News

May 2017 Positive Money New Zealand issued a press release seeking clarity from the Reserve Bank on how our money is created.  They still refer to intermediation by the banks, which is not how our banking system works.

5th November 2016 An article in The Guardian newspaper in England argued that abolishing debt-based currency holds the secret to getting our system off its addiction to growth.

5th September 2016 KPMG released a report, commissioned by the Prime Minister of Iceland, titled "Money Issuance" The report looked at money created by the Government.

28 March 2016 Bryan Gould has agreed to be the Patron for Positive Money New Zealand.

Bryan is a respected commentator on economic matters, an author, academic and Companion of the New Zealand Order of Merit.

31 October 2015 A monetary reform group in Switzerland has enough signatures for a referendum on who creates their money supply.

14 October 2015 The Finance Commission of the Dutch parliament discussed monetary reform.

31 March 2015. The Telegraph in London reports on the Icelandic governments plan to have their central bank issue their money supply and calls it a radical plan.

22 November. The British parliament debated money creation last week, for the first time in 170 years. There was cross-party support for a proposal to set up a monetary commission

23 September. A new generation of young people, dubbed ''property orphans'' may be destined to be renters for life.

17 September. The Bank of International Settlements (BIS), the bank used by central banks, confirmed New Zealand houses are among the most "unaffordable" in the world compared to people's incomes.

6 September. Bruce Bisset of Hawkes Bay today reveals the true story behind the so called Rock Star economy.

25th April 2014 "Strip private banks of their power to create money”: says the Financial Times’ chief economics commentator Martin Wolf, who endorses Positive Money’s proposals for reform

15th March 2014 - In a historic move The Bank of England quarterly bulletin explains how money is created. Whenever a bank makes a loan, it creates a deposit in the borrower’s bank account, thereby creating new money. The bank says that this differs from the story found in some economics textbooks.

16th August 2013. The retiring head of the Financial Markets Authority apologised for the mistakes made saying “You were let down”.

 

John Kenneth Galbraith“The study of money, above all other fields in economics, is one in which complexity is used to disguise truth or to evade truth, not to reveal it. The process by which banks create money is so simple the mind is repelled. With something so important, a deeper mystery seems only decent.”

John Kenneth Galbraith (1908-2006 ), former professor of economics at Harvard, writing in ‘Money: Whence it came, where it went’ (1975).

Benefits / Problem overview

Following is a table that compares the "merits" of money creation by private banks and a full reserve one.

   

Current Economy
(Money created by private banks)

 New Economy
(Full Reserve Banking)

Money created as destructive
means of exchange
Money created as medium of exchange
Money serves private profit Money serves the public
Privately controlled money supply Government regulated money supply
Interest-bearing debt keeps expanding Interest-free debt will not grow
Competitive scarcity of money Sufficient supply of money
“Boom and bust” crash-fated economy Confident, stable economy
Economic growth needed to repay
debt despite finite world
Allows steady state economy
within limits of finite world
Government debt increases public tax
burden until impossible level of debt
Government does not incur debt to
fund services, so taxation lower
Cuts to public services Allows reliable public service funding
Unemployment High level of employment
Primarily short-term investment in
profit-driven products, infrastructure
Facilitates long-term investment in
public services, infrastructure
Promotes consumer culture and the
unsustainable manufacture of ‘stuff'
Promotes sustainably-focused
innovation and enterprise
Promotes environmental exploitation and
destruction of Earth’s biosphere
Promotes ecological economics
to maintain life on Earth
Transfers wealth upward from net
borrowers to net lenders 
Wealth remains where created
Promotes human exploitation Promotes social justice
Increases poverty, famine, disease,
and resource scarcity
Reduces human hardship and
alleviates resource scarcity
Results in economic migration to
cities and developed countries 
Supports rural communities, towns
and local economies
Supports Plutocracy (rule by money) Supports Democracy (rule by public)

 

 

 

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