Monetary Reform Proposal

[Kensington]

This is a very interesting, yet simple, plan to reform our monetary system. It would not be disruptive and would only really involve a change in banking computer programs.

The basic idea is as follows: Only the Central bank is allowed to create money. All other banks can only make a loan from existing deposits.

An independent Monetary Policy Committee would monitor the economy and decide whether the money supply should be increased or decreased. If the money supply needs to be increased, the Central bank would create the appropriate amount according to the MPC and put it in the Governments account, to be spent as the government sees fit.
If the supply needs to be reduced, the Central bank can reduce the Government's account.

The plan is spelled out in detail here.

The Reform In Detail Ben Dyson - Financial Crisis Solutions & Monetary Reform

[Slippers]

It's a good plan and, the sooner it's implemented, the better.

If anyone is looking for an explanation of how most of our money is created by commercial banks and not by the state or the ECB, I recommend this textbook extract.

[Kensington]

It is sad to see the needless unemployment (and employment), the inflation, falling wages, stress and pain that the economy causes. It is completely unnecessary. It is an illusion. If we wanted to solve it, we could do it in the morning as we know, and have known since the days of Aristotle, how to fix it.

Winston Churchill summed it up very well:

Who would have thought that it would be easier to produce by toil and skill all the most necessary or desirable commodities than it is to find consumers for them? Who would have thought that cheap and abundant supplies of all the basic commodities would find the science and civilization of the world unable to utilize them? Have all our triumphs of research and organization bequeathed us only a new punishment: the Curse of Plenty? Are we really to believe that no better adjustment can be made between supply and demand? Yet the fact remains that every attempt has failed. Many various attempts have been made, from the extremes of Communism in Russia to the extremes of Capitalism in the United States . They include every form of fiscal policy and currency policy. But all have failed, and we have advanced little further in this quest than in barbaric times. Surely it is this mysterious crack and fissure at the basis of all our arrangements and apparatus upon which the keenest minds throughout the world should be concentrated.

Richard Cook writes about the Social Credit proposal. It would be even easier to implement as it would not require the end of fractional reserve banking. There are many simple, complete ideas on monetary reform. All that is needed is public and political education the matter.

Bailout for the People: ?The Cook Plan?  :: The Market Oracle :: Financial Markets Analysis & Forecasting Free Website

[toxic avenger]

I assume the OP is referring to the ECB, as we don't actually have a currency of our own to control supply of...

[Kensington]

I assume the OP is referring to the ECB, as we don't actually have a currency of our own to control supply of...

We would have to leave the Euro, almost certainly. The benefits, however, would far outweigh any possible disadvantages.

[toxic avenger]

We would have to leave the Euro, almost certainly. The benefits, however, would far outweigh any possible disadvantages.

We can't leave the Euro now. I opposed entry, I thought and think that a single currency is a supremely bad idea involving mutually exclusive needs being catered for by one-size-fits-all rates and supply. I argued at the time that once we were in we couldn't pull out, no-one listened. Too late now, I'm afraid, we have made our bed...

[Mr.De-Regulation]

Nah. Its too easy of a system to corrupt. I prefer money being introduced as products are, like the gold standard.

[Kensington]

We can't leave the Euro now.

Now is the exact right time to leave it. Why can we not leave it?

It is not just simply returning to a national currency. If the argument was to return to the punt, then yes, there would be no benefit in leaving.

We need to create a debt-free monetary system, and develop our domestic economy. Several countries in the EU are not in the Euro, so can we.

One argument one may say against this is. 'Well, we have to stay in the EU because the ECB are bailing us out'. We could just as easily bail out ourselves. Plus, in a debt-free government-issued system, we could have a proper monetary system and a proper economy.

We could, for example, have 3 day work days, then people could attend college or some other education institution for, maybe 2 days a week. We could have life-long education, the most educated people on the planet. people could try out new things and innovate like no other people on the planet. Ireland would become the envy of the world.

[Kensington]

Nah. Its too easy of a system to corrupt.

How? It seems to be far less corruptible than the present system.

I prefer money being introduced as products are, like the gold standard.

How is gold standard money introduced as products are? The amount of money is limited by the amount of gold. It has no relation whatsoever to the amount of production in the economy.

In a Government-issued monetary system, the money is spent into the economy on infrastructure, services etc. So it is introduced and regulated to match production.

[Hazlitt]

The amount of money is limited by the amount of gold.

So ??

The "Proper" Supply of Money