Robert et al, while Ann Pettifor is generally correct about how central banking works, she is wrong or omits a several important details. The privatized version of central banking under a fiat sovereign currency has only sort of served our collective and common needs and it is actually not very functional at all. As she describes it we have a "credit" based system. The use of the word "credit" is often used to mask the reality that "credit" is debt by another name. She also omits entirely describing the major difference between credit (debt) based money issued by a privatized banking system which issues credit as compared to the effects of currency issued debt-free by a sovereign government in the interest of sustaining and developing societal/sovereign infra-structure. Under the privatized issuance of debt based currency the privatized monetary system accumulates both the interest attached to currency as a credit and it makes back the entire principle as well. Adding together the compounded interest and the principle of the debt (aka credit). This makes the related debt to be HUGE!!! To provide this free rent on the franchise granted to privatized central banking, other than related overhead costs of operating a private bank and central banking system, those who sign onto the credit/debt issuance of currency units have to go out an essentially strip the economy and the commons of resources which by the fractional reserve and leveraging ends up being many times the original debt/credit. When a local or central government uses bonds to credit that currency it is acquiring debt to private investors including the banking issues this the related debt/credit. This result is very, very different under a sovereign, fiat, asset based currency process. She is quite right about the feeding credits into the demand side of the economic ledger IS how saving are established for the general population. Having the sovereign government go into credit/debt to develop infra-structure needs, is poor strategy compared to currency issued on a debt free basis. Credit issued as loans either to the central sovereign government or to corporations and private individuals (think "mortgages" as a contractual agreement of debt/credit. If currency is put into circulation on a debt-free basis by the sovereign government, the the private investors, including banks will not acquire the huge returns achieved for private interests by way of the debt basis of the issuance of currency. She does not distinguish her "supply-side" aka consumer demand side of the economy and supply side to the benefit of the privatized banking systems. This will make her presentation seems very much like "supply-side" economics, in service to plutocracy. This lack of distinction is problematic in the details of how the issuance of currency can serve the interests of the commons in many ways. Trusting banks to invest in the de-carbonization of our industrial cultures, under the private credit/debt basis of issuance, will cause those investments to go where the return on that investment will be highest. If a high private return on the "investment" is somehow guaranteed by the government, then the debt load will be higher, compared to what it would be under a process where the sovereign government acts as the primary steward of the commons and the currency credits are issued debt free. It is this sort of poorly informed jumble packaged along with very attractive objectives, ends up adding to the net public confusion of how monetary systems and a functional approach to fiscal policy could operate in the interests of the commons and toward sustainability. Ask questions here, if you don't understand some of these details. I will be happy to respond. The bottom line issue is that the commons and sustainability will be vastly better served by a fiat, asset based(aka debt/credit free) currency issued by a sovereign government. At least she has some content that points in the right direction, but then she also has significant content that ends being poorly informed and even likely to have a major net negative impact. There also seems to be no implied or actual analysis of how the globalized,centralized, privatized banking conventions have produced the current melt down. I half expected her to also advocate for further deregulation of the privatized currency commons. as we go, Tadit Anderson On Wed, 21 Sep 2011 07:27:05 -0400, robert searle <[email protected]> wrote:
People are at long last waking up....to a more intelligent approach to financing......There is hope yet for humanity...!! http://www.youtube.com/watch?v=UMEsWxrnAY4 RS.