1. Budgets and Banks

A page on government economic policy – mostly things covered by HM Treasury and the Bank of England and Financial Regulators – including banking.

My main leaflet about money creation: The problem with banks

My petition of July 2013 to my MP.

In the first brief video I give reasons for watching the second 33 min one on a vital issue: who creates, owns and allocates our nation’s money.

Answer: the banks for the benefit of the banks, but it should be the Bank Of England for the benefit of the nation.
(Further down is one about how badly in debt we are!!)

The main video saying that banks create money and they shouldn’t.

The Pennsylvania Settlers of colonial America and their self-contained monetary system.

A delightful, focused talk on banking in Canada by Canadian Victoria Grant aged 12! NB The then Central Bank Governor of Canada arrives here to be the Bank of England Governor in July!!

I have attended a meeting of the House of Commons Treasury Select Committee, visited the Chancellor’s constituency in Wilmslow (Tatton), the Shadow Chancellor Ed Balls’ constituency (Morley near Leeds) and the constituencies of many Treasury Committee MPs and have had personal conversations with heads of several major banks.

My main message is that banks (ie the commercial banks as opposed to the Bank of England with a capital “B”) should not be the creators of our circulating money. It gives them an unwarranted privilege to allow them to create our money to the detriment of society as a whole. It means that all money in circulation except notes and coin is owned by commercial banks and is only in circulation as a debt that has to be repaid to the commercial bank at interest.

Public authority should be the creator of the money of our land and it should be created as an asset of our society as a whole rather than an asset of the self-interested businessmen who own the banks.

All new money in Britain should be created by the Bank of England and given to the government to spend on projects that help society as a whole, and it would be wisest to spend the new money on things that help us earn a living in the world rather than on luxuries. So it should be spent getting our infrastructure up to scratch since this is essentially a tool for us collectively to live our life and do our work. It should also be spent on good higher education for our young people in universities and technical colleges and on research and development so that we will have a keen skilled workforce and good products that make the world a better place and for which foreigners will pay us a good price for.

The present system is crazy in that we allow the commercial banks to create our money which they do when they make  a loan. Almost all the money lent out didn’t exist before the moment that someone agreed to borrow it. It wasn’t obtained from somewhere it was just magicked into existence.

Ordinary citizens like you and me aren’t allowed to create money. We would be locked up. But banks create money. I have been told that by the top people.

Another thing that it seems that banks do is to lend out current account deposits even though depositors are perfectly entitled to ask for it back at any time. If everybody does the money isn’t there to pay them and there is a run on the bank as people rush to withdraw their deposits before it is all gone. SO the poor old government, if it doens’t want to be too unpopular to get elected next time around, has to borrow money from somewhere to make up the missing money.

So the thing to do about current account money is to make it so that commercial banks can’t touch it. A way to do that is to have current account money go straight through the high street bank to be kept safe in an account at the Bank of England. Then, if the high street bank goes bust the depositors money is safe in the Bank of England. Alternatively you could have a government-run GIRO bank as I understand they do in Holland and Austria which just does the essential boring job of making sure people’s deposits are safe with the government and enables you to pay your bills (ie a payments system without any commercial agenda).

It is really hard to get the government to understand this. There is a cosy relationship between the government and the banks. The government allows this unwise system to continue and it seems that it is hard for them to gather the courage to bite the bullet and change the system to the one I describe above.

But the present system with the power of money creation vested in the banks leaves the banks powerful and the government weak and that’s not healthy. They need to understand it and admit that “the emperor has no clothes” and take back the authority of money creation entirely to public authority namely the Bank of England.

Please explain it to your MP or send him a link to this page and video and ask him to write to the Chancellor to urge this change.

My petition for signature by David Cameron’s Witney constituents (which I am asking people in the street in Witney and Chipping Norton to sign) reads “By Act of Parliament, please make the Bank of England the only body in the land authorised to create the nation’s money and prohibit commercial banks from doing so.” Please don’t copy this, though, since I want to have control of each sheet of petition signatures so people can be reassured that their personal details will only be seen by Mr Cameron and his staff.

And here is the money creation petition in various constituencies addressed in each case to the respective MP.

And here’s a punchier one – my fifth constituency – this time to John Hemming MP for Birmingham Yardley

Powerpoint at meeting on 1st June. My vision.

Budgets and Government Expenditure

In this video I say that we are deep in debt as a nation and that we are tolerating the government going deeper into debt to the tune of £100 per week per household just to keep us in the lifestyle to which we have become accustomed. We can’t go on doing that. Getting the finances sorted out can’t be done only by cuts. It has to be done by us starting to earn more on the world scene. That doesn’t mean the government should avoid cuts but that we should run a livelier economy and produce more goods and service that we can sell to export customers.

Why should be tolerate a national debt. Our govenrment has an income: the taxes paid by British people and some other customs dues and so on. Let’s live within that limit and pay off the debt.

As above, the banks need sorting out otherwise there’s a hole in the boat. We’ll stay afloat better if we fix this crucial drain on our finances as I explain above.

Let’s have simple taxes and a national spirit that wants to see our nation thrive and to do our bit including paying tax.

Privatisation has gone too far. Just because we are hard up it doesn’t mean that the government has to give the jobs over to the commercial sector. If there’s a job to be done it just might be cheaper and better in the long run to do it ourselves rather than pay someone to do it for us. Like running the trains, supplying the water, gas and electricity and the healthcare. These companies are nice but unfortunately that do need to be paid and often the bill is bigger than doing it ourselves.

And for public works procurement we should get better at getting good value for money out of our contractors if we have to engage contractors. British companies should do a good job on time and on budget without it having to be one of these horrible PFI contracts described on this website as issue number 6.

Let’s run an efficient show with a lively national effort and be careful with out money and get the whole thing to succeed.

My visit to Brussels to help make a “more sustainable economy”. May 2013

Birmingham Municipal Bank reopens (for an art exhibition) Thrift Radiates Happiness. http://www.thriftradiateshappiness.com/ Let’s have local banks back.

A brief report on ECOBATE 2013 banking conference 6th March in Winchester. Key to getting banks sorted out for the public good.

Please see the following report (7 pages and 5000 words starting with a summary).

Report: Banks Create Money and what to do about it.

My 2nd June 2012 letter to the Chancellor to which I hope for a reasoned reply within their correspondence deadline of (I think) 14 days. Later note: I didn’t get a helpful reply and communications with them became harder and harder. They didn’t seem to me to be interested in giving really lucid replies. That needs to change.
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On the next Key Campaign ie saving the NHS.

Useful links

Positive Money

James Robertson’s book: Creating New Money.

Professor Richard Werner at the University of Southampton