Does Sir Mervyn King ever ask himself why that should be so? Seemingly not, because if he had, then the solution would surely be obvious.
Britain’s economy is stagnating because of a lack of consumer spending power and the reason for that is simple to understand:
A money supply that is insufficient to raise the economy out of recession.
When a machine is sluggish, it is customary to oil the mechanism. Britain’s economy is sluggish and needs oiling, and there lies the problem, because the only oil available is debt. Within current practices, more debt is the only means we have of increasing the money supply, which at the present time the banks are unable, or unwilling to provide, so we are left with a stagnating economy.
It is not even certain that things will be much different after another five years, as all new debt has the effect of mortgaging future spending power because of debt repayments and loan interest. As a result the future levels of spending power can only be maintained through ever more new debt, creating a vicious endless cycle.
However looked at, money whether created with its string attached as debt by banks, or created by the Bank of England as debt free money, is still at the end of the day just money, but with one very big difference: The one mortgages the future while the other provides a permanent increase in the money supply.
Why are our politicians so blinded by convention that they are unable to accept that a debt funded economy is doomed to failure. All the evidence is there to be seen, supported by a history of debt financed booms followed by bust every time the level of debt becomes unsupportable.
How does one reach Mr Cameron and Mr Osborne and get them to listen to the case for changes to the financial system? Changes that could spare us this unnecessary misery and hardship their present policies are causing. Policies that are handicapping economic recovery and squandering our future through ever increasing national debt and all that implies for the future. Never forget that every tomorrow eventually becomes today.
If proof were needed that changes could be benificial, then the ‘Guernsey Experiment’ can provide it?
To quote from the book ‘The Guernsey Experiment’, written in 1960:
“The contrast between bankruptcy and prosperity, between negligible taxation and legalised robbery – in a word between Guernsey and Britain, points a lesson. The flaw is in money creation. Guernsey creates its own money as a Credit, the so called nationalised Bank of England creates our money as a Debt. Guernsey lit the torch of freedom from debt 130 years ago and they are reaping the benefits in present prosperity. Guernsey leads the way in common sense finance – shall we follow, or shall we continue to flounder ever deeper into the quagmire of debt, taxation and final extinction?”
A question that deserves an answer, or will the dead hand of our civil servants prevent this from ever reaching those who need to listen?