UK Parliament will hold a three hour debate on the issue of ‘Money Creation and Society’ on Thursday 20th November. This will be the first time in 170 years that Parliament has debated money creation.
Under the current monetary system customer deposits provide banks with a cheap source of central bank reserves, which are required to make the payments to other banks that may result from the issuing of loans. (Banks acquire central bank reserves (base money) when payments are made to their customers’ bank accounts.) However, despite helping to fund the loans, depositors have no say and little idea over the use of ‘their’ money. They may therefore be unwittingly helping to fund activities that they disagree with.
Cash is disappearing. It is being replaced by electronic money which is just numbers in computers and other electronic devices. The joke is that electronic money is not legal tender. The law has been left behind by technology and up to now the politicians have omitted to extend the government’s monopoly of money to electronic money. That is no accident because the banks profit enormously from this legal loophole.