Well well, who'd have thought it. IMF report highlights the fundamental problem of allowing banks to create debt based IOU money and how we could solve the current economic crisis. www.telegraph.co.uk/finance/comm ... nkers.html

Well well, who'd have thought it. IMF report highlights the fundamental problem of allowing banks to create debt based IOU money and how we could solve the current economic crisis. www.telegraph.co.uk/finance/comm ... nkers.html

Quote LeighGionaire="LeighGionaire"Well well, who'd have thought it. IMF report highlights the fundamental problem of allowing banks to create debt based IOU money and how we could solve the current economic crisis. www.telegraph.co.uk/finance/comm ... nkers.html'" There is too much vested interest in the the way the current system works for this to happen IMO. I think the whole thing would have to come crashing completely down for it to be even considered. So long as they can keep kicking the can down the road to maintain the current system they will IMO.

Quote LeighGionaire="LeighGionaire"Well well, who'd have thought it. IMF report highlights the fundamental problem of allowing banks to create debt based IOU money and how we could solve the current economic crisis. www.telegraph.co.uk/finance/comm ... nkers.html'" There is too much vested interest in the the way the current system works for this to happen IMO. I think the whole thing would have to come crashing completely down for it to be even considered. So long as they can keep kicking the can down the road to maintain the current system they will IMO.

First line of the paper: This Working Paper should not be reported as representing the views of the IMF.

Problem with this is it puts enormous power in the hands of the state.

Can't argue with that but they are reaching the end of the road IMO, there isn't much further the can can be kicked.

Quote Cookridge_Rhino="Cookridge_Rhino"First line of the paper: This Working Paper should not be reported as representing the views of the IMF.'" Whilst true just the fact that there is a working paper based on this issue circulating within the IMF is a massive step forward for anybody like me who believe's the current debt based system is fundamentally flawed. This position is becoming slightly more mainstream every day. At one time the only people talking about bank created debt based money were conspiricy sites and obscure economic publications. Now we have a think tank devoted to the issue called Positive Money, several well know economists highlighting the flaws and now an IMF paper. The problems with debt based money even got mention on Radio 4 recently - you can listen to the 15 minute programme here. www.bbc.co.uk/programmes/b01ngmjr

Quote Cookridge_Rhino="Cookridge_Rhino"First line of the paper: This Working Paper should not be reported as representing the views of the IMF.'" Whilst true just the fact that there is a working paper based on this issue circulating within the IMF is a massive step forward for anybody like me who believe's the current debt based system is fundamentally flawed. This position is becoming slightly more mainstream every day. At one time the only people talking about bank created debt based money were conspiricy sites and obscure economic publications. Now we have a think tank devoted to the issue called Positive Money, several well know economists highlighting the flaws and now an IMF paper. The problems with debt based money even got mention on Radio 4 recently - you can listen to the 15 minute programme here. www.bbc.co.uk/programmes/b01ngmjr

This same power is currently in the hands of international banking cartels. At least with the state controling the money supply in theory government policies that we vote for will determine where any extra money created gets spent into the economy and at least it stops banks leeching off the tax payer via the National Debt.



Just think about this for a moment. Governments go to banks to borrow money. The banks create this money OUT OF NOTHING and loan it to the government at interest. Why didn't the Government just create the money itself and spend it into the economy?

So you're suggesting making banks (as we know them) illegal, and making the government the only organization allowed to be a fractional reserve bank?



Also banks cannot buy assets (such as government bonds) with money created out of nothing. If they could do this why would governments ever struggle to sell bonds, there would be a limited supply of gov't bonds and a limitless demand (because hey, there's absolutely no risks involved because they can create as much money as they want and buy as many bonds as they want - even if some get defaulted on they haven't lost anything).

Cookridge Rhino is right. What you are thinking about in terms of 'creating money from nothing' is banks lending out more money than they have to cover their depositors' deposits, counting on the fact that

a) their depositors will not all demand their deposits back at once

b) if they are in a situation where they have to raise cash quickly to meet depositors' demands, they will be able to borrow off another bank



Whilst I agree there are risks in this model and it needs to be carefully regulated, banks cannot create money from thin air.



There would have been no reason for Lehman brothers, RBS etc to go under - surely they could have just created $1000 trillion from thin air and then they would have been solvent again.



In reality money creation is what the Central Bank does - quantitative easing is the central bank creating money out of thin air to buy government bonds so this is effectively what you are advocating.

You'll never convince Legionnaire.

Nobody will do that.

Quote sally cinnamon="sally cinnamon"Cookridge Rhino is right. What you are thinking about in terms of 'creating money from nothing' is banks lending out more money than they have to cover their depositors' deposits, counting on the fact that a) their depositors will not all demand their deposits back at once b) if they are in a situation where they have to raise cash quickly to meet depositors' demands, they will be able to borrow off another bank Whilst I agree there are risks in this model and it needs to be carefully regulated, banks cannot create money from thin air. There would have been no reason for Lehman brothers, RBS etc to go under - surely they could have just created $1000 trillion from thin air and then they would have been solvent again. In reality money creation is what the Central Bank does - quantitative easing is the central bank creating money out of thin air to buy government bonds so this is effectively what you are advocating.'" If banks don't create money why would Bank Of England chairman Mervyn King say this in a speech last week? Quote sally cinnamonWhen banks extend loans to their customers, they create money by crediting their customers’ accounts. The usual role of a central bank is to limit this rate of money creation, so that an excessive expansion of money spending does not lead to inflation.'" You can find the quote on p3 of the document. www.bankofengland.co.uk/publicat ... ech613.pdf If Banks don't create money how has the money supply doubled in the past 8 years? If banks can create money how can a bank go bust? www.positivemoney.org.uk/2012/07 ... went-bust/ As to Dally and Mintball, I can easily see why you might not agree with some random internet poster, but when the Bank Of England Chairman backs up my claims surely that gives my opinion some credibility? Please watch this documentary - it's only an hour long. If you can see any fatal flaws in the thinking behind it I'd be interested to see you point them out. www.positivemoney.org.uk/97perce ... cumentary/

Quote sally cinnamon="sally cinnamon"Cookridge Rhino is right. What you are thinking about in terms of 'creating money from nothing' is banks lending out more money than they have to cover their depositors' deposits, counting on the fact that a) their depositors will not all demand their deposits back at once b) if they are in a situation where they have to raise cash quickly to meet depositors' demands, they will be able to borrow off another bank Whilst I agree there are risks in this model and it needs to be carefully regulated, banks cannot create money from thin air. There would have been no reason for Lehman brothers, RBS etc to go under - surely they could have just created $1000 trillion from thin air and then they would have been solvent again. In reality money creation is what the Central Bank does - quantitative easing is the central bank creating money out of thin air to buy government bonds so this is effectively what you are advocating.'" If banks don't create money why would Bank Of England chairman Mervyn King say this in a speech last week? Quote sally cinnamonWhen banks extend loans to their customers, they create money by crediting their customers’ accounts. The usual role of a central bank is to limit this rate of money creation, so that an excessive expansion of money spending does not lead to inflation.'" You can find the quote on p3 of the document. www.bankofengland.co.uk/publicat ... ech613.pdf If Banks don't create money how has the money supply doubled in the past 8 years? If banks can create money how can a bank go bust? www.positivemoney.org.uk/2012/07 ... went-bust/ As to Dally and Mintball, I can easily see why you might not agree with some random internet poster, but when the Bank Of England Chairman backs up my claims surely that gives my opinion some credibility? Please watch this documentary - it's only an hour long. If you can see any fatal flaws in the thinking behind it I'd be interested to see you point them out. www.positivemoney.org.uk/97perce ... cumentary/