Wednesday, March 19, 2014

Bank of England concurs with Prof Richard Werner's view on money creation by banks

Richard Werner (Professor of International Banking, University of Southampton) has for a decade or two made it quite clear that banks don't receive deposits and then pass them out as loans, rather they make the loans first, out of nothing. See his short video interview: Banking and the Economy and this one: Who creates the Money Supply? 

Now the Bank of England has admitted this is just what happens and in the latest Quarterly Bulletin 2014 Q1:  Money creation in the modern economy spells it out, also repeating the message with a video from the gold vaults of the Bank.

The Guardian has an article (David Graeber, Tue 18 Mar) as the general media suddenly discover the truth about money creation.

There are those who have a vested interest in the mythical convention that it is only the banks who can lend to governments to cover public spending deficits. Those are the bankers whose huge salaries and stupendous bonuses continue on despite the disaster of the financial crisis. The new Bank of England clarity needs to be pressed further. The government need not borrow to cover debt, the government could create its own money debt free and interest free as per another video by Richard Werner

Funny thing, Prof Werner's video messages about money/credit creation have been available since 2011 (see links to the full set). You wait three years for the media to catch on to these secrets about banking and suddenly they have found the courage! The next cause is to follow the Guardian and challenge the austerity theme that the Coalition Govt. is chained to, with its poverty-promoting effects for us all.  Positive Money has been battling away at this theme for ages, and  here is a helpful explanation about the false 'truths' of economic orthodoxy from Ann Pettifor.
posted by Charles Bazlinton. Author The Free Lunch - Fairness with Freedom (about banking reform and much more). 

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