"Labour accepts that private financial institutions like banks should be allowed to issue new money as credit"

The full significance of this statement, correctly understood and widely known, would fundamentally change the whole global economy.

The existing banking system originated in England in 1694, when King William gave permission for the bankers to be the source of part of England's currency. They formed the Bank of England with an Act of Parliament called the Tonnage Act, which remains on the statute book.

Times have changed since then and with the advent of the personal computer, a new industry has come into existence, the credit industry and with it, electronic money. Money now exists as computer entry to replace ledger entry.

The people have always been encouraged to believe that the bank of England is 100 per cent reliable and part of our national heritage, such as the Monarchy. Safe as the Bank of England etc. But the Bank of England established upon the Royal right to issue new money as credit, has always been very secretive and protected by the Official Secrets Acts.

The Bank of England has needed to be autocratic and independent of Parliament, in order to have absolute control over the rate at which new money is put into circulation. Full independence was only obtained in recent years under Labour, so that now, inflation can be kept under tight control by adjusting interest rates.

Because interest has to be paid on new money the rate at which new money is created and issued can be controlled, by how much it costs to do so.

People ignore the fact that new money is credit, which did not exist until the credit was accepted as a loan of money. People also ignore the fact that by diluting the currency with credit the currency gradually turns into debt. Using debt as our currency has two major disadvantages.

Perhaps the most important, is total inability to establish any sort of yardstick, by which to measure the value of credit. This value is pure guesswork and guessing becomes a fine art and almost a science. Such expertise provides 'insider' knowledge and creates a thin upper stratum of society, which although purely parasitic, creams off enormous wealth without making any contribution to the creation of the wealth. A practice correctly designated as theft, although held in the highest esteem in contemporary society.

The other disadvantage of credit, is that credit has attached to it, a tax in the form of interest. Credit is expensive stuff to use and also credit must be repaid to the banks as money. The banks who allow you to have credit to use as money will not accept credit as money from you.

Economics is the study and practice of the creation of goods and services and their distribution for the benefit of the consumer. The only difficulty we have with economics, lies in the problem of distribution. Distribution beyond a barter system, depends upon a reliable means of exchange. Credit can never be a reliable means of exchange. That is the trouble with global economics. Today, there is no reliable means of exchange any longer in existence. The world has a dire shortage of money and a vast surfeit of debt. We need to restore to Government the sole right to create and issue new money and demand the right to see that it is done correctly.



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