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bankster01There is a period of time when the repayment will reduce both sides of the bank's balance sheet, money is destroyed, and money has been taken from the economy to repay the loan if it is someone like me paying down a mortgage for example. Most banks were told to reduce their balance sheets after the ...

Yesterday

Marco Saba"there is nothing to stop the bank using my repayments as the basis for further lending" and further spending if they see it fit....

2 days ago

donald dietrichI think he is on about reserves not being destroyed as he mentions 'cash' and 'clearing'. Suppose he could say what happens when we pay down our loans with more clarity. Which would probably be exactly what we know happens on their spreadsheets. Some people still split hairs in regards to 'money'...

2 days ago
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Why we disagree with Ann Pettifor

ann4

A couple of months ago, Positive Money's proposals to reform the creation of money were featured by Martin Wolf (the chief economics commentator at the Financial Times). In an article entitled "Why I disagree with Martin Wolf and Positive Money", veteran campaigner and economist  Ann Pettifor responded that the proposal is 'deeply flawed', 'outlandish', and would lead to "a shortage of money, high unemployment and low economic activity".

sacicrI would like some one to evaluate what I say here. Because I am not an expert, but I think Anne Pettifor is wrong for the following two reasons (apart from all those mentioned in the above article).1) If 97% of the money supply is created as a debt, compound interest will make the debt grow exponent...

Yesterday

Jamie Walton"ensure that things stay just as they are." - Wow! That says it all really.Things staying just as they are is not an option.The present system is extractive, is increasingly extractive, and is not sustainable.The present system is driving environmental destruction and leading our biosphere to the p...

3 weeks ago

Jamie WaltonCorrect PJM.Ann Pettifor also seems to be overlooking that savings, once lent, are then spent and are returned into the income stream, so it's not an ever-diminishing scenario. Money would simply pass back and forward between savers and borrowers (as it does now with all non-bank lending; e.g., pee...

3 weeks ago
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jakeSo how do Bank of England interest rates have an effect on Prive bank credit allocation at all?This is a real blindspot in my understanding of the monetary system.I understand that banks create credit.But what is the realtionship between BOE interest rates and Private bank lending.What are reserves?...

last month

simonThe credit multiplier has been shown not to be an accurate description of how the current banking sytem works, although it wrongly still gets top billing in economics text books. Banks tend to lend first, then seek the reserves later to support that lending. The book "Where does money come from" giv...

June 2014

David CroxtonSurely, if banks just electronically print the money they choose, then they can print the reserves also. It's only ordinary working people who suffer, who are then fooled into thinking they can safely borrow. We need politicians bright and strong enough to both understand the real situation who will...

June 2014
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Steve Wallis"This saves the government annual interest on £50bn of the national debt, freeing up more money for government spending."I've just checked interest rates on government bonds at http://markets.ft.com/research... and 3-year bonds are just over 1% (and only 3.37% on 30-year bonds). The annual interest...

June 2014

Marco SabaThe Bank of England is an unnecessary institution, making profits which “fairly belong to the public.” David Ricardo (1824) http://books.google.it/books/r......

June 2014

Chuck BaggettIn the phrase "both approaches recognise that money can created by the state" it should say "can be created" instead of "can created"....

June 2014
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