1 Aug 2012

We need an international audit of money creation by commercial banks

Maybe you already know this, but I am now absolutely certain that the real cause of our misery is the insane system by which commercial banks have a virtual monopoly for creating the money supply. Even when central banks like the ECB and the Bank of England create money themselves, they hand the money to the bankers.

We are supposed to believe that this is the best way to do it. Only bankers can be trusted to create money intelligently - elected governments would make a mess of it. And, of course, it is normal that the banks should receive $1 trillion in interest payments every year for creating money out of thin air, and then lending it to governments at virtually zero risk.

OK. So let them prove it.

I propose that we should have a detailed international audit in which every bank is required to provide the following information in full.

1) How much money did they create every year for the last 10 years?
2) Where did the money that they create go?
3) Specifically, what percentage was used for making mortage loans, what percentage for financing the financial sector, what percentage to finance business?
4) To what extent are newly created funds used internally by the bank? 
5) What were the interest rates that they charged for making the loans?
6) What was the total amount of revenue that they recieved in the form of interest charges?
7) What use was made of the revenue from interest charges?

These seem like simple and obvious questions to which I think the public deserves straight and honest answers. We have (foolishly) allowed commercial banks to have this effective monopoly on money creation. The very least that we should have is a clear understanding of how the system works.

Unfortunately, it is virtually impossible to find this sort of information.

I suspect that if the truth got out, it would be clear to everyone concerned that the current system is totally indefensible.

1 comment: