Clive Rosher

This is very much a political issue, since politics and economics are inevitably linked, but one which ersons of goodwill in all political parties, or in none, hould be able to support with enthusiasm.

In 1963 in the UK, MO (coins and notes - issued by the government) stood at 3 billion, and the total money stock M4 (MO + Bank Created Money) was 14.1 billion.

By 1997 the figures had escalated to 25 billion and 680 billion respectively.

Notes and coins are issued debt-free, but bank credit comes into existence as loans and creates instantly the same amount of debt as the new money. That debt is then augmented by the requirement to pay interest on the loans.

The proportion of debt-free money has diminished from 21% in 1963 to 3.6% in 1997, and with nearly all the money now created as bank credit the situation has arisen that there is now more debt than money.

So it is impossible for all debts to be paid.

However, the bank debt is spurious, not genuine, because the banks require payment for money lent that has, in fact, cost them nothing.

This is a world-wide swindle of astounding roportion. I cannot think of a greater one. If you can, please let me know.

Since anything that is lent remains the property of the lender, all the credit which the banks have conjured up from nowhere - that is, nearly all the money in circulation - actually belongs to the banks.

Thus worldwide, the means of exchange for trading has been effectively privatised.

It seems a bit like a privately run lending library that charges for the use of its books - quite legitimately because a library has to pay for its books - but the bank doesn't pay for its money. Yet it charges interest on any that it lends out just the same!

People and businesses and Third World countries - and indeed our own government unable to provide satisfactory services for lack of financial resources - wallow in a sea of fraudulent debt, all because of the way that money is now predominantly created.

The evil consequences that flow from this excess of debt, and the fear of debt which drives the ruthless search for profit at any cost, include the destruction of the environment from excess logging and the burning of fossil fuels producing possibly irreversible climate change, and the ever developing arms industry producing "Weapons of Mass Destruction", and delivery systems and small arms, which all must be sold, paving a sure path to war.

I do not believe that we can hope to live on a peaceful and hospitable planet until people learn to be much more co-operative and much less competitive and conflict orientated; and that seems virtually impossible until we cease to be driven by spurious debt.

The present position is preposterous. The remedy is common sense.

P.S. to Educators:

Since it is unsatisfactory to teach anything other than the truth as far as it is known, and since deceptive half-truths, and still more so 3% truths will just not do, please can the full story of the creation of money and its consequences be told to students?

from Prosperity, March 2003