The Magic Money Tree

Politicians (of all parties) are woefully ignorant about where money comes from, according to this new poll commissioned by Positive Money.

There really is, in fact, a ‘’magic money tree”,’ but it is in the hands of privately-owned commercial banks like Barclays. NatWest and HSBC, who create new money out of nothing whenever they make loans.

Tragically, this (un-earned) privilege is used in ways which don’t benefit – and actually harm – most of society. Over 80 percent of new bank lending is directed towards property and financial markets, pushing up the value of assets like houses, shares, and corporate bonds. . This is making housing unaffordable, increasing inequality, and resulting in more and more people being crippled by debt.

In order to address the problems of rising inequality, the housing crisis and record levels of personal debt, MPs surely need to grasp the basics of how the economy works…..don’t they  ?  

http://positivemoney.org/2017/10/mp-poll/


How the actual magic money tree works

MONEY

Guardian article by Zoe Williams.

How is money created ? Some is created by the state, but usually in a financial emergency. For instance, the crash gave rise to quantitative easing – money pumped directly into the economy by the government. The vast majority of money (97%) comes into being when a commercial bank makes a loan. Meanwhile, 27% of bank lending goes to other financial corporations; 50% to mortgages (mainly on existing residential property); 8% to high-cost credit (including overdrafts and credit cards); and just 15% to non-financial corporates, that is, the productive economy.

What’s wrong with that ? On the corporate financial side, bank-lending inflates asset prices, which concentrates wealth in the hands of the wealthy. On the mortgage side, house prices rise to meet the amount the lender is prepared to lend, rather than being moored to wages. The lender benefits enormously from larger mortgages and longer periods of indebtedness; the homeowner benefits slightly from a bigger asset, but obviously spends longer in debt servitude; the renter loses out completely.

Is there a magic money tree ? All money comes from a magic tree, in the sense that money is spirited from thin air. There is no gold standard. Banks do not work to a money-multiplier model, where they extend loans as a multiple of the deposits they already hold. Money is created on faith alone, whether that is faith in ever-increasing housing prices or any other given investment. This does not mean that creation is risk-free: any government could create too much and spawn hyper-inflation. Any commercial bank could create too much and generate over-indebtedness in the private economy, which is what has happened. But it does mean that money has no innate value, it is simply a marker of trust between a lender and a borrower. So it is the ultimate democratic resource. The argument marshalled against social investment such as education, welfare and public services, that it is unaffordable because there is no magic money tree, is nonsensical. It all comes from the tree; the real question is, who is in charge of the tree ?

What could we do instead ? We could do QE for the people, overt monetary financing in which a government creates money for social benefit, such as green infrastructure or education. Or helicopter money, a central bank distributing it to everyone, either in a one-off citizen’s dividend or a regular citizen’s basic income. The nature of centrally created money should itself be opened up for debate, whose starting point is: if we agree that commercially created money is skewing the economy, can we then agree that it should be created by a public authority, even if we don’t yet know what that authority would look like.

https://www.theguardian.com/global/shortcuts/2017/oct/29/how-the-actual-magic-money-tree-works?CMP=Share_AndroidApp_Facebook


greco_christ-traders-temple A FEW QUOTES ON BANKING : https://mpbondblog.wordpress.com/2014/01/10/a-few-qoutes-on-banking/

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Carthago Delenda Est

putin

When Vladimir Putin was elected President of Russia in 2000, the nation owed $16 billion to the International Monetary Fund, and its debt to the Rothschild-controlled ‪‘’Paris and London Club Of Creditors’’ was over $36 billion.

Since then, at the same time as fully repaying these debts, Russia has written off a large part of the debt developing countries owed to it. In total, Russia has forgiven more than $100 billion in debt owed by developing countries (including Cuba, Iraq, North Korea, and much of Africa) over the past decade.

This is the REAL reason the global banking elite and their puppet governments in the West demonize Putin — Russia has effectively escaped the clutches of their rapacious hegemony and neo-liberal austerity doctrine, restored its own national financial sovereignty, and set the ‘dangerous’ precedent of unilaterally writing off unpayable or crippling debt.

Carthago delenda est.


Russia pays off balance of Soviet Union’s foreign debt

russia


Zionist-war-mongers-by-Dees

ALL WARS ARE BANKERS’ WARS (video)  https://mpbondblog.wordpress.com/2013/11/01/all-wars-are-bankers-wars/


 

A Labour Brexit

corbynomics

As events play out over the next year or two, a ”Labour Brexit” might just provide the best possible outcome.

It’s clear to me that if Britain somehow stayed in the EU under Corbyn it would sooner or later face similar punitive measures from  the  ”troika‘  that Greece under Syriza suffered (and continues to suffer). The EU remains essentially a neo-liberal / austerity economic project, and Labour, the largest political party in Europe, must now offer an alternative, based on radical reform of the banking system – the proposed National Investment Bank is a good start – and re-structuring of debt.

Who knows, the rest of Europe might then follow Britain’s lead….


“My view of the EU has always been, not that I am hostile to foreigners, but I am in favour of democracy.  I think they are building an empire and want us to be part of that empire, and I don’t want that.”  ~ Tony Benn

BENN EU”I am against the Treaty of Rome which entrenches laissez-faire as its philosophy and chooses bureaucracy as its administrative method.” ~Tony Benn (Encounter, January 1963).

Debt Slavery

ezra pound

Debt forms the kernel of the modern State, and the new apparatus of repression.

The system of endless monetary debt, precluding forever all prospect of its discharge, is to be mankind’s crushing fate.

Now the aim of the State is to make the glance recoil disconsolately from an iron impossibility.

The Earth becomes a madhouse.


A Few Quotes on Banking : https://mpbondblog.wordpress.com/2014/01/10/a-few-qoutes-on-banking/

Mnuchin : Neck-deep in the Trump Swamp

mnuchin
 If it wasn’t already obvious that Trump’s ”tough” pre-election talk about ‘’draining the swamp’’ was merely empty rhetoric, his appointment of longtime Goldman Sachs executive Steve Mnuchin as Treasury Secretary removes any doubt.
As his companies were aggressively foreclosing on homeowners at the time of the 2008 crash, and millions of Americans were losing their homes, jobs, savings and pensions, Mnuchin was making his fortune off their misery.
Mnuchin also has a lucrative sideline as ”executive producer” of Hollywood movies, including the hideous celebration of patriotic psychopathy, American Sniper.
As Democratic National Committee chairwoman Donna Brazile says, ”The muck in President Trump’s swamp just got neck-deep.”

Brexit and Neo-Feudalism

brexit2
There was a fundamental flaw in the fear-mongering logic of the Remain campaign – namely that scaring deprived communities with economic uncertainty simply would not work when they had lived with economic uncertainty for over 30 years.
In communities where self-employed tradesmen have not given themselves a pay rise for fifteen years; where the minimum wage is the maximum wage for many, and zero hour contracts offer zero security to others – try explaining to these people that the EU ”protected their employment rights”.
In Britain today, 63 per cent of poor children grow up in families where at least one family member is working. For them, the poverty trap has already closed. A recent study found that more than 600,000 residents of Britain’s second city, Greater Manchester, are “experiencing the effects of extreme poverty.”
The profoundly undemocratic EU has become essentially a mechanism of capitalistic entrenchment, social injustice, austerity, bankers’ hegemony and endemic indebtedness — the virulent extremism known as “Neoliberalism”, or as I prefer to call it : Neo -Feudalism.

Why the British said no to Europe

john pilger by John Pilger : https://mpbondblog.wordpress.com/2016/06/26/deal-with-it/


NEO FEUDAL

Conceived in Iniquity, Born In Sin

BENN EUConceived in iniquity and born in sin”. ~ Sir Josiah Stamp, a Governor of the Bank of England back in the 1920’s, used these words to describe the modern banking system, but they apply equally to the origins of the EU.

”I am against the Treaty of Rome which entrenches laissez-faire as its philosophy and chooses bureaucracy as its administrative method.” ~Tony Benn ( Encounter, January 1963).