Survey
* Your assessment is very important for improving the workof artificial intelligence, which forms the content of this project
* Your assessment is very important for improving the workof artificial intelligence, which forms the content of this project
Debt Or Delusion Soft Currency Economics The UK Government is in major debt But who do they owe? How will we pay for all this? Where Does Money Come From What is money unit of account, means of exchange, store of value a ‘neutral veil’ lying over the ‘real’ economy Is this correct? Money as Social Relationship Money as social relation (credit and debit) Abstract money of account State money for over 4000 years(Keynes 1931) Control of money is a social and political issue Taxes drive money lets play a card game. Example of government spending requires deficit to save. Positive Money example in WDMCF. What do banks do Look after our gold? Lend out our savings to business and fellow citizens? Borrow from china? Other? Banks Create New Money Primary function of banks is money creation Banks create new money Bank 'loans' don't exist Bank credit creation Balance sheet example Lets play banker! “It proved extraordinarily difficult for economists to recognize that bank loans and bank investments do create deposits.” Schumpeter, J. A. (1954) Bank Balance Sheet Asset Liability loan contract Deposit 10,000+interest 10,000 Net = 0 Where did the money come from? Where did the bank get the matching liability They wrote the number Banks are allowed to create money Loans create deposits and reserves too When loans are repaid the money is removed from the system Private Pain The private sector can only spend what it Earns or borrows. Levels are currently at all time highs 90% GDP Credit only lasts for so long This House is different Government can always pay Creating new “money” is data entry Inflation could happen if excess UK can never “run out of money” Floating exchange / Fixed Exchange Positive money idea of consul bonds QE for the people Citizen dividend Bond/Gilt holders 25.70% BOE 9.30% Banks/Building 23.10% Insurance/pension 30.70% Overseas BOE holds about 30% of public debt The government owes that to itself! Including interest. We could cancel that No one would lose out. Key Points Banks create “money” Private sector must earn or borrow UK Government cannot become insolvent Gov Deficit = Non Gov savings to the penny (net financial assets) China not your banker Questions