Money, Money, Money (vid on economic crisis & History of Money)

[MarkiB]

For a thorough analysis of the current financial situation, watch this
documentary by Bill Still, known to many through his “Money Masters”
series. 
Ref: http://www.youtube.com/watch?v=D22TlYA8F2E

Still explains the latest financial crisis and the perversity at the heart
of it - how the private banking system causes nations to borrow even in the
good times and makes money out of the financing function of the government,
and in so doing, uncovers the underlying message of the original story of
Wizard of Oz by L Frank Baum. 

He explains how shortfalls in government spending over tax revenue the
difference is funded by government borrowing - which is funded by
government's issuing of interest-bearing bonds which are sold on the open
market and purchased by the banking system; banks go on to use these bonds
as collateral for further loans - 10 times as much – as part of the normal
practice of fractional reserve lending (central banks around the world just
revised the minimum capital reserves banks should hold in Basle, the Basel
3 agreement). Bonds reach maturity, so the government does not receive
anything more for this asset apart from the original capital finance from
it’s initial trade. Outstanding debt commitments accumulate into the future
as the 'National Debt', continually financed by continual borrowing into
existence. Interest payments on this national debt is increasingly
swallowing a larger and larger proportion of total government spending in
the financial year (in the UK, before the bailout after which the share of
the nationla debt to GDP skyrocketed up to over 70%, the cost of interest
payments on the National debt was about £30 billion a year).

In 2008, the US government not only bailed out a failing banking system to
the tune of $1 trillion (a neccessary temporary ameliorative measure to
stop the financial system built upon a debt-spiral from sliding into a
tumultuous crash), it borrowed this money as debt to support the system.
Thus, it is being charged interest on a debt created via the private
banking system - money which was then given to support that very banking
system! (in the UK, the Labour govt to their credit atleast gained share
ownership of banks in return for bailout funds, even if they also borrowed
this money at interest paid back to the banking system).

The question is, if the Bank of England I the UK and the Federal Reserve
in the US and other central banks around the world are “printing money” to
boost the economy in terms of quantative easing (money which has been
seemingly only used for short-term speculative purposes in the City of
London), why does the government not use the function of central
bank-created money to finance the shortfall?  The reason is usually given
that it is inflationary, pumping too  much money into the system. So, if
that is true, why has quantative easing not led to a Zimbabawe-style
inflationary spiral?  I don’t know the answer to why, but might I speculate
that the situation was possibly so bad that if the world led by Gordon
Brown hadn’t acted the way they did in October 2008, the economic
depression that would have been unleashed would have made 1929 look like a
tea-party.

However, there remains the question of how central banks’ ability of
create money under ‘normal’ circumstances is sacrificed in favour of
borrowing from the private banking system to create debt-based finance. As
in the Money Masters, Still gives a history on various instances over the
years of the American publics’ long fought struggle to retain public
ownership of their central bank against the monopolistic interests of
private capital interests.

m
-------- Original Message --------
Subject: [Diggers350] There's nothing wrong with banking in itself
Date: Mon, 13 Sep 2010 09:36:10 +0100
From: Mark Barrett <marknbarrett at googlemail.com>
To: diggers350 at yahoogroups.com

http://gco2e.blogspot.com/2010/09/theres-nothing-wrong-with-banking-in.html

There is something very wrong with banking when it has become corrupt,
by commanding the rental stream from land as an unearned income:

•70% + of money created as debt is to buy land
•It is created for free by private banking corporations. No capital
was employed for the returns as so called "interest"
•Zero cost of production = unearned income
•OK so there was some labour and capital employed, lets say about
0.001% is earned income
•The "interest" is really rent as the rental stream from the
collateral of the loan
•Who do you want to pay your rent to? A landlord or a bank?
•If the mortgagee defaults the bank gets a nice piece of land.
Evidently the best asset anyone can invest in as society advances
•Land values ALWAYS rise as society makes progress. And only fall when
it is in decline. That has only happened as whole civilisations have
collapsed (Rome, Babylon, China, India etc)
•If the "loan" is repaid in full, the bank gets double the loan unearned
•Thus there is no more risk to creating money as there is to buying
land directly. Please get over paying banks for risk. There is none.
Its a win win free gift for them
•Land is the thing the most people speculate on, even homeowners.
Banks do it the most intensely because of their buying power in
monopoly money creation
•21st century banks are the modern day aristocratic landlords, simply
more insidious. Fully protected by our democratically elected
parliament and our undemocratically elected house of (land) lords
•Failing to see this is why the integral nature of money creation and
private land ownership is a difficult concept
•In the end it is still the land that matters most, even today no
wealth can be created without it
•In fact this simple factor has intensified the more easily wealth can
be produced. It is growing in intensity while it becomes ever more
entrenched
•Remember: Wealth in the economic sense is not money, nor is it land.
Wealth is anything produced by doing work using natural resources,
that people want in exchange, for their own wealth
Make sense?

The legitimate business of banking might be limited to the:

•safe keeping of money
•loaning money *
•making of credits
•exchange of credits

* Real Loans from depositors money

Visit this group at http://groups.google.com/group/project2012?hl=en-GB.


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