2014 – BANK OF ENGLAND ADMITS LOANS COME FIRST AND DEPOSITS FOLLOW
The Bank of England released two articles explaining the money creation process – “Money in the modern economy: An Introduction” and “Money creation in the Modern Economy” – in their flagship Quarterly Bulletin of March 2014.
‘In the modern economy, most money takes the form of bank deposits. But how those bank deposits are created is often misunderstood. The principal way in which they are created is through commercial banks making loans: whenever a bank makes a loan, it creates a deposit in the borrower’s bank account, thereby creating new money….”
1821 – GREEK INDEPENDENCE DAY
There is an ever-declining degree of political and economic independence in Greece today. External economic institutions (i.e. International Monetary Fund, European Central Bank and European Union) have forced the nation to reduce public services and privatize/corporatize public assets – selling them off to transnational corporations to reduce costs and raise funds to pay off many loans that were known from the beginning would be unpayable. The Greek people and their Parliament are losing more of their national sovereignty as more decisions are made by undemocratic entities outside their borders.
Debt has become the more preferred weapon (rather than tanks, planes and armies) to colonize other peoples and plunder national assets and treasures – all of which profits foreign corporations, including banks. Economic austerity, social disintegration and loss of political power results. It’s a growing phenomenon among many emerging market nations – and has its domestic equivalent in the U.S. Rising and unpayable debts are increasingly used to justify severe budget cuts, privatization/corporations of municipal or state assets and reduce the power and authority of democratically elected councils, mayors, legislatures and governors – and by extension by We the People.
1923 – BIRTH OF ALBERT BARTLETT, PROFESSOR OF PHYSICS AT THE UNIVERSITY OF COLORADO AT BOULDER
“The greatest shortcoming of the human race is our inability to understand the exponential function.” Bartlett was a leader on sustainability and this quote is from his lecture, ” Arithmetic, Population, and Energy” he first delivered on September 19, 1969.
Exponential growth requires exponential resources – which are finite. If we have no energy, we have no economy. The economy must grow but nonrenewal energy can’t grow since the environment is fixed.
1975 – DEATH OF RALPH HAWTREY, BRITISH ECONOMIST, FRIEND OF JOHN MAYNARD KEYNES
“Banks lend by creating credit. They create the means of payment out of nothing.”
1832 – DEATH OF JOHANN WOLFGANG VON GOETHE, GERMAN WRITER
“None are more enslaved than those who falsely believe they are free.”
2009 – PUBLICATION OF PEOPLE’S BANK OF CHINA GOVERNOR ZHOU XIAOCHUAN’S PROPOSAL FOR REFORMING THE INTERNATIONAL MONETARY SYSTEM
“’In the interest of international financial stability,’ Zhou proposed the creation of a new international reserve currency that is disconnected from individual nations, issued in accordance with agreed rules and stable in value. For this purpose he proposed to modify the IMF’s Special Drawing Right (SDR), a synthetic reserve asset and unit of account created by international agreement in 1969 to supplement official reserves of member countries and to support the Bretton Woods fixed exchange rate system.”
2008 – NEW YORK FEDERAL RESERVE BANK ANNOUNCEMENT IT WILL GIVE CASH TO J.P. MORGAN TO ACQUIRE BEAR STEARNS
The Federal Reserve Bank of New York announced that it would provide financing to facilitate JPMorgan Chase & Co.’s acquisition of The Bear Stearns Corporation. J.P Morgan Corporation received $29 billion from the Fed. However, the Fed never provided financing of this amount during this time to help small businesses or homeowners who were victimized by the speculative financial ventures of Bear Stearns Corporation, which led to its implosion, triggering the Great Recession.
2014 – QUOTE BY RICHARD FISHER, PRESIDENT OF THE DALLAS FEDERAL RESERVE BANK
“I don’t think there is any doubt that quantitative easing enabled the rich and the quick. It was a massive gift.”
[Note: Quantitative Easing was the Fed’s program on injecting several trillion dollars into the economy – most of which ending up going to banks and to corporations to buy back stock.]
1894 – COXEY’S ARMY BEGINS MARCH
Jacob Coxey, a businessman from Massillon, Ohio organized a 500-strong “Coxey’s Army” march from Massillon (beginning on March 25, 1894) to Washington, D.C. (ending April 30) to promote federal intervention for job creation. The primary demand of this “petition in boots” was unique — the direct printing and issuance of $500 million by the Federal Treasury to employ 4 million people. Coxey’s Army proposed two bills. The first, a “Good Roads Bill”, would help farmers through $500 million issued by the federal government in legal tender notes, or greenbacks, to construct rural roads. The second, a noninterest-bearing bonds bill, would empower state and local governments to issue noninterest-bearing bonds to be used to borrow legal tender notes from the federal treasury. This money would be used to build urban libraries, schools, utility plants and marketplaces. Millions of jobs would have been created — debt-free.
1892 – BIRTH OF PAUL DOUGLAS, ECONOMIST, US SENATOR, QUAKER
Douglas was a prominent University of Chicago economist who helped develop “A Program for Monetary Reform” in 1939 — sent to President Roosevelt as a means to end the Great Depression. More than 230 economists from 150 universities approved it without reservations while an additional 40 supported it with some reservations.
In assessing the problem of the day, the PMR states, “If the purpose of money and credit were to discourage the exchange of goods and services, to destroy periodically the wealth produced, to frustrate and trip those who work and save, our present monetary system would seem a most effective instrument to that end.” It also stated monetary systems based on a gold standard “has had…disastrous results all over the world.”
The PMR called for government creation and maintenance in the quantity of money. “Our own monetary policy should…be directed toward avoiding inflation as well as deflation, and in attaining and maintaining as nearly as possible, full production and employment.” The plan also called for eliminating fractional reserve lending – the process of banks loaning multiple times the amount of money in their possession. Back in the 1930’s the reserved requirement was 5:1. Today it’s 9:1. Some of the major banks involved in the economic collapse of 2007 had ignored this law and were loaning out 50 times their reserves. The PMR called for a 100% reserve requirement – banks could only lend the amount of money they possessed.
The document goes on, “In early times the creation of money was the sole privilege of the kings or other sovereigns – namely the sovereign people, acting through their Government. This principle is firmly anchored in our Constitution and it is a perversion to transfer the privilege to private parties to use in their own real or presumed interest. The founders of the Republic did not expect the banks to create the money they lend. “
Their plan to reduce the national debt was simply to have the government purchase government bonds with new US debt-free money.
Why this calendar? Many people have questions about the root causes of our economic problems. Some questions involve money, banks and debt. How is money created? Why do banks control its quantity? How has the money system been used to liberate (not often) and oppress (most often) us? And how can the money system be “democratized” to rebuild our economy and society, create jobs and reduce debt? Our goal is to inform, intrigue and inspire through bite size weekly postings listing important events and quotes from prominent individuals (both past and present) on money, banking and how the money system can help people and the planet. We hope the sharing of bits of buried history will illuminate monetary and banking issues and empower you with others to create real economic and political justice. This calendar is a project of the Northeast Ohio American Friends Service Committee. Adele Looney, Phyllis Titus, Donna Schall, Leah Davis, Alice Francini, Deb Jose and Greg Coleridge helped in its development. Please forward this to others and encourage them to subscribe. To subscribe/unsubscribe or to comment on any entry, email firstname.lastname@example.org