Transcript Slide 1

Growing the Campaign
27th Jan 2014
Peter Verity
(Co-ordinator – Sheffield group of Positive Money supporters)
Welcome – who are we?
• Positive Money is a movement to democratise money
and banking so that it works for society and not against it
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money created through a democratic and transparent body
money created debt-free
new money spent first in the real economy
banks not allowed to create money
• www.positivemoney.org.uk
Overview
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Review of where we are [20mins]
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local, national, international
Competing schools of thought [40 mins]
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An analytical framework of reform ideas
How to get the message across [30 mins]
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Interactive!
Review of where we are
Sheffield group
• First meetup Oct 2011
– 2nd ‘annual report’ covers Oct 2012 to Dec 2013
• Streetstall team - 9 people – room for more!
– Green Fair, Town Hall (2), Fargate (2)
• Events
– ‘Question Time’ with Ben Dyson
– screening of 97% owned
– talks to Transition, Occupy etc.
• Mailing list grown from 66 to 150
Review of where we are
National organisation
• Publications
– Modernising Money (book), Sovereign Money (booklet)
• Social media, rapid growth
– Youtube channel (½ million views)
– Mailing list: 15,000
– Facebook: >19,000 followers
• Annual supporters’ conference March 1st
– places still available
• Politicians
– Welsh Assembly cross-party group on monetary reform
– adopted as Green Party policy
Review of where we are
International
• International Movement for Monetary Reform (IMMR)
• Currently 22 organisations worldwide
– 19 established, 3 in infancy
– Switzerland ‘people’s initiative’ requires 100,000 signatures in 18-month
period (36,500 already)
– Iceland – investigating full reserve banking
Objective for 2014
• To ATTRACT and INFORM understanding-seekers
– “People who want to understand how the world and the systems
in it work, and so want to understand the money system and its
role in the 2008 financial crisis.”
• Should be public knowledge where money comes from
• More help needed with
– Street stalls
– Tell your friends. Website. Facebook. Mailing list
• Discussion (to 7:50)
Competing schools of thought
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Positive Money – the wider context
1.
2.
3.
4.
5.
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money = credit
‘real’ money
public money (Positive Money)
alternative currencies
transitional
Pros and cons – unbiased(?)
Personal views
money = credit
• “Banks create money out of thin air and lend it to us at interest”
• Status quo : 97%
• Fiat – “let it be”
• Money is created on demand
– “a wonderful thing” (Ann Pettifor)
– catalyst for enterprise, growth, prosperity
– potentially infinite
• Downsides
– unstable
• bubble/crash
– non-productive uses (75%)
• asset inflation (eg. Housing). Financial speculation
• bank lending to business still falling (Nov 13)
money = credit
Downsides
– interest (usury)
• transfers real wealth from the bottom 90% to the top 10%
– high levels of private debt
• household, mortgage, business
– misaligned risk/reward
• too big to fail : private gain, public loss
• Keynes
– increase in money supply causes an increase in production
– “we can do what we can do” [with unlimited credit]
Competing schools of thought
2
1
Money = credit
Real money
‘Real’ money
(ironic)
• Money ≠ credit : Permanent : Loanable Funds (supply/demand)
• Money has intrinsic value
– money as a commodity : Austrian school : gold/silver
– finite/inflexible supply
• Monetarism
– ‘natural’ level of production (long run)
– increase in money supply increases prices / devalues money
‘Real’ money
• Gold – especially in USA
• American constitution (Ron Paul)
– “No State shall … make any Thing but gold and silver Coin a
Tender in Payment of Debts”
– ‘fiat’ money unconstitutional
– inflation redefined as increase in the quantity of money
• Islam : Gold Dinar
• Youtube videos – millions of hits
– Mike Maloney: ‘The hidden secrets of money’
– Peter Schiff, Max Keiser
‘Real’ money
• Pro
– popular, intuitive
– natural reaction to bank ‘credit’ money
• Con
– inflexible supply constrains economic growth
– who owns most of the gold?
• 20% central banks, rest private
Competing schools of thought
3
Public money
2
1
Money = credit
Means of exchange
Real money
Store of value
Public money
• Notes and coins (3%)
– Permanent
• Created by BoE, value credited to Treasury
• £2-4bn per year
• Positive Money
– ‘Fiat’ digital
• expandable
– Permanent
• loanable funds
• banking the way most people think it already works
– Public
• democratic control
• £40-80bn per year public benefit
Public money
• Positive Money
– Pro
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stable money supply, based on the needs of the economy
reduced burden of personal, household, govt. debt
align risk and reward
allow banks to fail without jeopardising payments system
– Con
• Too radical a change?
• Hoarding by public or banks?
– cf. peer-to-business lending 5%-15%
• Restricts [excessive] growth?
– environmentalists vs. business
– regulatory body vs. market
• Neutrality of BoE and/or MPC?
Public money
• Monetary Policy Committee remit unchanged
– 2% CPI inflation
– “to achieve strong, sustainable and balanced growth that is more
evenly shared across the country and between industries”
Public money
• Full reserve banking
– Money = credit, but 100% backed by reserves
– Chicago Plan revisited (IMF)
• LSE lecture Nov 2013 (Youtube)
– Pros & Cons similar to Positive Money
Competing schools of thought
Alternative currencies
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3
Public money
2
1
Money = credit
Real money
Alternative Currencies
• Community based, not legal tender
• Backed by Sterling
– Totnes, Brixton pounds etc.
• Not backed
– LETS
• Bitcoin and others (cryptocurrencies)
• Credit commons
Alternative Currencies
• Pro
– Stimulate local demand
– Community resilience
• Not dependent on big banks, or state
• Con
– Scaleable?
– How to pay for public sector?
– How is new money created? Who benefits?
Competing schools of thought
Alternative currencies
4
3
Public money
5
Transitional
2
1
Money = credit
Real money
Transitional
• Regulations / Restrictions
– Basel 3 : higher capital ratios (by 2018)
– Banking Commission : ringfencing (by 2018)
– Banking competition : smaller banks = higher reserves
• Bank credit ‘tight’ for foreseeable future
• Continued need for injections of state money
– Direct to the public and/or the Treasury (not to finance sector)
– Quantitative Easing for the People (QEP)
• Anatole Kaletsky
– Sovereign Money (Positive Money)
– Overt Monetary Finance (Adair Turner)
• “dramatically increased” fractional reserve
Transitional
• Pro
– Easy – no structural changes
– Support by central bankers?
• Con
– Regulation won’t stick
Competing schools of thought
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Conclusion
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Strong desire for change
Lots of ideas – old and innovative
Biggest ‘threat’ to PM : public mistrust of fiat money
No perfect system! (pros & cons)
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Mission – get people onto 1st step
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asset/exchange ; market/state/community
Where does money come from
Discussion (to 8:30)
Getting the message across
Three steps to understanding :1. Where does money come from?
2. Why is that bad?.............................
3. What should we do about it?...........
Getting the message across
Asset
Liability
Money
Debt
Liability
Asset
ignoring competition between banks
Getting the message across
• “97% of money is created by private banks and
lent to us at interest”
– Don’t understand
– Understand, but don’t really believe it
– Believe it, but don’t think Positive Money is the
answer
– None of the above
• Thanks for listening
• Voluntary donations (suggested £3)
• Books (£10) and handouts (free)
• Sign-up sheet
• Next meeting Feb 24th
– “Debt or Delusion” : is the National Debt a curse or a
blessing?
• Continue in pub?