Tag Archives: DEBTS

How much money can banks create – Banking 101…Positive Money

How much money can banks create – Banking 101 (Part 4)

Published on Jan 18, 2013

http://www.positivemoney.org/
What does actually limit the ability of banks to increase the money supply?
In this video you’ll see that the type of reserve ratio that’s discussed in the textbooks has never even existed in the UK. We’ll see that the liquidity ratios that did exist have been reduced and eventually abolished, and that even when they did exist, they only limited the speed that the money supply could increase, but put no limit on the total size that it could grow to.

You’ll learn that the Capital Adequacy Ratios and Basel accords are about preventing banks from going bust when loans go bad, rather than limiting their dangerous lending or limiting how much money they create through lending. And although the capital adequacy requirements can restrain lending after a banking crisis, it doesn’t do anything to restrain lending in a boom.

You’ll also see that there is no natural limit on how quickly the banks can create money. They know that even if they don’t have the actual central bank reserves to make payments, they’ll be able to borrow those reserves from other banks, or even the central bank.

All this comes together to imply that the only thing that truly limits the creation of money, is the willingness of banks to lend. And their willingness to lend depends on their confidence.

In other words, the money supply of the nation depends on the mood swings of banks and the senior bankers that run them. This is surely an insane way to run an economy.

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If you’d like to translate this video into other languages, please let us know. We’ll send you the transcript with timecodes.
Email: mira[at]positivemoney.org

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Positive Money is a not-for-profit research and campaign group. They work to raise awareness of the connections between our current monetary and banking system and the serious social, economic and ecological problems that face the UK and the world today. In particular they focus on the role of banks in creating the nation’s money supply through the accounting process they use when they make loans – an aspect of banking which is poorly understood. Positive Money believe these fundamental flaws are at the root of – or a major contributor to – problems of poverty, excessive debt, growing inequality and environmental degradation. For more information, please visit: http://www.positivemoney.org/

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The Gold Series: Gold as an Investment (Part 4)

http://www.visualcapitalist.com/portfolio/the-gold-series-gold-as-an-investment-part-4

Gold as investment...Infographic

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Usury: Making the Rich Avaricious & the Poor Poorer…108morris108

Usury: Making the Rich Avaricious & the Poor Poorer

Uploaded on Oct 13, 2010

This video explores the historical critique of Usury, its prohibition and some alternatives.

Usury – the lending of money at interest has been condemned throughout history by noble people of ALL faiths (Hindus, Buddhists, Jews, Muslims, Catholics, Greeks). It makes the poor poorer and gives rise to the most avaricious of lenders.

We are actually being told our wars are for the purpose of enriching these people – and this is presented to us as an acceptable reason (not in the video).

Instead of money being a medium of exchange, interest rates elevate money to being an end in itself.

It is strange that so many Jewish people are in the lending business, when lending at interest rates is treated with scorn in the Old Testament, although permissible in the event of lending to a non Jew for business purposes.

But nowadays we are all indebted, Jew and non Jew to interest rates for our housing and living expenses.

“In the Old Testament, usury is considered an “abominable thing,” listed next to rape, murder, robbery and adultery. (Ezekiel18:19-13).

The Ancient Greeks regulated interest, and then deregulated it. Upon deregulation, there was a catastrophic amount of unregulated debt which lead to the selling of Athenians into slavery. Plato (Laws, v. 742) and Aristotle (Politics, I, x, xi) both agreed that usury was immoral and unnatural…”

from: http://stopusuryinamerica.com/whatisusury.html

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