A letter from Mr James Skinner was published in Financial Times, 17th Oct 2012 in which he explains why the calls for a debate to take place on “ultraradical policies” for “boosting aggregate demand” is likely to prove helpful only if it starts from a clear statement and understanding of how new money is currently created.
Constant references to “printing money” and “newly minted money” only cloud the debate. In fact such money amounts to less than 3 per cent of the money in circulation. The rest of the money in circulation is created by the private banking sector, for its own purposes, in the form of debt.
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