Our network has made it into the Wall Street Journal!
Economic crisis has prompted ordinary people to delve into internal workings of financial system, reads the article entitled “U.K. Activist Group Emerges as Voice for Monetary Reform” on 19th August 2015.
Here’s a short extract:
Online and on the fringes of mainstream economic and political life, a vibrant subculture of monetary crusaders is emerging. These enthusiasts swap notes on long-forgotten economists, and argue about obscure topics like the gold standard and fractional-reserve banking.
Many people imagine that banks lend borrowers the cash parked with them by savers and, since savers don’t need constant access to all their funds, banks can make loans equivalent to many times the money they have on deposit.
In fact, whenever a bank makes a loan and credits the borrower’s account with the funds, it creates new money electronically with a couple of keyboard taps—or in previous decades by the stroke of a banker’s pen. James Tobin, an influential American economist, once described these newly minted deposits as “fountain-pen money.”
Today, these deposits exist as computer records and account for roughly 97% of U.K. money, according to the Bank of England, easily dwarfing the bank notes and coins in everyday circulation. In the U.S., such deposits account for around 89% of money, according to data from the Federal Reserve.
You can read the full article here.