September 2018 Release of our petition to have the Reserve Bank issue our money along with an opinion piece.

June Press release on the swiss referendum. Despite the campaign of confusion and fear run by opponents, 25% voted for the Sovereign Money Initiative.

April The AustralianRoyal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry is coming up with some serious wrongdoing by the banks and financial institutions

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

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

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.

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

Blocking economic development

Can a system in which growth in the economy requires growth in household and corporate debt lead to a positive outcome for the economy and society?

Under the current system, there are two 'rules of money' that cause a real headache for any government trying to generate growth, economic development or a recovery:

  1. When a bank makes a loan, it increases the amount of money in the hands of the public (by increasing the total quantity of electronic bank deposits)
  2. When a member of the public repays a loan, it reduces the amount of money in the hands of the public (by decreasing the total quantity of electronic bank deposits)

This system of getting money into the economy effectively means that, under the current monetary system, growth can only occur if it is fueled by rising household and corporate debt.

The two sides of this ‘Catch 22’ situation are explained below:

  • Economic growth requires either an increase in the quantity of money, or for the existing money to circulate faster.
  • The speed at which money circulates (its ‘velocity’) changes relatively slowly, suggesting that growth requires an addition of new money into the economy.
  • The only method, under the current system, of injecting new money in the hands of the public is for the public and the government to borrow money.
  • Therefore, significant growth can only take place if an already over-indebted public goes into even further debt.
  • Excessive debt was the trigger point for the current recession and it is questionable whether the public can afford to take on more debt in order to stimulate a recovery.

To add to the challenge:

  • High household debt will serve as a barrier to growth, as much of the public’s income is absorbed in servicing debt rather than spent into the real economy
  • So to stimulate economic growth, household debt needs to fall
  • Falling household debt results in a falling quantity of money in the economy (see the second rule of money).
  • A falling quantity of money in the economy triggers a recession
  • A recession leads to job losses and higher indebtedness, as people turn to credit cards to buy necessities and take principal repayment holidays on mortgages
  • Higher household indebtedness is a barrier to growth

The conclusion is that significant growth or economic development is almost impossible as long as commercial banks have a monopoly on the supply of money to the economy.

Unnecessary taxes

When the Treasury prints new bank notes ($100, $50, $20, $10 and $5), the profit is paid over to the Treasury (the profit being the difference between the cost of printing the physical notes and the face value of the note itself). This profit – a little less than $100 per taxpayer per year – is money that does not have to be collected as taxation.

However, cash makes up a continually declining proportion of the money supply. When banks create money, they - and not the government - receive the profits (profit in this case being the interest that can be charged on that money every year from then on).

Consequently, by allowing private banks to issue the nation’s ‘digital’ money supply, the government is losing billions every decade. Specifically, from 1990 to 2010, the government missed out on $125 billion.

Logically, if the profits of printing bank notes mean that the public has to pay less tax, then by handing responsibility for creating digital money to the private sector, the government is imposing a huge tax burden on the public, in order to effectively subsidise the banks.

The $125 billion created out of thin air by the banks between 1990 and 2010 represents not only $125 billion of extra debt piled up on the economy, but also $125 billion of taxes that would not have been necessary had the government created this money itself. And, if the $125 billion had been created by the government, there would be no interest payable on it. Instead, the interest we have to pay on it is a drag on our economy.

Wasted opportunities

When new money is created, at a rate in excess of the rate of economic growth it eventually creates inflation - pushing prices up and reducing the value of existing money (unless the money is pumped into productive investment). But before that happens, whoever creates the money is able to spend it and get something in return.

At the moment, the banks have a near-total monopoly on the creation of money. Three-quarters of the money they create goes directly into the housing and commercial property market - doing very little other than making existing houses and properties extremely expensive.

If the public did have a democratic say over how newly created money should be spent, would they choose to pump it all into increasing the cost of housing and pushing up the rents on commercial property, as the banks have done year after year? Or might they choose to fund hospitals, education, research into medicine and technology, high-speed rail, reducing poverty and reducing the tax burden on enterprise?

Whoever gets to creates money is able to get the benefit of creating that money. At the moment that benefit goes directly to the banks, at the expense of everyone else. Can banks be relied on to use this money, and this benefit, wisely?

Unnecessary debt

All this debt is completely unnecessary. There is no need for all money to be created as debt; for house prices to be as out-of-reach as they are now, and for the public and the government to be in as much debt as they are. All these problems are consequences of the current system.

The money that was created by banks as debt could just as easily have been created debt-free by the state and spent into the economy. After all, this money is nothing more than numbers in a computer system, and costs absolutely nothing to produce. If this money had been created without the corresponding debt, then we would have still had the economic growth of the last 50 years, but wouldn’t be in the pit of debt that we are in now, and would therefore be poised to continue for another 50 years of growth and advancement, rather than years of declining standards of living and a futile struggle to pay off unpayable debts.




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