, leading expert on Keynes (and founder of the PKT list), discussed Keynes role during the Great Depression and the Bretton Woods Conference.

AMI ADVISORS Prof. Bob Blain, Ken ("Sovereignty") Bohnsack, Dick Distelhorst devised a fund raising program for the AMI!

But its unfair to single out just a few of our excellent presenters! To see "who and what" happened at the 2007 conference, please go to:
http://www.monetary.org/2007schedule.html

Next years conference is Scheduled for Sept. 25-28, 2008 at Roosevelt University in Chicago. You are invited! If you can register postmarked by December 10th, you get the early registration discount at $195 instead of $295. The

Description and registration form for the 2008 conference is at
http://www.monetary.org/2008conference.html

Please pay particular attention to the conference statement of purpose there. Education is the major part of it, but it is NOT just knowledge for its own sake. Our view is that this knowledge must be applied and followed up by action in reforming our flawed money system. Knowledge must be properly applied to be of value to humanity.

One interesting phenomena is that sometimes participants at first underestimate the level of our other attendees and they want to speak out to them the way they would to most groups with limited monetary knowledge. They quickly discover that the audience is like no other and is sometimes out front on some issues. But its all kept friendly and informative. Of course we draw the line at some places: the conferences don't get diverted into non-monetary areas and we do our best not to let our participants time be wasted.

Some Participants are writing comments and reports on the 2007 conference and we'll post them at the BLOG and website when they are done. See blog details below.

Video DVDs of the entire 2007 conference are available at $395 per set. See the order form at
http://www.monetary.org/2008conference.html

We'll do audio CDs also if enough people ask for them.

SECOND POINT - THE AMI HAS LAUNCHED A BLOG:

The address is at http://moneyreform.wordpress.com/

Take a look. Make comments - ask questions! We are just getting it started and don't know yet exactly how it will work - we'll use Aristotles method: "Learn by doing!"

THIRD POINT:

On Friday November 16, I'm giving a talk on money at the Henry George School of Social Science in Manhattan at 121 E. 30 street, at 6:30 PM. All are welcome! No tickets or reservations necessary, but if you plan to attend, please email me so I'll be sure to see you there. The Talk is titled GREENING THE DOLLAR. Its the talk I gave at the Green Party National Convention in July. Hope to see you there.

Then on Wednesday December 5th at 6:30 PM: I'm giving the same talk in Philadelphia at the Henry George School of Social Science at 413 South 10th Street. All are welcome! If you are going to attend please email me!

Well Friends thats it for now. 2008 is going to be a big year for the AMI and for monetary reform. Please become a greater part of it.

Sincerely,

Stephen Zarlenga
Ami

We can’t find a link for this short report in today’s Journal, so we’ll quote the relevant passage here:

Region ‘hostage’ to big companies
Adrian Pearson, The Journal

The annual North-East Economic Forum’s conference saw some of the area’s top business leaders discuss the way forward for the region.

Among those giving an optimistic assessmentof the region was Tanfield group chairman Roy Stanley.

Describing himself as a “passionate believer in the North-East”, he called for the Government to free up cash for new regional businesses.

Mr Stanley, who heads up a multi-million pound company manufacturing electric vehicles, warned that big business was not necessarily best for the region.

He said: “We are increasingly held hostage by big companies coming to the North-East who are not investing any intellectual facilities here. And that means if we don’t do as they say they can just up and leave and we have to pick up the pieces.”

Whose Money? says:

We couldn’t agree more, Mr Stanley. It’s great to hear someone who actually boosts our manufacturing trade speaking up fro the region, rather than the theoretical planners.

But asking the government to “free up cash for new regional businesses” is a no-hoper. With the economy making a sharp downturn, as borrowers are increasingly unable, or unwilling, to take on more debt, our rulers will be more concerned with appeasing the areas of high population on their doorstep, and their supporters north of the border.

More to the point was the campaign to keep money in the region reported by the Northern Echo yesterday:

Buy North-East to help region grow

Deborah Johnson

THE Northern Echo today joins forces with the region's leading business organisation to launch a campaign to boost the North- East economy by more than £1bn and create thousands of jobs over the next ten years.

Buy North-East, run in conjunction with the North-East Chamber of Commerce (NECC), aims to help and encourage local authorities to work more closely with the business community.

Research by NECC has shown that of the £3.5bn spent by the public sector on contracts with private firms each year, less than half is spent directly with local suppliers.

Whose Money? says:

Great idea!

And why not make it even better, by introducing a regional currency, along the lines of those now operating not only in artists colonies like Salt SpringIsland, but in Germany (eg, the Chiemgauer, in Bavaria http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2007/01/18/cneuro18.xml and in Italy (the Scec, in Naples and the TalenTo, in Turin - see Alternative currencies and money reform advances in Italy, Article 15 here).

The UK is not an optimal currency area, as far as we up here are concerned. Publicly-created, debt-free money would be a far better basis for prosperity throughout the country: but if the government remains stubbornly unwilling to discuss the matter, we should go ahead and at least do what we can for ourselves.

And a debt-free regional currency, accepted in payment of all local taxes throughout the North-East, is currently our best option.

Credit crunch hits high street as sales fall

Harry Wallop, The Telegraph

There were signs that the credit crunch has hit the high street as figures showed yesterday that retail sales fell in October for the first time in nine months.

The high street has so far escaped almost unscathed from the turmoil that has caused people's loans, mortgages and credit cards to cost more. But figures from the Office for National Statistics showed that shops were starting to feel the pain for the first time, with sales volumes falling 0.1 per cent, despite a fourth successive month of discounting from retailers. Not much hope here, then ...

Whose Money? says:

And in a system which depends on exponentially increasing “growth” just to keep going, this is serious.

If people aren’t borrowing more and more into existence through their sky-rocketing mortgages, or getting bank loans backed by their housing “equity” to finance current spending, where are the rest of us virtuous, debt-free people going to get our money from?

House price growth to collapse next year

Gabriel Rozenberg, The Times

Nationwide forecasts that house prices will fall in real terms as the growth rate slumps from 9.7% to zero.

Whose Money? says:

Not much hope there then …

Thursday, 15 November, 2007

SNP freezes council tax in budget deal

Kate Devlin, The Telegraph

A £1.3 billion deal to freeze council tax and the return of the student grant formed the centre of the Scottish National Party's first budget in power.

But the SNP faced accusations that it had "conned" voters as admitting that it would not honour other pre-election pledges, including to write off all Scottish student debt. To read James Gibb Stuart's Scotland and its Money in full, order here:

Whose Money? says:

As James Gibb Stuart predicted in his 1991 booklet, Scotland and its Money, under devolution the Scottish parliament still has to “frame its budget estimates within whatever pool of funds (is) allocated from the central exchequer in London”.

He goes further, pointing out that even full-blooded independence would make very little difference, unless there was a break from the present debt-based financial system:

“Independence?” he writes. “Is Peru independent, after the chairman of a New York mega-bank told her recently that if she did not service her loans, she could be removed from the map entirely? Is Mexico independent, with equity in her vast oilfields being progressively turned over to foreign creditors as down-payments on non-performing debt? Nigeria? The Phillipines? Colombia? Nicaragua? All nominally sovereign states, having their own elected parliaments - or nepotistic dictatorships - all sending their nominal representatives to the UN and other international bodies; but all also beholden to foreign bankers from whom, through credulity or pressure, they have saddled themselves with billions of dollars of irredeemable loans.

“Is that what we want? All the panoply and ceremony of statehood; all the trappings and the pomp … all the form without the substance! None of the debtor nations, whatever its official status, has any real control over how it handles its resources, enhances its environment or uplifts the expectations of its people; just because it has never thought - or never managed - to take charge of its own credit.”

The fact is that, if by some chance the SNP gains sufficient support to secede from the UK, it will only launch Scotland into true independence if a) it refrains from seeking membership of the EU ; and b) it “takes charge of its own credit”.

Within the EU, it would have no power to make its own political or economic decisions, if these were not in line with the general policy of the governing supranational élite; and if it continued to rely on debt to put money into circulation and fund its infrastructure and services, it would soon find itself as strapped for cash as ever it was under rule from Westimnster, with its own less prosperous regions now complaining bitterly of Edinburgh’s favouritism toward the areas of high population and profitable business activity.

So would it be possible for a newly independent Scotland to base its economy, either in whole or in part, on a publicly-created, debt-free national currency?

Of course it would - though, because of the dearth of information available in economic textbooks regarding the proven success of publicly-created money, most people find this hard to believe. However, Scotland and its Money gives several examples, including the “Bradburys” issued at the start of World War I, and the Commonwealth Bank in Australia between 1912 and 1923.

And would such a break from the global debt-based system be generally welcomed?

Of course not: but, to return to James Gibb Stuart, “despite the mighty array of banking power that could be ranged against us, it is mainly a matter of political and national will. A Scottish Parliament which proclaimed its sovereign independence by the clear consent of its electorate is most unlikely to be attacked by tanks and aircraft. The pressures would come against our currency, our creditworthiness and our external trade. … Much of the pressure would be psychological.

“Starting without debt the Scottish economy would enjoy taxation relief, worthwhile employment and all-round competitiveness that would eventually make our markets irrestitible. …

“It has long been realized that if one small nation-state managed to break the bankers’ credit monopoly, and articulated the methods by which this had been achieved, others would want to follow. That is why the big financial interests have been concerned to see that no such experiment ever materializes, and to stamp fiercely on its manifestations, wherever they might be found.”

A financially subject Scotland, toeing the EU line, would be no better off than it is at present, under government by Scots from Westminster. As Sir Robert Menzies, Australia’s longest-serving prime minister, said: for nations, as for individuals and families, there can be no independence without financial independence.

And there’s no doubt that a politically and financially independent nation just across the border would set people in Cumbria and the north-east thinking about a different approach to their own problems, and generate pressure on Westminster to provide the English, too, with debt-free money.

To read James Gibb Stuart's Scotland and its Money in full, order here: http://www.ossianbooks.co.uk/books.php

For a discussion (based on relevant passages in Professor Carroll Quigley’s book, Tragedy and Hope) of Britain’s decision to issue £300 million in publicly-created, debt-free “Bradburys”, on 25 July, 1915, see http://www.cyberclass.net/turmel/quig07a.htm

Wednesday, 14 November, 2007

Welfare-to-work a 'revolving door'

James Kirkup, The Telegraph

Nearly half of benefits claimants who get jobs through Gordon Brown's flagship welfare-to-work programme are unemployed again six months later, a report has found.

Whose Money? says:

So why try and push large numbers of people (frequently left uneducated, unskilled and resentful by years of compulsory state schooling) into low-paid, short-term employment, when most of the jobs in question are being created by government specifically to keep unemployment figures down and collect more taxes? This "work" is increasingly useless, and even inimical to any expansion in the country's real wealth, since they drain off resources into bureaucratic and regulatory areas, and have to be financed by the diminishing number of taxpayers still engaged in beneficial industries and services (ie, those which produce goods or improve the quality of life).

Publicly-created money distributed as a non-means-tested basic income to all adult citizens would not only make part-time work and job-sharing a viable option, and save the one-wage-packet family from extinction. By returning financial power to the pockets of ordinary people, it would be possible to break down the huge state bureaucracies that have taxed and regulated away quality and freedom of choice in matters such as health, education, transport, and the maintenance of environment and infrastructure, while spending millions on telling us how we should think and behave (as, for instance, with all the money spent on persecuting smokers - see http://www.joejackson.com/pdf/5smokingpdf_jj_smoke_lies.pdf )

To dispel the apathy which has fallen over political debate under a managed party system controlled by the financial power of unaccountable private businesses, we need publicly-created, debt-free money and low taxation - with the state being granted merely enough to pay for genuinely national business, instead of ganging up with the banks to syphon off the lion’s share of the money we have worked for before we even get a look in.

We doubt whether Philippe Van Parijs - clearly convinced of the benefits of, among other fashionable causes, European political union - would agree with our views on taxation: but we like this article of his on a basic income:

A Basic Income For All

Philippe Van Parijs Visiting Professor Philippe Van Parijs

Photo: http://www.fas.harvard.edu/~phildept/faculty.html

Entering the new millennium, I submit for discussion a proposal for the improvement of the human condition: namely, that everyone should be paid a universal basic income (UBI), at a level sufficient for subsistence.

In a world in which a child under five dies of malnutrition every two seconds, and close to a third of the planet’s population lives in a state of "extreme poverty" that often proves fatal, the global enactment of such a basic income proposal may seem wildly utopian. Readers may suspect it to be impossible even in the wealthiest of OECD nations.

Yet, in those nations, productivity, wealth, and national incomes have advanced sufficiently far to support an adequate UBI. And if enacted, a basic income would serve as a powerful instrument of social justice: it would promote real freedom for all by providing the material resources that people need to pursue their aims. At the same time, it would help to solve the policy dilemmas of poverty and unemployment, and serve ideals associated with both the feminist and green movements. Entering the new millennium, I submit for discussion a proposal for the improvement of the human condition: namely, that everyone should be paid a universal basic income (UBI), at a level sufficient for subsistence.

Read this very interesting article in full here:

http://bostonreview.net/BR25.5/vanparijs.html

Whose Money? says:

Please note, all Conservatives, whose immediate reaction to a basic income (what CH Douglas called “the National Dividend”) is that it would encourage idleness, and inflate the power of the state: properly administered it would give ordinary people the power of the purse strings (see our article on Economic Democracy, here).

As Philippe Van Parjis says, “If you really care about freedom, give people an unconditional income.”

Here he answers some of the more predictable objections:

Philippe Van Parijs Responds

What an unexpectedly sympathetic set of comments! No doubt unrepresentative of US public opinion. But it’s a start. I will focus my comments here on the most critical remarks, concentrating first on issues of normative justification, then on questions of political strategy.

http://bostonreview.net/BR25.5/vanparijs2.html

Whose Money? says:

We remain unconvinced that there can be any reasonable way of financing a basic income (ie, any way that doesn't involve taxing Peter to pay Paul) as long as we persist, against all reason, in using debt as our means of exchange.

If we really care about freedom enough to give people an unconditional income, we must make this possible by demanding from our governments a publicly-created, debt-free money supply.

Tuesday, 13 November, 2007

Fastest rise in food prices for 14 years

Harry Wallop, The Telegraph

… Increased wheat, dairy, meat and vegetable prices mean food factories are having to pay six per cent more for their raw ingredients than a year ago - the highest annual rate since 1993, said the Office of National Statistics (ONS).

Read in full …

http://www.telegraph.co.uk/news/main.jhtml?xml=/news/2007/11/13/ncosts113.xml

Whose Money? says:

This item has moved up from also-ran status in the paper yesterday. For a passing mention of the part played by the biofuels fiasco in pushing up prices, though, you have to go to the business section:

Backing agriculture could reap a rich harvest

Tom Arnold, The Telegraph

No one likes to see an important sector like the banks falling through the floor. Like it or not, we all have a vested interest in the health of the financial sector and the knowledge that serious losses from this year's credit catastrophe remain unbooked is a deep concern.

But self-interest aside, there is something reassuring about the implosion of the whole greedy, over-leveraged financial fantasy. The illusion of prosperity that has sustained the debt-addicted Anglo-Saxon world has been elbowed aside by the real creation of wealth by people on the other side of the world who work hard and save even harder. It's a victory for substance over style.

Whose Money? says:

So we're beginning to come down to earth, are we? Even if purely financial profits are still being given priority, at least long-term investment is more likely.

But why not focus that steady, long-term investment first and foremost on this country’s own agriculture and manufacturing sectors?

As for the 0.8% production increase “to meet politically driven, but nonetheless real, government-set biofuel targets”, wouldn't it be better to get the world properly fed, and back research into things like cold fusion,
http://www.pureenergysystems.com/news/2005/04/03/6900077_Leslie_Pastor_on_ColdFusion/index.html, rather than growing good food simply to burn it?

With publicly-created, debt-free money, things that are economically desirable - whether feeding the world, or researching alternative forms of energy - are financially possible - see this new article by Ellen Brown, author of The Web of Debt (order here http://www.webofdebt.com):

Letter To The United Nations: How To Cut Sustainable Energy Costs In Half

Governments have the sovereign right to create and lend money. The United Nations could assume that right as well, just as the International Monetary Fund has assumed the right to issue credit in the form of "Special Drawing Rights" that are convertible into national currencies. As will be shown here, government-issued or U.N.-issued money could be used for sustainable energy projects without causing inflation, and this could be profitably done even by impoverished governments with weak legal structures and immature government accountability mechanisms.

Credit created by governments or the United Nations would have the advantage that it could be issued interest-free. Eliminating the cost of interest could cut production costs dramatically. Interest composes as much as 77% of the cost of capital-intensive goods and services such as public housing. The average is brought down by labor-intensive services such as garbage collection, for which interest makes up only about 12% of the cost; but the overall average cost of interest has been estimated at about half of everything we buy.1 If money for alternative energy projects were issued interest-free, projects that have been considered unsustainable because of the burden of interest could become not only self-sustaining but highly profitable for the funding governments.

Read it in full here:

http://www.opednews.com/articles/opedne_ellen_br_071109_letter_to_the_united.htm

Whose Money? says:

Although we are unconvinced by popular hysteria regarding man-made climate change (see http://www.junkscience.com for world-wide reports on the latest news, looking at all sides of the controversy; also this article by Christopher Booker, in today's Mail http://www.dailymail.co.uk/pages/live/articles/news/news.html?in_article_id=493058&in_page_id=1770) we are very much in favour of finding new forms of energy that would reduce pollution and the waste of finite resources.

As Ellen points out in this article, the repeated cry by governments of “No money!”, backed by ever-higher levels of taxation to meet compound interest charges, are entirely specious.

If they wanted to, they could solve the money problem overnight.

The trouble is, they’ll probably not see reason and take the plunge until we ordinary people pressurise them, en masse, to do so.

Monday, 12 November, 2007

US will retake economic superpower crown

Ambrose Evans-Pritchard

Like a great battleship at sea, the US industrial and export machine is slowly turning around. Within a couple of years, its big guns will be sweeping the world again, ready to silence pious talk about America's trade deficit - and to menace chunks of Europe's manufacturing base.

Photo: http://www.shipz.com/Battleship.htm

Whose Money? says:

A pretty depressing analysis. Are we looking forward to a future in which industries constantly migrate from country to country, in an endless quest for the cheapest place to engage in the cut-throat struggle for sales?

Is it really necessary to have full-scale economic warfare, with nations battling it out against each other for the lion’s share of the market in a surfeit of consumer goods - yet failing to provide everybody in the world with adequate food and shelter?

Look at the vocabulary used in this article: “retake”; “battleship”; “big guns”; “menace”; “economic war”; “join the kill”; “conquer” …

Why on earth should one country only be able to succeed at the expense of another? Why shouldn’t each nation produce as much as they can for the home market, and export only what they don’t need, in return for what they do?

How is it, as Michael Rowbotham points out in The Grip of Death (see here), that every single country is in debt, and struggling to earn enough money in exports to pay that debt off ? How can they possibly all export enough to pay off debts which are always increasing, at compound interest, far faster than new wealth can be produced?

Although Mr Evans-Pritchard believes that America will “win”, he acknowledges that there are many unknowns. Adrian Ash explores some of them in the following article:

A Crisis To Shatter The Whole World

... "Printing a $100 bill is almost costless to the US government," as Thomas Palley, a Washington-based economist wrote last year, "but foreigners must give more than $100 of resources to get the bill.

"That's a tidy profit for US taxpayers."

This profit - paid in oil from Arabia...children's toys from China...and vacations in Europe's crumbling capital cities - has surged since the Unites States closed that "Gold Window" at the Fed, and ceased paying anything in return for its dollars.

Now the world must accept the Dollar and nothing else besides. So far, so good. But the scam will only work up until the moment that it doesn't.

Read in full here ...

http://www.gold-eagle.com/editorials_05/ash111007.html

Whose Money? says:

As Mr Ash notes, a falling currency may boost exports, but it also means higher import costs.

However, we're inclined to agree with this comment appearing in the online Telegraph below Ambrose Evans-Pritchard's article:

Hi Ambrose,

As of late, you have been writing some great articles. I can't, however, agree with you on this one. The dollar is dying, and the "Powers that Be," will let it die so the "Amero," can be introduced. This, of course, is all about the North American Union, which is in the process of being implemented. I don't know where Paulson and the Fed get their figures, I assume they create them out of thin air, but their figures are not reality. In August of 2001, I wrote an article about the derivative crisis, which is now beginning to surface. I was ahead of the curve on this, and surely did not invision the "Housing Bubble," however, the chickens now have come home to roost. Here in the states, our manufacturing is gone, our service industry has been out-sourced and many are losing their jobs. This is only going to get worse. Our maufacturing plants are gone, and I don't see them suddenly being re-tooled and booming again. The climate is quite different that it was in the 1930s and in the past, we are in a differnt ballgame. You have written so many excellent pieces, but on this one, my firend, I really have to disagree.
Posted by Karen-lee Bixman on November 12, 2007 10:54 AM

The present bankruptcy of our debt-based financial system is plain for all to see, and should spur us into demanding a return to sanity, and a switch to publicly-created, debt-free money. </