Summary: See my new Radio site at www.SteveHart.co In this edition of Talking Point I draw on a previous interview with Don Richards of Positive Money based in Wellington, New Zealand. Don is part of a growing campaign to reform the international banking system and curtail their ability to create money by typing numbers into a computer. Supporters of the Positive Money campaign want governments to create interest-free money to fund things such as public projects - from house building to roads etc - and to not borrow the money from banks and then burden tax payers with interest payments. The Positive Money website is here. Subscribe and comment on iTune here Comment - By Steve Hart When you first hear that banks create money by typing numbers into a computer you can’t quite believe it. When you hear that this free ‘money’ is lent out with interest added, you dismiss it as lies because the banks would be no better than counterfeiters. Like the rest of us, I have been watching as our government, as well as those across Europe and in the US, beg for funds from the central banks to the tune of trillions of interest-bearing dollars. In the back of my mind I wondered where all this money came from - it couldn't all be the savings of bank customers... I watched documentaries such as Bill Still’s The Secret of Oz, Paul Grignon’s Money as Debt and read Deirdre Kent’s excellent book Healthy Money, Healthy Planet. It took less than a week to join the dots and understand that we are collectively indebted to the banks and the debt will only grow larger. Under the current monetary system, there is no way out. Once you understand that the banks create 98 per cent of all money in New Zealand, and the money is loaned out with interest attached, and that the two per cent of money (notes and coins) created by the government is nowhere near enough to pay that interest, you start to understand why we are in a collective spiral of increasing debt. The Reserve Bank of New Zealand (RBNZ), which has the ability to create debt-free money, will tell you why it would be madness for the RBNZ to take back control of the money supply. This is what Mike Hannah of the Reserve Bank has to say about it: “If the government ‘prints money’ and uses it to spend in the economy, the quantity of money in the economy increases, and all else [being] equal, interests rates will fall, and prices will rise.” What Hannah forgets is that government printed money would not be inflationary when spent on items such as infrastructure – items that are currently funded by taxes and bank loans taken out by the government. Loans that are paid for with tax receipts and reduced public services. Hannah says: “Conversely, when the government borrows money from the public to spend, this in itself does not increase the money supply.” This ‘public’ money comes from banks, the creators of most of our funds. So it has already been created out of thin air and is attracting interest. Instead of saying ‘money supply’ Hannah could more accurately call it ‘debt supply’. If the government created and controlled the money we need, it would not need to borrow any money. As a country we would not be beholden to any corporation. Is changing the way government obtains the money it needs to pay for public services, infrastructure and civil servant payrolls an election issue? It could be. But as countries start to fall further into debt, as banks step in to foreclose on people’s homes, businesses and (European) countries, a sea change may be unstoppable. It is likely that any change will have to be driven by the people. We can’t rely on politicians, who’s Parties - and future careers - may well be funded by the banks, to look seriously at changing the current system. When banks lend you millions of dollars, do you do what the people want or what the banks want? Who’s your daddy?
