It is well enough that people of the nation do not understand our banking and monetary system, for if they did, I believe there would be a revolution before tomorrow morning. Henry Ford

Those who surrender freedom for security will not have, nor do they deserve, either one. Benjamin Franklin

The idea that you know what is true is dangerous, for it keeps you imprisoned in the mind. It is when you do not know, that you are free to investigate. ~ Nisargadatta Maharaj

Friday, 6 February 2015


"I tell Turner that my shock stemmed from a conversation I had some 3 years ago with a very senior official at the Bank of England, proposing this alternate view of credit creation. I was listened to with bemusement. I had got it wrong, I was told, politely but with a slight look of incredulity. A major central banker did not know this three years ago but this is far from an anomalous example, Turner says: “I was told by a very, very senior economist – I won’t tell you whom – in a global organisation, not long ago. We had lunch together and I had given him a copy of a recent lecture I’d done and he said in advance, “just to spice up our lunchtime discussion, I do not believe that banks create money, I think they intermediate money that already exists”. And I tried to persuade him that he was wrong”.
Despite the revolutionary implications for our economic understanding, the news has not spread to that shortcut for common knowledge, the man on the Clapham omnibus"

1 comment:

  1. Great posting.

    Always amusing how so many... even those supposedly 'smart' have little idea about money creation.

    If the average person knew that 90% of the money issued in a mortgage/loan is created out of nothing....they'd be real real mad.

    After all.... the bank is effectively only risking 10%... for an asset/house that (even if sold on discount) could raise 70/80% at auction.

    Banks...can't lose.... except on paper of course... but then... they can print all the paper they want. ;)