moneyreform.

MONEY REFORM IS URGENT

Dick Clifford July 2011

The world faces huge problems, some are discussed and some are not. Global warming is discussed heatedly, Peak Oil - meaning the serious probability that oil production will be 20% down in 5 years time - is barely mentioned by the media. While the world financial position is discussed in great length very few suggest that the economic system itself needs reform.

A report issued by the Bank for International Settlements (BIS) on the 29^th June makes it plain that the dangerous imbalances now evident in the market are the same that led to the collapse of Lehman Brothers in 2008

The BIS calls for sweeping measures to bring down government debt. In many countries, it says, pension schemes and social benefits are too expensive to sustain. The report makes it plain that the working classes face a deepening brakedown of the world capitalist economy

The current money system is dependent on debt. The banker makes a loan to industry or government, nine tenths of which he has created by printing it with a computer key. So long as more money is being loaned, more is circulated, business is good, stocks rise, but if you cant repay the debt or the interest, you join the starving millions who cant take out a loan.

The system encourages private industry, which expects to make a profit and diminishes infrastructure usually built for the benefit of all, and is not expected to make a profit. But Banks still expect to charge interest though perhaps at a lower rate because the government can always raise taxes so the money is safer.

Governments avoid going into debt, the amount of tax they can raise is limited so they cant afford much infrastructure. But we need much more infrastructure. Solar towers to combat global warming, electric cars to combat oil shortage in addition to the expanding needs of education, hospitals and the renewal of railways, water mains etc. which have long passed their use by dates.

The present financial system, encumbered as it is by the debts in Europe, Africa and America is on the verge of collapse, but sadly few are talking about the need for reform. Don’t doubt that when the collapse comes Australia will be dragged down, while government debt is low, commercial debt is high (over 300% of GDP) also when the collapse takes hold few countries will be able to buy our exports.

REFORMS? In the USA there is the American Monetary Act which is able to provide money to the States for essential infrastructure, but nobody expects it to pass. Britain also has a reform act before parliament but there are no reforms before the Australian parliament as yet.

Has any financial reform been successful? Why yes, the Guernsey Experiment as it is called, started in 1817 and lasted over 100 years without inflation, maintaining low unemployment, prosperity for its citizens as measured by their bank accounts. How did they do it? It first must be realized that this island in the English channel was stony broke, owing money to the banks, they could not loan money because the citizens could not pay their taxes and they needed lots of infrastructure, so what to do?

They went and printed the money, just as the banks do. Conventional economists would be horrified but they were careful. The money was only spent on contracts to builders to build the sea defenses needed to prevent the island being washed away, on roads, on a school, on roads. The money trickled down to the rest of the community who were then able to pay their taxes. From the taxes they were able to cancel the issue amount originally printed so the account balanced, there was no inflation and not a cent of interest had been paid. Effectively the peoples taxes had paid for the infrastructure at cost price. There is always infrastructure needed so they again printed the money and the process was repeated for the next 100 years.

Why did it Stop? Because undue influence was brought against them to become a tax haven so they remained comfortably off using other peoples money. This happened after WW2 because some objected to Attlee’s high taxing government.

Could this happen again? It would be difficult because few countries actually control their own currency. European countries have ceded their rights to the European Union. African, South American countries have mostly all signed Free Trade Agreements which limit their financial freedom. But it only requires one or two countries to change for the rest of us to realise how stupid we are.

The real problem though is that the Banks would start a huge campaign maligning every possible reform and claiming that money wisdom lies only with the banks. They would not mention that their reduced business would mean that they could no longer pay their executives obscene salaries. Such is the power of the press that we would believe the banks. We will have to experience two more major world crashes before the bankers themselves admitted that reform is necessary.

Today unemployment in the USA is over 9%, The workers in Greece are striking and rioting because of the cuts being made on government expenditure. Many Australians do not realise how fortunate we have been in escaping the worst effects of the 2008 crash and do not remember the 1930s when unemployment was 25 - 30%, many tramped the countryside looking for odd jobs to earn a crust of bread. Soon we will all start to sing the old song,

"Brother, can you spare a dime?"

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	MONEY REFORM IS URGENT Dick Clifford July 2011 The world faces huge problems, some are discussed and some are not. Global warming is discussed heatedly, Peak Oil - meaning the serious probability that oil production will be 20% down in 5 years time - is barely mentioned by the media. While the world financial position is discussed in great length very few suggest that the economic system itself needs reform. A report issued by the Bank for International Settlements (BIS) on the 29^th June makes it plain that the dangerous imbalances now evident in the market are the same that led to the collapse of Lehman Brothers in 2008 The BIS calls for sweeping measures to bring down government debt. In many countries, it says, pension schemes and social benefits are too expensive to sustain. The report makes it plain that the working classes face a deepening brakedown of the world capitalist economy The current money system is dependent on debt. The banker makes a loan to industry or government, nine tenths of which he has created by printing it with a computer key. So long as more money is being loaned, more is circulated, business is good, stocks rise, but if you cant repay the debt or the interest, you join the starving millions who cant take out a loan. The system encourages private industry, which expects to make a profit and diminishes infrastructure usually built for the benefit of all, and is not expected to make a profit. But Banks still expect to charge interest though perhaps at a lower rate because the government can always raise taxes so the money is safer. Governments avoid going into debt, the amount of tax they can raise is limited so they cant afford much infrastructure. But we need much more infrastructure. Solar towers to combat global warming, electric cars to combat oil shortage in addition to the expanding needs of education, hospitals and the renewal of railways, water mains etc. which have long passed their use by dates. The present financial system, encumbered as it is by the debts in Europe, Africa and America is on the verge of collapse, but sadly few are talking about the need for reform. Don’t doubt that when the collapse comes Australia will be dragged down, while government debt is low, commercial debt is high (over 300% of GDP) also when the collapse takes hold few countries will be able to buy our exports. REFORMS? In the USA there is the American Monetary Act which is able to provide money to the States for essential infrastructure, but nobody expects it to pass. Britain also has a reform act before parliament but there are no reforms before the Australian parliament as yet. Has any financial reform been successful? Why yes, the Guernsey Experiment as it is called, started in 1817 and lasted over 100 years without inflation, maintaining low unemployment, prosperity for its citizens as measured by their bank accounts. How did they do it? It first must be realized that this island in the English channel was stony broke, owing money to the banks, they could not loan money because the citizens could not pay their taxes and they needed lots of infrastructure, so what to do? They went and printed the money, just as the banks do. Conventional economists would be horrified but they were careful. The money was only spent on contracts to builders to build the sea defenses needed to prevent the island being washed away, on roads, on a school, on roads. The money trickled down to the rest of the community who were then able to pay their taxes. From the taxes they were able to cancel the issue amount originally printed so the account balanced, there was no inflation and not a cent of interest had been paid. Effectively the peoples taxes had paid for the infrastructure at cost price. There is always infrastructure needed so they again printed the money and the process was repeated for the next 100 years. Why did it Stop? Because undue influence was brought against them to become a tax haven so they remained comfortably off using other peoples money. This happened after WW2 because some objected to Attlee’s high taxing government. Could this happen again? It would be difficult because few countries actually control their own currency. European countries have ceded their rights to the European Union. African, South American countries have mostly all signed Free Trade Agreements which limit their financial freedom. But it only requires one or two countries to change for the rest of us to realise how stupid we are. The real problem though is that the Banks would start a huge campaign maligning every possible reform and claiming that money wisdom lies only with the banks. They would not mention that their reduced business would mean that they could no longer pay their executives obscene salaries. Such is the power of the press that we would believe the banks. We will have to experience two more major world crashes before the bankers themselves admitted that reform is necessary. Today unemployment in the USA is over 9%, The workers in Greece are striking and rioting because of the cuts being made on government expenditure. Many Australians do not realise how fortunate we have been in escaping the worst effects of the 2008 crash and do not remember the 1930s when unemployment was 25 - 30%, many tramped the countryside looking for odd jobs to earn a crust of bread. Soon we will all start to sing the old song, "Brother, can you spare a dime?"
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