News

May 2017 Positive Money New Zealand issued a press release seeking clarity from the Reserve Bank on how our money is created.  They still refer to intermediation by the banks, which is not how our banking system works.

5th November 2016 An article in The Guardian newspaper in England argued that abolishing debt-based currency holds the secret to getting our system off its addiction to growth.

5th September 2016 KPMG released a report, commissioned by the Prime Minister of Iceland, titled "Money Issuance" The report looked at money created by the Government.

28 March 2016 Bryan Gould has agreed to be the Patron for Positive Money New Zealand.

Bryan is a respected commentator on economic matters, an author, academic and Companion of the New Zealand Order of Merit.

31 October 2015 A monetary reform group in Switzerland has enough signatures for a referendum on who creates their money supply.

14 October 2015 The Finance Commission of the Dutch parliament discussed monetary reform.

31 March 2015. The Telegraph in London reports on the Icelandic governments plan to have their central bank issue their money supply and calls it a radical plan.

22 November. The British parliament debated money creation last week, for the first time in 170 years. There was cross-party support for a proposal to set up a monetary commission

23 September. A new generation of young people, dubbed ''property orphans'' may be destined to be renters for life.

17 September. The Bank of International Settlements (BIS), the bank used by central banks, confirmed New Zealand houses are among the most "unaffordable" in the world compared to people's incomes.

6 September. Bruce Bisset of Hawkes Bay today reveals the true story behind the so called Rock Star economy.

25th April 2014 "Strip private banks of their power to create money”: says the Financial Times’ chief economics commentator Martin Wolf, who endorses Positive Money’s proposals for reform

15th March 2014 - In a historic move The Bank of England quarterly bulletin explains how money is created. Whenever a bank makes a loan, it creates a deposit in the borrower’s bank account, thereby creating new money. The bank says that this differs from the story found in some economics textbooks.

16th August 2013. The retiring head of the Financial Markets Authority apologised for the mistakes made saying “You were let down”.

 

Captain Henry Kerby“That this House considers that the continued issue of all the means of exchange – be they coin, bank-notes or credit, largely passed on by cheques – by private firms as an interest-bearing debt against the public should cease forthwith; that the Sovereign power and duty of issuing money in all forms should be returned to the Crown, then to be put into circulation free of all debt and interest obligations…”

Captain Henry Kerby MP, in an Early Day Motion tabled in 1964.United Kingdom

Creating new money

The Big Four banks have been creating up to $14 bn of new money every year, causing massive inflation (especially in housing) and saddling the public with debt. We can't trust profit-seeking bankers or vote-seeking politicians to create money, as the temptation will always be for them to create too much.

So instead we need an independent, transparent and accountable body that is responsible for creating money and keeping inflation low. We suggest that the Monetary Policy Committee should have this task.

While some commentators have criticised the Government's 'Quantitative Easing' scheme as 'printing money' and being inflationary, these same commentators are usually ignorant of the fact that the money supply has increased by an average of of 9% per annum for the last 20 years  - almost entirely as a result of the money creation within the private banking system.

Since this newly created money was all matched by the same amount of debt, it laid the foundation for the recent financial crisis.

Our modernised system would make it impossible for commercial banks to increase the money supply in order to maximise their own profits. However, that's not to say that the economy will run smoothly on a fixed amount of money - we may need to increase the money supply in line with rises in population, productivity, or other fundamental changes in the economy.

There are also issues as we make the transition from a debt-fuelled economy that requires new money to avoid collapsing under the weight of the debt, to the stable, low-debt economy that this modernised system would create.

Consequently, in the absence of money creation by commercial banks, we need an alternative source of new money. Detail on what this source of new money should be, and how it will work is contained in Solution Detail - Creating New Money.

 

 

 

MoST Content Management V3.0.6374