Whose Money?

Paying the cost of your own slavery

From our Whitley Bay office  ...


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

(For earlier entries, see Archives)

Sunday,20 December, 2009

Santa seeks bailout

Legal counsel for St Nicholas, Saul Feigenbaum: "Oi, give me a break with this hand-wringing  ...  £700 billion for Wall Street crooks, and nothing for my client?  Nothing for the man who has single-handedly boosted retail sales around the   ...  world for decades?  ...  You want to see a recession turn into a depression, and quick, go ahead, mess with me!"

Watch the video here:

http://www.youtube.com/watch?v=W5MltkO7FnY&feature=related

Whose Money? says:

Unfortunately, it's true.

A money supply that, financial speculation apart, is heavily dependent on continuous borrowing for the production of more and more goods (their long-term value mostly subject to fashion and planned obsolescence) and on ever-expanding markets, can't survive if retail sales fail to rise year-on-year.

Cancel Christmas, and you hit retail where it hurts most.



Saturday, 19 December, 2009

Congressman Ron Paul's "Free Competition in Currency Act" Won't Solve the Problem But Still Raises Vital Issues
 
Richard C Cook, Global Research
 
...  A metallic-based currency, one of whose purposes is to uphold the value of money due to its scarcity, is based on a flawed concept.  Money, even based on gold and silver, does not derive its value from being scarce nor is an abundance of money itself inflationary.
 
Actually, money should exist in sufficient quantity and availability to move all the legitimate trade that is waiting to be moved.  Money is a medium of exchange and should be nothing more than that.  When used by the banking system for wanton speculation, as money is today, it's an abuse.  But to artificially restrict the availability of money when people need it to trade and earn a living is also an abuse  ... 
 
...  (N)one of the current proposals to restructure the financial regulatory system or reform the Federal Reserve would address the underlying issue of the inflationary nature of a monetary system based on federal government debt, financial speculation, and the supremacy of banking over the manufacturing sector.
 
Read it in full here:
 
 
Whose Money? says:
 
As usual, Richard Cook gets to the heart of the matter when he points to "the supremacy of banking over the manufacturing sector".
 
The purpose of an economic system is neither to make money, nor even to create jobs: it is to provide human beings with all those goods and services necessary for physical well-being and a joyful existence.
 
The present system has become so distorted in favour of the multiplication of financial units, at the expense of both the environment and of real wealth expansion for the benefit of human beings, that only fundamental reform can solve our present problems.

Fortunately, practical blueprints for those reforms are available!

(See, eg, Ben Dyson's website,
http://www.bendyson.com/)

More from Richard C Cook on the subject of local currencies on his blog, here:
 

Friday, 18 December, 2009

Public sector takes on record number of staff
 
Macer Hall, The Daily Express
 
Record numbers of staff are being taken on by the state despite soaring job losses in the private sector, official employment figures revealed yesterday.
 
The public sector payroll increased by 23,000 workers in just three months, reaching an unprecendented six million.
 
Half the overall rise was accounted for by increases in burearcrats in the Civil Service and public administration.
 
Read more  ...
 
 
Whose Money? says:
 
Well, they've got to keep the unemployment figures down somehow, if they're to increase their chances at the next election!

Seeing the state of some areas of Whitley Bay this morning, we'd think an increase in public employees was something to be pleased about  ...  if the people recruited were being put to useful work keeping the streets clean, painting the railings on the sea front, etc, etc.
 
But more bureaucrats ?
 
We'd actually like to see our public places kept in sparkling good order, and made more attractive, by an army of cleaners, painters, pavement- and tarmac-repairers and gardeners:  all of them accorded respect and paid a decent living wage, on top of the non-means-tested benefit which would be the right of all adult citizens, under a reformed financial system of publicly-created, debt-free money.
 
If there were enough of them, they would even be able to work part-time - and without a drop in wages!

Physical labour of the kind that is currently in such short supply as far as the maintenance of our town goes is just the thing that could be financed with ease, if councils were to pay wages in the form of vouchers acceptable in payment of council tax, thus providing a perpetually circulating increase in local purchasing power.  (See James Gibb Stuart's proposals for Glasgow, here:
http://www.sustecweb.co.uk/past/sustec13-5/policy_proposal.htm.)
 
Of course, when a national dividend largely replaces over-complicated , inefficient and counter-productive means-tested welfare systems, the bureaucracy at present operating them will tend to waste away even faster than the numbers of productive workers on the public payroll grows.
 
With public borrowing now at an all-time high, we can only wonder how long dwindling numbers of taxpayers in the private sector can continue to supply enough money not only to support the banks but to provide ersatz employment for those whom bank foreclosures have made homeless or redundant. 

(For the latest borrowing figures, see
http://news.bbc.co.uk/1/hi/business/8420049.stm.)

Former Managing Director of Goldman
Sachs: Accounting fraud of the too big to fails may be worse than Enron
 
Washington's Blog
 
Nomi Prins  -  former managing director of Goldman Sachs and head of the international analytics group at Bear Stearns in London  -  is saying the same thing that financial bloggers have been saying: The giant banks are manupulating their books to make themselves look profitable.
 
In fact, Prins says that this might be worse than the fraud which occurred at Enron  ...
 
Read more  ...
 
 
Whose Money? says:
 
When someone "with Prins' financial background" is unable to decipher the accounting tactics of the "too-big-to-fails", it's time to bring some clarity to a financial system all too open to manipulation and corruption!
 
And the best way to do that is to get back to square one, and ask what a financial system is for.
 
Is it to multiply monetary units through speculation?

Or is its purpose, quite simply, to facilitate the production of the real wealth  -  ie, the goods and services  -  on which we all depend, and  -  without forcibly eliminating variations in income  -  to distribute enough purchasing power for everyone to enjoy a decent standard of living?

Friday, 18 December, 2009

Public sector takes on record number of staff
 
Macer Hall, The Daily Express
 
Record numbers of staff are being taken on by the state despite soaring job losses in the private sector, official employment figures revealed yesterday.
 
The public sector payroll increased by 23,000 workers in just three months, reaching an unprecendented six million.
 
Half the overall rise was accounted for by increases in burearcrats in the Civil Service and public administration.
 
Read more  ...
 
 
Whose Money? says:
 
Well, they've got to keep the unemployment figures down somehow, if they're to increase their chances at the next election!

Seeing the state of some areas of Whitley Bay this morning, we'd think an increase in public employees was something to be pleased about  ...  if the people recruited were being put to useful work keeping the streets clean, painting the railings on the sea front, etc, etc.
 
But more bureaucrats ?
 
We'd actually like to see our public places kept in sparkling good order, and made more attractive, by an army of cleaners, painters, pavement- and tarmac- repairers and gardeners:  all of them accorded respect and paid a decent living wage, on top of the non-means-tested benefit which would be the right of all adult citizens, under a reformed financial system of publicly-created, debt-free money.
 
If there were enough of them, they would even be able to work part-time - and without a drop in wages.

Physical labour of the kind that is currently in such short supply as far as the maintenance of our town goes is just the thing that could easily be financed if councils were to pay wages in the form of vouchers acceptable in payment of council tax, thus providing a perpetually circulating increase in local purchasing power.  (See James Gibb Stuart's proposals for Glasgow, here:
http://www.sustecweb.co.uk/past/sustec13-5/policy_proposal.htm.)
 
Of course, when a national dividend largely replaces over-complicated , inefficient and counter-productive means-tested welfare systems, the present gargantuan nationalised bureacracy will waste away, even faster than the number of productive workers on the public payroll grows.
 
With public borrowing now at an all-time high, we can only wonder how long dwindling numbers of taxpayers in the private sector can continue to supply enough money not only to support the banks but to provide ersatz employment for those whom bank foreclosures have made homeless or redundant. 

(For the latest borrowing figures, see
http://news.bbc.co.uk/1/hi/business/8420049.stm.)

Former Managing Director of Goldman
Sachs: Accounting fraud of the too big to fails may be worse than Enron
 
Washington's Blog
 
Nomi Prins  -  former managing director of Goldman Sachs and head of the international analytics group at Bear Stearns in London  -  is saying the same thing that financial bloggers have been saying: The giant banks are manupulating their books to make themselves look profitable.
 
In fact, Prins says that this might be worse than the fraud which occurred at Enron  ...
 
Read more  ...
 
 
Whose Money? says:
 
When someone "with Prins' financial background" is unable to decipher the accounting tactics of the "too-big-to-fails", it's time to bring some clarity to a financial system all too open to manipulation and corruption.
 
And the best way to do that is to get back to square one, and ask what a financial system is for.
 
Is it to make money?
 
Is it to distribute incomes?
 
Or is its purpose, quite simply, to facilitate the production and distribution of the real wealth  -  ie, the goods and services  -  on which we all depend?

Thursday, 17 December, 2009

Record 6.6 million 'half-timers' now working reduced hours as bosses struggle to pay full wage
 
Becky Barrow, The Daily Mail
 
Record numbers of employees are working part-time because their bosses cannot afford to pay full-time salaries, official figures revealed yesterday.
 
There are now 6.6 million employees working part-time, the highest number since records began.
 
Experts blamed the longest recession in history for triggering the explosion in 'part-time' Britain, and warned the numbers will keep on climbing.
 
Read more  ...
 
 
Whose Money? says:
 
It is certainly true that many people are working shorter hours, not just because their employers cannot afford to pay the full-time rate, but because the work simply isn't there.
 
When someone who has worked productively full-time for more than thirty years in the same successful business now finds himself on a four-day week, for lack of anything to do, something is seriously wrong.
 
And what about the self-employed, especially in the building trade, many of whom are now struggling to find any customers at all? 
 
However, it's also true, as one of the comments below the article points out, that tax credits may be contributing to the number of part-time workers.
 
As "polly, england" writes (17/12/1009 06:56) "people have figured out they don't need to work full time to get full time money."
 
The debt-based financial system  -  ie, a system in which the point of economic activity is to make money out of money, rather than contributing to the world's wealth by producing and distributing goods and services  -  has now led to such ridiculous distortions, and such destruction of real value, that the only solution is a thorough overhaul.
 
With publicly-created, debt-free money, spent into circulation on infrastructure and on a non-means-tested national dividend for all adult citizens, we'd all be working part-time, since automation has made it possible for more and more goods to be produced by fewer and fewer people.
 
Time to rethink all our ideas about money and employment, and base our policies not on out-dated dogmas but on the goal of providing a decent standard of living for all human beings, with as little dreary, repetitive labour as possible!
 

Wednesday, 16 December, 2009

Moody's warns of 'social unrest’ as sovereign debt spirals

Edmund Conway, The Telegraph
 
In a sombre report on the outlook for next year, the credit rating agency raised the prospect that future tax rises and spending cuts could trigger social unrest in a range of countries from the developing to the developed world.

It said that in the coming years, evidence of social unrest and public tension may become just as important signs of whether a country will be able to adapt as traditional economic metrics. Signalling that a fiscal crisis remains a possibility for a leading economy, it said that 2010 would be a “tumultuous year for sovereign debt issuers”.

Read more  ...

http://www.telegraph.co.uk/finance/economics/6819470/Moodys-warns-of-social-unrest-as-sovereign-debt-spirals.html

Whose Money? says:

We'd hope that in the UK, at least, protests take the form of people going to their MPs' surgeries in large numbers, ensuring a press presence, and demanding reform of the financial system, rather than protests on the streets which can be manipulated to justify a further clamp down on our traditional freedoms.

We might also take steps for ourselves by initiating local currencies and exchange systems (like Freecycle), and by using cash instead of cards:

A simple plan to get change

Deprive banking and other financial businesses of the income they gain from credit and debit card services, fees, penalties and interest  ...  use Cash instead of credit and debit cards.

Feel good about it.  You'll be sending a message by using cash.

Big Banking is out of control.  Many corporate financial institutions, considered too big to fail, received a share of a trillion dollars of taxpayer money.  To thank us, they are hiking interest rates on existing credit card debt, lowering and cancelling small business credit lines, and imposing more and higher fees and penalties with impunity.

Read more  ...

http://www.usecashmovement.org/

Whose Money? says:

Unfortunately, with internet sales, direct debiting utility bills, and the of payment of wages straight into bank accounts, not to mention the convenience of card transactions, the temptation to rely on non-cash money increases all the time.

However, if large numbers of people began to reject the use of credit cards and paid for their everyday transactions in cash, more cash would have to be provided.

And every extra penny of cash provided by public authority, rather than as a loan from the private banking sector, means an increase in the amount of debt-free money in circulation.

Ignore the ads that tell you plastic is the smart way to pay: use cash!

Tuesday, 15 December, 2009

EU, IMF Revolt: Greece, Iceland, Latvia May Lead the Way
 
Ellen Brown, The Huffington Post
 
Total financial collapse, once a problem only for developing countries, has now come to Europe.  The International Monetary Fund is imposing its "austerity measures" on the outer circle of the European Union, with Greece, Iceland and Latvia the hardest hit.
 
Read more  ...
 
 
Whose Money? says:
 
Malaysia also stood up to IMF demands after the Asian crisis, advised by money-reformers from the West.
 
Let's hope that we in the UK will finally reassert our independence, force our "representatives" to repeal the European Communities Act of 1972 before we too are absorbed into the eurozone, and switch to a publicly-created, debt-free national currency.
 
Cash-strapped local governments, servicing huge and unnecessary debts, could start the ball rolling by part-paying their employees with vouchers acceptable in payment of council tax.  These would then serve as a local currency, supplementing purchasing power within a defined area.
 
This is not a time for propping up the old, failed system at the expense of millions of ordinary people.  It is a time for fundamental reform of the bankrupt, debt-based financial system  -  and it looks as if the smaller nations will be the ones to show the rest of us that there is an alternative to debt peonage and poverty. 

Monday, 14 December, 2009

Playing hard to get

Lucy Denyer, The Sunday Times

Barbara and Robin Bonner-Morgan have been trying to sell their seven-bedroom, Grade II-listed home in Suffolk for more than two years. The couple, now both retired, first put Brickwall Farmhouse, near Stowmarket, on sale for £695,000 in June 2007, at the height of the boom. It failed to sell, however, and like many frustrated vendors across the country, they began to cut the asking price.

By September last year, they were ready to take just £590,000. This month, with the house still unsold, the Bonner-Morgans adjusted the price yet again, only this time upwards, to £725,000 — £30,000 more than they were hoping for when the market was at its most optimistic.

Read more  ...

http://property.timesonline.co.uk/tol/life_and_style/property/buying_and_selling/article6952605.ece

Whose Money? says:

People still haven't twigged, apparently, that the big balloon has sprung a leak, and can't be reinflated.

The comments beneath the article say it all.

Meanwhile it seems that on the other side of the world the property-price inflation continues  ...


Young Chinese groan at skyrocketing property costs

Fran Wang, Yahoo! News
 
Computer engineer Jenny Jin and her husband have been hunting for a home for a year, but like many would-be property owners in China, they have struggled to enter the market due to soaring prices.  ...
 
...  Property prices in 70 medium-sized and large cities in China rose 5.7 percent in November from a year earlier, the fastest rate in 16 months and the sixth consecutive monthly on-year increase, the government said last week.
 
The boom has been bolstered by easy bank loans, tax breaks and a lower down payment threshold, introduced by the government in the past year to support the real estate sector, a key driver of China's economic recovery.
 
Read more  ...
 
 
Whose Money? says:
 
Now, if the government had been creating the money to build and sell or rento out decent housing to China's huge population at a reasonable price, that would make sense!
 
But a building boom and price inflation based on bank lending?  Haven't they noticed what's been going on in the West?
 
When will they ever learn?

Drug money saved banks in global crisis, claims UN advisor

Rajeev Syal, The Observer
 
Durgs money worth billions of dollars kept the financial system afloat at the height of the global crisis, the United Nations' drugs and crime tsar has told the Observer.
 
Antonio Maria Costa, head of the UN Office on Drugs and Crime, said he has seen evidence that the proceeds of organised crime were "the only liquid investment capital" available to some banks on the brink of collapse last year. He said that a majority of the $352bn (£216bn) of drugs profits was absorbed into the economic system as a result.
 
This will raise questions about cremi's influence on the economic system at times of crisis.  It will also prompt futher examination of the banking sector  ...
 
Read more  ...
 
 
Whose Money? says:
 
When money has acquired a value in itself which is unrelated to the production or preservation of real wealth, but which nevertheless allows its possessor to acquire a greater share of the real wealth already in existence, crime flourishes, and dealers in money are only too likely to become involved in questionable transactions.
 
We need a transparent monetary system distinct from the interests of private, profit-making businesses, who will always tend to put their own balance sheets above national and human well-being. 

The antidote to corruption and distortion of the economic system is publicly-created money, issued free of any debt at source, with the amount in circulation continuously adjusted in line with the nation's assets.
 
Why rely on private businesses and interest rates to do a job which debt-free money, created as a public service, could do directly, and far more efficiently?:

Sunday, 13 December, 2009

Toxic Textbooks

What does “toxic textbooks” mean?

As an epistemological event, the 2008 meltdown of the global financial system ranks with the observation of the 1919 solar eclipse.  The latter proved that classical physics pertained only to a special case and so prompted physicists to introduce new textbooks.  In the wake of today’s global disaster economists must do likewise.  The fact that the economic system that collapsed had been tailored to fit traditional mainstream teachings means that its textbooks harbour and promote fundamental misconceptions about the way economies, most especially their markets, function.  These misconceptions led to one global disaster and could lead to more.  In other words, these textbooks are toxic.

Read more  ...

http://www.toxictextbooks.com/

Whose Money? says:

And we'd hope the new textbooks would deal in a more open-minded way with the question of how a stable supply of purchasing power is to be created and distributed in an age of ever-increasing automation.

As C H Douglas repeatedly pointed out, what the unemployed are crying out for is not jobs, but reliable incomes  -  and reliable incomes, together with increased leisure time, would be the natural result of a sane economic system which dealt with the realities of life in a technologically advanced society, rather than the dictates of labour-intensive production for basic needs: see the following entry at the website Unemployment Is Good:

Unemployment is a distribution problem, not a production problem

Michael Berney

In current economic thinking unemployment is usually considered to be a production problem. That is when there is not enough production going on to make use of all the available labour you end up with some people left out of the whole economic cycle. The usual response to this is to try to create more work to absorb this excess labour. This is why we are compelled to continuously increase our production so as to keep ahead of the growing pool of unemployed.

But looked at from a broader perspective unemployment is not a problem of production but rather one of distribution.

Even if output goes down a little, as it has over the last year – putting more people out of work, our enormously productive technology still goes on churning out more than enough goods for us all. So we are not looking to find work for the unemployed because we need their labour to ensure we can produce enough. We are trying to find work for them so they can earn an income to gain access to the things that would be produced whether they were working or not. Wouldn’t it be simpler to just give it to them directly rather than go through this complicated process that results in so many negative side effects? (the marginalised unemployed, environmental problems of overproduction, the lack of fulfilment in trying to consume all this stuff, resources not being used where they are really needed – ie in ending hunger and poverty in the world for a start)

When I say – wouldn’t it be simpler to just give it to them directly – I’m not advocating having one section of the community sitting idly by while the rest of us work to support them. What I’m suggesting is that if we are already producing enough, we share the “less work” around equally and all work that much less while still having the same living standard as before. Paradoxically that would be an increase in living standard because the same living standard on less work is an increase in living standard.

(Our emphasis)

Read more at:

http://unemploymentisgood.wordpress.com/

Whose Money says:

Exactly!

Saturday, 12 December, 2009

Poorest half of UK owns just 9% of wealth

Simon Briscoe, Financial Times
 
Official figures have for the first time quantified the extent of the wealth gap in the country  -  the least well-off half of households own just 9 per cent of the wealth  -  and shown that many gouseholds were poorly placed to endure the recession.
 
The Office for National Statistics survey, released on Thursday shows that household wealth, estimated at £9,000bn, is dominated by pensions and property assets, each accounting for two-fifths of the total. The other components, financial wealth and physical wealth – such as cars and antiques – each accounted for one-ninth of the total.  ...
 
...  The dominant source of wealth changes as wealth increases. Physical assets are the main asset for the poor, housing for those in the middle, and pensions are most important for the wealthiest 10 per cent. Financial assets increase in importance as wealth rises. ...

...  The figures sometimes show very large differences between mean and median figures. For example, the mean net financial wealth looks a reasonably healthy £40,000 but the median amount is just £5,200.

The median is the preferred measure of the statisticians as it is the value below which half of the households fall and is not distorted by a few very large numbers.

Read it in full here:

http://www.ft.com/cms/s/0/742025ee-e5b4-11de-b5d7-00144feab49a.html?nclick_check=1

Whose Money? says:

So do we think that everyone should be equal?

Definitely not.

We do believe, however, that everybody, in this age of unprecedented wealth and productive capacity, is entitled to a decent standard of living, and to security during periods of ill-health and in their old age.

The fact that the ten-percent strong "top layer" disposes of over half the nation's "financial assets and pension wealth" shows how having some spare money to conjure into yet more purchasing power, rather than being a convinced practitioner of the work ethic, is the crucial factor enabling a life-style of conspicuous consumption.

There will always be rich and poor; but if we really want to reduce the extremes of wealth and poverty we must ensure that the money supply expands, and is distributed, in line with the creation of real wealth, rather than endlessly replicating itself in a minority of personal strong boxes while the real economy wastes away.

The answer to poverty is not total state control, with jobs and identical wage packets doled out to all by a government of oligarchs.  The answer to poverty is to prime the economy with a publicly-created national money supply, spent into circulation on infrastructure and in the form of a non-means-tested national dividend for all adult citizens, and free of any debt at source.

Friday, 11 December, 2009

£19,000: The cost every family will pay over EIGHT years to rebuild the economy
 
James Chapman, The Daily Mail
 
Rebuilding the public finances will cost everyfamily £2,400 a year and mean savage public spending cuts of almost 20 per cent, lading economists have warned.
 
A dissection of alistair Darling's Pre-Budget Report concluded that after the next election his postponed cuts would see 19.2 per cent slashed from budgets for transport, universities, defence and housing.
 
The Institute for Fiscal Studies thinktank also said that families with one earner and children  -  and anyone earning more than £35,000  -  would be worst hit by the tax rises Labour has announced so far.
 
Read more  ...
 
 
Whose Money? says:
 
The inherent lack of balance in the present economic system is further exaggerated by every twist and turn made to keep the nation afloat.
 
As if the cards weren't already stacked against parents who want to bring up their children themselves rather than hand them over to nurseries and childminders before they can even walk, the one earner family is going to receive further punishment  -  and we shouldn't be surprised if this results in a further fall in the number of marriages, or even a rise in strategic divorces, as couples see the favoured status accorded to single mothers.
 
Again, as this report points out, bosses hit by the increase in National Insurance contributions, as the tax on employment is politely called, are only too likely to cut wages, or invest in automation save money.
 
The whole system is dangerously out of kilter, and every attempt to patch it up results in further malfunctioning, as incentives are distorted, and growing numbers of people fall into the underclass or lose the struggle to maintain their standard of living.
 
The Mail's poll today invites you to decide whether or not the Government should delay public spending cuts until we start to come out of the recession.
 
This is the wrong question.
 
What we should be deciding is whether we want to continue with a system which regards the multiplication of monetary units as the key objective of all economic activity, or switch instead to a system focused on the adequate provision of goods and services for all, with publicly-created, debt-free money facilitating production and distribution.

Thursday, 10 December, 2009

Darling vows to hammer middle classes but refuses to tackle Britain's terrifying debt (that'll be someone else's problem)
 
James Chapman, The Daily Mail
 
Alistair Darling shamelessly hammered middle-earners with tax rises yesterday so he could keep pouring cash into public services.
 
In his final Pre-Budget Report before a General Election, the Chancellor refused to set out plans to rein in public spending.
 
Instead, he gambled that ten million voters earning more than £20,000 a year will resign themselves to a 1p rise in National Insurance in 2011 so Labour can fight on a pledge to maintain budgets for schools, hospitals and the police.
 
Read more  ...
 
 
Whose Money? says:
 
For a start, we'd answer the (highly justified) accusation that Mr Darling "refuses to tackle Britain's terrifying debt" by asking in what way he differs, in this respect, from any of his predecessors.
 
For several hundred years now the National Debt has been accumulating; and any sane journalist, seeing the "terrifying" implications of compound interest on an increasingly large liability would have sounded the alarm long before now, pointing out that borrowing, either public and private, is not a sustainable way of providing the nation with its means of exchange and distribution.
 
Why start bleating now, just because the debt-money system is creaking to its logical conclusion?
 
It does seem extraordinary to us, however, that people earning anything over £20,000 a year should be classed as "middle earners".  We ourselves know families struggling to get by on around £21,000 who are considerably worse off than those who deliberately settle for less than £16,000 in order to be able to claim the maximum amount in benefits.
 
And who would blame them?
 
The benefits programme  -  indeed, the whole scale of rewards and penalties  -  no longer makes any sense: and in order to return to sanity nothing less than reform of the monetary system will suffice.
 
It is ridiculous that a humble service industry like banking, which produces nothing in the way of intrinsically necessary goods, should be in a position to cream off profits which allow its principal officiants to buy up an ever greater proportion of the world's real wealth.
 
It is ridiculous that more and more of the population are becoming dependent upon benefits, as jobs in general, not to mention jobs paying a living wage, disappear.
 
It is ridiculous that it now takes two wage packets for a family with young children to achieve a decent standard of living, when previously one would have done the job.
 
The antagonism between net tax payers and net receivers of benefit cannot be resolved under a debt-money system that eats up an exponentially growing amount of tax payers' money, while at the same time automation and increasing company liabilities are making even skilled workers reliant upon the state and rapidly reducing the number of jobs which yield sufficient contributions in income tax to service the snow-balling debt.
 
Mr Darling, however remiss, is only the latest in a long line of Chancellors who have refused to tackle these problems.
 
Instead of lumbering him with all the blame, the media would do better to start examining our financial problems in depth, and calling for fundamental reform of an utterly bankrupt system.

Monster at the Treasury picture from The Money Bomb, by James Gibb Stuart:  order it here: http://www.ossianbooks.co.uk/books.php


Clobbering the middle earners:
National Insurance raid will mean someone on £40,000 must find £200 in extra tax
 
Tony Hazell, Tom Kelly and Becky Barrow, The Daily Mail
 
National Insurance is to increase by one percentage point from April 2011 in a £13 billion tax grab.
 
This woul add almost £200 a year to the National Insurance bill for a middle-income earner on £40,000 a year.
 
Read more  ...
 
 
Whose Money? says:
 
Well, at least they're now calling a tax a tax!
 
This measure will only increase job losses, as hard-pressed smaller businesses struggle to keep down costs by reducing their wages bill.
 
More power for green revolution
 
William Green, The Newcastle Journal
 
The North East's green energy revolution received a welcome boost as the Chancellor handed over £15m for the world's largest wind turbine centre.
 
His Pre-Budget Report paved the way for the North East to build a new testing centre which will attract energy companies from across the globe.  ...

...  But the rest of the region’s manufacturing base was left without further support.

Alan Hall regional director of manufacturers’s association EEF said: “It was a disappointing budget as far as our North East manufacturing businesses are concerned.”

Read it in full here:
 
 
Whose Money? says:
 
It just goes to show what a mess central government makes of picking winners!
 
Better to remove all the planners, with their disproportionately large salaries and perks, and use the savings to reduce taxes on businesses which already exist!
 
The proliferation of wind farms fills us with dismay.  This is not a technology which can meet the needs of a developed economy. 

As Ian Plimer, Professor of Geology at the University of Adelaide pointed out at the Global Warming Sceptics' Seminar, on the fringe of the ongoing Copenhagen travesty, "the fossil fuel age will end, sure as night follows day, because we have better technology".
 
That better technology is unlikely to be wind farms, covering the globe with their acres of sterile concrete and steel. 

While delegates at Copenhagen tilt uselessly at windmills, scientists elsewhere patiently pursue the approaching breakthrough to more practical possibilities of clean, unlimited energy.
 
Watch a report from the alternative climate seminar here:
 
 
And read about promising research into new, practically efficient forms of energy here:
 

Wednesday, 9 December, 2009

Exodus of the bankers

James Moore, The Independent

The president of Britain's second largest bank has issued a veiled threat that the country's elite financiers could join a mass exodus from the City of London if the Government pushes ahead with a bonus supertax today.

The Chancellor, Alistair Darling, is widely expected to use his pre-Budget report to introduce a one-off windfall tax on banking bonuses to help assuage public anger over six- and seven-figure pay-outs just months after the Government's multibillion-pound bailout of the banks.

Bob Diamond, the president of Barclays and head of investment bank Barclays Capital, said businesses and individuals could desert the City if new taxes were imposed.

"Both financial capital and human capital are extremely mobile," he said.

Read more  ... 

http://www.independent.co.uk/news/business/news/exodus-of-the-bankers-1836772.html

Whose Money? says:

This threat by the very people whose dodgy business practices have caused the present crisis reinforces the argument that complete reform of the way we produce our money supply is now not only the sensible course but the only valid option.

The financial sector can no longer be permitted to hold the nation to ransom by claiming that it plays a "crucial role  ...  in generating income for the Government"  -  or, indeed, because it has the power to increase or decrease the money supply in line with its own priorities.

Would the Government need to raise such astronomical amounts in taxes if the country weren't saddled with the accumulated debts of centuries  -  all as a result of the absurd practice of borrowing the bulk of our national currency into existence?   Why not call the bankers' bluff and appoint an accountable public body to provide us with stable, debt-free money instead?

We can do without banks that lord it over the "real economy", using their monopoly over the creation of the nation's entire non-cash money supply to tilt the scales against real wealth production and in favour of non-productive financial services  -  which they now even dare to call "products"!

What we require are banks that know their place, as a humble ancillary service bringing investors and producers together, and loaning out money which already exists.

As for the statement that "the bank has never taken funds from the British taxpayer"  -  what nonsense! 

As long as governments are foolish enough to follow the roundabout path of issuing bonds, rather than simply creating enough money both to fund public services and to facilitate the production and distribution of all the goods required by the population, all banks  (since all banks buy up a significant portion of those bonds) will continue to bleed the British taxpayer white in the service of their own interests.

Mr Diamond states that "both financial and human capital are extremely mobile".  He is wrong.  Most "human capital" (a particularly repulsive way of referring to human beings) is not mobile.  Most of the men and women who make up the work force have homes, and families and private responsibilities, not to mention languages and traditions, which severely limit their mobility.

Of course, what Mr Diamond actually means is that top bankers, having no loyalty to any particular nation, are "extremely mobile".   People who earn a basic £250,000 per annum plus the odd few million in bonuses, and who can afford to have a variety of pieds à terre around the world, paying others to fufil their family responsibilities, can base their operations in whichever financial centre currently offers the lowest taxes and regulations.

Fortunately, however, there is no need for the lives of the less mobile to be made wretched by excessively mobile financial capital, since, unlike real wealth, such capital can be created at will, and free of debt, by public authority.

Let's hope that Mr Darling will be guided in his decisions by this fact.

Tuesday, 8 December, 2009

Fiver set for a comeback

msn. money

The £5 note is set for a New Year comeback across UK cash machines after the Bank of England said it would launch a campaign to increase its circulation.

The Bank plans to urge major banks to increase the availability of £5 notes in their ATMs, while it will also ask retailers to give out more fivers in change to meet consumer demand for the note.

Read more  ...

http://money.uk.msn.com/news/articles.aspx?cp-documentid=151225376

Whose Money? says:

Does this demand from the public mean that people are turning back to cash, in an attempt to live within their incomes, after being stung by heavy credit card charges?

We hope so!

And we also hope that increasing quantities of cash, issued by public authority and free of any debt at source, will soon be joined by supplies of publicly-created non-cash money which are equally debt- free!

Why Dubai’s debacle does matter

Edward Chancellor, The Financial Times
 
After an initial shock, conventional wisdom is downplaying Dubai’s mishaps. After all, the losses involved are tiny compared with trillions of dollars of red ink spilled over the past couple of years. Analysts have been quick to point out that the emirate, with $50bn (£30bn, €33bn) of gross domestic product, is a small fry in the vast oceans of global finance. This is to miss an important point. Size is not always what matters. Dubai’s debacle demonstrates how loose liquidity conditions when combined with grandiose state-directed economic development produce a potentially toxic mixture.
 
Read more  ...
 
 
Whose Money? says:
 
We'd say that "grandiose state-directed development" doesn't happen unless financial and business élites are in cahoots with political oligarchs and dictators.
 
If the money supply weren't so closely tied up with interest rate levels, and if the banks hadn't willingly created the billions which financed all that unnecessary real estate in Dubai and elsewhere, this ludicrous expansion of unwanted "assets" could never have happened.
 
It just goes to show how silly it is to say that private businesses have a better sense of what is a good investment than some public authority answerable to the nation.
 
Publicly-created money spent into circulation on the kind of infrastructure  -  eg, transport, health, education and, above all, a national dividend  -  that supports the population's own, un-centrally-planned economic activities is a far safer option.

Monday, 7 December, 2009

Britons are keeping £50 notes under the bed because they have 'lost confidence in banks' says UK's chief cashier

Becky Barrow, The Daily Mail

An increasing number of savers are hoarding cash at home because they have lost confidence in the banking system, it emerged yesterday.

The Bank of England said the total value of its notes in circulation has soared while their use in transactions is falling.

There are 40million more £50 notes alone in circulation than two years ago.

Picture and further article at the Guardian Money Blog, here: http://www.guardian.co.uk/money/blog/2009/mar/05/savings-interest-rates-under-the-mattress

Read more  ...
 
 
Whose Money? says:

Keep hoarding, folks! 

The greater the proportion of cash in circulation, the smaller the proportion of the money supply that's subject to sudden disappearance, as bank loans fail and further lending dries up.

But don't just hoard cash.  Use it as much as possible in your transactions, even major ones.

Ignore all those giant adds from credit-card companies, telling you that notes and coins are old-hat.  Plastic needn't be the most convenient way to pay. 


Withdraw cash in bulk, and use it to buy the things you need.  You'll find yourself far less likely to go into the red, with all the expense that that entails, if you're your own banker!

And if you're finding it hard to make ends meet without using your credit card, why not take the advice given in the following article?

The frugalista: ‘No shame in home-made’
Kirstie Allsopp, The Times

If I could do one thing this year it would be to persuade people that second-hand and home-made presents are not in any way second-rate. I have no concept that there is anything shameful about them.

This may be because I was brought up seeing the worth in second-hand pieces because my father worked for Christie’s. I have an aunt who is also an expert skip diver.

Her husband was in the House of Lords and a Foreign Office minister, but they would think nothing of rummaging through skips.

My other half, Ben, and I live in a huge house in East Devon that we couldn’t possibly afford to furnish unless we used recycled goods.

Read more  ...
 
 
Whose Money? says:
 
Why stop at Christmas presents?
 
More and more people are turning to e-Bay for the things they need; and, even better, freecycle ("changing the world one gift at a time") provides an online exchange market where people offer what they no longer need and advertise for any new requirements, all for free: not barter, but a simple way of recycling goods in good condition directly, for the benefit of all.
 
As the debt-based financial system totters towards its end, we can protect ourselves by turning any surpluses we may have into savings by using them to purchase durables of intrinsic value; and by offering publicly-created notes and coins, issued free of any debt at source, for our day-to-day transactions.  We can also barter, where we have either material objects or the wealth of our skills, time and experience to offer; or we can freely exchange goods we no longer need.
 
There is no need for collapsing banks to destroy real wealth and impoverish millions.
 
Money is not the same thing as wealth; and, as Aristotle pointed out, it is a creature of law, not nature.

The kind of money created as an interest-bearing debt to the private banking system can, if the will is there, be replaced virtually overnight by publicly-created accounting tokens fostering the easy exchange and distribution of any goods and services we may desire.
 
But this isn't going to happen unless governments are brought under the control of those who pay for them.

It's up to us, the electorate, to see that our representatives have the will to change.
 
 Picture: The Best Recession Ever, http://bestrecessionever.com/?tag=bank

Sunday, 6 December, 2009

Open Letter to the Governor of the Bank of England
From The Forum on Stable Currencies
 
This Open Letter to Mervyn King was sent by our Chairman Austin Mitchell MP today, accompanied by relevant enclosures, and illustrating three points:
 
a) false documents are being used to file bankruptcy
b) wealthy individuals are being bankrupted
c) Bank of England accounts are being used by The Insolvency Service
 
All evidence can be viewed here.
 
Here are the links:  Whose Money? says:
 
 
http://forumforstablecurrencies.info/2009/12/03/open-letter-to-bank-of-england-and-fsa/

Whose Money? says:

An Open Letter has no effect unless it is widely circulated.

Please forward these links to everyone on your mailing list, and ask them to do the same!

Saturday, 5 December, 2009

Why the next banking crisis could be even worse

David Stevenson, Money Week

It's not been a great week for British bankers.

There's the ongoing spat between RBS and HM Government over how much the former's heavy hitters can pay themselves in bonuses. Then there's the embarrassing yet somehow inevitable revelation that our banks are the ones most exposed to Dubai – with RBS top of the pile, naturally.

Meanwhile, French President Nicolas Sarkozy has been unable to disguise his glee that Europe's new finance minister is a Frenchman, who he clearly believes will take the City down a peg or two.

But these are just niggles compared to the real dangers the banking system faces.

Read more  ...

http://www.moneyweek.com/news-and-charts/economics/why-the-next-banking-crisis-could-be-even-worse-94916.aspx

Whose Money? says:

Our hope is that when the next shock brings the system crashing down beyond repair it will be replaced not by a global dictatorship but by debt-free money in the form of national, regional and local currencies, controlled from the grass-roots up by ordinary people throughout the world.

VAT rise to 20% could 'choke' economic recovery and fuel inflation, say leading retailers

Julia Finch, The Guardian
 

High-street retailers are bracing themselves for a potentially big rise in VAT next year, warning that it would stoke inflation and could halt the economic recovery.

One VAT increase, on 1 January, is already certain, as the government reverses the cut made from 17.5% to 15% last December as an emergency measure to encourage consumer spending in the wake of the credit crunch. But retailers now fear an increase in VAT to 20% as the government seeks to plug a deficit expected to top £175bn this year. ...

...  Andy Street, managing director of John Lewis, warned a big VAT rise "could choke off recovery" and make the black hole in the country's finances even bigger. He said: "We are all reconciled to 17.5%, but it shouldn't go any further than that because the economy is very fragile. Consumption is 70% of the UK economy and confidence is crucial."

Read more  ...

http://www.guardian.co.uk/business/2009/dec/04/retail-tax

Whose Money? says:

And all to service billions of completely unnecessary debt!

Why aren't the banks paying us interest on all the money we've thrown into their gambling kitty?



Last night we joined children from the schools of Whitley Bay to launch the Christmas season with the St Nicholas Festival.

Here's an alternative version of one of the carols we sang:

The Twelve Days of Bailouts 

On the first day of bailouts out we had to bail
A bank that was far too big to fail
 
On the second day of bailouts out we had to bail
Two mortgage giants
And a bank that was far too big to fail
 
On the third day of bailouts out we had to bail
Three auto makers, two mortgage giants
And a bank that was far too big to fail  ...
 
For all twelve days, go to:
 

 

Friday, 4 December, 2009

Fury as EU creates watchdogs for London

James Chapman, The Daily Mail - This Is Money
 
Fears are growing over Britain's future as a world financial centre after the Government agreed to sweeping new European controls over banks, finance houses and insurance firms.
 
Chancellor Alistair Darling was accused of a 'sell out' after signing up to a deal that will mean the creation of three powerful new EU regulators.

It came days after French President Nicolas Sarkozy declared that the EU was now determined to end the 'free-wheeling Anglo-Saxon model' of finance.

Read more  ...

http://www.thisismoney.co.uk/news/article.html?in_article_id=495269&in_page_id=2&ct=5&in_page_id=2&expand=true

Whose Money? says:

The answer is to repeal the European Communities Act of 1972  -  not so that we can continue to rely on finance as our main source of national income, but so that we would have the power to introduce a publicly-created national currency, issued free of any debt at source.

A stable money supply, together with a sensible plan for retiring the national debt, would allow us to focus economic activity on maximum domestic production for the home market, importing only what we are unable to provide for ourselves.

£40,000 a family: The taxpayers' cash used to fund the £850bn bailout

James Chapman, The Daily Mail

The extent of taxpayer support for Britain’s banks is revealed today to be £40,000 for every family in the country.

An official report concludes that bailouts, guarantees, insurance and loans offered by the Government and the Bank of England reached £850billion.

Not all the cash has actually been spent, and ministers insist that taxpayers will see a return when the banks get back to profitability and the public stakes are sold off to the private sector.

But the total aid package works out at £ 13,800 per person in Britain, or about £40,000 per family.

Despite this, the bailed- out banks are still refusing to lend.

Read more  ...

 
Whose Money? says:

Hmmmm  ...  Somehow we think that if we personally owed a bank £13,800 a little matter of paying interest on the loan might raise its ugly head  ...
 
Be that as it may, you can't expect banks, as private, profit-making concerns, to put the good of the nation before their own business priorities.
 
So why rely on them to create and distribute our entire non-cash money supply (97% of the total) in normal times?  Even worse, why rely on them to see that the money we've undertaken as a costly debt against present and future generations, through quantitative easing, finds its way into general circulation at this time of crisis?
 
The nation didn't plunge into unprecedented depths of insolvency so that banks could gamble away that hard-bought liquidity, or award themselves another round of bumper bonuses  -  presumably in recognition of their outstanding failure to deliver.

That money was meant to fund the productive economy  -  what little remains of it, after over a quarter of a century in "Europe".


Whether you would prefer your means of exchange to be created as a debt owed to privately-owned  banks, as a debt owed to publicly-owned banks, or, as we do, in the form of money issued free of charge as a public utility, one thing is certain: unless sufficient purchasing power is made available to producers and consumers, this recession has a long way to go.

As Ellen Brown says, in the following article, we need more "funny money" if the productive economy is to survive.

Lessons from the Japanese: Time to Stop Borrowing Money and Start Printing it

Miners used to keep canaries in coal mines as an early warning device. If the air was so bad that it killed the canary, the miners would soon be next. Japan may be the canary for the out-of-control deficit spending policies now being pursued in the United States and the United Kingdom. In a November 1 article in the Daily Telegraph called “It Is Japan We Should Be Worrying About, Not America,” international business editor
Ambrose Evans-Pritchard wrote:

“Japan is drifting helplessly towards a dramatic fiscal crisis. For 20 years the world's second-largest economy has been . . . feeding its addiction to Keynesian deficit spending – and allowing it to push public debt beyond the point of no return. The rocketing cost of insuring against the bankruptcy of the Japanese state is telling us that the model has smashed into the buffers. ..."

...  (An) argument often raised is that the money created as government securities and Federal Reserve loans has been “sterilized” by lodging it with central banks and commercial banks. When this money hits Main Street as dollars competing for goods and services, the floodgates will open and hyperinflation will be upon us. That is the alleged justification for keeping the stimulus money in the banks instead of in the marketplace. But then what was the point of the stimulus? If the money is only stimulating the banks, it is not doing anything for the real economy. We want money out there in the marketplace generating demand for products, which generates jobs. Price inflation results only when “demand” (money) exceeds “supply” (goods and services). If the money is used to create goods and services, prices will remain stable. We have workers out of work and factories sitting idle. They need some “demand” (money) stimulating them to create supply, in order to make the economy productive again.
 
Read more  ...
 
 
Whose Money? says:

We agree with Ellen.

What's the point of throwing money at banks that can't or won't lend it where the productive need, rather than the financial profit, is greatest?
 
Let quantitative easing create money, not debt; and let's spend it directly into the real economy, instead of diverting it into the financial casinos.
 
David Blanchflower interviewed by Richard Harris of CityWire
 
While he has nothing specific to say about monetising our massive debts, Professor Blanchflower emphasises the dangers of nipping off quantitative easing before sufficient money has flowed into the real economy:
 
"We're still in a very deep recession, the worst recession we've had in post-war times, the greatest financial crisis in a hundred years, and it's stimulus that's keeping us going; so if you remove stimulus in a recession the danger is you can turn it into a depression  ...  Interest rates are as low as they can go, we're doing qu e so if you say we've got to balance the budget, and solve the public sector debt, then you reduce the stimulus in the economy, create unemployment, and the danger is that you push us over a cliff."

See the full interview here:


http://www.youtube.com/watch?v=8gG6F6xKWvI&feature=related

Whose Money? says:
 
We particularly like Professor Blanchflower's suggestion that economists should be open to a wider diversity of viewpoints, and that the present financial system deserves in depth scrutiny by open minds, rather than knee-jerk reactions, in an attempt to return to "business as usual".

David Blanchflower speaks again about the need to keep money flowing through the real economy here:

In-Depth Look - Europe's Expansion - Bloomberg

Central banks have got to keep the stimulus going.  Think of a green shoot  ...  a strong frost can kill it off  ...  The biggest worry central banks around the world have is severe deflation, and I say to people, when you say well the worry is inflation, well, first let's get some, and we'll deal with it  ...  central banks have got the tools to deal with inflation.
 
Watch it here:
 
 
Whose Money? says:
 
Professor Blanchflower speaks good sense, except for one thing: why focus on getting the banks lending again?

If it's ok for nationalised central banks to use their discretion to withdraw money from the economy, in the face of inflation, by lowering interest rates or cutting off quantitative easing, why can't they also use their discretion to channel money into the economy, in line with real wealth and the requirements of production and infrastructure?

In short, why not switch to publicly-created, debt-free money, flowing directly in and out of the economy as needed?

Thursday, 3 December, 2009

Held to ransom by the bankers:
Bosses at RBS (Yes, YOU own it) threaten to quit if they can't dole out huge bonuses

Simon Duke, The Daily Mail

Royal Bank of Scotland directors were accused of holding taxpayers to ransom last night over plans to pay huge bonuses. 

The board has threatened to resign en masse if the Treasury blocks the payments. 

The row is over an estimated £1.5billion bonus pool for staff at the investment arm of the bank, which is largely owned by the public. 

The pool is around 50 per cent bigger than last year and would give 20,000 bankers the equivalent of three times the national average salary each. 

The Treasury has demanded a veto, following the taxpayers' £45billion bailout of the Edinburgh institution, but board members say their lawyers tell them they would have to resign if they lost the power to set pay levels.

Read more  ...

http://www.dailymail.co.uk/news/article-1232530/Darling-seizes-control-RBS-bonus-pool.html

Whose Money? says:

So they get rewarded for failing to lend out the money we've given them to the productive economy, while the rest of us are taxed into ruin in order to pay their debts!

But the fact is that the real economy is perpetually "held to ransom" by the big bankers  -  never more so than at the present time, when their success in convincing us all that only banks are entitled to put new non-cash money into circulation has induced the government to hand over billions, at our expense, just to keep these discredited (in every sense of the word) institutions in business.

Let them go  -  and replace all those debilitating "loans" with a publicly-created national currency, spent into the economy free of any debt at source, and invested in productive businesses via the agency of new, honest banks, competing for deposits of money which actually exists.

Householders to pay £500 each for tide and wind power

David Derbyshire, The Daily Mail

Households will be paying £500 a year to subsidise wind turbines and tidal power stations by 2025, the energy regulator warned yesterday.

Almost a third of the average domestic fuel bill will be siphoned off to fund the construction of renewable energy sources and other Government green initiatives, according to Ofgem chief executive Alistair Buchanan.

Read more:

http://www.dailymail.co.uk/news/article-1232707/How-green-energy-revolution-set-cost-household-UK-extra-500-year.html#ixzz0YcbY3UOc

Whose Money? says:

Surely the big businesses and financiers who are the principal beneficiaries (not to mention the major polluters) in our warped economic system should be the ones who donate the funds necessary to develop alternative forms of energy! Ordinary people are already being bled white by their unrepresentative governments.

And while we're on the subject, we'd sooner see money going into developing things like cold fusion (http://www.infinite-energy.com/, http://www.infinite-energy.com/resources/martinfleischmann.html), which seems to have been subjected to the same kind of peer review firewall as the submissions of sceptical climate scientists, blocked by "true believers" in man-made climate change.

Incidentally, the blatant falsification of data at the University of East Anglia shows just how little reliance can be placed on "experts", when billions of pounds and a cushy lifestyle are at stake.

So how about taking a closer look at the financial "experts" who, in a similar way,  systematically starve propositions for monetary reform of publicity and funding?

Off subject, but with Climategate (read all about it here: http://scienceandpublicpolicy.org/images/stories/papers/originals/Monckton-Caught%20Green-Handed%20Climategate%20Scandal.pdf) finally breaking into the mainstream media, we can't resist putting in a link to this song:

Minnesotans for Global warming

"If we had some global warming  ..."

Watch the video here:

http://www.youtube.com/watch?v=qJUFTm6cJXM&feature=player_embedded

Wednesday, 2 December, 2009

Credit Action has released the latest details of private debt in the UK  ...
 
Debt Statistics
December 2009

Total UK personal debt

Total UK personal debt at the end of October 2009 stood at £1,458bn. The twelve-month growth rate fell to 0.7%.

Total lending in October 2009 rose by £0.3bn; secured lending increased by £0.9bn in the month; consumer credit lending fell by a net £0.6bn(total lending in Jan 2008 grew by £8.4bn).

Total secured lending on dwellings at the end of October 2009 stood at £1,230bn. The twelve-month growth rate was unchanged at 0.8%.

Read more  ...

http://www.creditaction.org.uk/debt-statistics.html?utm_campaign=stats-mailings&utm_source=dec

Whose Money? says:

Note that total debt is still growing.  It's just the growth rate of debt that's falling.

We can't help wondering what all those people in Newcastle city centre are spending.  Are they relying on their "equity", as the media tell them house prices are on the rise again?

The economic crisis and what must be done

Richard C Cook, Global Research

The United States does not control its own destiny.  Rather it is controlled by an international financial elite, of which the American branch works out of big New York banks like J P Morgan Chase, Wall Street investment firms such as Goldman Sachs, and the Federal Reserve System.  They in turn control the White House, Congress. the military, the mass media, the intelligence agencies, both political parties, the universities, etc.  No one can rise to the top in any of these institutions without the elite's stamp of approval.

Read more  ...

http://www.globalresearch.ca/index.php?context=va&aid=16258

Whose Money? says:

As "a former federal analyst", employed by the government, Richard C Cook is in a position to know how the system works.

Like all money reformers, he builds his conclusions on the basic fact that the purpose of an economy is to produce and distribute goods and services.

So why do people whose financial dogmas lead to the waste and destruction of valuable goods and services, in order to maximise the proliferation and accumulation of money in fewer and fewer hands (mostly their own) call us cranks?

Obvious, isn't it?

Tuesday, 1 December, 2009

Money supply and bank lending fall

Daniel Pimlott, The Financial Times
 

Key measures of money supply and bank lending both fell in October, raising further questions about the effectiveness of the Bank of England’s £200bn ($329bn) programme to pump cash into the economy.

Money supply as measured by M4 “broad” money excluding distortions from the financial sector shrank by 0.7 per cent in the month and by 5.3 per cent over the last three months annualised, figures from the Bank showed on Monday.

Read more  ...

http://www.ft.com/cms/s/0/5d0b84be-dd96-11de-9f8b-00144feabdc0.html

Whose Money? says:

Why borrow the money to feed in through the banks, increasing both the national debt and the liabilities of those who must then borrow it into general circulation, rather than spending publicly-created, debt-free money directly into the economy? 

Why indebt the nation, rather than accepting that providing the nation with a means of exchange is a public duty, rather than the privilege of profit-making private businesses?

If we could rely on a stable national currency, created without reference to their balance sheets, the banks could be allowed to sink or swim, lending out money which actually existed.

Monday, 30 November, 2009

EU bureaucrats to receive 'recession proof' pay rise

Bruno Waterfield, The Telegraph
 
European Union bureaucrats are to get an inflation busting and recession proof pay rise that is over three times the average rate for British workers hit by the economic slump.
 
Baroness Ashton, the newly appointed EU foreign minister who is also a European Commission vice-president, will pocket an extra £9,000 on top of her basic annual salary of £241,000.
 
Eurocrats will get the 3.7 per cent pay rise despite negative or near to zero rates of inflation across Europe, soaring unemployment, falling wages and austerity measures in most national public sectors.
 
Read more  ...
 
 
Whose Money? says:
 
We are no advocates of outcome equality, as opposed to the equal worth of all human beings.
 
However, we do believe that, in an age when the problems of production have been solved, there is no reason for anyone to suffer hunger and deprivation.
 
So it's grotesque to see those in positions of power and influence cushioning themselves from the effects of a financial collapse which their own class of wealthy transnationals has provoked, and which is further eroding standards of living among those whose living standards were not high even during the "boom" period.
 
Large supranational governments like the EU, and their henchmen in denationalised national assemblies, work with the corporate financial oligarchy to maintain a monetary and economic system which channels purchasing power into fewer and fewer hands, effectively enslaving all but the favoured few.
 
Remember C H Douglas's definition: the hallmark of the slave is not that he or she is badly treated.  It is that slaves have no say in their own policy.
 
It's hard to avoid the conclusion that, like America, Britain is now "the land of the fee and the home of the slave".


Keiser on "Tsumnami Alert": Dubai debt crisis awakes storm

Television interview with Max Keiser

...  The people of the UK are now the proud owners of a defunct real estate deal in the Mid East  -  they should be used to that by now, all of their real estate in the UK is going belly-up, so now  ...  they can add some Middle Eastern distressed properties to their portfolio  ... 

Gordon Brown and Alistair Darling have got to be the Beavis and Butt-head of the global finance markets, they're truly remarkable in their ability to pick losers  ...

....  on the surface, it looks like only another $60 or $80 bn is at risk, but at this point, after having gone through many hundreds of billions of  dollars of write-offs, every additional 50 or 60 billion starts to cut into the bone of the global financial system, and these governments are at the end of their tether  ...  Phase two of this crisis will start to really dig deep, in a way that phase one, as bad as it appeared, was really only superficial, if we're going to look at this in the context of what's yet to come  ...

Watch the interview here:



Whose Money? says:

We can only repeat: as the debt-based financial system totters, it's the ideal time to replace it from the bottom up  -  not with an alternative super-currency, but with debt-free currencies authorised at local and national level, plus an international trading currency along the lines of Keynes's Bancor which would finance co-operative, rather than competitive, trade among nations.

The alternative is chaos or dictatorship.

And the first step towards the economic and political democracy of publicly-created, debt-free money must be to re-establish our right to make our own laws by repealing the European Communities Act of 1972.

Thursday, 26 November, 2009

World First Foreign Exchange 26 November 20
Update: Dubai Debt Hurts Brit Banks, The Pound
 
The cost of insuring against defaults on Dubai debt rose massively yesterday  ...   That's seeded through to the equity markets  ...  bank shares, in particular, a lot, lot lower  -  HSBC is the biggest faller  it's owed something like  ...  $600m from the Dubai government.  If it doesn't get that, that's simply put a massive hole in HSBC's balance sheets.  The nightmare scenario is  that Dubai can't repay, everything falls out, you have real estate across the world falling down continually again, you see equity markets fall off again as banks have to deal with swaths and swaths of toxic debt  -   they have to get bailed out again  -  certain banks will get bailed out, certain banks won't get bailed out  -  we're back to where we started.  That is the nightmare scenario that's festering here in the Middle East  ...
 
If bank shares are up, sterling's normally doing well, if bank shares are down, sterling is normally doing badly.
 
Listen to the report in full here:
 
 
or on You Tube, here:
 
 
Whose Money? says:
 
That's what happens when you rely on  speculative real estate and finance for your bread and butter, and on dirt-cheap foreign labour for the things you really need in order to survive.
 
Time to stop donating taxpayers' money to a defunct banking system's gambling fund, and focus on building a productive economy, with the help of a publicly-created, debt-free national currency!
 
We are taking the weekend off  -  back on Monday.

Thursday, 26 November, 2009

China quietly introduces new financial system
 
Benjamin Fulford, The Silver Bear Café
 
China has stealthily introduced a new financial system based on the renminbi which is well on its way to becoming fully convertible, according to a high-level Chinese source. In addition, China is purchasing 10,000 tons of gold to back up a new fund designed to develop and market heretofore forbidden and suppressed technologies. The fund will be based outside of China and will be controlled by prominent members of the Chinese overseas community. The gold purchase will take some time because of the logistics of transporting it and the Chinese wish to test it thoroughly. Both the Chinese government and MI6 now confirm reports that much of the gold sold by the Federal Reserve Board over the past decade is in fact gold plated tungsten.
 
Read more  ...
 
 
Whose Money? says:
 
If this is true (and the editor tells us to use our discretion in this respect) all the more reason for the UK to stop propping up a system which is foundering in the debt without which it can't survive.
 
It makes no sense to replace one dominant currency with another. 

We have already seen the absurd advantages which this gives to the nation which controls the master currency. (For more on this, see Global Trade Imbalanced and Destabilised by Dollar Domination, by Ron Morrison, here: http://www.prosperityuk.com/prosperity/articles/global1.html).
 
Each nation should start creating its own currency as a public utility to promote optimum domestic production and distribution, while coming together with the rest of the world to plan for an international trading currency along the lines of Keynes's Bancor.

(See also this article by Michael Rowbotham, here: http://www.prosperityuk.com/prosperity/articles/mrkey.html). 

Wednesday, 25 November, 2009

Inflation: Too much money chasing too few goods? – Hardly!

Robert Poteat

That more money is available than goods is a nearly axiomatic definition of inflation in economic texts, media, and politics. But empirical data from direct observation indicates it is not true in the current economic environment. 

One can find many retail businesses offering discounts, and failing businesses; while advertising is a multi-billion dollar enterprise.  One can easily find retail stores full of merchandise for sale.  This is direct evidence that there is not enough money to liquidate what is available for sale.  Yet, prices keep going up.  Therefore, it cannot be too much money for consumption causing price increases.

Consumer debt is about $2.5 trillions for consumer goods that have been “sold” but have not yet been paid for; and, still, retail stores are full of merchandise.  Advertising of sales discounts is constant along with easy credit. 

Read more on the American Monetary Institute website, here:

http://monetary.org/moneyscenesix.htm

Whose Money? says:

When people tell you that publicly-created money in line with the needs of the economy would lead to a Weimar situation, refer them to this article.

It is the use of debt as money, not money spent into the economy free of debt at source, that pushes up both prices and taxes.

For a future without inbuilt inflation, reform the financial system!

Tuesday, 24 November

Greece tests the limit of sovereign debt as it grinds towards slump

Ambrose Evans-Pritchard, The Daily Telegraph

Euro membership blocks every plausible way out of the crisis, other than EU beggary. This is what happens when a facile political elite signs up to a currency union for reasons of prestige or to snatch windfall gains without understanding the terms of its Faustian contract.

When the European Central Bank's Jean-Claude Trichet said last week that certain sinners on the edges of the eurozone were "very close to losing their credibility", everybody knew he meant Greece.

The interest spread between 10-year Greek bonds and German bunds has jumped to 178 basis points. Greek debt has decoupled from Italian debt. Athens can no longer hide behind others in EMU's soft South. ...

...  Modern economies have reached such debt levels before, and survived, but never in the circumstances facing Greece. "They can't devalue: they can't print money," said Mr Christensen.

The tourist trade is withering, down 20pc last season by revenue. Turkey was up. It is hard to pin down how much is a currency effect, but clearly Greece has priced itself out of the Club Med market.

Read more  ...

http://www.telegraph.co.uk/finance/comment/ambroseevans_pritchard/6630117/Greece-tests-the-limit-of-sovereign-debt-as-it-grinds-towards-slump.html

Whose Money? says:

This is a sobering example of what happens when optimal currency areas are not maintained  -  a situation which prevails within nation states, as well as in unnaturally contrived super-states without any unified sense of identity.

In fact, the lack of financial autonomy can even erode a previously well-developed national identity: witness the north-south divide in the UK.

For thriving national and local economies, we need both national and local currencies, created free of any debt at source.  Unfortunately the single European currency, like the proposed Amero, takes the world in the opposite direction, towards economic and political dictatorship under systemic debt and a global élite which has no loyalty to any nation.

Let's hope we're not absorbed into the eurozone by default, as exchange rates between the pound and the euro converge.

In any case, we'll have to repeal the European Communities Act of 1972 before we make the switch to publicly-created, debt-free money which is the only lasting solution to our current problems.

Monday, 23 November, 2009

Is America finally starting to stand up to Wall Street?
 
Washington's Blog

...  The American people are shouting so loud at their congress members and Senators, that even some of the most pro-Wall Street congressman are starting to get it.

For example, the Congressional Black Caucus has been hearing so much about how congress is failing to address the crisis of unemployment from their constituents, that the CBC delayed Barney Frank's proposed financial reform.

The House Financial Services Committee received so many phone calls from constituents that it approved the Ron Paul/Alan Grayson bill to audit the Fed and defeated the trojan horse alternate bill written by Mel Watt. Indeed, I have heard from congressional sources that the only calls to support the Watt alternate bill were from the Fed itself. And see this.

The Committee also approved Congressman Grayson's bill to rein in foreign currency swaps.

Read it in full here:

http://www.georgewashington2.blogspot.com/2009/11/america-stands-up-to-wall-street.html

Whose Money? says:

Wish there was similar activity over here.  All we've done is sign up to being a province in the EUSSR  -  making it even more difficult to reform the financial system, as we are absorbed into the eurozone by default.

Even the best bailout songs seem to be coming from the States.  Here's another one (don't know why it stops so abruptly):

"Give it to me" Bailout Rap

Listen to it here:

http://www.youtube.com/watch?v=YRR80Eq3FQM&feature=related

And another good article from Washington's Blog:

Financial reform doesn't need to be complicated

...  One blogger sums up the big picture argument pretty succinctly:  ...  What’s a bank for? What’s a financial system for? 

...The public purpose of banking as a public/private partnership is to allow the private sector to price risk, rather than have the public sector pricing risk through publicly owned banks.  ...

...  If the activities of the banks are not facilitating the production and movement of real goods and services what public purpose do they serve?

Read it in full here:

http://georgewashington2.blogspot.com/2009/11/lets-simplify-debate-on-financial.html

Whose Money? says:

Exactly.

What we should be asking is not only what the financial system is for, but what the economy itself is for.

It is, of course, to produce goods and services for all: and banks should be furthering that purpose by receiving deposits of publicly-created money and and investing those deposits in productive enterprises.

Fury as credit crunch civil servant lands Rothschild job

Simon Watkins, The Mail

The civil servant who oversaw the taxpayers’ stake in Britain’s crisis-hit banks is at the centre of a conflict-of-interest row after it emerged he is to join a leading investment bank.

John Kingman, the former chief executive of UK Financial Investments, is to become the new managing director of NM Rothschild.

Read more  ...
 
 
Whose Money? says:
 
How can we hope for a fair deal when the oligarchy controls not only finance and big business, but our elected "representatives" and civil servants, who slip with such ease from government to to banking and back again?

Isn't it time we started shouting as loud as the Americans for reform of a thoroughly corrupt system?

Sunday, 22 November, 2009

Property market hasn't collapsed because banks can't face the truth

Ruth Sunderland, The Observer
 
...  The first thing to say is that the boom in prime London real estate gives a misleading picture of the market as a whole  ...

...  Lower down the scale, there is a huge amount of hidden distress. This is being papered over by the banks because they simply cannot crystallise the enormous, unrecognised potential property losses sitting on their books without putting themselves right back on the critical list.  ...
 
...  It would not take very much to puncture the prime property bubble – a strengthening of the pound, or a further downturn in the economy, hitting tenants and their ability to pay for space could do it. And it is hard to see any relief for the lower tiers of the market either, for years to come. A dowdy retail development in a secondary location, say, faces the prospect of pressurised consumers who fear rising unemployment, the end of quantitative easing and an eventual rise in interest rates. Empty units are lowering developers' income streams and making debt harder to service, and there is precious little funding available for redevelopment of these sites.
 
Read the report in full here:
 
 
Whose Money? says:
 
Yet new developments are still going ahead: for example, the retail/office buildings which are to replace the old cinema at Jesmond.
 
Who will keep these new shops going, as jobs are lost, and the government looks for ways to cut back on spending?  Surely they can only survive by putting established concerns out of business!
 
Here's a link to a recent report in Bloomberg regarding the similar condition of the US commercial property market:

http://www.bloomberg.com/apps/news?pid=20601109&sid=atReshofT51c

Meanwhile, in Whitley Bay, life is finally stirring in the abandoned Woolworth's building in the centre of town, as Wilkinson's move in  -  and we hear that the boarded-up Co-op store and T & G Allan's are also likely to be reoccupied by Christmas.

However, charity shops encroach upon prime locations, the Marks and Spencer store casts a blind eye over the entrance to the new shopping centre, and smaller shops in Park View are closing down on a regular basis.  Rumour has it that some of them, at least, will soon be converted back into houses.

The banking crisis is far from over; nor will we ever be able to escape from repeated booms and busts caused by the erratic and increasingly unproductive flow of "credit" until we take control of our economy away from these private, profit-making businesses and legislate for stable purchasing power in the form of publicly-created money, issued free of any debt at source.

Saturday, 21 November, 2009

Britain PLC:
Jut one big black hole as tax crash drives our borrowing to £11.4bn  -  88 times more than last year
 
The Daily Mail

A record crash in tax receipts and spiralling public spending has left Britain heading for the largest budget deficit of any leading nation. 

Figures yesterday revealed the Government borrowed £11.4billion in October  -  an astonishing 88 times the amount for the same month last year. 

Read more  ...

http://www.dailymail.co.uk/news/article-1229177/Retail-sales-17-month-high-mortgage-lending-climbs-.html

Whose Money? says:

We don't know whether to laugh or cry. 

Why are they borrowing what they are entitled to create free of any debt  -  what, in fact it is their duty to create on behalf of the nation?

You can watch government debt increasing by the second here:
 
 
£13,244 in public debt owed per head of each member of the UK population!
 
And that's before you even consider the massive personal debt being shouldered by the big borrowers who are so kindly providing the rest of us with our means of exchange  -  at their own risk and expense!
 
Expect debts to get even more crippling over the next month or so  ...
 
The Christmas credit crunch:
Greedy finance firms push interest rate towards 40%
 
Sean Poulter, The Daily Mail

Credit card firms are pushing up interest rates by as much as 7 per cent ahead of Christmas.

The move by Capital One means some customers will be paying almost 40 per cent interest on their Christmas gifts and January sale purchases unless they clear the balance on their cards.

The American-owned finance giant said the rises were to reflect the higher risk of certain customers and 'market conditions'.

Read more  ...

http://www.dailymail.co.uk/news/article-1229666/The-Christmas-credit-crunch-Greedy-finance-firms-push-rate-40.html

Whose Money? says:

We have been amazed by the contradictory indications in Newcastle city centre.

On the one hand, you have shops in prime locations standing empty and sporting estate agents' boards.

On the other hand, business appears to be booming, and Northumberland Street is packed with the usual seasonal shoppers.

We can only assume that the proportion of window-shopping to buying is up on previous years, as people hunt for bargains or patronise dirt-cheap clothing stores like Primark.

Credit cards will certainly feature largely in more expensive purchases.

Incidentally, the drive to get us all using plastic for even minor transations continues apace  ...

You could win £2,012 worth of shopping when you pay by Visa

Read about it here:

https://www.visa.co.uk/promotions/enteronline.html

Just remember: until all non-cash money is created by public authority, reliance on plastic, rather than hard cash, increases our reliance upon debt.

The fewer the notes and coins demanded by the public for their everyday transactions, the greater the amount of non-cash money flowing in to take its place.

Yes, it's more convenient.

But it costs us all more in the long run, because every penny of non-cash money created by the banks is borrowed into existence and must be repaid to them plus compound interest.

This is not a cost-effective way of supplying purchasing power to the economy.

Time enough to swich to plastic for your day-to-day shopping when debit cards, like notes and coins, are issued by an accountable public authority, free of any debt at source.

In fact, we'd say that, with the potential for control offered by plastic (ie, the possibility of cutting off purchasing power on political, as well as financial grounds) hard cash should remain as a permanent alternative to debit and credit cards or any other high-tech means of payment which may emerge in the future.

Meanwhile, notes and coins are the only form of money which comes into existence without someone, somewhere having to go into debt to create it.

Friday, 20 November, 2009

So nobody could have predicted it?
 
The Warning
 
Frontline
 
Long before the economic meltdown, the story of one woman who  tried to warn about the threat to the financial system.    ...  Before the toxic assets poisoned the economy, she warned of their danger  -  and that made her the enemy of a very, very large number of people.
 
A story from inside the  highest levels of the Clinton administration. 
 
They were all part of a very concerted effort to  shut her up and shut her down: and they did, in fact, shut her up and shut her down.
 
Watch the video here:
 
 
Whose Money? says:
 
According to Brocksley Born, it's all too likely that lobbyists for the financial sector will even now succeed in neutering any attempts at regulation, leaving millions of ordinary people (though not the perpetrators of economic mayhem themselves) vulnerable to future catastrophes.
 
We'd go further.
 
We'd say that lobbyists for the banking and financial sector, on both sides of the Atlantic, wield such power over the productive economy, by virtue of the banks' licence to create ALL non-cash money (97% of the total money stock), that, sooner or later, they will succeed in using that power to water down, or drive loopholes through even the most well-intentioned of regulations.
 
Those with the influence attendant upon wealth will always push against any restraints; and as Sir Josiah Stamp pointed out, if you leave the banks with the power of money creation, they will, by hook or by crook, find ways of using this privilege to make friends within governments who are willing to devise ways of boosting and sharing in their profits.
 
Regulation is not enough.  The sensible way forward is with legislation making it as much a crime for banks to create and distribute their own non-cash money as if it as if it were legal tender as it already is for them to print notes or mint coins.
 
Financial power must be decentralised and handed back to the nation, with publicly-created, debt-free money spent into circulation via investment in infrastructure, and a non-means-tested national dividend for all adult citizens.
 
Of course, this cannot be done until Parliament takes the popular step of  restoring this nation's power to make its own laws, with the repeal of the European Communities Act of 1972.

What happened when I tried to live on £65 a week

Liz Jones, The Daily Mail

I am exhausted. I cannot move or think. I look terrible, ugly. I feel completely humiliated. The reason? I have just spent a week trying to live on benefits.

I revealed in the Mail a couple of weeks ago how hopeless I am at living within my means, and that despite a hefty salary I am £150,000 in debt (not including my horrendous, interest-only mortgage; I don't even have a pension).

I am pursued by credit card companies and HM Revenue and Customs men (trust me, they are the Taliban of the money-collecting world, really aggressive and nasty) and Santander bank ('Bloody Spaniard!' I yelled incongruously at one of their operators the other day).

So having realised that, what with the £8.95 toothpaste and the £26,000 bat sanctuary, perhaps I was overdoing the spending, I decided I'd see whether I could survive on far less.

Read more  ...
 
 
Whose Money? says:
 
Let's forget making judgements about how she spends her money and how she managed to get herself into so much debt, and get to the crux of the matter.
 
While some people may be organising their working lives to ensure that they get as much out of the benefits system as possible, most people dependent upon the state for their entire income, as this article points out, aren't exactly living the life of Riley  -  and those who actually try to be self-supporting are frequently even worse off.
 
The benefits system is a joke.
 
Why not slash the cost of administering it and wipe out both the profiteering and the complicated calculations involved in deciding how many hours it's safe to work before you're out of pocket, by introducing a universal non-means tested national dividend which would act as a platform for further earnings and as a safety net in the event of redundancy or ill health?
 
An impractical pipe-dream?
 
Not if the banks are brought to heel, and all money is created and put into initial circulation by public authority, free of any debt at source.

Thursday, 19 November, 2009

Local currencies  - 
The missing link in the quest for sustainability

Helen Dew,
Aletho News (New Zealand)
 
Currency is the lifeblood of an economic system. Most people think that there’s only one type of money, because that’s all they’ve ever known. Cheques and credit cards etc. represent special-purpose forms of cash, but money is money, they think, regardless of the form it takes. Few realise that there are, potentially at least, many different forms of money, and each type can affect the economy, human society and the natural environment in a different way.
 
Read more  ...
 
 
Whose Money? says:
 
This article puts the case for local currencies very well.
 
However, we agree with the comment by "Marc" to the effect that "they don't solve the underlying problem we must all face and deal with. That is, you cannot beat unstable exponentially expanding currencies with stable linear local currency alternatives."
 
It seems to us that, for regional and local currencies to work (ie, to stop wealth gravitating to some parts of the country and draining away from others) a stable national currency, issued as a public service, and free of any debt at source, must first exist. 
 
Publicly-created, debt-free money at national level is also the basis on which to establish an international trading currency, primarily for the exchange of surpluses and goods unique to a given place.
 
If continent-wide, debt-based currencies become the norm, eventually merging to form a single global exchange medium, local currencies will be nothing but a band-aid, to keep the peasants in basic hand-to-mouth business, while the transnational plutocracy continues to use its privileged access to "leverage" to syphon off and control the world's real wealth.
 
And if this appropriation of national assets is bad in the UK, just give a thought to third-world countries like the Philippines  ... 

IMF-WB Tricks and flattery and The Savage Cruelty of Debt
 
Eric Encina, thepeoplesvoice.org
 
“To supplement tax collections, we will aggressively pursue the privatization of government-owned and controlled corporations and the sale of government assets.” – Philippine Government.

The quoted statement above under the present financial-economic system and tax collection policies is blatantly a contradiction or a hostile to Article II, Sec. 19 of the 1986 Constitution that states: THE STATE SHALL DEVELOP A SELF-RELIANT AND INDEPENDENT NATIONAL ECONOMY EFFECTIVELY CONTROLLED BY THE FILIPINOS. Therefore, this is an outright treason and a savage cruelty to the Filipino people in the process and in conflict with the charter so far as the public wealth or people's money is concerned.

The IMF Managing Director Rodrigo de Rato has made a very flattering remarks about the Philippine economy, hailing the RP financial progress under debt-fuelled economy through the implementations of tough tax measures. In an exclusive interview with the Philippine Daily Inquirer Newspaper, he praised the Philippine economic strengths through the interest of foreign investors in the stages of the government privatization program. He added that the presenceof strong foreign interests in the recent successful sales of GOVERNMENT ASSETS is an evidence of the remarkable turnaround to Philippine economy over the last few years.

The sales and privatizations of the Philippine national assets are blatantly in contradiction to Philippine Constitution. However, to other economists, bankers and politicians —usually with vested interests and juicy commissions, the sale or the privatization of government assets is a matter of economic contingency or exigency or simply a matter of economic pragmatism and practicality albeit of the expense of the greater numbers of Filipino people.

Read more  ...
 
 
Whose Money? says:
 
This is nothing sort of looting  -  and it's going on all over the world, in "rich" nations and poor
 
We in the UK no longer own our public utilities; and the line between public companies and private corporations is being blurred by public/private partnerships, at the expense of taxpayers, present and future.
 
The interests of millions of ordinary people in the developed world are identical with those of the Filipinos, and with the populations of other emerging economies  -  though we are not yet sending young mothers abroad to do menial work in the financially dominant commercial centres, where they keep house and look after other people's children for a pittance, in order to send a bit of money back home. 

Our version of family disruption, now that (owing to the inroads made by debt into disposable incomes, both directly and as a result of raised prices and taxes) it takes two wage packets to do what one achieved fifty years ago, is to send young mothers out into the "workplace" when their children are less than a year old.
 

Wednesday, 18 November, 2009

Eight in 10 savings accounts LOSE cash: Inflation goes up  -  but banks still pay interest rates just above zeroo
 
Becky Barrow, The Daily Mail
 
More than eight in ten savings accounts are paying such a paltry interest rate that customers are effectively losing money, research revealed yesterday.

Financial experts said savers have become the 'sacrificial lambs' of the Bank of England's desperate attempts to rescue the economy.

Because the Bank has held down interest rates, the value of their savings is not keeping pace with inflation, so savers are losing money in real terms.

Read more  ...

http://www.dailymail.co.uk/news/article-1228676/Nine-10-savings-accounts-pay-paltry-customers-losing-money.html

Whose Money? says:

How can people take responsibility for themselves when they have no way of preserving the value of what they have earned  -  while those rich enough to speculate, rather than put their money in a "secure" savings account, get the windfalls? 

The present financial system doesn't work for industry; it doesn't work for infrastructure and services; and it doesn't work for ordinary people, who are losing out on all counts.

As this song says, "We need a rescue plan to save the common man,"  ...  because "what goes up doesn't ever seem to trickle back down":
 
Where the Money Goes
 Trace Adkins
 
Listen to it here:
 

Tuesday, 17 November, 2009

How the servant became a predator: finance's five fatal flaws

William K Black, The Huffington Post

(Originally published on the Roosevelt Institute's blog, New Deal 2.0.)
 
What exactly is the function of the financial sector in our society? Simply this: Its sole function is supplying capital efficiently to aid the real economy. The financial sector is a tool to help those that make real tools, not an end in itself. But five fatal flaws in the financial sector's current structure have created a monster that drains the real economy, promotes fraud and corruption, threatens democracy, and causes recurrent, intensifying crises.  ...
 
...  Economic reform efforts are focused almost entirely on fixing finance because the finance sector is so badly broken that it produces recurrent, intensifying crises. The latest crisis brought us to the point of global catastrophe, so the focus on finance is obviously rational. But the focus on finance carries a grave risk. Remember, the sole purpose of finance is to aid the real economy. Our ultimate focus needs to be on the real economy, which creates goods and services, our jobs, and our incomes. The real economy came off the rails at least three decades ago for the great majority of Americans.
 
Read it in full here:
 
 
Whose Money? says:
 
This article correctly pin-points the many ways in which the financial sector fails to support the real economy.
 
One essential point is missing, though: that it is the nature of our money supply itself which has allowed the financial sector to run amok over genuine wealth production
 
If the banks were unable to create "credit" in absurd quantities for purposes and persons of their choice (ie, those most likely to serve their own business priorities by helping them achieve maximum financial profits) there would be no gratuitous inflation of asset prices.
 
If national currencies were issued by public authority, and spent into circulation on infrastructure projects and a national dividend, real economies would not be starved of investment.
 
And if nations did not rely upon the banks for their money supply, those banks would not be able to hold them to ransom.
 
At the root of all our financial ills lies the fact that we choose to create our means of exchange and distribution as a compound interest-bearing debt owed to private, profit-making businesses
 
Is it surprising that those offered such power should find ways to abuse it?

Monday, 16 November, 2009

A rise next year? You'll be lucky, warn bosses as they plan second pay freeze

Becky Barrow, The Daily Mail

Private sector workers stung by a pay freeze this year should brace themselves for another, a bleak report warns today.


Around half of bosses are planning to hit their staff with the second zero per cent deal, a survey reveals.

In fact, the chance of a pay rise at the next annual review is almost non-existent, according to business lobby group CBI.  ...

...  In addition, more than 930,000 private sector workers have lost their jobs over the past year, but nearly 290,000 people have joined the public sector workforce.

Read it in full here:
 
 
Whose Money? says:

So, with an ever greater proportion of people employed by the government, who is going to pay the bill for their wages and salaries  -  let alone the increased cost of ex-private-sector workers on the dole?
 
We need a complete re-think, if we are ever to have a properly functioning economy  -  ie, one based on the premise that economy activity is undertaken not to produce money, not to produce jobs, but to produce goods and services.
 
And the first step towards such an economy is the outlawing of money creation by the banks, under the guise of interest-bearing "credit", and the adoption of a publicly-created national currency, issued free of any debt at source.

Meanwhile, as workers in the private sector prepare for another year of pay freeze (effectively a pay cut, as there will be no freeze on tax and price inflation) they be joining those in a similar plight in America, asking, in the works of the following song-parody:
 
"Will the government, the mighty government, accept a cut in pay?"

Listen to the song here:


The Stimulus Song
 
http://www.youtube.com/watch?v=MhGXLg2Q9-w&feature=related

"In the government, the mighty government, the money flows so free,
"But will the government, the mighty government, pass it down to you and me?"




China has now become the biggest risk to the world economy

Ambrose Evans-Pritchard, The Telegraph
 
"The inherent problems of the international economic system have not been fully addressed," said China's president Hu Jintao. Indeed not. China is still exporting overcapacity to the rest of us on a grand scale, with deflationary consequences. ...
 
...  The world economy is still skating on thin ice. The West is sated with debt, the East with plant. The crisis has been contained (or masked) by zero rates and a fiscal blast, trashing sovereign balance sheets. But the core problem remains. The Anglo-sphere and Club Med are tightening belts, yet Asia is not adding enough demand to compensate. It is adding supply.

My view is that markets are still in denial about the structural wreckage of the credit bubble. There are two more boils to lance: China's investment bubble; and Europe's banking cover-up. I fear that only then can we clear the rubble and, very slowly, start a fresh cycle.

Read it in full here:

Whose Money? says:

But do we really want to start a "fresh cycle" of boom and bust, under the same old dysfunctional system?

This article describes the kinds of unnecessary problems which arise when economic activity is based upon finance, and the international exchange of goods is driven not by the co-operative exchange of surpluses, but by the need for each nation to get its hands on as much effectively debt-free money as possible (ie, money which which comes to the importer without strings attached, since it has been borrowed into existence by the importing nation, which must continue to service and repay the debt even when the purchasing power which it created has gone abroad).  The system makes no sense. 

It breeds manipulation and corruption and discourages sensible production aimed at increasing human well-being.

Time to switch to debt-free currencies at national, regional and local level, and an international trading currency along the lines of Keynes's Bancor (see this article by Alistair McConnachie on the Prosperity website, http://www.prosperityuk.com/prosperity/articles/bancor.html).

Shock as city house prices fall 12%

Mark McLaughlin, The Scotsman

HOUSE prices in Edinburgh have fallen by nearly 12 per cent in the last three months, it was revealed today.
The Capital's poor performance came as a surprise and goes against the trend of a modest house price recovery in the rest of Scotland, which has seen the average cost of home rise by 0.7 per cent in the last quarter.

Read more  ...
 
 
Whose Money? says:
 
As the report points out, the Edinburgh property market is particulary vulnerable to job losses in the financial sector.
 
With further job losses expected, both in the Scottish capital and throughout the UK, house prices everywhere have a long way to fall, before first-time buyers return to the market in any numbers.

Sunday, 25 November, 2009

New name for a new economy?
 
Stephanie Flanders, BBC News
 
Do we need a new name for the kind of economy we live in today?  I ask because it's becoming a bit of an issue.
 
We started the week celebrating the 20t anniversary of the fall of the Berlin Wall.  It was, everyone agreed, ironic to be marking the fall of communism, when less than a year ago capitalism itself had seemed to be on its knees.
 
Capitalism has survived.  But it's not the capitalism we thought we had.  When you consider the scale and scope of government involvement in most of the advanced economies right now, "free market capitalism" seems a bit of a stretch.
 
Today we had confirmation that the eurozone economy had moved out of recession in the third quarter.  But the public sector was almost entirely responsible for the modest growth that the major European countries have achieved since the spring.
 
Read more  ...
 
 
Whose Money? says:
 
Perhaps it would be more accurate to say that financial capitalism has been brought to its knees, and only survives because of generous welfare payments to the banks.  As John Cassidy points out, it doesn't work.
 
However, the main lesson to be learned from cumulative experience is that if you make common sense subservient to dogmas, whether "capitalist", "communist" or any other, you invite disaster.
 
What we advocate is not a new dogmatic system of economics, but the simple provision of that publicly-created, debt-free money which would permit businesses, families and individuals to make their own choices, while both ensuring the availability of adequate, well-distributed purchasing power and drastically reducing the rôle of the state.
 
This is not a new "ism", competing with all the others.  It will lead to economic democracy, which is the foundation of political freedom: and on that foundation, creativity, diversity and enterprise can flourish.
 
Oh, and about a new name for the present economy: one which has been circulating on the internet for some time is "kleptocracy". 
 
As things stand, it doesn't seem to be too wide of the mark.
 
You can hear Stephanie Flanders interviewing economists on the Radio 4 Analysis programme, The Economist's New Clothes here:
 
 
Here are a couple of encouraging extracts from contributors, at the conclusion of the programme:
 
"I think  ....  there should be a joint venture   ...  to reconnect the subject of economics with broader questions of social and political theory.  I think that for too long the values underlying economic reasoning have been obscured, or even denied to be values.   ...  So perhaps together we can reinvent the old-fashioned discipline of moral and political economy, less scientific but, I think, truer to the world, and more directly connected with questions of what makes for a just society and what makes for a good society."  ...
 
...  "The publication process in economics takes years  ...  So the things that will appear in the journals and eventually in the text books, it'll take ten years before we see a big change in what economists are doing.  But someone once said that science marches on, funeral by funeral  ...  I think that the new theories will come from the new people coming into the profession.  They will have lived through this, and will start to write down models which make more sense."
 
Whose Money? says:
 
Stephanie Flanders sums up by harking back to the "fresh-faced graduate students at the London School of Economcs" she referred to at the beginning of the programme:  the kind of people who are currently hearing Simon Dixon discussing the problems that result when we rely on banks to create our entire non-cash money supply as an interest-bearing debt owed to themselves (see http://www.simondixon.org/comment-page-1/ ).

So yes, there's every reason to hope for reform of the present dysfunctional system, as the new theories these young people evolve root out the underlying problem of systemic debt, and lead the way to a new era of prosperity and human well-being, both in Britain and throughout the world.

Saturday, 14 November, 2009

Above the poverty line, but out of pocket – Britain's missing third

Jenni Russell, The Guardian

The man who painted my house two summers ago is out of a job. The company that has employed him for the last 10 years has sacked almost all its staff, because the work just isn't there. Joseph has had no income for eight weeks. For the first time in his life, he tried to claim a benefit – jobseekers' allowance – but he wasn't entitled to it because, for all but the last 10 months, his firm had defined him as self-employed. Ten months isn't enough to build an independent tax and national insurance contributions record, even though he has been a taxpayer for 27 years. He's been told he can't have income-based benefit either, because his wife, who is a cleaner, earns about £8,000 a year.

The couple live in a rented flat with their 20-year-old student son. The son, hardworking and ambitious, lives at home and spends four hours a day travelling to university because his family were too frightened to take on the extra debt of a student loan.

Read more  ...

http://www.guardian.co.uk/commentisfree/2009/nov/11/britains-missing-third

Whose Money? says:

This article shows exactly why those who can find ways of getting onto benefits do so, rather than attempting to fight the system by earning their way against the odds  -  and being hammered when hit by job losses or illness in the family.

And remember: even those who are home owners, and in a slightly higher income bracket than Joseph's family, because both partners are bringing in £350 a week, are highly vulnerable, since they frequently depend on both those wage packets to pay their basic outgoings.

And, as Jenni Russell makes clear, this is far from being a new phenomenon, since "Eleven million already had financial problems before the recession began".  We ourselves have friends who have been living on the edge for years, struggling to pay off a never-ending mortgage while holding down as many as three jobs to meet the bills. 

It just takes a divorce, or a period of illness, to throw tight budgets deep into the red.

Another point: it's these same people, who have little if any disposable income left to spend after paying for the basic necessities, who are the hardest hit by inflation. 

High-tech luxury goods may be getting less expensive, and clothes are available at budget prices from Primark (thanks to dirt-cheap overseas labour) or from charity shops: but outgoings over which you have no choice (rent/mortgage, insurance, fuel, utility bills, fares and transport, and, of course, taxes  -  the latter a major price inflator, being built into every stage of production and distribution) continue to rise: and the greater the proportion of your income absorbed by these unavoidable outgoings, the higher your personal rate of inflation.

It's encouraging to hear that The Resolution Foundation (http://www.resolutionfoundation.org/) has been set up to highlight the predicament of so many low-paid, but hard-working people in this country: people who have contributed lavishly to the Chancellor's coffers over the years, yet who are decreed ineligible for assistance when they themselves are up against it. 

However, the palliatives suggested at the end of the article are insufficient.  What is required is a thorough re-examination of the financial system, taking into consideration the very different conditions, and opportunities, offered by automated production systems.

It is our belief that only a switch from means-tested benefits to a universal national dividend, distributed as part of a nationalised, debt-free money supply, will meet the needs of the 21st-century population, since only a financial platform offering basic security will make part-time employment and a return to the one-wage-packet family a feasible proposition.  This would enable us to adjust satisfactorily to a world where less human labour is required, without breeding a rapidly expanding underclass of pauperised or idle no-hopers.

One thing is for sure: in any such re-assessment of our economic options and priorities, the "missing third of the population", as Jenni Russell says, "must be heard too"

At the moment, they are bound and gagged.

Britain the economic 'sick man of Europe'

Sean O'Grady, The Independent

After decades of outperforming the continental economies, Britain seems set to become the "sick man of Europe", languishing at the bottom of the European growth league table.

Official figures released by Eurostat yesterday revealed that the eurozone economies, comprising 16 of the EU's 27 member states, are now officially out of recession, having grown by 0.4 per cent in the third quarter. The growth rate for the EU as a whole, dragged down by the UK and some east European states, was 0.2 per cent. Both are the first positive news on growth since spring last year, though they are somewhat below market expectations.

Of the five largest European economies, only Britain and Spain are still in recession, and even the stricken Spanish economy is performing marginally better than the UK. The US and Japan are also out of recession.

Read more  ...

http://www.independent.co.uk/news/business/news/britain-the-economic-sick-man-of-europe-1820527.html

Whose Money? says:

It only goes to show how daft it is to equate national well-being with standard economic indicators!

As Jenni Russell pointed out in the article above, around one third of the British population were excluded from the much-vaunted bonanza when Britain was "outperforming" the continental economies.  Large numbers of people were, in fact, already struggling to get by during the "boom" which preceded the present bust.

Now it is the EU nations, when their "growth" rates are averaged out, which have gone into the lead in this meaningless race  -  meaningless, that is, to the millions of human beings within the "Union" who, in the face of unemployment and low wages, are feeling no benefit from a theoretically rising "European" GDP.

Genuine prosperity  -  which includes both the elimination of poverty and increased well-being at all levels of society  -  will never be achieved without national currencies which are created and distributed free of any debt at source, and which  -  with the help of local and regional currencies, and an international currency on the lines of Keynes's Bancor  -  support both maximum home production and the co-operative exchange of surpluses between nations.

The replacement of national currencies by the euro eliminates the essential building-block of a national money supply, geared to encouraging a thriving domestic market  -  just as national currencies, unsupported by supplementary local and regional currencies, have led to economic black spots within nations.

Britain, as this report makes clear, is not the only "sick man" in Europe.  In fact, we'd say that any economy that uses debt as its means of exchange is suffering from a deep-seated, and potentially crippling, disease, regardless of its GDP.

We are lucky enough to have retained our national currency.  Before exchange rates absorb us into the eurozone by default, we should now re-establish our right to make our own decisions by repealing the European Communities Act of 1972, and switch, without delay, to the publicly-created, debt-free money which would nurse us back to health. 

Friday, 13 November, 2009

Workshy Britain: benefits out of control
 Emily Garnham, The Daily Express
 
The shocking truth of workshy Britain was laid bare today as figures revealed the number of households receiving benefits worth more than £15,000 a year has doubled under Labour.
 
Welfare Reform Minister Jim Knight said 1.2 million households were given state handouts in excess of £15,000-a-year in 2007-2008, compared with 600,000 a decade before.
 
Read more  ...
 
 
Whose Money? says:
 
"Is it time for the benefits system to be overhauled?" asks the Express.
 
Of course it is!

The "shocking truth" is that governments over the past century have made the redundancies necessarily resulting from automation even more disastrous by failing to support home production, as they allied themselves with the purely financial objectives of the banking sector and with those advocates of supranational government who equate a preference for maximum self-sufficiency with selfish nationalism.

With unemployment  -  especially for young people  -  growing, and the only escape route for many leading into low-paid jobs offering no hope of advancement, no wonder the benefits bill is rising!

On top of this, when struggling families and individuals don't just miss out on a whole raft of means-tested benefits but end up seeing their disposable incomes actually reduced below the means-test level after paying out thousands in taxes and "National Insurance", and when these same families and individuals are required to fork out for services which come free to those narrowly managing to qualify for assistance, is it any wonder that tips on how to get the best deal out of a crazy system quickly go the rounds?
 
We have heard of increasing numbers of people either staying unemployed or keeping their earnings just low enough to qualify for across-the-board benefits, in order to maintain a decent standard of living for their families.
 
Can you really blame them?  They're just responding to market conditions, and getting the best deal available.

How much more sensible to give everyone the non-means tested national dividend warranted by increased automation (ie, by our ability to produce the necessary quantity of goods and services using a mere fraction of the human labour previously required)?
 
People would then be able to afford to work part-time or in low-paid jobs while maintaining comfortable living standards, fulfilling their domestic responsibilities and enjoying quality time with their children  -  and, as an added bonus, the rôle of the state, with all the expense of its intrusive bureaucracy, would be minimised.
 
Of course, in order to provide a national dividend for all, regardless of wealth and status, it would be necessary to outlaw bank "credit" creation, and issue the nation's non-cash money supply (97% of the total) as a debt-free public utility, distributed for the benefit of the population as a whole, not according to the priorities of private, profit-making businesses.
 
Anatomy of Casino Capitalism
 
Jane D'arista interviewed by Paul Jay on the Real News Network
 
Paul Jay:   ...   How did we get into this crisis which seems to be deepening for most ordinary people.
 
Jane D'Arista:  It is deepening for most ordinary people, as you say, because of unemployment.  But it's not over by any means; and many of us believe that the same things that brought us to this place last year are now building up to give us a second piece of the storm: and that is the speculative activities of our financial sector, which are ongoing, and they involve proprietary trading, leverage and the funding operations that make it possible to make an enormous amount of money and to inflate the balance sheets of these institutions  ... 
 
Proprietary trading is when an institution trades for its own account, not for its customers.  ...  They are buying assets on credit for their own account in order to increase their profits, so they can pay those huge bonuses.  So proprietary trading does nothing for the customer, and it does nothing for the economy, this is just an inside game, a speculative game.  ... 
 
... ( I)n order to make that kind of money they have to borrow a huge amount of money  -  that's called leverage  -  in relation to their capital  ...  long-term capital management was borrowing almost $100 dollars for every $1of their own money.
 
Watch Part 1 of the interview here:
 
 
and Part 2 here:
 
 
(Part 3 doesn't seem to be available on You Tube, as yet.)
 
Whose Money? says:
 
An excellent explanation of what has been happening.
 
Clearly, the privileged position of the banks, allowed , as they are, to create non-cash money at their own discretion (or lack of it) and to use it for whatever purpose they deem most profitable to themselves as private, financially-orientated businesses, is what enables them to indulge in crazy levels of leverage.
 
In our opinion, no amount of regulation would be sufficient to solve the problems generated by the nation's willingess to accept bank "credit" (ie, debt) as legal tender.
 
As long as banks retain their powers of money-creation, sooner or later rules will be relaxed or circumvented, and ingenious minds will invent new ways to milk the real economy, with the assistance of novel "financial instruments". 
 
Let non-cash as well as cash money be covered by the laws of legal tender, with all new purchasing power coming into existence as a public utility created in line with the nation's real wealth by an accountable democratic body: and let this new purchasing power be issued for the benefit of the population, free of any debt at source.

Thursday, 12 November, 2009

Britain on the Mend
 
Gabriel Milland
 
Britain is bouncing back from the brink of economic ruin, an upbeat Bank of England revealed yesterday.
 
Governor Mervyn King predicted economic growth would hit a brisk 4 per cent next year with "a more buoyant picture ahead".
 
Read more  ...
 
 
Whose Money? says:
 
The article goes on to make it plain that even if the predicted "4 per cent" growth is achieved it will make little difference to the unemployed and "economically inactive"  -  ie, those who do not receive a wage packet or salary (many of whom will, in fact, be far from inactive, and more usefully occupied, doing unpaid work in the family and community, than those salvaged from the unemployment register by the provision of government-created non-jobs).
 
Is any thought being given to how satisfactory incomes will be distributed among these people? 
 
This article from the Telegraph deals with the question in more detail ...
 
5.7m and climbing: the real unemployment toll
 
Edmund Conway, The Telegraph

The labour market figures published this morning were pretty encouraging, showing that the the number of people out of work is, if not falling precipitously, then at least rising far more slowly than previously. Indeed, look beneath the headline figures which showed a 30,000 increase in the number of people out of work between July and September to 2.46m and you can see broad based signs of improvement.

But it is important not to lose sight of the scale of the problem. We’ve all heard plenty about the youth unemployment issue (rising to around 20pc of people under 25 now) but the problem is far broader than that. In my column a few weeks ago I mentioned that if you add up all the people who would like to work but for various reasons can’t get hold of a job (something Chris Dillow looked at last month), you actually get the rather more alarming unemployment figure of 5.6m.

Read more  ...

http://blogs.telegraph.co.uk/finance/edmundconway/100001901/5-7m-and-climbing-the-real-unemployment-toll/

Whose Money? says:

For "who would like to work" substitute "who would like to receive an income in return for the work they do".

We need a complete re-think of the whole question of work and incomes, based on a reformed financial system, with publicly-created money spent into the economy free of any debt at source.

It is no longer possible to allow the banks the privilege of being our sole non-cash money creating mechanism without consigning huge numbers of people to the growing underclass.

Let the banks sink or swim, competing for deposits from the new, nationalised money supply.  Taxpayers cannot afford to support them as the next phase of the financial crisis unravels : see the following article ...

If you thought the housing meltdown was bad  ...

Doug Hornig, Revolutionary Politics

…wait until you see what’s in the cards for commercial real estate.

That’s right, the next train wreck will be in commercial real estate. Couldn’t be worse than last year’s residential market crash? That remains to be seen. But it’s coming soon, probably as early as the second quarter of next year, and there’s nothing that can prevent it. The government will intervene, trying desperately to delay the day of reckoning, and may even succeed. For a while. But make no mistake about it, that train is going off the tracks no matter what.

Every part of the sector – from multifamily apartment buildings to retail shopping centers, suburban office buildings, industrial facilities, and hotels – has accumulated a huge amount of defaulted or nonperforming paper. It’s an impossible, swaying structure that cannot long stand. ...

...  Problem is, instead of trying to meet this inevitable challenge head on, asset managers have decided to believe in such phantoms as the tooth fairy, honesty at the Fed, and an economic turnaround powerful enough to bail them all out. De Nile is not just a river in Egypt.

Read it in full here:

http://revolutionarypolitics.com/?p=2951

Whose Money? says:

Looking at the empty shops now appearing even in the centre of Newcastle, this next tsunami is not likely to be confined to the States  ...

Time to cut our losses, and initiate a programme for fundamental reform of the dysfunctional monetary system which is at present running amok through the real economy, and ruining millions.

We're told that we need is more patriotic spending (and, naturally, more patriotic borrowing) to save the day  ...

Time for some

Superspending

Song parody of "Supercalifragilisticexpialidocious", from Dan Henkel


...  Well under Reaganomics we'd have really gone to town,
Just cut the rich folks' taxes and then see what trickles down;
But now our man's okayed a plan that worked for FDR,
So if you are a patriot go out an buy a car!

Watch the video at:

11 November, 2009

Goldman's profits come from our pockets: why we need a Tobin tax

Ellen Brown, The Huffington Post

In the midst of the worst recession since the Great Depression, Goldman Sachs is having a banner year. According to an October 16 article by colin Barr on CNNMoney.com:

While Goldman churned out $3 billion in profits in the third quarter, the economy shed 768,000 jobs, and home foreclosures set a new record. More than a million Americans have filed for bankruptcy this year, according to the American Bankruptcy Institute.
Barr writes that Goldman's "eye-popping profit" resulted "as revenue from trading rose fourfold from a year ago." Really. Revenue from trading? Didn't we bail out Goldman and the other Wall Street banks so they could make loans, take deposits, and keep our money safe?

That is what banks used to do, but today the big Wall Street money comes from short-term speculation in currency transactions, commodities, stocks, and derivatives for the banks' own accounts. And here's the beauty of it: the Wall Street speculators have managed to trade in practically the only products left on the planet that are not subject to a sales tax. While parents in California are now paying 9% sales tax on their children's school bags and shoes, Goldman is paying zero tax to sustain its gambling habit. Race track winnings and other forms of gambling are taxed at up to
25%. But stock market trades get off scot free.

That helps explain Goldman's equally eye-popping tax bracket. What would you guess - 50%? 30%? Not even close. In 2008, Goldman Sachs paid a paltry 1% in taxes - less than clerks at WalMart.

Read more  ...

http://www.huffingtonpost.com/ellen-brown/goldmans-profits-come-fro_b_349640.html

You can also listen to Ellen being interviewed by Max Keiser, here:

http://maxkeiser.com/2009/11/06/ote-26-on-the-edge-with-ellen-brown/

Whose Money? says:

Thank you, Ellen for your well-timed antidote to last weekend's Sunday Times interview with Lloyd Blankfein, chairman and CEO of Goldman Sach, in which he claimed, "We help companies to grow by helping them to raise capital. Companies that grow create wealth. This, in turn, allows people to have jobs that create more growth and more wealth. It’s a virtuous cycle."

But a Tobin tax, however justified, would not be enough.  We would also prefer a nationalised money supply to state-owned banks.

Why should licensing the banks to create our entire non-cash money supply, thus making them a crucial pillar of the economy and too important to be allowed to fail, be a precondition for creating wealth?

Wealth creation essentially depends not upon bank loans but upon human skills, invention and ingenuity, and a wise use of natural resources.

Bank-created debt-money, so frequently diverted into non-productive speculation and asset-price inflation, as Ellen shows so well, offers no guarantee that the first three essentials will be encouraged; and, since money created as a debt is inseparable from exponential growth, regardless of any increase in real wealth or well-being, it tends to channel the economy towards waste and pollution.

Let the banks lend only publicly-created money, issued free of any debt at source, which has been placed with them on long-term deposit.  They would then be unable to create the excess billions currently being used not for wealth creation, but for speculation and financial profiteering.  We would all then respect their valuable contribution in bringing together investor and entrepreneur.

Tuesday, 10 November, 2009

House prices 'to keep on rising'

BBC News
 
House prices are likely to keep on rising for the time being, says the Royal Institution of Chartered Surveyors (Rics).

Its latest monthly survey shows that sellers are now beginning to return to the property market.

But they are still being outweighed by the number of potential buyers registered with estate agents.

Read more  ...

http://news.bbc.co.uk/1/hi/business/8350707.stm

BUT  ...

House prices should fall more than 30%, says Blanchflower

citywire

What's not credible at the moment is  ...  credit's not available, the conditions are tight to get loans, and wages are falling.  ...

...  In any case you have to worry about people having an incentive to tell you that house prices are rising.

Watch the video here:

http://www.citywire.co.uk/adviser/-/video/other/content.aspx?ID=366921&re=7481&ea=118560

Whose Money? says:

We agree with Mr Blanchflower.

However much the banks and the government  -  not to mention the estate agents and other vested interests  -  want house prices to keep rising, there's a limit to the amount of debt people can take on when jobs are disappearing and wages failing to keep up with high household bills and punitive taxation.

There comes a point at which you can no longer rely upon ordinary people taking on yet more debt in order to keep sufficient money in circulation  -  and we're at that point now.

Monday, 9 November, 2009

Bank of England says financiers are fuelling an economic 'doom loop'

Edmund Conway, The Telegraph
 
On the eve of the G20 meeting of finance ministers in Scotland, Andy Haldane, the Bank's executive director for financial stability warned that the relationship between the state and banks represents a "doom loop" which will keep inflicting crises on the public unless arrested.
 

The warning, which follows Governor Mervyn King's call for investment banks to be split from their high street wings, is the most radical yet from the Bank, and comes amid growing concern that the G20 has abandoned any plans for far-reaching reforms.

It also coincided with news that the combined effect of rescuing Britain's biggest banks is likely to increase the national debt by a staggering £1.5 trillion, instantly making the UK one of the world's most indebted countries.

Read more  ...

http://www.telegraph.co.uk/finance/financetopics/financialcrisis/6516579/Bank-of-England-says-financiers-are-fuelling-an-economic-doom-loop.html

Whose Money? says:

But "a financial sector reform effort every bit as radical as followed the Great Depression" won't do.  Ultimately, it didn't work then, and it won't work now.  It needs to be far more radical.

You can't expect private businesses whose aim is to make as big a profit as possible not to do all they can to increase returns for their shareholders.

The answer is to insist they do this by wise management of money actually deposited with them, instead of squeezing their profits from the real economy by manipulating units of "credit" which they themselves conjure up in accordance with their own business priorities.

No reform short of a clear understanding that legal tender will in future be limited to money created by public authority (ie, nationalisation of the money supply) will do.  Paper money was nationalised by Robert Peel's government under the Bank Charter Act of 1844.  Gordon Brown might earn a little credibility if he nationalised all non-cash money under a similar Act before the next election.

In case the word "nationalisation" inspires fear in those who, like ourselves, believe in maximum freedom of the individual, we would point out that by nationalising the actual money supply there would be no need for government to interfere in the day-to-day working of the banking system, which would continue to operate independently, choosing whom money was lent to, and for what purposes.  The difference would be that, without the option of creating new money, and no longer too important to be allowed to go bust, the lenders would be much more circumspect in their dealings.

We might also see the property market benefitting from the return of the old-fashioned building society.

Let's hope that this latest statement from the Bank's executive director will encourage  the Monetary Policy Committee to edge towards the realisation that future crises can only be avoided by the implementation of  full-scale monetary reform.

Just for fun, here's what ordinary Americans think about TARP (the Troubled Asset Relief Program), the transatlantic version of bank welfare bailouts  ...

"TARP Song" Tea Party Theme Song

Bill Zucker

"Lost my job, they took my home, I'm down on my knees,
Heard about this place where money grows on trees  ..."
 
Watch the video here:
 
 
Whose Money? says:

Great to see ordinary people not letting it get them down!
 
Presumably they're singing this at protest "tea parties" in the States.

Sunday, 8 November, 2009

Even more uncomfortable truth
Greg Pytel's Blogspot
 
An accounting firm BDO Stoy Hayward (the same firm that was commissioned by the British government to produce a report on the MG Rover saga) published recently an analysis:
"Time to break the silence?".  ...
 
...  The entire report makes a very uncomfortable reading  ...
 
...  However the whole truth is even more uncomfortable than it transpires from the BDO report. Firstly the government, as it admitted, does not have an idea of the size of the liquidity hole that it still may have to plug. There are already signs that the next wave of liquidity crunch may be on the way. Other governments, like German’s, are gearing up for it. BDO report assumes, implicitly, that the scale of deficit will not increase dramatically. This appears to be an optimistic assumption.
 
Read the whole entry here:
 
 
Whose Money? says:
 
We agree absolutely with Mr Pytel, and with the comment which follows from Stephen Herring, Senior Tax Partner with BDO.
 
We also agree that a public debate on these matters is long overdue: in fact, we'd say that what's needed is a wide-ranging investigation, tackling not only the present debt crisis, but our dysfunctional economy as a whole.
 
Clearly debt, and the runaway self-interest of the banking sector, are now the most pressing problems; but in our opinion it is impossible to deal sensibly with the banks without asking this basic question: how can the nation provide itself with a money supply without coming to depend upon private companies which are "too big to fail"? 
 
Is it satisfactory to continue requiring not only governments but private businesses, families and individuals to go ever deeper into debt, if money is to be put into circulation? 
 
Is it sensible to continue with legal tender amounting to a mere 3% of the total money stock, while turning a blind eye to the fact that all new non-cash spending power (ie, the remaining 97%) is created in the form of bank credit, and issued to the people, and for the purposes, judged by banks to offer the greatest opportunity for profit to themselves?
 
Would it not be more rational to accept that the national currency is a public utility, and to appoint a democratically accountable body to issue  -  and withdraw, if necessary  -  both cash and non-cash money in line with the needs of the population; at the same time making it illegal for banks to lend anything but what they actually hold as long-term deposits?
 
Would it not, in fact, make more sense to nationalise money, not the banks?
 
There are other pressing problems, too, under the current dispensation.

-   How, for instance, should incomes be distributed, now that automation is leading to redundancy even for skilled workers, with more and more firms seeking to remain competitive by reducing their pay-rolls?
 
How should the profits from automation be distributed? 






-  How is it that those who are lucky enough to have a job must frequently work longer hours, despite the labour-saving potential of recent technological innovations? 
 
Why does it now take two full-time earners to support a family, when previously one could do the job?


 
-  Why is the wage gap growing to unmanageable proportions, with those in the lowest-paid jobs now finding it more profitable to go on benefits, particularly if they have children? 
 
What about all the unnecessary, and frequently counter-productive bureaucratic and regulatory jobs created merely in order to distribute wage packets and hold the unemployment figures down?


 
-  Is it really advisable to allow more and more of the population to become dependent upon some form of means-tested benefit or other government support, with all the opportunities for cheating and retaliatory spying which this generates?

How can we turn the problem of unemployment for an ever greater number of people into the opportunity of more leisure for all?



-
  Wouldn't a non-means-tested national dividend for all adult citizens make job-sharing and part-time work, or even low wages, an economically feasible proposition, enabling everyone to enjoy a decent standard of living?   Wouldn't this innovation  -  which, since it would be the birthright of rich and poor alike, would not attempt to impose an artificial and closely regulated equality upon essentially diverse individuals  -
  be more conducive to social harmony, and a greater spur to taking personal responsibility for improving one's lot, than the temptations of the welfare trap and the ever-present fear of being sucked into a growing underclass?
 
These questions need to be thoroughly investigated and discussed; but underlying them all, and driving the need for reform, is the problem of debt: because it is our insistence upon using debt as our principal means of exchange that has put us at the mercy of  private banks which are too big  (ie, too important in the present economic scheme of things) to be allowed to fail, even when their questionable business practices are pauperising millions. 
 
Nationalise the money supply, restructure the economy in line with a means of exchange and distribution which comes into being free of any debt at source, and leave the banks to take care of themselves! 

This financial mess isn't even the end of the beginning for UK wealth

Liam Halligan, The Telegraph

...  Behind the scenes  ...  even Brown and Co have grasped that yet another "fiscal stimulus" would see a sovereign debt downgrade, in turn provoking a creditors' strike – under which the UK would be rendered "insolvent", unable to roll-over its debts.

So that leaves "quantitative easing" – or QE – the even more extreme policy where the Bank of England creates electronic money from nothing, apparently in a bid to stimulate the economy.

The Bank has already created £175bn of such "funny money" since March – some 99.7pc of which, in a bizarre example of circular financing, has been spent on government securities. So our central bank prints money and gives it to the Government, which in turn gives it to the banks. This is the economics of Zimbabwe and the Weimar Republic.

Read it in full here:

http://www.telegraph.co.uk/finance/comment/liamhalligan/6521350/This-financial-mess-isnt-even-the-end-of-the-beginning-for-UK-wealth.html

Whose Money? says:

What exactly is "funny money"?

-  Is, by contrast,  purchasing power created out of thin air by banks to meet the cost of over-valued houses serious money?

-  Is purchasing power created out of thin air by banks for use as stakes in the international money casinos serious money?

-  Is purchasing power created out of thin air by banks to enable the asset-stripping of a hitherto viable company serious money?

Are, on the other hand, the savings of millions, representing years of hard, productive work which actually increased the real wealth of the nation, to be considered as no more than "funny money", disappearing at the flick of the banking system's magic wand whenever its hocus-pocus goes awry?

A decent financial system would guarantee the value of money which has been worked for, and would make it impossible to fuel the flames of speculation with money created only for that purpose.

Of course people have the right to bid up house prices: but let them bid prices up with money which actually exists.

Of course people have the right to speculate and gamble: but let them stake money which they already have, rather than borrowing it into existence for that specific purpose.

Of course borrowing is, at times, necessary: but let the loans be made from existing deposits.

And when we talk of the dangers of "funny money", don't let's forget that the Weimar inflation, so beloved of those who think the nation's means of exchange should be under the control of private, profit-making businesses, was unleashed by a privately owned bank, not by one under democratic control.

The tragedy of quantitative easing is not that the government is creating money, just as the banks do, "out of thin air", but that this money is being created as a debt ; and that, because it is being used for yet more speculative credit creation by the banks, it could provoke renewed asset-price inflation, while failing to distribute productive purchasing power.

With publicly-created money, spent into circulation on necessary infrastructure and a national dividend, and issued free of any debt at source, plus a legal embargo on any more bank creation of "funny money", there would be no need for any increase in the national debt.

James Gibb Stuart has suggested how to deal with the servicing of the already existing debt here: http://www.prosperityuk.com/prosperity/articles/interest.html

And Ellen Brown, in the States, goes further, in the interview reported here: http://www.thestirrer.co.uk/bp2911071.html

This video from America presents the implications of growing national debts even more brutally:

The Money That Is Sold Abroad Is You!
 
It is not dollars that are being sold, or bonds, or agency debt, or treasuries, or anything like that.  Where is your government going to get the money to pay off its creditors?  It's not pieces of paper, or contracts or computer bits that are being sold.  There is only one thing that the government has to sell.  Governments have only one asset that they can use as collateral.  Your leaders are selling you.
 
Watch the video here:
 
 
Whose Money? says:
 
Did we vote for all this debt?  It's certainly never been included in an election manifesto!

Perhaps it's only by putting the facts as bluntly as this video does that the public will finally cotton onto the enormity of what is being done by their governments.
 
It's time for reform of the financial system  ...
 
But if we're to have the freedom to pass the necessary legislation for ourselves, this must be our first step:
 
Repeal the European Communities Act of 1972!

Saturday, 7 November, 2009

The Looting of America: Billionaire Bailout Society
 
Marina Portnaya interviews Les Leopold
 
...  the banks were on their knees, they were begging for help, and we gave it to them.  ...
 
...  the President is unwilling to toss overboard the fundamental philosophy that the bankers live under.  ... 
 
...  I'm surprised by how gutsy Wall Street has been.  I didn't think they would come in our face this quickly.  The fact that they started selling the risky securities again, the fact that they're willing to  ...  pay themselves these enormous bonuses, the fact that they're gambling again high stakes, trades, because they know they're too big to fail, the fact that they lobby against consumer financial protection agencies so overtly tells me that they don't think there's really any serious opposition either in Congress or in the White House. 
 
I'm surprised, actually.  And this is what makes it even a bigger surprise.  The reason I'm sort of waffling on your Obama question is that he's only going to be as good as the rest of us.  So we have to make Obama do these things.  We have to first identify what it is we want him to do and then we have to organise to make him do it, because the other side is doing an excellent job in organising to make him not do it.  ...
 
...  I don't think any rational person can view this any other way: we put the entire sector on welfare.  It was kaput, it was gone, a year ago.   It was in shambles, and we pumped it full of money  ...  (The banks are) on welfare, and in this country we're very hard on people who are on welfare.  We have income limits on people on welfare  ...   I think this is quite generous, $400,000 a year, I think it's quite generous for people who are living off American welfare.
 
Q  If President Obama does not step up to the plate, what options are left for Americans.
 
A  I would say that in order to get him to step up to the plate we have to do what's been done in every other crisis in the history of America.  At some point or another, people get mobilised.  Institutions that represent the interests of the average person either form or re-emerge  ...  and they start developing an agenda, they start going out and pushing for it, and trying to get politicians to adhere to it  ...  You need a clear-cut agenda, and sustained activity around it.
 
Watch the video here:
 
 
Whose Money? says:
 
Mr Leopold is misinformed in his belief that higher living standards for ordinary working people are not suffering equal erosion in "northern Europe"  -  at any rate in England.  The same process is in operation here  -  and the same complicity of government and the financial sector to cushion the banks from their own folly, without regard for the well-being of the real economy and the vast mass of ordinary people.
 
What we like about this interview is the suggestion that it's pointless blaming politicians for letting us down.
 
It's up to ordinary people to present a "clear-cut agenda" for reform, and to keep pushing it until recalcitrant representatives are brought to heel.
 
And at the top of that agenda should be a clear-cut demand that Parliament should outlaw money creation by the banks, and provide the nation with a means of exchange and distribution issued by public authority, and free of any debt at source.
 
NB  -  With the ratification of the Lisbon Treaty, it may be argued that the power to change the system is now effectively out of the hands of our Westminster Parliament.
 
In that case, top place on the agenda should be repeal of the European Communities Act, and restoration of the right to self-government   -  a right which the British electorate has never yet agreed to cede.
 
Even while Mr Brown assures us that, with bank bonuses soaring and the housing market once more in business, all is now well on the economic front, we note the continuing disappearance of jobs  ...

Over 260 jobs could be lost at borough factory

Hayley Revell, Whitley Bay Guardian 
 
More than 260 jobs could be lost at Twinings Tea Factory in North Shields. 
The announcement comes following the company's decision to consider closing the site on Earl Grey Way in September 2011 and moving production from (sic) the UK to its plant in Andover.

The business will also be relocating some of its manufacturing operations closer to its overseas markets.

The factory employs 263 workers and has entered a consultation process with all members of staff.
 
Read more  ...
 
 
Whose Money? says:
 
It is impossible to over-emphasise the need to find a way to distribute adequate incomes, as jobs disappear owing to automation and outsourcing.  Now that this is beginning to affect even skilled workers, perhaps the gravity of the unfolding situation will be appreciated.
 
Clearly, wage packets can no longer do a satisfactory job  -  and nor can a labyrinthine superstructure of grudgingly administered, means-tested benefits.
 
The answer is to stop doling out welfare to the banks, and to provide the nation with a debt-free money supply, distributed at least partly in the form of a uniform, non-means-tested national dividend to all adult citizens, with additional funding for children.
 
This would provide a platform for further earnings, while making part-time work and the single earner family possible.
 
However, as the "Lisbon Treaty" has now made independent decision-making by this nation subject to "the interests of the Union", we will, from now on, finish all our entries with the following proviso:
 
FIRST, WE MUST REPEAL THE EUROPEAN COMMUNITIES ACT!

Friday, 6 November, 2009

Zombie economy promises frights in store for us all

Larry Elliott, The Guardian
 
Welcome to the zombie economy. Banks stagger along courtesy of large slugs of taxpayer money. The housing market is puffed up by the lowest bank rate in history. The Treasury's time-limited VAT cut and cash-for-clunkers is providing a temporary boost to consumer spending. Yet the economy continues to struggle. Neither alive nor dead, this is limbo land.  ...

...  The quantitative easing programme involved Threadneedle Street buying government bonds from the big financial banks in the hope that banks would use the extra cash to boost lending to small businesses and individuals.

But lending to these groups is going down rather than up: instead of helping the real economy, QE has allowed the commercial banks to play the casino economy. Asset prices – shares, commodities, property – have all been booming. Given that it was an asset prices bubble that got us into this mess in the first place, this is hardly progress.

Read more  ...

http://www.guardian.co.uk/business/2009/nov/05/zombie-economy-banks-recession

Whose Money? says:

So the government continutes to wade deeper and deeper into the red to supply the banks with money for speculative purposes.

As Thomas Edison said, "If the Nation can issue a dollar bond it can issue a dollar bill. The element that makes the bond good makes the bill good also."

Substitute pounds for dollars, and the proposition holds good.

Why is our government buying its own bonds from the banks, and miring us all in unrepayable debt, when "the same element that makes the bond good makes the bill" (or even the non-cash money) "good"?

In order to put a stop to the ongoing economic destruction, it is the government's duty to authorise a debt-free means of exchange.

And it's up to us to make sure that they do!

Meanwhile, as the banks use money created at taxpayers' risk and expense to return to their usual job of financing speculation, another nice little money spinner emerges  ...

Carbon traders deny sub-prime crisis brewing

Rowena Mason, The Telegraph
 
Carbon traders have refuted claims that the European emissions trading market is "the next sub-prime crisis", after a report by Friends of the Earth called for the system to be abolished.
 
The environmental charity said not only does the current system of trading permits fail to tackle climate change, it is also financially dangerous.
 
Read more  ...
 
 
Whose Money? says:
 
Well done, Friends of the Earth!  We may not agree with you as regards man-made climate change, but we certainly think you're right about this!
 
Remember this article in Harper's Magazine, in February last year?

The next bubble:
Priming the markets for tomorrow's big crash

Eric Janszen
 
A financial bubble is a market aberration manufactured by government, finance and industry, a shared speculative hallucination and then a crash, followed by depression. 

Bubbles were once very rare—one every hundred years or so was enough to motivate politicians, bearing the post-bubble ire of their newly destitute citizenry, to enact legislation that would prevent subsequent occurrences. ...

...  Nowadays we barely pause between such bouts of insanity. The dot-com crash of the early 2000s should have been followed by decades of soul-searching; instead, even before the old bubble had fully deflated, a new mania began to take hold on the foundation of our long-standing American faith that the wide expansion of home ownership can produce social harmony and national economic well-being. Spurred by the actions of the Federal Reserve, financed by exotic credit derivatives and debt securitiztion, an already massive real estate sales-and-marketing program expanded to include the desperate issuance of mortgages to the poor and feckless, compounding their troubles and ours.  ...

...  There are a number of plausible candidates for the next bubble, but only a few meet all the criteria. ... 

...  There is one industry that fits the bill: alternative energy, the development of more energy-efficient products, along with viable alternatives to oil, including wind, solar, and geothermal power, along with the use of nuclear energy to produce sustainable oil substitutes, such as liquefied hydrogen from water. Indeed, the next bubble is already being branded  ... 

Read it in full here:

 
Whose Money?
 
 
Meanwhile, there's still some life in property-price inflation, as recent rises in house prices have shown.

But for how long?

Watch out: the housing market is about to turn back down

Dominic Frisby, MoneyWeek

House prices slump is over' screamed a recent Daily Express headline. Nationwide had just reported the first annual rise in house prices for 19 months, with prices up 2% year-on-year in October.

Meanwhile, the most recent Rightmove report shows that the average asking price in London jumped 6.5% to £461,157 in the four weeks to 10 October, sailing through the high of £412,731 set in November 2007. Asking prices are also rising across the rest of England and Wales.

Read more  ...

http://www.moneyweek.com/investments/property/uk-property-house-prices-about-to-fall-94510.aspx#

Whose Money? says:

Asset-price bubbles are a symptom of the debt-money disease.

As long as banks can create purchasing power for clients and purposes of their choice, they will distribute this brand new money with a view to maximising their own profits, regardless of whethe it goes into production or speculation.

There will only be an end to bubbles of the size we are now experiencing when bank credit is replaced by publicly-created, debt-free money.

Interview with Peter Schiff
 
...  It's not so much that America doesn't like to admit its mistakes, it's more that our political leaders, it's the politicians, it's the central bankers, they just keep repeating their mistakes.  And if they want to admit a mistake, it's not a real mistake  -  like, they'll say, "Well, our mistake was that we didn't regulate enough."  Well, you know, that's not a real admission of anything, that's an excuse to increase their power base.
 
You know, we need to change that philosophy, we need to understand what we've done wrong, what our nation, what our leaders have done wrong, the laws that we've passed, the subsidies that we've enacted, the regulations that we've enacted, that have so distorted the free market, that so disrupted the natural forces that would have kept our economy in balance  -  if we can roll back government, and repeal regulation, and restore sound money, then we can have a bright future.
 
Watch the video here:
 
 
Whose Money? says:
 
Peter Schiff is absolutely right when he identifies the distortion of natural patterns of production as a major cause of our present troubles.
 
In the UK, as well as in the States, government regulations and subsidies of selected sectors and people have destroyed any semblance of a free market.
 
We'd also agree wholeheartedly that sound money is a vital component of any properly functioning economy, since it is by relying upon bank-created debt for our entire non-cash money stock that we have placed the production and distribution of real wealth at the mercy of the purely financial objectives of the banking sector, thus encouraging government interference, as attempts are made to compensate for the problems which result: problems whose solution seems only to result in further problems, and yet more government interference.
 
However, if by restoring sound money Mr Schiff is harking back to the gold standard, here we part company.  Adherence to the gold standard has, in the past, led to too much misery for too many people for this to be a desirable objective.
 
For "sound money", read "publicly-created, debt-free money".
 
Contrary to widespread belief, publicly-created money spent into the economy free of any debt at source would actually lead to less government direction of production and distribution. 
 
If this debt-free currency were used to finance infrastructure, and to provide a non-means-tested national dividend for all, private enterprise would be free to acquire and use it, once it was in circulation, in accordance with demand and profitability.  (At the same time, of course, it would be made illegal for banks to expand the money stock with their "credit": all loans would have to come from previously existing deposits.)
 
Only with publicly-created, debt-free money can genuinely free markets exist, with liquidity gravitating towards the needs and demands of the public, rather than to the strictly financial priorities served by money manipulation, and asset-price inflation.

Thursday, 5 November, 2009

Crisis Compels Economists To Reach for New Paradigm

Mark Whitehouse, The Wall Street Journal

The pain of the financial crisis has economists striving to understand precisely why it happened and how to prevent a repeat. For that task, John Geanakoplos of Yale University takes inspiration from Shakespeare's "Merchant of Venice."

The play's focus is collateral, with the money lender Shylock demanding a particularly onerous form of recompense if his loan wasn't repaid: a pound of flesh. Mr. Geanakoplos, too, finds danger lurking in the assets that back loans. For him, the risk is that investors who can borrow too freely against those assets drive their prices far too high, setting up a bust that reverberates through the economy.  ...

...  Mr. Geanakoplos has yet to develop his theory into a comprehensive model. "His work assumes that the leverage cycle is bad, but gives little guidance [about] to what extent regulators should control it," says Markus Brunnermeier, an economist at Princeton who specializes in financial bubbles. (Read a related article.)

The goal for economists now is a model that takes account of what happens in the financial sector, yet is simple enough to apply in policy making. The quest is bringing financial economists -- long viewed by some as a curiosity mostly relevant to Wall Street -- together with macroeconomists. Some believe a viable solution will emerge within a couple of years; others say it could take decades.

Read more  ...

http://online.wsj.com/article/SB125720159912223873.html

Whose Money? says:

Congratulations!  Perhaps, at last, common sense is beginning to impinge on orthodox economic theory!

However, it's not enough to realise (as rational people, as opposed to those blinded by dogma, have long been accustomed to do) that lending enormous quantities of money against non-existent or over-priced assets will inevitably lead to trouble.

If we're to have a more stable economy, we need to find a "comprehensive model" which gets right to the bottom of the problem: which is not merely that banks may at times indulge in irrational lending, but that the use of debt as our means of exchange makes us dependent upon their doing so.

In the words of banker Robert Hemphill, back in the era of the Great Depression (soon, if we don't change our monetary ways, to take second place behind the Even Greater Depression), "If the banks create ample synthetic money" (ie, debt, alias "credit") " we are prosperous; if not, we starve".

Fortunately, an alternative "comprehensive model" already exists, as exemplified in proposals by James Robertson and Ben Dyson, in the UK (see here http://www.jamesrobertson.com/book/creatingnewmoney.pdf and here:

http://www.bendyson.com/) and Stephen Zarlenga in the States (see here: http://www.monetary.org/amacolorpamphlet.pdf).

That model is based upon 100% publicly-created money, issued free of any debt at source.

If creation of non-cash money by the banks is made as much a crime against the nation as the printing of notes or the forging of coins, they will no longer be able to inflate asset prices, with a view to increasing their profits.

We wait eagerly for this important penny to drop, in the minds of  economic "experts" and politicians.

Wednesday, 4 November, 2009

An article from March, 1979  ...

THE COMING BREAKDOWN

OF THE EMPLOYMENT SYSTEM

From Enterprise  -  Organ of the Institute of Economic Democracy, Vancouver

...  Economic theory is not the anarchical battlefield that the interminable disagreements of the economists might suggest.  To the contrary, it is discilined by a number of fundamental assumptions which are not considered open to debate within the profession.  Indeed, economists have no greater dread than being enticed onto the ground of these assumptions, covering as it does such questions as the basic purpose of economic activity, the rightful beneficiaries of economic endeavour, and so on.

For decades the economists have ventured therir speculations from the terra firma of these little-challenged assumptions; but now a volcano seems to be rumbling under their feet and threatening to explode their tight little conceptual universe.  The end of this universe, when it comes, will be cataclysmic, for the axioms of the economists' "science" will be exposed as not merely inadequate, but positively barbaric.

The force that is shaking the ground under their feet is technology, the dizzying progress of which is thrusting into high relief certain problems inherent in modern industrial economies.  The embarrassment of the purveyors of conventional economic wisdom grows as they are bombarded with questions, not about the level of employment, but about the value of the work being accomplished by the employed  ...

Read the article here:

http://cog.kent.edu/lib/KlinckBreakdownEmploySystem.pdf

Whose Money? says:

Only consider that this article was written over thirty years ago, and quotes from other sources already preoccupied with what has now become an intractable problem  -  yet still no attempt has been made to bring the financial system in line with the decreased need for human labour!

This quotation, taken from a 1978 number of the New Scientist, puts it succinctly:

"The major social issue to be faced as a result of industrial automation is that of income distribution: how to distribute equitably the produce of an increasingly capital-oriented society.  This issue has not been distinguished from that of unemployment because employment is the standard mode of income distribution in the industrialised world.; but it must be clearly distinguished if any meaningful analysis of the social impact of the silicon chip is to be made, and, more importantly, any necessary remedies suggested.  At present 'income' and 'work' are almost synonymous  ...  if there is rapid automation a very high growth rate will be necessary to achieve full employment.  Such a growth rate is probably not attainable economically but also  ...  probably wholly undesirable."

It is high time for the whole question of how purchasing power is created and distributed to be put at the top of the political agenda  ...  but, since nothing will happen until there is a popular demand for financial reform in line with new realities, please sign the following petitions on the Number 10 website, and forward the link to as many people as possible!

Petitions

(1)

We the undersigned petition the Prime Minister to reform the banking system, make fractional reserve banking illegal and require banks to hold full (100%) reserves of currency.
 
Submitted by Colin Smith
 
AND
 
(2)

We the undersigned petition the Prime Minister to make the Bank of England the sole creator of money in our economy and to stop the commercial banks from creating money.
 
Submitted by Rev Dr Richard Rodgers FRCS
 
You can sign these petitions at:
 
 

and 
 

Tuesday, 3 November, 2009

Argentina: Disappearing Farmers, Disappearing Food
 
Marie Trigona, Global Research
 
Worldwide, industrial mono-culture farming has displaced traditional food production and farmers, wreaking havoc on food prices and food sovereignty.  This is paricularly true for the global south, where land has been concentrated for crops destined for biodiesel and animal feed  ...
 
According to Argentina's 2008 agricultural census, more than 60,000 farms shut down between 2002 and 2008, while the average size of farms increased from 421 to 538 hectares.  The shift to soy has replaced cultivation of many grains and vegetables and even the country's beef production.
 
Read it in full here:
 
 
Whose Money? says:
 
It's the same old story: human beings suffering because the goal of economic activity is no longer to produce and distribute an adequate supply of goods and services to all  -  not even those goods which are necessary for basic survival.  Under the grotesquely misnamed "free market" the primary aim of economic activity is to make a financial profit, regardless of the type or quality of goods produced, and without consideration for human well-being.
 
As Marie Trigona points out, this is a global phenomenon, with nations throughout the world losing the ability to feed themselves as the money-fixated agro industry mops up more efficient (though less profitable) small mixed farms catering to the local population, and turns the land over to the mass production of cash crops. 
 
We agree with Dena Hoff that "global capital should not control our food".

In fact, every nation has the right to protect itself from corporate domination of this kind by making itself financially independent. 

How?

By outlawing the creation of money by the private banking system and providing its population with enough publicly-created, debt-free currency to maintain its own agriculture and industries.

From The Grip of Death, by Michael Rowbotham:
Productive Farming

The mixed farm, growing a wide range of crops, and keeping one or more types of livestock, is often derided as the unrealistic dream of some bygone rural idyll.  ...  But the whole point about mixed farms is that they are incredibly efficient.  In terms of output per acre, maximum use of resources, and taking advantage of what the land has to offer, mixed farms are by far the most efficient system yet devised. 

Low grade land can be used to grow foodstuffs for livestock, and high grade land for cereals and vegetables for marketing.  The unused portion of crops can be fed to livestock, either direct or as silage, or used as bedding.  The waste from livestock is recycled onto the land to improve fertility, and rotation of crops and husbandry to maintain the soil's fertility is simple.  The diversity of crops and animals means that distributed pockets of land neglected by the agribusinesses are far more likely to be used.  as a result, the land is far more productive under a mixed system of management than under a monoculture system.  Also, mixed farming produces a wider range of crops more locally, involves fewer net inputs and fewer additional resources particularly chemicals.

But the one thing a mixed farm does involve is more employee hours.  Mixing animals and crops is a more efficient use of the land, but it is less efficient in terms of time and wage costs. ...

...  We are so accustomed to trusting monetary statements and acquiescing to the results of economic 'progress' that the decline of small, medium-sized and mixed farms has been accepted.  If these farms are inefficient in money terms, they must be inefficient in agricultural terms.  But they are not.  ...  We have lived so long with the centralising tendencies of a debt money economy that we have come to accept automatically that large organisations succeed.  ...  We trust the economic process, via a free market, to favour those enterprises which are (a) the most efficient and (b) produce what the consumer wants.  All the evidence is that these are precisely where modern agriculture is failing and all the evidence is that the financial system is responsible for this.

Read the first chapter of The Grip of Death here, and for a complete overview of the effects of the present debt-based money system on the production and distribution of real wealth, buy the book   -  available from Amazon here:

Monday, 2 November, 2009

It is Japan we should be worrying about, not America

Ambrose Evans-Pritchard, The Telegraph 
 
Japan is drifting helplessly towards a dramatic fiscal crisis.  For 20 years the world's second-largest economy has been able to borrow cheaply from a captive bond market, feeding its addiction to Keynesian deficit spending  -  and allowing it to push public debt beyond the point orf no return.
 
The rocketing cost of insuring against the bankruptcy of the Japanese state is telling us that the model has smashed into the buffers  ...
 
Read more  ...
 
 
Whose Money? says:
 
The model that is out of control is the debt-based financial system, which distorts and restricts productive economic activity by making it dependent upon bank lending. 

This is the factor which persistently undermines human well-being and prosperity.
 
"The debt path" to destruction, in Japan and elsewhere, is not the result of "Keynesian deficit spending", which is a desperate attempt to correct the periodic shortages and chronic maldistribution of a non-cash money supply created by the banks in the form of essentially unrepayable loans (ie, unrepayable because if all loans were repaid there would be no money left in circulation).
 
The real idiocy of "Keynesian deficit spending" is not that it encourages people to live beyond their means (after all, the "means" is not the amount of money available, but the amount of real wealth, in terms of materials and labour which is actually at the nation's disposal). 

The real idiocy of "Keynesian deficit spending" is that it forces governments to take on costly loans, mortgaging a nation's future in order to provide the national currencies which they are entitled to create free of any debt at source.
 
As we heard yesterday from Michael Hudson, the ex-Soviet states and Iceland are gearing up to challenge the world's debt-based financial system.
 
Now, if Japan were to do the same  ...

Sunday, 1 November, 2009

High street banks to be broken up

Kamal Ahmed, and Patrick Hennessy, The Telegraph
 

Alistair Darling, the Chancellor, will confirm over the next few days that Royal Bank of Scotland (RBS) and Lloyds Banking Group, both of which are majority-owned by the taxpayer, will be split up.

Many of their assets will be sold off in deals which ministers will present as fulfilling Gordon Brown's promise that the taxpayer would get "pay back" for the multi-billion pound Government bail out of the sector last year.   ...

...  likely purchasers will come in from the US, Australia or the Middle East.  ...

...  Lord Oakeshott of Seagrove Bay, the Liberal Democrat Treasury spokesman, said: "The Government is struggling from one short term fix to the next.

"It is completely the wrong thing to do now and not in the taxpayer's interest. It is madness to float the good bits of Northern Rock off for blatant political advantage. Private bankers will pick the plums out of Northern Rock and leave taxpayers with the lemons."

Read it in full here:

http://www.telegraph.co.uk/finance/newsbysector/banksandfinance/6475562/High-street-banks-to-be-broken-up.html

Whose Money? says:

Shuffling the deck chairs again  ...

Nothing will be solved by focusing on the number of banks or the way they are run.  The crucial question is to decide who should have the right to create the nation's money supply, and profit from its creation.

With money recognised as a public utility and duly nationalised, there would be no need for governments to interfere with the running of the private banking system.  No longer permitted to control access to purchasing power according to their own priorities, by creating money as "credit" (ie, debt), banks could safely be left to compete for deposits from the available public money stock, and to make loans as they saw fit.

It is only because we are now dependent on bank lending  for our entire non-cash money supply (97% of the total) that banks have become "too big to fail".

Leave the banks alone, Mr Brown  - but give us the publicly-created, debt-free money which would automatically cut them down to size. 

The Worm Turns

On the Edge, With Michael Hudson

What's happened in Latvia first of all is a chronic balance of payments deficit.   ...  They financed this by borrowing foreign currency to finance a real estate bubble; and because the Soviet Union didn't have domestic commercial banks or mortgage banks, the banks were mainly Swedish and German  ...  Well, finally last year in April the real estate bubble burst, and now there's no more foreign exchange coming in to finance purchases and inflate mortgage prices so how is Latvia, how is Estonia, how are these other countries  -  Hungary also  -  going to finance their trade deficits?

...  The IMF, and the European Union, especially, have said, "We will lend you money, but you can only use it to pay the Swedish banks which have extended your loans  ...  and only use it to support the exchange rate, so that Latvian mortgage debtors can afford to pay their debt to the Swedish banks.  

"You cannot use it for any domestic expenditures.  We don't want you to use EU or IMF money to put any industry in place.  We want you to tear down your textile industry, so you will be good customers for the European Union; we want you to stop feeding yourself and dismantle your agriculture, so you can buy our grain surpluses; and we want to lend you the money so you will pay us interest."  ...

Sweden wants to return Latvia to feudalism and reduce the population to debt peonage so that they can work the rest of their life paying the bad debts that Sweden's banks have irresponsibly made  ...

Watch the video here:

http://www.youtube.com/watch?v=Rj4crMCg-XY&feature=related and http://www.youtube.com/watch?v=xJhsfPGL6To&feature=related

Whose Money says:

In Part 2 of the video Michael Hudson makes it clear that British and Dutch banks are playing the same game with Iceland as Swedish and German banks are with the ex-Soviet Baltic states.

And, of course, the developed countries have been up to the same tricks in the Third World for years now.

However, let's be clear about this: it's not nation states that are the profiteers, but a financial and corporate plutocracy (some would say kleptocracy) which knows no allegiance to any country.

It's great to see the victims of debt peonage finally calling the exploiters' bluff  -  especially when it's the ordinary people, as in Iceland, who are saying that enough is enough.

And it's great, too, that money reformers like Michael Hudson, and the British delegation that advised Malaysia some years ago now, are giving previously cowed nations the confidence to resist the bullying of financial profiteers.

Make no mistake, the population of the UK are being milked by the international money mafia as surely as any third-world people: though, luckily for us, not to the point of starvation.  Nevertheless, our agriculture is being progressively destroyed, and our industry and utilities sold off to the highest bidder, as the lack of liquidity resulting from unjustifiable debts takes its toll: all because we have chosen to give private, profit-making businesses sole right to create our entire stock of non-cash money!

Maybe. in the end, it will be the third-world countries who show us the way to prosperity, by being the first to monetise their wealth and turn their backs on all that unrepayable debt  ...

Quote of the day, from the Hudson interview above:

'When a country is trying to protect itself, of course the predator is going to call it suicide.  What is happening is that the Swedish banks are a parasite on the back of the host economy, Latvia.  The parasite says, "It will be suicide if you throw us off your back."  The fact is, they're killing the parasite, not themselves.  They will die if they don't thrown the parasite off their back.'

Saturday, 31 October, 2009

The latest debt statistics from Credit Action are out  now   ...

Debt Facts and Figures - Compiled November 2009

Total UK personal debt

Total UK personal debt at the end of September 2009 stood at £1,459bn. The twelve-month growth rate remained at 0.8%.

Total lending in September 2009 rose by £0.7bn; secured lending increased by £0.9bn in the month; consumer credit lending fell by a net £0.3bn (total lending in Jan 2008 grew by £8.4bn).

Total secured lending on dwellings at the end of September 2009 stood at £1,229bn. The twelve-month growth rate fell by 0.1 percentage points to 0.8%.

Total consumer credit lending to individuals at the end of September 2009 was £229bn. The annual growth rate of consumer credit continued to fall, to 0.5%.

Average household debt in the UK is ~ £9,161 (excluding mortgages). This figure increases to £21,305 if the average is based on the number of households who actually have some form of unsecured loan.

Average household debt in the UK is ~ £58,340 (including mortgages).

If you add to this the 2009 budget figure for public sector net debt (PSND) expected in 2013-14 then this figure rises to £116,180 per household.

Read the full report here:

http://www.creditaction.org.uk/assets/PDF/statistics/2009/november-2009.pdf?utm_campaign=stats-mailings&utm_source=nov

Credit Action also gives these 'Striking Numbers':

9,300

Number of new debt problems dealt with by CAB each day

£58,340

Average household debt (including mortgages)

£182m

Interest paid in UK daily

Every 11.5 minutes

a property is repossessed

2,553

people made redundant every day

1 person every 3.97 minutes

declared bankrupt or insolvent

£4,110 a second

increase in Government national debt

Whose Money? says:

Time to stop driving people into the red in order to put money into circulation!  Nationalise the money supply!

Friday, 30 October, 2009

The Money Fix

At the bottom of all the rules is the rule that making money is always more important than anything else  ... 
 
We've made money more importatnt than human life  ...  and on that bed of lies our relationship with money is resting  ...
 
This is where we are today, that the entire apparatus of assumptions underlying economics are wrong  ....  so why do we allow societies to be run with this malfunctioning source code  ...
 
Part of the difficulty is that very few people think about what money is, where it comes from, how it is created, how it is controlled  ...
 
Money doesn't facilitate.  In its present form it inhibits transactions and trade  ...
 
You can watch the video here:
 
 
Whose Money? says:
 
This film is 79 minutes long, so you need to set some time aside to watch it; but it is very helpful in clarifying what money is, and what service it is actually intended to perform.
 
The part about the Federal Reserve is irrelevant in the UK  -  and we already know, from our own experience, that a nationalised central bank is no real solution.  What is necessary is a nationalised, debt-free money supply, not nationalised banks.
 
We believe that eventually debt-free currencies  should be available at national, local and regional levels, together with something along the lines of Keynes's Bancor to facilitate international trade.
 
Local currencies, in the absence of a debt-free national money stock, will be limited in their scope. 
 
However, if our national government continues to remain unwilling to provide us with a properly functioning means of exchange, we can help ourselves by adopting locally acceptable alternatives. 

Of course, these would be much more effective if councils would accept them in payment of council tax, and use them to pay their employees

(One suggestion is presented by James Gibb Stuart, at
http://www.sustecweb.co.uk/past/sustec13-/policy_proposal.htm).

Thursday, 29 October, 2009

Change of Heart
 
Michael Berney, Unemployment Is Good (Bringing sanity to our economic system)

I’m interested in paradigm shift. That is in seeing with new eyes, or simply being aware of how much our world is shaped by the cultural stories and beliefs we share. Often these world views are so ingrained we are unaware that we hold them. Some paradigms work well, others not so well. Some are just downright destructive.

Many of the paradigms that are contained in our world economic outlook are seriously questionable. Here are a few of them  ...

Read this article, and much more of interest, here:

http://unemploymentisgood.wordpress.com/2009/05/17/change-of-heart/

Whose Money? says:

This is a great website.  Read it!

Here's a link to one of the articles quoted in the piece above:

Why do our kids get so caught up in consumerism?

Brian Swimme

...  The advertisers of course are not some bad persons with evil designs. They are just doing their job. On the other hand, we can also say that their primary concern is not explicitly the well-being of our children.  ...  But at a deeper level, what we need to confront is the power of the advertiser to promulgate a world-view, a mini-cosmology, that is based upon dissatisfaction and craving.

Read it in full here:

http://www.newdream.org/newsletter/swimme.php

Whose Money? says:

Advertising could send out quite a different message.

Think what it would be like if it didn't promote maximum consumption of quickly obsolete fashion articles, but focused instead on originality, craftsmanship, and good quality long-lasting products!   

Which would, of course, be possible, if the need to put money into circulation by enforcing continuous and exponentially increasing levels of borrowing weren't driving production and consumption.

So what do we want? 

Unnecessary work and worry, because of enslavement to debt and artificially whipped up cravings for cheap, throwaway products? 

Or the leisure and universally comfortable living standards  that could so easily be ours, now that the problems of production have been solved and the most pressing problems of distribution can be eased at a stroke by the introduction of publicly-created, debt-free money?

Wednesday, 28 October, 2009

How mistaken ideas helped to bring the economy down

Martin Wolf, The Financial Times

How did the world economy fall into such a deep hole? It is recovering, but painfully, and after a deep recession, despite unprecedented monetary and fiscal easing. Moreover, how likely is it that a balanced world economy will emerge from this force-feeding? The very fact that such drastic action has been necessary is terrifying. The fact that there is little room for a policy encore is yet more terrifying. Most terrifying of all is that this is not the first time in recent decades the world economy has had to be guided through a post-bubble collapse.

Read more  ...


Whose Money? says:

For a start, we doubt whether the economy is actually recovering, at any rate as far as its long-term health is concerned. 

Secondly, we'd say that an economy which was healthy in the first place would never have reached the point where it needed forced feeding. 

An economy hooked on the credit drug to the point where it no longer displays much interest in either normal activity or ordinary means of nourishment is a different case.

It amazes us that so many articles are written by so many expert commentators without the least attention being paid to the root cause of these recurrent attacks of economic breakdown.  This, of course, is the fact that credit is issued according to the priorities of profit-making private businesses, and that those priorities are just as likely  -  in fact, as we are now seeing yet again, even more likely  -  to favour debilitating speculative enterprises as those which contribute to the well-being and sustenance of the nation.

Rather than asking government agencies to nip asset-price inflation in the bud, would it not be more sensible to switch from private to public credit: real credit, nourishing productive enterprise, as opposed to what we currently call credit  -  a term which at present disguises our crippling dependency upon debt?

Get the patient off the drug.  Then there will be no need for forced feeding.


Jesmond Picture House is finally demolished

Sam Wood, The Newcastle Journal

ONE OF the region's best loved old cinemas is finally being reduced to rubble, as it makes way for a new office and retail complex.

Demolition work on the facade of the historic Jesmond Picture House, in Newcastle, began yesterday.

For more than 70 years the cinema showed some of the hottest movies from Hollywood to packed audiences.

But as the popularity of the cinema declined so did attendances, and the reels stopped rolling in 1993.

More pictures and archived report here: http://www.28dayslater.co.uk/forums/showthread.php?t=35069

Read more  ...

Whose Money? says:

We are sad to see the old building come down.  In the photos we link to above the state of its deterioration over the past 15 years is plainly seen  -  and we wonder if this deterioration was not deliberately permitted in order to make demolition inevitable.

Under a sane financial system, there is no reason why the cinema could not have been restored and developed as a valuable community resource.

Instead, we are amazed to read that it is to be replaced by "a new office and retail complex".

If there is anything we are not short of at the moment, it is empty office and retail space.  All this new development can hope to do, as more shops in places like Whitley Bay disappear each month and even Newcastle sees closures, is take business away from those who are already struggling to survive.

It is insane to place hopes of a revived economy in retail and rising house prices, when the borrowing which recently funded the "boom" in those areas can no longer be sustained.

What is needed is a new, more efficient and productive way of supplying money to the economy, not the offer of more and more goods which people can only afford to buy by mortgaging their future.

The way forward is not property speculation and dysfunctional, compulsive consumerism, but a stable, productive economy, with a good standard of living for all made possible by a switch to publicly-created, debt-free money at national, regional and local levels.

Northern Rock will be split, but stay in North East

William Green, The Newcastle Journal

THE sale of Northern Rock will be kick-started today with Brussels approving its split into a "good" and "bad" bank.

Business and political chiefs gave a cautious welcome to news the European Commission is today set to approve the split – which is likely to take place in the New Year and could see the “good” part of the bank sold within months.

But they stressed keeping the Rock in the North East and securing jobs was vital amid signs the “good bank” could go to a new entrant to the banking sector, such as Tesco or Virgin Money.

Read more  ...

Whose Money? says:

This is not the way to go.

Only last week Mervyn King was talking about breaking up the big banks, and here we have Alistair Darling planning for Northern Rock to grow into "something bigger", along the lines of the major lenders we already have.

We'd like to see the consolidation of real deposits (ie, the hard-earned money of millions of small depositors) into stable,  nationalised money, with supplementary currencies issued at regional and local level as necessary.  Locally-orientated banks and building societies  -  such as Northern Rock used to be  -  could then compete to lend out this publicly-created, debt-free money to promote a thriving economy.

As long as we maintain the status of the banks as sole providers of non-cash money to the nation, there will be no solutions.

If we look first to the needs of the productive economy, and channel money into circulation in line with those needs, everything will begin to fall into place.

SECRET PLAN FOR EURO INCOME TAX

Gabriel Milland, The Daily Express

SECRET plans to seize more than £4billion a year from Britain and make its citizens pay taxes direct to Europe emerged last night.

The leaked proposals, seen by the Daily Express, state that Britain should lose the billions of pounds in rebate that was agreed by Margaret Thatcher 25 years ago.

The plans – with a foreword by European Union Commissioner Jose Manuel Barroso – would cost every British family at least £155 a year.

They would also mean Brussels being given the power to dip straight into taxpayers’ pockets.

Read more  ...

Whose Money? says:

Whether these plans are resisted or not by the present government, they are the logical end-point of the course the EU has been taking ever since its genesis as the European Coal and Steel Community.

With the pound soon likely to be virtually interchangeable with the euro, as their exchange rates converge, and with around 85% of our laws now originating in proposals of the EU Commission, it is natural that the money will follow the power.

This is diametrically opposed to the requirements of freedom and self-government.

It is our opinion that the centralisation of financial (and therefore political) decision-making power within the nation state has already led to unacceptable levels of waste and the flagrant misdirection of public spending on, eg, quangos, bureaucracy and aggressive warfare. 

It has become routine for Westminster governments to disregard the priorities of taxpayers, who are compelled by law to furnish them with the wherewithal to exceed their mandate; and this impotence of the electorate has now been vastly extended, reducing local governments to beggary as they find themselves forced to appease not only London but Brussels. 

Indeed, it has now reached the point where we can only hope to have a few financial crumbs thrown in our direction if we consent to come into line with the centrally-planned policies of people who have lost any sense of identity with those they "represent".

With our national government already unresponsive to local needs, the suggestion that our taxes must increasingly come under the control of a body beyond all democratic control threatens yet more alienation.

Our vision of life after money reform is quite the opposite.  This would give us an opportunity to reverse the present trend, legislating for all taxes to be collected locally and to remain firmly under the control of local electorates, nothing being passed on to a more remote level of government without their express consent.

This is the way to return power, both financial and political, to the grass roots, where it properly belongs.

Tuesday, 27 October, 2009

UK financial system 'not able to support recovery'

Angela Monaghan, The Telegraph
 
Britain's financial sector is not equipped to support recovery when it comes and could trigger a double-dip recession if not fixed, the newest recruit to the Bank of England's Monetary Policy Committee (MPC) warned yesterday  ...
 
...  He said the main question was where credit for non-financial companies - particularly small and medium-sized enterprises - would come from. Without it, the emergence of a sustainable private-sector led recovery would be constrained, there would be insufficient investment into the UK economy, and a reduction in the number of businesses formed he said.
 
Read more  ...
 
 
Whose Money? says:
 
We certainly need "alternative channels through which to provide capital to businesses", as Mr Posen points out. There's little to hope from a private banking sector more concerned with multiplying financial units than supporting a productive economy.
 
The best way to provide an "alternative channel" is to nationalise the money supply, and spend in into circulation on the maintenance and improvement of infrastructure, and on the provision of a non-means-tested national dividend for all.
 
With bank money creation in the form of "credit" outlawed, the commercial banks would compete to lend the existing nationalised money stock to the small and medium-sized home-based companies which are at present being starved of capital in favour of more financially profitable clients who are engaged in speculative activities.
 
We wait with bated breath for the MPC to suggest a reform along these lines  ...

Credit card terms 'to be curbed'

BBC News
 
Some unfair credit card terms are to be outlawed under proposals being put forward by the government.

It wants to stop card firms raising interest rates on existing debts and to prevent them raising someone's spending limit without authority.

Monthly repayments must be used to pay off the most expensive debts first, and the size of minimum repayments will be raised to ensure faster debt repayment.

Read more  ...

http://news.bbc.co.uk/1/hi/business/8326485.stm

Whose Money? says:

Good that an attempt is being made to ban exploitation  ...  but a pity that there is apparently no recognition of the rôle that must be played by exponentially increasing borrowing, if the economy is to be revived under the present debt-based system.

Every day we have fresh evidence of the clash between financial priorities and the needs of the population.

Either we go on providing the nation with its money supply by forcing more and more people into deeper and deeper levels of debt, or we make human well-being our prime concern, and switch to the publicly-created, debt-free money which (without imposing a doctrinaire equality) will ensure an adequate distribution of goods and services to all.

Reform of the financial system, not futile attempts to abolish greed, is the answer.

If you have an hour to spare, listen to this interview with Elizabeth Warren:

Conversations with History

Berkeley University

...  Today's family is already full out , they've got both people in the workforce full-time ...  Today a family, instead of having to have 52 pay cheques to know that they'll be able to make the mortgage payments and health insurance  ...   they've got to bring home 104 pay cheques  ...

Put it all together, and it's a pressure cooker.  People are more likely to lose jobs than they were before.  The jobs are going abroad. When they lose jobs  ... the odds that they'll get back a job that pays as well as the job they've lost has gone down  ...  They run the risk that if someone in the family gets sick they're going to lose income  ... 

So what we're watching here is a family unit that's getting more and more economically vulnerable.  They're working harder than ever, they've got two people in the work force, and yet economically every part of the game is loaded against them  ...

Watch the video here:

http://www.youtube.com/watch?v=S1Uk-DwUvJw&NR=1

Whose Money? says:

Elizabeth Warren presents a devastating picture of how a two-tier society is developing in the US (and, we'd add, in the UK), with a minority of the comfortable middle class being lifted into a somewhat enlarged upper class, while the vast majority are sucked down into the huge underclass of those living forever on an economic knife-edge, if not in downright poverty.

We believe that this is the inevitable result of basing all economic activity upon money which is created as a debt and put into circulation to the narrow financial priorities of private, profit-making businesses.

This interview offers a superb presentation of the problems. 

Money reformers have the answers.

Monday, 26 October, 2009

Eimar O'Duffy on National Dividend/Basic Income
 
Frances Hutchinson, The Social Crediter
 
"...  (W)hat of those who prefer to idle?  Let them idle.  At present we carry millions of unwilling idlers on our backs.  The willing idlers will be fewer; and to punish them by denying them their income will be no remedy.  It would merely restore that poverty, with all its attendant evils for society, which it is our prime purpose to remove  ...
 
"The present economic system does not punish idlers except accidentally: on the contrary, some of its richest rewards go to idlers  ...

"The Socialist says, 'Nobody should have an unearned income.'  Social Credit says: 'Everybody should have an unearned income  ... '

"That unearned income will be an equal share [regardless of wages and salaries] in that potential surplus of goods due to the productivity and economy of modern machinery as compared with hand labour.  It is our share in the bounty of nature, and our heritage in the work of our ancestors."
 
Read it in full here:
 
 
Whose Money? says:
 
The unwilling idlers, of course, are the unemployed and underemployed, of whom there are once more growing numbers.

Is it really more sensible to sustain a complicated means-tested benefits system at vast administrative expense (and liable to all kinds of fraud and deception) than to provide a secure financial platform available to all as a basis for further earnings, without fear of punitive taxation?

A great article  -  and lots more of interest in the autumn edition of The Social Crediter.

Sunday, 25 October, 2009

Gordon Brown: 'It would be suicidal to abandon economic stimulus'

Patrick Hennessy, The Telegraph

The Prime Minister used his weekly podcast to claim there were signs that "confidence is beginning to return in some areas" – but his overall message was one of caution.

He said: "Now more than ever is the time for steady and clear policies. That is why it would be suicidal to put recovery at risk by suddenly cutting off the funding and investment that is supporting young people, families and businesses throughout the most challenging times in a generation."

Read more  ...

http://www.telegraph.co.uk/news/newstopics/politics/gordon-brown/6425078/Gordon-Brown-It-would-be-suicidal-to-abandon-economic-stimulus.html

Whose Money? says:

What a mess!

Money given to the banks, so that they can continue to indebt businesses, families and individuals way beyon their capacity to provide not only themselves but the rest of the nation with purchasing power!

No relief for businesses as the government attempt to claw back some revenue, amid rising unemployment and falling disposable incomes!

Unlike all those "independent experts", we are not confounded by the most recent figures on the UK's economic performance.  Nobody focused on the productive economy rather than the financial status of the stock and property markets would be!

Until the "experts" get down to the nitty-gritty, and start analysing how money created as a debt actually works in the real world, rather than how orthodox economic theory supposes it to work, the problems will persist.

The aim of an economy is not to produce money, nor even to produce jobs, but to provide and distribute the goods and services we all need: and the most efficient way to ensure adequate production and distribution is to facilitate trade and exchange with publicly-created money, issued free of any debt at source.

Elizabeth Warren: "Just take it," said Hank Paulson to the banks

(On the very different treatment meted out by government to the banks and the auto industry) " ...  I want to understand  -  if it's taxpayers' money on the line, if these are described as 'systemically significant institutions, and that's the reason for coming in  -  did he think the banks were better run?  ...  My view is, any institution that is too big to fail is one that distorts the economy, and ultimately is very costly to all of us."
 
Watch the video here:
 
 
Whose Money? says:
 
We love Elizabeth Warren, and agree with so much of what she is saying here.
 
However, when she harks back to the post-war years of prosperity under sensible regulations, she forgets the fact that during this time both public and private debt was mounting (along with the penal levels of taxation inseparable from heavy government borrowing).
 
The fact that both exponential borrowing and exponential growth are unavoidable, if you choose to use debt as the national currency, led quite logically to the breakdown of the regulatory framework as ways had to be found to entice a steady stream of new borrowers to lay down their solvency on behalf of their country.
 
Hence the explosion of credit-card and mortage debt  ...  see the following video!
 
Maxed Out's James Scurlock and Elizabeth Warren on Nightline
 
"Yes, where is the Government? 
 
"Congress gets a lot of money from the credit-card industry in contributions.  More than that, though, I think politicians are really terrified of what would happen if they came down too hard and all this easy credit was suddenly snatched away, and the economy dried up.  You know, that is the fear we have in this country.  You've got to keep buying, and you've got to keep spending; and what enables that?  Credit cards!"
 
Watch it here:
 
 
Whose Money? says:
 
The quote from James Scurlock, above, gets to the heart of the matter.
 
You can regulate and control the banks as much as you like; but as long as you continue to depend on borrowing to provide the nation with its means of exchange and distribution, those who have control of that borrowing will be the ones in power.

Saturday, 24 October, 2009

Bank of England is set to reverse quantitative easing

Hugo Duncan, London Evening Standard

The Bank of England today said it is ready to reverse quantitative easing as the housing market showed further signs of recovery.

Policymakers on Threadneedle Street said the Bank will have to withdraw the £175 billion of freshly printed money it has pumped into the economy, but only when the time is right.

It came as figures from the British Bankers' Association showed mortgage lending is back up to levels last seen at the end of 2007.

Read more  ...

http://www.thisislondon.co.uk/standard-business/article-23760107-bank-of-england-is-set-to-reverse-quantitative-easing.do

Whose Money? says:

So, according to this report it's back to business as usual for those who still have jobs, as the borrowing takes off again  ...

All the same, it is now being clearly demonstrated that an accountable public authority can feed money directly into the system (and subsequently withdraw it, if there is any threat of inflation) far more easily than the private banking system, which must use the clumsy and highly unpredictable mechanism of debt finance, driven by the raising and lowering of interest rates.

What a pity that the recent quantitative easing benefited the banks, rather than the real economy; and that all those billions in state aid may now be withdrawn from circulation not because they have already resulted in increased productive investment, but because big finance, with its bonus culture, is once more in the driving seat, distributing purchasing power strictly according to its own priorities as it fuels the next asset-price bubble!

This recession just became a depression

Edmund Conway, The Telegraph
 

It is difficult to know what to be most shocked by in the gross domestic product figures published by the Office for National Statistics this morning: the fact that we are in the longest-lasting deepest continuous recession in recorded history or that no-one in the City foresaw it*.

Leaving aside the City’s failings, with which we are intimately familiar, the scale of the economic collapse is disturbing. The National Institute for Economic and Social Research has been calling this a “depression” rather than a recession for some time – these figures surely now underline such a description.

Read more  ...

http://blogs.telegraph.co.uk/finance/edmundconway/100001543/this-recession-just-became-a-depression/

Whose Money? says:

So perhaps the banking bonanza will be sustained by a little more QE, after all!

Or might the Government now realise the error of its ways, and instruct the Bank to throw a few crumbs in the direction of the productive economy?

How about using a little debt-free QE to improve what we still own of the nation's infrastructure, and perhaps turn financial disaster into a time of new hope and opportunity?

And now, for a little light relief (especially for those who remember the original song)  ...

Monster Crash
 
The Telephonics
 
Listen to it here:
 
http://www.youtube.com/watch?v=28I0JK0byLU&feature=related

Whose Money? says:

"In a few more years we'll forget, and then
Unregulated markets will be back again  ..." ?

Not if we insist on publicly-created, debt-free money NOW !

Friday, 23 October, 2009

Bank of England will not target asset bubbles, say deputy governor Paul Tucker

Edmund Conway, The Telegraph
 

Paul Tucker, the Bank's deputy governor for financial stability, gave one of the first clear indications of the types of tools and responsibilities the Bank will have in the future as it moves beyond the inflation targeting which has been at the core of policy for more than a decade and a half. In comments which come as a surprise, he dismissed assumptions that the Bank would aim directly to target asset-price bubbles or that it will use simple capital requirements as its key macro-prudential tool.

His comments, although theoretical, are highly significant, since markets are slowly absorbing the fact that Britain is on the cusp of a new era of monetary policy, in which targeting price stability is no longer the sole and primary objective of its economic decision-makers. The structure of the system will have profound implications for the way inflation, interest rates and the broader economy behave in the coming decades.

Read more  ...

http://www.telegraph.co.uk/finance/newsbysector/banksandfinance/6409831/Bank-of-England-will-not-target-asset-bubbles-say-deputy-governor-Paul-Tucker.html

Whose Money? says:

The "recent boom" did not have "at its heart increases in the price of houses".

At the very heart of the "recent boom"  -  a "boom" experienced by many as increased hardship, as they struggled to pay their bills and taxes on two or more meagre wage packets  -  was the banks licence to create money in the form of credit.

Without this licence prices could not have risen across the board.  Why not?  Because the pseudo-money used to fuel property-price inflation could not have been available for lending.

Until this bomb ticking away in the foundations of the economy is defused, the "new era of monetary policy" trumpeted in this report will, sooner or later, fail.

There has never been a better time for fundamental reform of a financial system which is intrinsically dysfunctional, and which invites corruption and malpractice.

Banksters are just like the drug cartel

"I think that what we're dealing with here is a really amazing sequence of events where  ...  the taxpayer bailed out these companies to the tune of hundreds of billions of dollars, and yet these same companies that were really rescued from the brink are now turning around and lobbying strenuously in Washington to maintain the status quo. 

"And you know, you pointed it out earlier, about this too big to fail issue, this is something that absolutely is not being addressed  ..."

Watch it here:

http://www.youtube.com/watch?v=Wm49GD9yVxE&feature=player_embedded

Whose Money? says:

As long as we rely on banks for our money supply, they will be able to beg state support when they run into major difficulties.

They did it during the First World War, when, like today, they were bailed out by government money backed by the full credit of the nation  ...  only to bite the hand that fed them, as soon as they had been put back on their feet again!

You can read about it here, in an online edition of the original book  -

The Financiers and the Nation

By Thomas Johnston, ex Lord Privy Seal

From the Preface, by Sydney Webb

I regard Mr Johnston's book as of great public service.  We cannot be too plainly reminded of the way in which the public is periodically fleeced by financial tricksters and swindlers; because these highlights of capitalist enterprise are, after each exposure, quickly forgotten.  It is remarkable how regularly during the past hundred years the story is repeated. 

Each decade sees a new variant, but the process is essentially the same.  Tens of thousands of small investors, and also some large ones, are persuaded by lies and misrepresentations to purchase shares in what is simply a swindle.  Hundreds of thousands, if not millions, of pounds are pocketed by the swindlers and the crowd of accomplices and parasites who 'in the ordinary course of business' co-operate in what must not yet be termed fraud.

Presently there is a collapse, and, more or less, exposure: occasionally one or more of the chief swindlers gets prosecuted and sentenced to prolonged imprisonment at the public cost.  But there is no effective or prolonged publicity.  All the influences 'in the City' combine to hush things up  ...

Read more  ...

http://www.archive.org/stream/financiersandthe033017mbp#page/n13/mode/2up

Whose Money? says:

The capitalism referred to in the extract above is, of course, financial capitalism.  Unfortunately this seems to have become identified with private enterprise, which is not at all the same thing.  Sadly, too, the reforms suggested by Sydney Webb at the end of the preface focus on public ownership of the banks, rather than money reform.

Close on a hundred years later, it is only too clear that the real solution is to nationalise money, not the banks.

Chapter VI of The Financiers and the Nation, Usury on the Great War, tells how the banks were bailed out by publicly-created money, then insisted (just as they are doing today) on an instant return to systemic debt, and made a fortune out of war bonds.

Thursday, 22 October, 2009

Gordon Brown rebuffs Mervyn King's suggestion that banks need breaking up

The Telegraph
 
Mr Brown told MPs that "the difference between having a retail and investment bank is not the cause of the problem."

The Prime Minister added that "the cause of the problem is that banks have been insufficiently regulated at a global level."

Read more  ...

http://www.telegraph.co.uk/finance/economics/6397375/Gordon-Brown-rebuffs-Mervyn-Kings-suggestion-that-banks-need-breaking-up.html

Whose Money? says:

No, Mr Brown, the cause of the problem is not "that banks have been insufficiently regulated at a global level". 

Whatever the regulations, as long as we continue to equate "credit" issued by private banks with money, financial whizz-kids in the banking sector will continue to invent new ways to exploit what amounts to virtual monopoly control over the nation's means of exchange.

The root cause of our present problems is neither insufficient regulation nor the merging of commercial and investment banking. 

It is the fact that, by allowing the banks sole right to create the non-cash component of our money supply (now 97% of the whole), and thus make the whole economy dependent upon their lending, we lay ourselves open to blackmail by private businesses both keen to maximise their profits, and deemed too important to fail.

We'd all get on a lot better if banks stuck to the business of lending money that they actually had, with their loans exceeding their deposits only at their own risk and expense, than by continuing to allow these private, profit-making concerns to be sole purveyors of non-cash money to the economy, while deciding who should benefit from first use of their credit, to what extent, and for what purpose.

Is it likely that we would have had to sell off the nation's infrastructure to transnational corporations, if newly created, debt-free money had been spent into existence to maintain and extend it?

Is it likely that house prices would have risen to exclude first-time buyers, if banks hadn't had an eye to the main chance, handing out bonuses from repayments and interest charges which far exceeded both the real value of the properties concerned and any reasonable assessment of purchasers' ability to pay?

To subject the nation's welfare to the legitimate priorities of private, profit-making businesses is plain stupid.

How much deeper into debt must we all go before a Bill is put before Parliament which makes increasing the money supply in the guise of "credit" as serious a crime as the printing of forged notes or the minting of fake coins?

Regulation, whether national or international, is not enough. 

As banker Sir Josiah Stamp said, "The bankers own the earth.  Take it away from them, but leave them the power to create deposits, and with the flick of the pen they will create enough deposits to buy it back again.

Fortunately more and more people  -  though not yet the Government  -  are realising the truth of this statement, and demanding abolition of the systemic debt which skews the economy towards over-production and waste while masking our true prosperity.

Wednesday, 21 October, 2009

Mervyn King: bail-outs created 'biggest moral hazard in history'

Edmund Conway, The Telegraph
 
In comments which will be seen as a clarion call for a potential break-up of Britain's banks, the Bank of England Governor warned that the support handed out by the Government had "created possibly the biggest moral hazard in history". He said that it was insufficient to expect that in the future tighter regulations alone would be enough to prevent banks from generating financial crises.
 
The warning goes against the grain of efforts by Governments on both sides of the Atlantic, which have tacitly ruled out splitting up the biggest banks and opted instead to scrutinise them more actively. Mr King, who said earlier this year that if banks are "too big to fail, then...they are too big," said that there is a risk the financial crisis comes and goes but the current system, in which big banks enjoy an effective guarantee from the state, remains.
 
Read more  ...
 
 
Whose Money? says:
 
Well said, Mr King!  At least you are acknowledging  that the status quo can't continue.
 
As we hear that bank bonuses are expected to hit 50% of salary, it is a relief to know that someone at least understands that " tighter regulations alone would (not) be enough to prevent banks from generating financial crises"  -  though we don't believe that breaking up the big banks is, in itself, the solution.   It would certainly not do anything  to prevent the growth of an impoverished underclass.
 
The fact is that, as long as the banks are free to create our entire non-cash money supply (which, with the vigorous promotion of plastic cards and the microchip, now looks likely to become the only form of money we have in the near future), they will always find ways of profiting from this licence, at the expense of a good proportion of the population.
 
The trickle-down theory doesn't work.  Consumption by the rich doesn't generate the spread of purchasing power through employment and wage packets when jobs are being lost through out-sourcing, automation and the IT revolution.
 
We have reached the point where our progress in producing goods and services has far outrun our methods for distributing this unprecedented wealth among the population (see the following article).
 
Keep talking, Mr King!
 

Financial crisis: UK job losses

The Telegraph

As of today, British companies have confirmed the loss of 154,266 jobs since October.
 
Read more  ...
 
 
AND AT THE SAME TIME:

The barefaced greed of bankers and their bonuses beggars belief

Boris Johnson, The Telegraph
 

If you pressed a rifle into the hand of the man in the street and asked him to choose between two targets – an MP or a banker – who do you think would get the bullet? Tricky, eh? It is hard to know which of these two formerly respectable professions has fallen further in public esteem.

Some people might hesitate, like Buridan's ass, the rifle barrel weaving indecisively between two such luscious hate-objects. Most people would simply call for two bullets.

Read more  ...

http://www.telegraph.co.uk/finance/newsbysector/banksandfinance/6371140/The-barefaced-greed-of-bankers-and-their-bonuses-beggars-belief.html

Whose Money? says:

Perhaps the bankers (and the politicians!) have a death wish. 

At any rate, they could not behave in a way more calculated to ensure demands for thoroughgoing reform on a wave of popular revulsion, as others lose not only their incomes but, in many cases, their homes.

Tuesday, 20 October, 2009

Thousands rush to apply for Royal Mail strike jobs ahead of national walkout

Sean Poulter, The Daily Mail
 

More than 85,000 applicants are chasing the 30,000 temporary posts being created by mail bosses to cope with national postal strikes.

The flood of applications suggests the figure could rise to 100,000 in the next few days among those desperate for work in the recession.

Read more  ...
 
 
Whose Money? says:

As the recession deepens, it will become easier to hold wages down.  Yet already a single wage packet is insufficient to give the average family a decent standard of living.
 
It's time we dealt with the question of how to distribute a living wage at a time when jobs are at a premium, and many families have realised that they'll find it easier to get by on benefits, with all the free services that are included in the package.
 
It's stupid to say that ordinary people should be debarred by unnecessarily low incomes  from sharing in the technological benefits bequeathed by past generations. 
 
Listen to C H Douglas pointing out that a National Dividend would not only solve the problem of unemployment but also remove one of the most potent causes of strife among nations:

It seems difficult to make it clear that the proposal for a National Dividend, which would enable the products of our industrial system to be bought by our own population, has nothing to do with Socialism, as that is commonly understood. The main idea of Socialism appears to be the nationalisation of productive undertakings and their administration by Government departments. Whatever merits such a proposal may have, it does not touch the difficulty we have been considering.

The provision of a National Dividend is merely to place in the hand of each one of the population, in the form of dividend-paying shares, a share of what is now known as the National Debt, without, however, confiscating that which is already in private hands, since the National Credit, is, in fact immensely greater than the portion of the National Debt which now provides incomes to individuals.

The practical effect of a National Dividend would be, firstly, to provide a secure source of income to individuals which, though it might be desirable to augment it by work, when obtainable, would, nevertheless, provide all the necessary purchasing power to maintain self-respect and health. By providing a steady demand upon our producing system, it would go a long way towards stabilising business conditions, and would assure producers of a constant home market for their goods. We already have the beginnings of such a system in our various pension schemes and unemployment insurance, but the defect for the moment of these is that they are put forward in conjunction with schemes of taxation which go a long way towards neutralising their beneficial effect. While this is inevitable under our present monetary system, it is far from being inevitable when the essentially public nature of the monetary system receives the recognition which is its due, but is not yet admitted by our bankers.

Listen to the whole audio, or read the transcription, on the Social Credit website, here:

http://douglassocialcredit.com/transcript.php

Monday, 19 October, 2009

Working mums left with just £67 a week after paying employment expenses and childcare bills

 

Working mothers are left with just £67 a week after paying childcare and employment costs, a survey has found.

Mothers who are employed full time are hit by average childcare bills of £400 a month, as well as work expenses including commuting, lunch and buying clothes to wear to the office.

More than four in ten are left with just 10 per cent of their salaries, leading many to question whether working is worth it.

Read more:
 
 
Whose Money? says:
 
The crucial line in this report, as far as we are concerned, is this: "More than half of working women  -  52 per cent - said they would like a 'complete break from work' until their children start school. Only 9 per cent said they would work full time if they had a choice."
 
This reflects our own experience within the family, and what we learn from anecdotal evidence.
 
Many people seem to think women are working for luxuries that they might well do without.  This may be the case for some, but for many it's a case of paying the basic bills.
 
With publicly-created, debt-free money, and a national dividend for all adult citizens, plus an allowance for children, families would have a basic income which would allow them to decide whether both partners should take on paid work, whether one would prefer to look after the household, or whether both should work outside the home part-time.
 
It would also give the basic security of knowing that loss of job, ill-health, or illness in the family would not mean repossession or hardship. 
 
Of course, some women  -  particularly those with interesting and rewarding careers  -  would prefer to work full-time, and would also be in a position to pay for childcare and still have plenty of money left over.  Others are simply working to get by  -  and for precious little, at that, unless they have family members who are able to look after their young children free of charge.
 
Those who truly want to see women (and men, for that matter!) liberated from drudgery and wage-slavery at a time when useless jobs are being invented simply to provide wage packets and distribute incomes, should be lobbying their MPs for a debt-free national currency and a national dividend.
 
Funding Sweatshops Globally
 
Stephen Lendman, Global Research

In July 2008, SweatFree Communities (SFC) released a report titled, "Subsidizing Sweatshops: How Our Tax Dollars Fund the Race to the Bottom, and What Cities and States Can Do" in which it studied 12 factories in nine countries that produce employee uniforms for nine major companies.

Widespread human and labor rights violations were revealed, including child labor; illegal below-poverty wages; few or no benefits; forced or unpaid overtime; hazardous working conditions; verbal, physical, and sexual abuses; forced pregnancy testing to be hired and while employed; excessive long working hours causing physical ailments, stress, and harm; denial of free expression, association, and collective bargaining rights; and elaborate schemes to commit fraud and deceive corporate auditors.

Read more  ...

http://www.globalresearch.ca/index.php?context=va&aid=15712

Whose Money? says:

At least in the UK people aren't forced to work under conditions like this (unless, of course, they're illegal immigrants,  fleeing from a life of sweated labour in their native countries, and unable to complain of their treatment).

It is crazy that people all over the world, usually in countries with enormous wealth in raw materials, are being used as slave labour to produce the exports which bring in money to pay off the nation'sentirely unnecessary debts.

Why not simply monetise their own wealth, base their economies first and foremost on production for the home market, and tell their "creditors" (who have already been paid off many times over in real value) to get lost?  Presumably, because a military threat hangs over them, if they don't play the debt-money game which produces the global money supply  ...

If a national dividend paid out of publicly-created, debt-free money would transform the lives of working people in the UK, just imagine what it could do in third-world countries! 

Whichever way you look at it, money reform is the basic issue underpinning nearly all of the other issues in a world where the problems of production have been solved without any compensatory adjustment of the means of distribution.

Sunday, 18 October, 2009

Those once called bonkers now point to where the madness lies

Liam Halligan
 
Consumer prices in the UK grew by only 1.1pc during the year to September.  Britain's CPI inflation is now at a five-year low.  The usual suspects in the City, and their government lackeys, are using this "below target" inflation number to crank up, once again, the notion that Britain is about to tip into a "catastrophic deflationary spiral".
 
As a result, the argument goes, we have "no choice" but to keep the Bank of England's printing presses in overdrive, pressing on with so-called "quantitative easing".  And, clearly, any action to get the UK's disgraceful public finances under control would, given this deflationary threat, be "woefully premature".
 
Read more  ...
 
 
Whose Money? says:
 
We were very excited when we saw this headline from a mainstream columnist in a mainstream newspaper. 

Was the money-reform message finally breaking through into widespread public debate? 
 
What a disappointment to find that it's just one more contribution to the debate between inflationaries and recessionists!  If only these mainstream columnists had come to the Bromsgrove Conference, they would have a much better grasp of the possibilities  ...
 
Of course, Mr Halligan is absolutely right in pointing out that "the UK will soon have tripled the size of its monetary base," and the possibility that when "banks stop hoarding that cash, inflation will let rip"
 
Here's what Alistair McConnachie has to say about quantitative easing (QE) in the latest edition of Prosperity (subscribe by ordering from 268 Bath Street, Glasgow, G2 4JR; Tel. 0141 353 6900; website address:
 
"According to the Bank of England (our emphasis):
 
" 'The aim of quantitative easing is to inject money into the economy in order to revive nominal spending  ...  The Bank is doing that by purchasing financial instruments from the private sector.  When it pays for those assets with new central bank money, in addition to boosting the amount of central bank money held by banks, it is also likely to boost the amount of deposits held by firms and households.  This additional money then works through a number of channels  ...  to increase spending.'
 
"Yes, that's correct, one of the 'channels' by which it increases spending in the economy is through the fractional reserve system.  New deposits in the corporate banking system allow it to lend out new money  ...  up to 8-10 times the amount originally deposited in the bank."
 
As Alistair points out, quantitative easing "has proven that the Central Banks can create money, but at the moment the process is acting only to prop up the private banking system  ...".  This, of course, means not only that we, the public, must go on borrowing ourselves to perdition in order to provide the nation with its money supply, but that any money created in this way may then be lent out by the banks to people, for purposes, and in quantities most beneficial to themselves as private, profit-making businesses.
 
How much simpler to vest the powers of money-creation in a public authority answerable directly to the electorate, and, as Alistair says, at the same time forbid private banks "completely from creating money via the fractional reserve system, thereby (since they will no longer be able to multiply this money 8-10 times)  ensuring that inflation does not occur" !
 
The alternative to these sensible reforms, at a time when, even without the "credit crunch", jobs   -  and no longer merely blue-collar jobs  -  are being lost to automation on a daily basis, is most probably stagflation, with the cost of living, particularly energy prices and taxation, rising, at the same time as both purchasing power and the productive base of the economy shrink.
 
To take a cue from Mr Halligan, at this point we could rant on about how monetary reformers have been warning for years that orthodox economics is a self-serving myth, an intellectual deceit designed to justify the dysfunctional (but profitable to a minority) status quo.  We have even been called "bonkers" and brushed aside as irrelevant cranks.
 
But we've been proven right!
 
As Alistair points out, "In one major way, QE has undoubtedly been good for Money Reformers.  Prior to QE few people would believe us when we said that the Bank of England had the power to create money out of nothing.  When QE was first introduced, there was general disbelief among many that the Bank could do that.  Now it is laid bare for all to see."
 
However, there is another major obstacle to overcome before we have not only publicly-created money, but debt-free money.  As things stand, it would be illegal for the Bank of England to give any money which it has created to the Treasury, to be spent directly into the economy free of any debt at source.
 
Why?
 
Not only because of conformity to orthodox doctrine and the opposition of vested interests, but because we are still fully signed up members of the European Union. 
 
Here (with thanks to Prosperity) is the EU Article preventing financial reform in the UK:
 
ARTICLE 101 (TEC) PROHIBITS DIRECT PUBLIC FINANCING
 
Direct Central Bank financing of the Treasury is illegal under the Treaty establishing the European Community (TEC)
 
It is forbidden by Article 101, introduced by the Maastricht round of treaties.
 
1  Overdraft facilities or any other type of credit facility with the ECB or with the central banks of the Member States (hereinafter referred to as 'national central banks') in favour of Community institutions or bodies, central governments, regional, local or other public authorities, other bodies governed by public law, or public undertakings of Member States shall be prohibited, as shall the purchase directly from them by the ECB or national central banks of debt instruments.
 
Even accepting that popular repugnance at our loss of the right to govern ourselves prevails, and we elect a government prepared to repeal the European Communities Act, there is a lot of work still before us if we are to overcome superstition and ignorance about the nature and correct use of money, and start providing this nation with a publicly-created, debt-free means of exchange.
 
But at least quantitative easing, though by no means the answer, has got us over the first