So there is a magic wand after all. A revolutionary paper by the International Monetary Fund claims that one could eliminate the net public debt of the US at a stroke, and by implication do the same for Britain, Germany, Italy, or Japan.
The IMF reports says the conjuring trick is to replace our system of private bank-created money. Photo: Reuters
2:31PM BST 21 Oct 2012
1013 Comments
One could slash private debt by 100pc of GDP, boost growth, stabilize prices,
and dethrone bankers all at the same time. It could be done cleanly and
painlessly, by legislative command, far more quickly than anybody imagined.
The conjuring trick is to replace our system of private bank-created money --
roughly 97pc of the money supply -- with state-created money. We return to
the historical norm, before Charles II placed control of the money supply in
private hands with the English Free Coinage Act of 1666.
Specifically, it means an assault on "fractional reserve banking".
If lenders are forced to put up 100pc reserve backing for deposits, they
lose the exorbitant privilege of creating money out of thin air.
SHOOT: So why won't it work? Where would you rather get money from, banks, or the state. Or put in another way, who would you rather trust, banks, or the state?
Ambrose Evan-s-Pritchard concludes: Arguably, it would smother freedom and enthrone a Leviathan state. It might be even more irksome in the long run than rule by bankers.
Read the full article here.
SHOOT: So why won't it work? Where would you rather get money from, banks, or the state. Or put in another way, who would you rather trust, banks, or the state?
Ambrose Evan-s-Pritchard concludes: Arguably, it would smother freedom and enthrone a Leviathan state. It might be even more irksome in the long run than rule by bankers.
Read the full article here.
