Money is currently produced by a ‘public-private partnership’ between the state and the financial sector, a partnership whose nature remains obscure to the great majority of the population. Is another distribution of knowledge – and hence of power – possible?Prime Economics
Whose money is it?
Geoffrey Ingham
Geoffrey Ingham is the author of The Nature of Money.
5 comments:
Private debts – what has been borrowed – are spent as public currency.
Not really. Bank money is a negotiable bank debt redeemable (most often on demand) into state money. And not one dollar of state money is issued by commercial banks; it is entirely issued by the central bank, a public institutions permitted to issue US government obligations.
In short, banks undertake two activities that are essential for the capitalist system: they operate the payments system and they create the credit-money by which it is financed.
Only in part true. The payments system has several layers. Payments between households, individuals and non-bank firms are often drafts against a bank account. More often than not, completing that payment requires that two banks complete a payment between themselves as well. The asset used for most interbank payment is state money, not bank credit.
Commercial banks have the same sort of relationship with the central bank that the rest of us have with the commercial banks. We enter into borrowing and lending relationships with commercial banks transacted with commercial bank obligations. Banks enter into borrowing and lending relationships with the central bank transacted with government obligations.
On the whole a good article though.
I think the clearest path to reform is to more fully nationalize the central bank and move to a public banking system.
Back door MMT
The banks take the free money carry trade it away and credit swap it into the shadowland.
Usurping sovereignty and setting up blockades to democracy like an aristicracy should.
Alexander de Tocqueville predicted it centuries ago. ...
Googleheim,
Do you have any links to material written by Tocqueville?
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