We can put an end to the cycles of boom and bust that plague our lives just by fixing the way that money and banking works.

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Editorial November 2011 'Time to reboot the system' (PDF 1.4mb)

IMF Working Paper August 2012 endorses a solution similar to the Positive Money one (PDF 1mb)

The Bank of England 2014 quarterly bulletin explains how money is created

The 1936 parliamentary debate that enabled our Reserve Bank to issue credit (money) for the construction of housing and public infrastructure.

Sovereign Money an introduction December 2016 which explains our Positive Money solution

The Solution - Overview

The Solution - Detailed

A better deal for bank customers

• Inflation
• Pensions
• The welfare state and benefits
• International trade and currency
• Summary

• Despite the removal of deposit insurance, citizens who wished to keep their money safe and have absolutely no risk of losing their savings would have the ability to do so.
• Post-reform, banks will have a strong commercial incentive to encourage people to save as much as possible and to look for good-quality borrowers. This is in direct contrast to the current situation, where the bank benefits most if everyone is in debt and the level of savings is not important.
• The new system will require banks to share more of their profits with their customers. At the moment they can use funds on which they pay 0.1% interest to make risky deals where they earn 5-10% returns. They then keep the bulk of the profit for themselves, but pass on the risks to taxpayers. However, post-reform, to attract the funds for these risky deals, the banks will need to pay more interest to their customers, meaning that when a bank takes risks successfully a fair portion of the resulting profits are returned back to the bank’s customers who provided the funds in the first place.
• The modernised system would restore the free market in banking and give power back to the consumers, rather than providing state support for failed investments, an effective privatised monopoly on the issuance of the nation's money supply, and an almost guaranteed, risk-free ‘super-normal’ (ie. excessive) profit each year.
  

Inflation

Inflation would be far less likely when the state takes control of issuing new money into the economy than when the money supply is effectively controlled by an army of loan- and mortgage-officers whose main consideration is not the needs of the economy, but their own potential to earn commissions.

Pensions

The looming pensions crisis could be avoided. Not only are huge holes appearing in the pension funds of major corporations, we are facing demographic change that could see the stock market enter long-term declines and wipe out the value of pensions. Under the existing system, there is simply no money to deal with this issue.

The welfare state and benefits

The demand for welfare payments and 'dole' can be reduced by creating a healthier and more stable business environment, and therefore creating more jobs and making existing jobs more secure. If major recessions are no longer inevitable (as they are under the current banking system), then businesses will be more willing to hire, without the fear of needing to make redundancies in the next few years. This should lead to an overall higher level of job creation.

International trade and currency

By making the money supply stable, creating a stable economy and an excellent environment for business, we can restore the New Zealand dollar as a stable currency.

Summary

All these benefits are there for the taking, simply by implementing this simple reform. Our current financial poverty is an illusion created by the flawed design of the banking system. The current banking system is economically and socially destructive and must be modernised.