Governing the Finance Industry

Share this article...

The actions of the banking and finance industry in particular have shown a reckless abandon with the world’s finances that is likely to cause an immense global crash in the next few years.  The bailout of the US mega banks in 2008 resulted in an even greater conglomeration of financial institutions into fewer, larger bodies capable of inflicting permanent damage on the global economy.  This behavior must be stopped and the financial industry requires special attention as a result.[1]  They have proven that they simply cannot be trusted with self-regulation, behaving like spoiled schoolkids, and now they must be brought to account.

In order to drive the right behaviours without losing the benefits of a global financial system, governments worldwide must adopt new, stringent regulations on all financial institutions.  Australia can be a leader in these provisions to show the world how to strike a far more intelligent balance between the desires of business & finance and those of the people and the environment.

The Creation of Money Without Debt

The government needs to return the power to create money to a government controlled entity that is fully audited, transparent and subject to public scrutiny on all its operations.  The current situation where a group of international banks determine policy for many countries is unacceptable as they routinely help themselves at the expense of the sovereign, elected, powers.  The current state of the creation of all money as debt by financial organizations must be stopped and changed – there are better alternatives.[2]  This will cause the Ponzi scheme we call the global economy to crash and that is an intended result.  The endless debt cycle must be escaped by cancelling the majority of it and placing any remaining burden on financial institutions to repay over time.[3]

Money should primarily be created by governments with no debt attached[4], this removes the endless cycle of unpayable debt that the banking industry inflicted on the US in 1913[5], that became a world standard over the following decades.  If government expenditure of created money becomes a primary way new money enters the economy, then any further creation of money must be made subject to this amount.  The current practices of banks creating infinite money to pay for infinite debt and shuffling the debt burden between entities is unsustainable.[6]  Hence, any further money supply required on an annual basis should come only after government expenditure needs are complete.  As a result, governments will no longer be burdened with artificial debt that enslaves them to the interests of the financial community.  If further creation of money would destabilize the currency, then no further money is created and the banks must return to full reserve banking practices.  This allows a focus to be made on maintaining and improving national infrastructure and services instead of the international gambling currently undertaken by banks.[7]

Reconsider Fractional Reserve Banking

Creation of Money

Fractional Reserve Banking

Fractional reserve banking as a system puts too much power in the hands of unelected, unrepresentative people with an agenda that runs counter to the best interests of the majority of people in any country.  Bringing back the power to create money to the government creates a natural balance in the process, so that banks no longer have the power or desire to create endless money to feed the endless artificial debt.  The nature of this change must be made subject to the primary principle of a Sustainable Zero Net Growth economy and that only governments can create money.  Financial institutions must be made to serve the whole population, not a small subset of greedy bankers.

Put the reserve bank back under complete government control

The reserve bank is a useful construct, but must be made wholly accountable to the government and the people.  It must become transparent in its dealings and any requests for action from global institutions a matter of public record.  Global financial institutions have proved they cannot be trusted and the fact they are not accountable to anyone is a primary factor.

 

[1] http://www.rollingstone.com/politics/news/gangster-bankers-too-big-to-jail-20130214

[2] http://www.positivemoney.org/how-money-works/how-banks-create-money/

[3] http://wiki.mises.org/wiki/Criticism_of_fractional_reserve_banking

[4] http://2joz611prdme3eogq61h5p3gr08.wpengine.netdna-cdn.com/wp-content/uploads/2012/02/Full-Reserve-Banking-in-Plain-English1.pdf

[5] http://www.forbes.com/sites/markhendrickson/2013/12/20/100-years-later-the-federal-reserve-has-failed-at-everything-its-tried/

[6] http://grayson.house.gov/media-center/press-releases/grayson-letter-on-preventing-big-banks-from-gambling-with-taxpayer-money

[7] http://www.rollingstone.com/politics/news/the-great-american-bubble-machine-20100405


Share this article...

Leave a Reply
See our discussion rules here

You can use these HTML tags

<a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <s> <strike> <strong>