This interview with Lord Adair Turner by Bharat Azad is very well worth a read. Here's a short extract:
If we want an economy that benefits the health of us all, rather than a few, we need to know how it works, and that includes everything about money too. In a recent poll, over 70% of the UK's politician's didn't know how money is created - and as Fran Boait explains, it's mind bogglingly simple, but totally unexpected.
"The EU financial sector does not need to be eased, there is plenty of liquidity in the banks. Quantitative easing, as practised by the Bank of England and the US Federal Reserve, merely flooded the financial sector with money to the benefit of bondholders. This did not create a so-called wealth affect, with a trickle-down to the real producing economy.",writes our supporter from the Devon local group, Tony Pugh, in a letter in the Guardian, 25th Jan 2015 as a response to last week's announcement of quantitative easing programme by the European Central Bank’s president, Mario Draghi:
In a recent FT Alphaville article Izabella Kaminska argues that it is ‘naïve’ to attempt to constrain banks’ ability to create money, because this will only prompt other financial sector firms (‘shadow banks’) to create other forms of money that could be used as a substitute for money created by the state. Naturally, we disagree. Kaminska’s article misses some key points of economic history, and also overlooks other reasons why it is unlikely that substitutes for money will compete with state-created money.