Yet more lending? Now that’s the last thing we need

The Newcastle Journal has published an excellent article written by David Cook on money creation, debt and Positive Money reform proposals on Friday 21st March.

Here’s a short extract:

The Government say we need to get the banks lending again. Actually that’s the last thing we need. Lord Adair Turner, Chairman of the Financial Services Authority has remarked: “We got into this mess because of excessive creation of private credit and money; we should be concerned if our only escape route implies building up a future excess.”

We need to look at what money is, where it comes from, and where it goes.

The organisation Positive Money points out that 97% of our money has been created out of nothing when banks make loans. It’s incorrect to think banks are intermediaries between savers and borrowers. Only 3% of our money (coins and bank notes) has come from the Bank of England.

You can read an online version of the article in full here