Prosperity Can Only Come From Change
Once it is understood how the economy is actually funded, it should come as no surprise to anybody that little or no progress is being made in the recovery from recession. It is the same story in America and Europe. All of the talk is of a global financial problem, which it is, but that is no reason why Britain cannot independently tackle the cause of the problems we face, leaving others to do as they see fit. The solution to Britain’s financial problem is not solely dependent upon a global solution.
Britain’s economy is debt based which means that it constantly relies upon new debt to finance economic stability and to fund new growth. In the absence of sufficient new debt, the amount of money in circulation will continue falling and with it demand for goods and services.
The cause is due almost entirely to lower consumer spending, which can be expected to continue falling until banks are prepared to substantially increase their lending, or there are fundamental changes made to how the economy is funded. If the basic economy were to be funded debt free, then Britain’s economy would be turned around. The resulting increase in consumer spending from this one change would create demand and at the same time increase employment opportunities.
Each month loan repayments are made, together with accruing interest charges which takes money out of circulation. As the debt consisted of ‘numbers’ money in the first place i.e. just numbers written on a bank account with no actual money involved, the repayments simply cancels out those numbers, without actually putting real money back into the hands of the banks.
The situation is blacker still when it is understood that we now collectively owe more money than we collectively have in all of our bank accounts, with the result that even the money needed to pay the loan interest has to come from borrowed money in the first instance. The difference between owed and money available to repay is a shortfall of between £300bn and £400bn. This is a situation that can only continue to worsen until the the present system of ‘numbers’ money is changed materially.
Those figures takes no account of the national debt which is quite separate from the commercial and private debt.
If the total amount owed to the banks etc. exceeds the total money available, then it means that if you have money in your bank account it will only be because someone else owes that money. Money which has worked through the system and has found its way into your pocket. Looked at another way, if I am an employer and I borrow from the bank to finance my business, and I use that money to pay the staff wages, then those who received the wages only have that money because I owe it.
As there is no possibility whatsoever of our getting out of debt, because there is insufficient money in existence to pay off all of the debt, the position can only progressively worsen, because of the constant addition of interest and other charges.
The final report from the Independent Commission on Banking didn’t even acknowledge this situation let alone consider how the problem is to be overcome.
The question on every ones lips should be “Why does the government continue to allow the banks’ to control the economy through their debt creation monopoly, which apart from notes and coins is the only way ‘new’ money is brought into circulation?”
Join the Campaign!
Join the 22,566 of us who know that our money system needs fundamental changes if we want an economy that works for people, not banks.
Trackback from your site.