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".


John Kenneth Galbraith“The study of money, above all other fields in economics, is one in which complexity is used to disguise truth or to evade truth, not to reveal it. The process by which banks create money is so simple the mind is repelled. With something so important, a deeper mystery seems only decent.”

John Kenneth Galbraith (1908-2006 ), former professor of economics at Harvard, writing in ‘Money: Whence it came, where it went’ (1975).

Economic instability

Every loan and mortgage that the banks issue creates new bank deposits (the numbers in your bank account).

This leads to massive instability in the economy. As banks increase their lending, it gets easier and cheaper to borrow and debt rises. Bank managers who used to lend money to conservative businesses now start giving credit cards to teenagers. Since every mortgage issued returns to the banks and can be used to fund more mortgages, the banks look for more people to lend to, starting with the ‘highest-quality’ borrowers, and eventually ending up with ‘NINJAs’ (No Income, No Job or Assets). Eventually it gets to the point where some people simply can't afford the interest on their debt, and then individuals, households or companies start to default, as happened in sub-prime America in 2007.

This inevitability is referred to as the ‘credit cycle’ or the ‘business cycle’ by central bankers and economists, but could just as accurately be called the 'debt cycle':

  • increasing debt, then
  • too much debt, leading to
  • inflation targets breeched as resources in the economy, especially labour, become scarce leading to
  • interest rate increases leading to
  • greater transfer of wealth to the investment sector as unearned income leading to mortgage defaults, leading to
  • asset write-downs by the banks
  • reduced lending
  • recession

This cycle was at the root of the current recession as in all recessions. If we don't change the system (by stopping banks from creating huge quantities of money as debt) then we can look forward to endless cycles of boom followed by bust!

The current system is inherently unstable and highly pro-cyclical. Pro-cyclicality means that underlying changes in the system are amplified until they get out of control and cause a crash. When banks make loans, they create new money, but the new money then allows them to make more loans. This process continues and means that the banks will never ‘run out’ of money - they will just keep lending until the debt burden becomes too high, borrowers start to default, and the banks suddenly become insolvent on paper.

This pro-cyclicality and inherent instability is hugely harmful to ordinary workers. The system first creates a boom that pushes up the cost of essentials such as housing and rent, forcing workers to get into ever higher levels of debt. It then causes a crash that throws thousands out of work. Then, as the economy finally starts to recover, employers are slow to hire fearing that they may need to make further redundancies if the recovery turns out to be a false start.

All together, this makes it harder for workers to find jobs, makes the jobs that they do find less secure, and significantly increases the amount of debt that they will fall into.




MoST Content Management V3.0.7525