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  ?

How the actual magic money tree works


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.




Tao Te Ching #41


When superior people hear of the Way
they follow it with devotion
When average people hear of the Way
they wonder if it exists
When inferior people hear of the Way
they laugh out loud
If they didn’t laugh
it wouldn’t be the Way
Hence these sayings arose
the brightest path seems dark
the path leading forward seems backward
the smoothest path seems rough
the highest virtue low
the whitest white pitch-black
the greatest virtue wanting
the staunchest virtue timid
the truest truth uncertain
the perfect square without corners
the perfect tool without uses
the perfect sound hushed
the perfect image without form
For the Tao is hidden and nameless
but because it’s the Tao
it knows how to start and how to finish

~Tao Te Ching #41 ~ 老子

Catalonia The Defiant

Results of the Spanish Civil Guards’ ”proportionate’’ actions.

As Guardia Civil  paramilitary forces are today using extreme violence to prevent crowds of peaceful citizens from voting, the entire political Establishment across the European Union has declared itself on the side of the paramilitaries.

Across the whole of the EU, the mantra of its mainstream media is that the Catalonian referendum is ”illegal”.

By what twisted logic can the right of a people to self-determination be constrained by the domestic legislation of the larger state from which that people seeks independence ?

Visca Catalunya ! Visca La Revolució !

craig murray The Freedom of Courage by Craig Murray

By arguing that Catalonia specifically signed up to the current Spanish constitution, all the Spanish government and its supporters are doing is offering conclusive evidence that the Catalans are indeed a people with the right of self-determination.

‘Double standard & hypocrisy’: Serbian president on EU denouncement of Catalan referendum

“The question every citizen of Serbia has for the European Union today is: How come that in the case of Catalonia the referendum on independence is not valid, while in the case of Kosovo secession is allowed even without a referendum. How did you proclaim the secession of Kosovo to be legal, even without a referendum, and how did 22 European Union countries legalize this secession, while destroying European law and the foundations of European law, on which the European policy and EU policy are based?”

Serbian President Aleksandar Vucic, 3 October 2017

Labour and Anti-Semitism (~continued~)


The taboo against anti-semitism is being fraudulently and shamelessly exploited by four distinct, but overlapping groups, all of whom will lose out if Jeremy Corbyn’s progressive ambitions for the Labour Party are successful.

1) The Conservative Party, who are attacking Labour at what is seen as its weakest point, while directing attention away from the Tories’ internal tensions and unpopular policies;
2) The BBC and mainstream media, now largely controlled by Zionists;
3) Pro-Israel activists, who wish to unseat Corbyn, the most prominent critic of Israel, and to discredit Palestine Solidarity activism;
4) The Blairite Labour Right, which hopes to weaken a popular grass-roots movement which has, quite suddenly and unexpectedly, wrested control of the Party from them.

 Israel constantly uses the ‘anti-semitism’ slur to block any meaningful discussion about Palestine. The reason anti-semitism is used is that the Israelis know perfectly well that they have NO valid argument with which to otherwise defend their colonial apartheid state – unless you count the racist ranting of their ”God” 3000 years ago, that is .

Miko Peled tells a fringe meeting at the Labour Party conference that Israel will do everything it can to stop Jeremy Corbyn becoming PM :


The Other 9/11


Exactly 44 years ago the USA orchestrated a violent coup d’etat against the democratically elected government of Salvador Allende in Chile, and imposed a brutal Neo-liberal regime led by Augusto Pinochet.

To say that Neo-Liberalism had a painful birth in Chile would be an understatement. During General Pinochet’s ruthless dictatorship over 3,000 people were “disappeared” (captured and tortured to death) whilst another 28,000 were detained without trial, most of them suffering torture and in many cases sexual abuse. Aside from those tortured and killed, and the families that survived them, other victims of this savage US-backed dictatorship included protesters who were burned alive in the streets by police, and musicians who had their fingers broken before being machine gunned to death.

1973 ~  The Other 9/11

Those who are unaware of the details about Pinochet’s blood-soaked two-decade reign should read about them, but take care not to eat beforehand.

He was a merciless overseer of torture, rapes and thousands of political executions. He had the hands and wrists of the country’s greatest folk singer Victor Jara broken in front of a crowd of prisoners before killing him. He had democratically elected Socialist President Salvador Allende shot dead at his desk. His specialty was torturing people in front of their families. As Naomi Klein has written so expertly in The Shock Doctrine, he then used this period of shock and slaughter to install a nationwide laboratory for neoliberal economics. If Pinochet’s friend Milton Friedman had a theory about cutting food subsidies, privatizing social security, slashing wages or outlawing unions, Pinochet would apply it.

The results of these experiments became political ammunition for neoliberal economists throughout the world, including Britain.

Pinochet was in charge of this human rights catastrophe. And yes, he was also someone who Margaret Thatcher called a friend. She stood by the General even when he was in exile, attempting to escape justice for his crimes. She said to Pinochet, “Thank you for bringing democracy to Chile.” Thatcher’s government directly supported Pinochet’s murderous regime, financially, via military support, even military training, which we know now took place in Dundee University.

The Shock Doctrine

Film by Michael Winterbottom, based on Naomi Klein’s terrifying book ”The Shock Doctrine : the Rise of Disaster Capitalism’’

Every September memorials are held for the 9/11 attacks in the US. Yet few recall the far more destructive 9/11 that occurred 28 years before.

Korea Amnesia

Dropping Bombs

US Air Force B-29 Superfortresses dropping bombs during the Korean War. (Photo by Keystone/Getty Images)

The mainstream media find it easy to mock North Korea’s paranoia and belligerence.

But they rarely remind us that In the 1950s the USA dropped 635,000 tonnes of bombs on North Korea, including 32,000 tonnes of napalm.

America killed approximately 20% of the North Korean population in those years.

It should not be surprising then, that this devastating assault resulted in a xenophobic, American-hating state obsessed with developing powerful weapons to ensure national survival. But in order to justify war, the existence of the Kim Jong-un regime is presented by politicians and the media as an inexplicable and eccentric manifestation of ”evil”.

That is to willfully ignore history. And tragically, that is now the norm for Western media.


korea war

Carthago Delenda Est


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