The truth is out: money is just an IOU, the banks are rolling in it

The truth is out: money is just an IOU, and the banks are rolling in it

Last week, something remarkable happened. The Bank of England let the cat out of the bag. In a paper called "Money Creation in the Modern Economy", co-authored by three economists from the Bank's Monetary Analysis Directorate, they stated outright that most common assumptions of how banking works are simply wrong, and that the kind of populist, heterodox positions more ordinarily associated with groups such as Occupy Wall Street are correct. In doing so, they have effectively thrown the entire theoretical basis for austerity out of the window.

To get a sense of how radical the Bank's new position is, consider the conventional view, which continues to be the basis of all respectable debate on public policy. People put their money in banks. Banks then lend that money out at interest – either to consumers, or to entrepreneurs willing to invest it in some profitable enterprise. True, the fractional reserve system does allow banks to lend out considerably more than they hold in reserve, and true, if savings don't suffice, private banks can seek to borrow more from the central bank.

The central bank can print as much money as it wishes. But it is also careful not to print too much. In fact, we are often told this is why independent central banks exist in the first place. If governments could print money themselves, they would surely put out too much of it, and the resulting inflation would throw the economy into chaos. Institutions such as the Bank of England or US Federal Reserve were created to carefully regulate the money supply to prevent inflation. This is why they are forbidden to directly fund the government, say, by buying treasury bonds, but instead fund private economic activity that the government merely taxes.

www.theguardian.com...

well, NOW the cat is officially out of the bag
methinks they are telling us we've been had...ooopsi
hooda thunkit
WHY DID THE BOE JUST ADMIT THIS?
what do YOU think this means ATS?

reply to post by Danbones


They must feel pretty confident that nothing now can be done to stop them.

That is the only reason I can see them being so blatant. Which means their endgame must be just around the corner.

reply to post by Danbones


could it have anything to do with the mass banker suicides? lol

I dont think anything will change unless this gets coverage on tv. Most people dont read newspapers or books or articles on the internet. They are more focused on who said what on facebook or twitter.

Im glad that the truth is out now, its not just a conspiracy any more its official folks....

ITS FACT!

Another great thread Dan! S&F

reply to post by Danbones


Hey Dan! Good find actually, thanks for the addition to my info library on this topic.

I've spent a bit trying to find a link to what I thought was an excellent documentary on this very subject called "End of the Road: How Money Became Worthless". However, I cannot find a link to it on the net that does not make you pay for it first. (If others can find a free download link, it's worth the watch) It's been played several times on a channel we get here named PIVT and we have watched it more than once.

Basically however it backs up your article, and even equates at one point printed currency as being more of an IOU than anything else. This is what happens when currency becomes fiat, backed by a lick and a promise rather than anything with the perception of value like gold and the like.

Thanks again!

MyMindIsMyOwn
reply to post by Danbones

 

Hey Dan! Good find actually, thanks for the addition to my info library on this topic.

I've spent a bit trying to find a link to what I thought was an excellent documentary on this very subject called "End of the Road: How Money Became Worthless". However, I cannot find a link to it on the net that does not make you pay for it first. (If others can find a free download link, it's worth the watch) It's been played several times on a channel we get here named PIVT and we have watched it more than once.

Basically however it backs up your article, and even equates at one point printed currency as being more of an IOU than anything else. This is what happens when currency becomes fiat, backed by a lick and a promise rather than anything with the perception of value like gold and the like.

Thanks again!

I don't know where you have been looking, but have you tried a site called "Underground Documentaries"? They have a fair sized catagorie for this subject.

Also!
Does this mean if I owe someone some money, I really should right them an IOU as a pledge to pay them back with more IOU's which I get from my cashing my paycheck at the IOU store?

Saw this crawl across facebook yesterday
Great find and right from the horses mouth too.
I hope some groups grab onto this and run with it.
Tired of the charade now, time to get on with humanity.

read the article three or four times just to be sure, and also did some research.. The Guardian is sensationalizing it all but there is nothing in the BoE's documentation that states that Money is IOU's in any way. What they are saying is simple:

If people get loans and credit, it means that there is more money in circulation because they deposit it somewhere else, to be loaned out again, etc ad infinitum. In simple to understand English: The banks, buy money (in the case of US Banks for my example) from the Federal Reserve at interest. They then loan out that money at interest to people. People then take that money and deposit it in other banks - hence a deposit becomes money for the second bank to loan out and so on and so forth, however, there is still the initial money that the first bank bought from the Federal Reserve, at interest that the first bank needs to pay back, with interest to the Federal Reserve, and hence the interest payments on a loan, so the bank can continue to turn a profit while also paying it's debt to the initial money vendor.

It's complicated to be sure, but at no time is money just an IOU, there is a very distinct chain that it goes through before it even hits the IOU stage of it's existence, and even then, it's got to be paid back to Bank A (The Federal Reserve in this example i'm using) so that Bank A can then re-sell that money again (without having to print more and therefore helping inflation stay low)

Also remember the author of this article is a radical activist (I say radical because i've read some of his stuff and it's not always the best thought through for a professor that used to teach at Yale) and tints the article to say what HE wants it to, not necessarily a true and accurate or honest assessment of the stuff he's read.. I refer to the couple of times he states that Occupy is correct, and the fact that he was in Occupy..

reply to post by teamcommander


Don't think I tried there? Hmmmm...this is what I get when I searched it "Sorry, this video does not exsist". It does however direct me to Amazon where I can spend my virtually worthless IOU's to buy it.

Unerground Documentaries Website

Since you seem to have the inside track on that site, perhaps you could spend a minute to find the link and post it? That would be great.

The only thing that matters today is the perceived value of money.

This has been known and common practice for a while as disclosure is happening one person at a time. 'How to screw your bank' by Laurence F. Hoins does go through the money making process quite well if you do want a better understanding of the situation. The main justification to support this situation is that banks make money like manufactures make cars or refineries make oil, money is just one of many resources required to keep society running and growing.

As for what I think about it, it has some good and bad points. Being able to adjust the cash supply to meet social demands does assist in the appropriate distribution of goods and services. Like all powerful industries it is also open to exploitation and corruption resulting in social instability and disadvantage.

I do like some of the stories about alien worlds where money does not exist, as for if humanity and Earth is ready and capable of functioning responsibly and productively from ones own liberty has some doubt. In the mean time I have no issue with BRICS taking on BIS and setting up their own central bank. If a global currency is to emerge I would rather see a global consensus behind it rather than some forceful fear / breakdown campaign. The SDR was one option I liked, but has become too entrenched in its past to meet todays environment.

I know the system has some problems, but when it has to deal with the lowest common denominator that humanity has to offer it does not provide a lot of hope. But considering that civilization in general is still going and growing there is still some hope remaining.

If I could make one change with how money is created I would eliminate the bond market. Money is based on nothing any way so lets just get real about it and take away the inflationary pressure that the bond market instills.

reply to post by Danbones

This is why I don't sweat it. As long as everyone goes to work tomorrow ... everything's gonna be just fine.

Now ask yourself, why is Obama* trying to get everyone to stay home?

So a new system of currency must be ready to go in place of the old one.

Things change, civilizations rise and fall, so it goes...

abeverage
So a new system of currency must be ready to go in place of the old one.

I believe you are exactly right and that this is one of the most closely guarded secrets of all time. Why I haven't seen the minds of ATS tear into this subject area is beyond me. I only hope the transition is peaceful. Folks living paycheck to paycheck will hardly notice ... unless they're in a prop job. People who push paper for a living, heavily invested in fallow land, and electronic currencies/savings are in for the ride of their lives.

reply to post by Snarl


If you look at the "test" run of a new currency in BitCoin you can see the reasons for holding back. The world currency conspiracy is a an old one but one that has some good reasons to persist especially in today's economy.

However the practical implications and security controls needed are being tested all the time problem is there will never be a perfect system only patches to the current one or an upheaval that causes a new one to be set in place. When that new one is set in place I can guarantee someone will find a way to exploit it or counterfeit it!

So really why worry? Of course we already see what world economies do when countries default without the need of global labeled currency...

Money is a sword that we caress as it slays us all.

reply to post by MyMindIsMyOwn


gotcha covered Opus...well, here is a summery at least..one might look around..it maybe out there subrosa

End of the Road: How Money Became Worthless

Wall Street is being occupied. Europe is collapsing in on itself. Around the world, people are consumed by fear and anger, and one question is on everyone's lips: Is the financial crisis over, or are we headed towards economic disaster? End of the Road is a documentary that chronicles the global financial collapse.

Told in an entertaining and easy to follow style, the film tells the story of how the world came to be in such a state, from the seeds sown after WW2, to the current troubles facing us today, and to the possible future that may await us all. Some of the world's top economic minds share the hidden tale behind the mishandling of the world's finances, give insight into how bad policy and a flawed monetary system joined together to create a catastrophe, as well as sharing their own personal advice on how the average person can best prepare for their financial future.

www.imdb.com...
rated 7.5

I care not who is elected...indeed
I'll just buy them off with fake bread...bunch of picklebreads
There's whistle blowers and then opposite that there is...well

reply to post by teamcommander


ICU and I will raise U 1 IOU
otherwise know as
"a cheezburger today and I'll pay you on tuesday?"
if you don't pay the cook on tuesday and you want another cheezeburger
ask for your bailout this way here:
"Say cookie, howz about giving credit where credit is due..."
duck slightly to avoid speedy delivery of cheezburger...catch in mitt...eat on way out door
lol ...*scratches head*..I think....

Danbones

The central bank can print as much money as it wishes. But it is also careful not to print too much. In fact, we are often told this is why independent central banks exist in the first place. If governments could print money themselves, they would surely put out too much of it, and the resulting inflation would throw the economy into chaos. Institutions such as the Bank of England or US Federal Reserve were created to carefully regulate the money supply to prevent inflation. This is why they are forbidden to directly fund the government, say, by buying treasury bonds, but instead fund private economic activity that the government merely taxes.

Bold by me for emphasis..

sacramento.cbslocal.com...

SACRAMENTO (CBS/AP) – The California couple that recently discovered gold coins valued at $10 million while walking their dog on their property may not be cashing in on their find anytime soon.

According to an article published Monday on the San Francisco Chronicle’s website, the coins may have been stolen during a heist back in 1900. Northern California fishing guide, Jack Trout, provided the newspaper them with an article published in The Bulletin of The American Iron and Steel Association, dated January 1, 1900, that describes the theft of $30,000 in gold coins from a cashier at the San Francisco Mint.

Now read this.. Let this sink in for a minute.. Inflation in red................


Also to add, you never noticed the best time the US had a major economic boom was from 1800 to 1900? Wonder why that was??? Any guesses?? Any?? Any at all??

Messed up..

methinks they are telling us we've been had...ooopsi hooda thunkit

WHY DID THE BOE JUST ADMIT THIS?

From Jan 2014




Just a thought.