Money Creation: Impact, Mechanisms, and Consequences

The monetary system, controlled by private banks, creates money through debt, inflating housing prices, causing inflation, and diminishing real incomes.

### The Hidden Mechanics of the Monetary System
* 💸 The monetary system is crucial for **international dominance and national control**, as it provides the **foundation for the economy**.
* 📈 The majority of money is created by private banks as debt-based commercial bank money, with only a small portion (**3% created debt-free by the central bank**).
* 🏦 Central bank reserves, a form of electronic cash, are used by banks to **settle payments** with each other and with the central bank.
* 📉 Allowing banks to create money has led to an ever-increasing debt burden, as a growing economy under the current system requires **growing debt**.
* 🏛 The current system lacks **democratic control over how money is created and allocated**, with private banks determining the **priorities of the economy**.
* 💰 Since the collapse of the gold standard in 1971, money is no longer backed by a commodity, and its value is based on **trust and belief**.
* 📈 The World Economic Forum has called for a **$100 trillion expansion of credit in the global economy**, highlighting the need for **continuous debt growth**.
* 🏠 Rising house prices, driven by the expansion of the money supply, **redistribute wealth towards existing homeowners** and **away from future generations**.

### The Impact of Money on Society and the Economy
* 💰 "If you have somebody creating money that can only be spent on one thing, which is housing, then the **price of that thing is going to go up**."
* 🏠 The UK experienced a housing boom due to the **large amount of speculative credit created by banks**.
* 💸 "It's **non-GDP based spending** that's what causes inflation."
* 📉 Real incomes have been declining, with the poorest people bearing the **brunt of financial crises**.
* 🏦 The current debt-based monetary system allows banks to **extract wealth from the economy** while making loans for **non-productive purposes**.
* 🏛 Governments are reluctant to challenge the financial sector and **implement reforms**.
* 🔄 "The only option going forwards is to **reform it, to stop banks from creating money**."
* 🌍 Alternative currency systems, such as the Bristol Pound, can help build community and **support local businesses**.
* 🏦 "A bank run can take three forms: customers withdrawing cash, moving money to smaller banks, and **international transfers**."
* 💱 "Currency war is a condition where countries compete to achieve a **relatively low exchange rate** for their currency."

### The Global Monetary System: A Chaotic and Unfair System Controlled by Banks
* 💰 The modern financial system, which is no longer based on the gold standard, relies on the market to determine exchange rates. Each day, **$3.2 trillion is traded on currency markets**, making it the **largest and most liquid market in the world**.
* 🌍 The system's volatility can have severe impacts on countries, especially smaller or developing ones, leading to **financial crises** and **rapid capital outflows**. Many of the world's financial crises in the past 30 years have been caused by such activities, often referred to as **"financial warfare."**
* 🏦 Major financial institutions, especially large banks, have benefited significantly from the current system, which has allowed them to **accumulate vast wealth and power**. The financial sector has become even larger than the corporate sector, and the real money is made through **speculation and financial activities**.
* 🛡 To protect themselves from speculative attacks and economic instability, countries often accumulate reserves, usually in the form of foreign currencies. When a country succumbs to a speculative attack, it is often forced to **deregulate its markets and conform to the demands of more powerful nations or institutions**.
* 🌐 The global monetary system has been described as a form of economic warfare, with rich countries and banks exerting control over poorer nations and **forcing them to align with their interests**. This has been compared to a **modern form of colonialism**.
* 🏛 Calls for monetary reform and democratizing the money supply have been made to create a system that is **fair and stable**. One proposal is to strip banks of their power to create money and place it in the hands of an **independent, transparent, and accountable body**.
* 🏦 Banks, as the primary creators of money, have been criticized for using this privilege to pursue their own interests, such as risky financial activities and lending practices. The power to create money is so significant that it must be **carefully managed to prevent abuse**.
* 🌐 Democratizing the money supply would allow money to be allocated according to the **needs and desires of the population**, and systems could be put in place to enable **direct democratic allocation of funds**. This would ensure that money is used for the **public good**.
* 🏛 Achieving monetary reform is a political issue that requires action by governments and policymakers. The banking lobby is powerful, and there are significant obstacles to implementing reforms that would **challenge the status quo**. However, the need for change is increasingly recognized due to the **inherent flaws and inequalities** of the current system.

97% Owned   Economic Truth documentary   Queuepolitely cut

Die Schweiz vor zukünftigen Finanzkrisen schützen! 
Die Banken erzeugen 90 Prozent unseres Geldes - nämlich sämtliches elektronisches Geld auf unseren Konten. Das tun sie profitorientiert und ausufernd. Deshalb kommt es immer wieder zu Finanzblasen. Das wollen wir ändern!
• Allein die Nationalbank soll zukünftig elektronisches Geld erzeugen. 
• Banken dürfen kein eigenes Geld mehr schaffen, sondern nur noch Geld verleihen, das sie zur Verfügung gestellt bekommen haben. 
• Die Finanzbranche wird in den Dienst der Realwirtschaft und der Gesellschaft gestellt. 
Wir Schweizer haben 1891 den Banken das Drucken von Banknoten verboten. Jetzt müssen wir auch das Erzeugen von elektronischem Geld  der Nationalbank übertragen. 
Unterstützen Sie bitte die Vollgeld-Initiative!

Vollgeld-Initiative

The Creation and Evolution of the Monetary System

The monetary system's mechanics have been hidden from the public for centuries, impacting both national and international levels.

The majority of the UK's money supply is now digital, created by commercial banks as accounting entries.

The profit from creating physical money banknotes goes directly to the treasury, reducing the amount of taxes that need to be paid.

In the 1840s, the power to create money was taken away from commercial banks and given to the Bank of England, leading to the dominance of digital money in today's economy.

Private banks, not the government, are responsible for creating the majority of money in circulation and determine its allocation.

This process, known as commercial bank money, occurs when banks issue loans to the public and is a poorly understood fact by the general population.

The expansion of bank-created money has been significant, with the outstanding loan portfolio of bank-created credit standing at over 2 trillion pounds by 2008.

Additionally, the growth rate of this bank-created money has reached up to seven to ten percent annually, significantly impacting the economy.

The Impact of Allowing Banks to Create Money

Banks' ability to create money has led to a dependency on debt for the economy to function.

This system creates a cycle of boom and bust, where people become increasingly dependent on debt to survive.

The practice of bailing out banks perpetuates a system that is inherently unstable and reliant on constant growth in lending.

The Impact of Bank-Created Money on the Economy

Private banks create £200 billion of new money annually, influencing the economy and making housing more expensive.

The Bank of England controls central bank reserves, crucial for banks to make payments, with their amount dramatically increasing since the financial crisis.

The system of bank-created money circulating through a small pool of real money can have a significant impact on the overall financial stability.

The monetary system has evolved from the gold standard to being backed by nothing.

The Bretton Woods agreements established the US dollar as the global reserve currency, but it eventually collapsed, leading to the modern financial system.

Today, money creation has grown exponentially, leading to a complex situation of credit expansion, inflation, and skewed measures of the cost of living.

The Impact of Rising House Prices on the Economy

Rising house prices contribute to wealth inequality by benefiting the wealthy and burdening the poor.

The housing market boom is driven by speculative credit created by banks, leading to a disproportionate investment in housing over small businesses.

Government reluctance to regulate the housing market and bank investments further exacerbates the issue, perpetuating the housing bubble.

This strategy of inflating house prices allows for the expansion of the money supply without investing in productive industry growth, ultimately increasing relative power without creating real economic value.

The Financial Innovations and Impact of Credit Regulation

The Netherlands used financial innovation, such as public lotteries and public shares, to raise money and build a more efficient financial system in the 1630s.

Credit regulation, with a focus on productive investment, was key to their economic success and ability to compete with larger countries.

The current debt-based money system is leading to a gradual decrease in the standard of living, with real incomes declining and wealth being distributed from the poor to the rich.

The Impact of Banking and Debt on the Economy

Banks have the power to create the majority of the money supply and receive extensive guarantees and benefits from the government.

The shift of risk from the public to the private debt is causing a disproportionate burden on vulnerable individuals, leading to an unfair and regressive economic policy.

The current debt-based monetary system, driven by the banking sector, is contributing to growing income inequalities and placing the economy at risk of recurring financial crises.

The Impact of Corporate Debt Repackaging on the Average Person

The average person is facing increasing costs for borrowing through overdrafts and credit cards, despite England repackaging corporate debt at lower interest rates.

The concentration of power in the hands of a small group, including former employees of Goldman Sachs in key European positions, has raised serious concerns about democracy.

The current money system favors large businesses and offshore wealth, leaving little opportunity for individuals to invest in their local communities.

The Impact of Bank Runs and Trade Imbalances on the Economy

Bank runs can take different forms, from customers withdrawing cash to shifting money to smaller ethical banks, and can have catastrophic effects on the economy, as seen in the September 2008 meltdown.

International money withdrawals and currency exchange can shift the reserve currency from one country to another, leading to devaluations, speculation, and trade imbalances.

Persistent trade deficits result in countries borrowing from abroad, leading to the need for a credible plan to repay debts and make exports more competitive.

The Impact of Currency Wars on the Global Economy

Currency war is a competition among countries to lower the exchange rate of their currency, boosting demand for exports.

The modern financial system has led to the foreign exchange market becoming the largest and most liquid in the world, with trillions of dollars being traded daily.

Rapid and large financial flows caused by volatility can negatively impact small and developing countries, leading to financial crises and economic instability.

This form of economic warfare has greatly benefited major institutions and the wealthy, leading to a push for a deregulated financial market.

The Impact of Rich Countries and the Financial Sector on the Global Economy

Rich countries and the financial sector hold significant power over poorer countries, often compared to a form of colonialism, forcing them to act in the interest of the wealthiest.

The International Monetary Fund (IMF) plays a key role in governing the global financial system, imposing conditions on developing countries that have proven to be detrimental to their economy and growth.

The financial system's evolution, including securitization and risk management tools, has led to a dramatic increase in the power and control of the financial sector, impacting countries' sovereignty and economic development.

The Evolution of the Financial Market and the Need for a New Currency System

The financial market shifted from being self-regulating to experiencing a spectacular crash in 2008, due to the rapid growth of complex financial products.

This growth benefited the financial sector significantly, but the system is now seen as unstable and unfair.

There is a need for a new currency system, possibly backed by renewable energy or a basket of commodities, to generate investment and bring order to the international macro economy.

The Issue with Private Banks and Money Creation

Private banks have the privilege of creating money out of nothing, which they mostly use for their own profit through financial market speculation and risky mortgages.

This behavior led to the financial crisis and a need for public bailouts, while essential services suffer from a lack of funding.

There is a call to democratize the money supply and take away the banks' power to create money, advocating for a system that prioritizes the public benefit and is separate from the banking industry.

Giving the power to create money to a neutral and accountable body could prevent its abuse for personal gain.

The Money Reform Party aims to bring the issue of money reform to the public and prevent banks from gambling with people's money without their consent.

Monetary reform could lead to a more stable and less debt-dependent financial system, making essential investments still accessible.

The Impact of the Independent Commission on Banking

The Independent Commission on Banking was set up by the coalition government to make recommendations for fixing the banking sector, including preventing future bailouts.

The commission recommended greater capital and loss-absorbing capacity, as well as the ring-fencing of retail banks, aiming to lower the capital requirement ratio for retail banks.

There is a close relationship between the government and the banks, and the reforms needed can only be achieved through parliament.

The banking sector's growing wealth and power are highlighted as a threat to the economy, emphasizing the importance of implementing the recommended reforms.