In one way or another, money affects almost
everything that happens on the planet. If we want to deal with the big social, economic
and environmental challenges that we’re facing today, changing the nature of the money
we use is where we have to start.  Right now we have a problem. More than 97% of all the money in our economy
is created by banks, when they make loans. Most of this money goes into house price bubbles
and gambling on financial markets. This has lead to ever widening inequality,
the highest personal debt in history and house prices that very few people can afford; before
even mentioning the financial crisis. But 3 simple changes to the way that money
and banking works could make a huge difference. These 3 changes would give us a more stable
economy, with more jobs, less personal and government debt, and a solid footing to begin
tackling the environmental crisis. So, what do we need to do?  Firstly, we need to take the power to create
money away from the banks and return it to a democratic, accountable and transparent
process.  History has shown that when banks have the
power to create money, they create too much in the good times, causing financial crises,
and too little in the bad times, making recessions and unemployment even worse. They put most of the money that they create
into house price bubbles and financial speculation, and only a small amount into businesses outside
the financial sector. We simply don’t think that we can trust banks, who are hardwired
to chase short-term profits, with something as powerful as the ability to create money. And it’s not enough to regulate them; regulators
have repeatedly failed to keep banks under control. There’s no reason why they should
get it right this time around. But we can’t trust politicians with the
keys to the printing press any more than we can trust the big banks. Instead, we need a new committee that decides
whether and when to create new money. This committee would need to be accountable
to Parliament and sheltered from vested interests. They would ensure the right amount of money
is created – not enough to cause bubbles and a financial crisis, but not so little
that it causes a recession. Secondly, we want to see money created free
of debt. Right now, banks create money when they make
loans, which means that for every pound in your bank account, someone else must be a
pound in debt. It means that almost all the money in the
economy is effectively ‘on loan’ from the banks, and we have to pay interest on
nearly every pound that exists. If we try to pay down our debts, money disappears
from the economy, making it harder for others to repay their own debts. Instead of letting banks create our money,
the state could create it, free of debt. And instead of lending money into the economy
through mortgages and loans, it could be spent into the economy. This means that new debt-free
money would stimulate the real economy, create jobs, and make it possible for ordinary people
to start paying down their debts. Finally, we want to see money come into the
real economy before it reaches financial markets and property bubbles.
If newly created money was used to fund public spending or cut taxes for ordinary people,
then that money would start its life in the real economy. It would create jobs and support
businesses, instead of getting trapped in financial and property markets.
There are real challenges facing us over the next 40 years, such as how to provide for
a growing population, a changing climate, and increasingly scarce natural resources.
Right now it’s impossible to solve these problems because money – which affects almost
every aspect of our lives – is broken. We need to fix it, and get a money system
that works for society rather than against it.  

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97 thoughts on “Could These 3 Simple Changes to Banking Fix the Economy?”

  1. What do you think about crypto-currencies as legal tender?

    You don't even need banks anymore to hoard money or make transactions, so banks would be forced to innovate.

    Money supply is sane, impossible to cheat, while each coin is divisible into as many parts as suitable. 

    If legal, cryptos would render the banking sector back to it's original role: An intermediary for collecting savied funds and making professional investment decisions. 

  2. Interest is the true evil. You should also create a max of interest banks can make.
    Like a max of 3% is more than good enough. Beacause interest is what makes the richer, more riche and the other less…..

  3. What we need is Glass-Steagall bank separation  legislation  -that will actually  put the Bankrupt banks of the City of London  & Wall Street into bankruptcy and stop them looting economy to stay in business , Then we need a National Bank of Public  Credit  and a  Program  of large infrastructure to  rebuild the manufacturing sector  and other areas to get the country going again  

  4. Let's say I'm the only person in the world capable of creating something. Let's say… corn. I am the world's only producer of corn, and I can produce any amount of corn I want, but I only produce corn as long as there is demand. You have to ask me for corn in order for me to make it magically appear for me to give to you.

    However, I also want corn for myself. I don't want infinite corn, though. I want a percentage of the corn I produce. So, what I do is, when I give you corn, I want all of that corn back, and a little bit more.

    This is the problem with banks and money. Banks are the only sources of legal tender. You can't just create your own disks of metal and pieces of paper and trade with those. You have to use money that's come from a bank. Banks create money, and then charge interest on that money, but they don't actually create the interest. Therefore, as long as you have money, you're in completely unpayable debt. You can't pay it off, because the money being demanded back simply doesn't exist.

  5. 1:43 Regulators have repeatedly failed
    1:52 Can't trust politicians
    2:51 "The state could create it (money)"… "It could be "spent" into the economy."

    Did you listen to this before you posted it?

    Or do you mean the government should do it's own dirty work instead of having the banks do it for them?

  6. Why do we have to have a committee? Why not just have competing currencies with different properties. If the money is shit people wont use it. If its good people will use it to save and spend. Why do we need to give one institution a monopoly of money creation? Is this committee going to have some exceptional moral will that will make them invulnerable to poor decision making and corruption unlike the banks or politicians.

    Its not that the wrong people have special powers. Its that special powers are not suitable for any one. There is no need for slaves and masters.

  7. Another regulating committee is not going to solve anything. It will become just as corrupt. Allowing the free market to work by allowing (legalizing) competing currencies is the solution. People should be able to use whatever they want whether it's gold, silver, platinum, copper, bitcoins, paypal credits, bullets, chickens etc. makes no difference. Freedom of choice is always the solution.

  8. We, here in the US anyway, don't use money. We have currency and there is huge difference between the two. Banks don't create money they create credit backed by nothing!

  9. Gold and Silver is Money.  There must be a separation of money and state, because the state always tends towards corruption.

  10. Your 3 ideas are really well-thought out. But I see one contradiction in your message: everywhere else on your site, we're taught that banks simply create money out of thin air whenever they decide to issue a loan–that it's not a one-to-one loan from depositor to borrower.  But this video says that for every one pound of loan, there is one pound of debt held by another person.

  11. I think that you need to make the distinction between money and currency. Most people use the term 'money' when they really mean 'currency'.

  12. An independent committee separate from banks but accountable to UK parliament but protected from vested interests; in short never work sorry but who would choose them and do not say the public because this requires honest and knowledgeable people with financial know how and experience. The head of the bank if England would gave to sit on this committee as well. Sounds like people needs a lesson Insupply, demand, employment , unemployment and debt and debt free. Capitalism always goes for profit; there have to be econmic opposites in the market . It a market sometimes you win sometimes you don't; welome to a global capstialist economy, money is not evil it is how it is used that makes it so. Why are we reinventing the wheel. Boom times and bust that how it works, Sadly.

  13. at the german spectator´s:
    wrong translation in german at 0:08 ; "economic and environmental" must translate into "umwelt und ökologischen"

  14. Another thing I would add to the list is a way to tie money creation to Earth's carrying capacity. E.g., if you use the money to cut down trees, then even if that produces more goods and jobs, it should have the effect of limiting future economic growth. Otherwise, the committee will still be under pressure to keep an indefinitely growing economy going through indefinitely incremental money creation, as they showed in the chart in this video.

    Because of inequality and the economic pain suffered by so many, public discussion on finance and banking reform naturally focuses on address these two issues. But we must not lose sight of the bigger picture or we will just be advocating for another form of un-sustainable development — one that is even harder to reform because the 99% are now vested in its continuity.

  15. The suggestion to let government manage state money seems disastrous, because there's no incentive to be efficient and every incentive to fatten their wallets on public money.

  16. Do away with money all together! A global, resource based economy with the true needs of human beings at heart is what is necessary.

  17. The idea of the government making more money and putting it into the real economy and not into the financial markets is a good one in only theory. As long as the extra printed money creates wealth through services that are truly needed, then the value of the currency will not go down. In practice, however, there is no guarantee that the government will provide services that are needed. Even if the government chooses to provide a service that is needed, history shows us that government is much more inefficient than private companies. Also, giving the government power over the the market to decide what is wanted or needed has consistently had dire consequences in the past. Why give the government this power if it has consistently misused it?

    I am not saying that the solution is to print money and put it into the financial markets, but that giving anybody the power to print money will cause inflation and will devalue the currency. It is simply better to have a currency that is based on a gold and/or silver standard.

  18. First of all, you need to clarify what money is….fiat currency is NOT money. Gold is money. #wealthprotectionpros   you might want to get re-educated at hidden secrets of money dot com

  19. What do U think about bitcoin? Instead of let a group of people or committee create money. Pre-define the rule first and let the Math Formula create money at a predictable rate.   

  20. Ever wonder what Hitler did to get Germany from a downtrodden wasteland to the powerhouse it was just before the Second World War? Ever wonder just why the Nazi's were made out to be the worst thing to ever happen to the world? Just maybe, the answer lies with money and interest…. Read the Manifesto for the Abolition of Enslavement to Interest on Money by Gottfried Feder who was the economic mentor of Adolf Hitler. With an open mind… if possible

  21. So if we created a fair democratic system and a worker on £15,000 pa wants to buy a home. How will any house price fall to HIS affordable level without a mortgage? Present house sellers will lose out bigtime… when todays value is say £200,000 and the new system reduces it to say £20,000.  Perhaps a fair democratic government will create the £180,000 shortfall and donate it to the seller. In time, house prices will drop and wages rise to realistic values. The Banks and Govt cronies will fight us every step of the way, with their millions they can win every court case. Give me hope that 'Postive Money' can work.

  22. Regardless of how the money enters the economy, if people still have the right to chose what they do with their money then loans/credit will still be provided from another source, housing bubbles will be inevitable because the majority of property is already owned and the financial markets and investments will still remain the driver of the economy.

  23. Jct: 3 simple changes to turn the malfunctioning 1/(s-i) banking system to the interest-free 1/s model. Seems there's only one simple change, not 3. And of course, they don't even deal with getting rid of the "i". 

  24. with reference to what he says above, if more money is injected into the economy when the economy is already overheated, i.e. in times of economic prosperity and more money only means overspending, and less money during economic recessions when the economy needs encouragement hence money to develop, then what is it if not treason, intentional provocation to wreck our economy and enslave us?

  25. Glad we're having this conversation, creating money out of thin air is definitely not sustainable and a con that keeps whole countries under debt slavery. Although an improvement, the suggestion by Positive Money doesn't go far enough. For as long as we have a money supply detached from resources it'll be unsustainable and the planet and us are doomed. Humans have created an abstract money system completely detached from finite natural resources based on an infinite supply of money. This will always inevitably lead to overspending and overusing the carrying capacity of the planet.

    Add to this the mass unemployment due to cheap mechanization of production in a not to distant future and it's obvious well have to come up with a different social order, perhaps one not based on work and money, that still provides for everyone.

  26. Why don't they just make it the responsibility of the judiciary, rather than starting up another body..but I like this concept!

  27. This for me has been one of the biggest problems, if not the biggest problem with our society for decades. The power needs to be given back to the people if we want a fair and just country, along with a decent standard of living for everyone.

  28. I don't understand how this solution could get to the point where it's implemented because I don't see what's in it for the bankers or the politicians.  How could policies for this kind of thing get passed if people in government would lose out?  If it were somehow set up independently, it would be made illegal.  I feel there is a major missing step here.

  29. Domingo Cavallo dice:
                                                                                  julio 10, 2015 a las 2:07 pm
    Hola Gabriel. Los inconvenientes que crea en la economía el sistema de encaje fraccionario que permite a los bancos crear dinero son conocidos desde larga data. Ha sido uno de los temas preferidos de la Escuela Austríaca de Economía. La última propuesta más completa de una reforma monetaria y financiera que elimine estos problemas fue hecha por Lawrence Kotlikoff y está publicada en un libro titulado Jimmy Stewart Is Dead, called Limited Purpose Banking, transforms all financial companies with limited liability,. Te recomiendo que lo leas. El tema no es simple. En el video lo presentan como una solución sencilla, pero en realidad, una reforma en edsa dirección es muy complicada……..Domingo Cavallo dice:
    julio 10, 2015 a las 2:07 pm

  30. Domingo Cavallo says:
                                                                                  July 10, 2015 at 2:07 pm
    Hello Gabriel. The disadvantages created in the economy fractional reserve system that allows banks to create money are known from long standing. It has been a favorite of the Austrian school of economics topics. The last comprehensive proposal of a monetary and financial reform that eliminates these problems was made by Lawrence Kotlikoff and is published in a book titled Jimmy Stewart Is Dead , called Limited Purpose Banking , transforms all financial companies with limited liability ,. I recommend you read it . The issue is not simple. In the video they present it as a simple, but in reality, a reform of management is very complicated edsa …….. Domingo Cavallo says:
    July 10, 2015 at 2:07 pm

  31. There is only 1 simple change needed for honest banking!

    1.We need to take the power to create money from the banks, and return it to the PEOPLE individually not democratically returning to a FULLY backed receipt currency based on resources not debt.

    A fiat economy weather it is created by the state, banks, or an independent committee like it already is in the U.S. is simply legalized counterfeiting based on fraud. Don't be fooled this video offers more of the same.

  32. I understand your point about how banks are "draining" earnings from the economy by making people pay for credit interests, but how much exactly is this number? Is it really that substantial compared to the overall output of the economy?

  33. If the government spends money into existence but doesn't require it to be paid back, wouldn't that just create inflation? Don't governments already spend money into existence that they don't have and that isn't being paid back?

  34. Good information. But no solution really exists . Even if a solution was possible the powers that be would dilute it or complicate it to the extent that it would be useless.

  35. What this video describes is chartalism and requires government taxation to motivate the use of this money system. Its success depends on the wisdom of the spending priorities of the government and/or the force which the government is prepared to apply to collect the taxes. If there was no taxation, there would be no incentive for the wider economy to adopt chartalist money and other forms of debt-based payment would become viable as competing monetary systems. In any case, it is either interest payment or taxation due that enforces the value of money, otherwise it is a figment of just a few people's imagination. The choice is thus in reality between a centralized state-sector monetary system, or a private sector-based system. Today we have a hybrid of the two, where a private system is underwritten by the force of state taxation, which is probably why it isn't working so great…

  36. This is a fascinating video and I am keen to learn more. one thing… at about 2.20 when discussing bank loans, the video says that "for every pound in your bank account, someone else must be in debt." Why? What is the link?

  37. The arguments of "Positive Money" succinctly:  1. The governments who sold their people to the banks are trustworthy.   2.  Wealth can be printed (or typed).

  38. The solution is worse that the current situation…How do you came with this? have you tasted? that's only will lead to authoritarian regime
    A simple solution is set regulation that banks lend to a rate between 2% to 11% and loans to housing should be made to a project backed by trust fund so it will avoid real estate bubble

    In simple term retail banking should become more humanize and be more flexible…but the goverment should not be creating fiat money becuase it can (it does, it did and it will) becuase that will lead to a disorden and bad production

    By anyway the problem is not money the problem is resource and production..go and take a look around at Venezuelan, people have money, good wages… actually, but nothing to buy and have to find products like milk and eggs in the black market

    Indeed money is created like that so what…? money is just a social contract money it self is nothing by virtual agreement, we use fiat money because we wont be barting around trading producst and services for another products or service… so if you work as clown for kids party will you go to the supermarket and made a little show to the cashier to pay for the grocery?

    Nevertheless nice jobs by educating the public in this subject and exposing the real model and truth of all this but societies are complex organism and money is the way they try to organize themself without recurring to barbarism

  39. 1.You just try to prove that the government is more trustworthy than those bankers.
    2.But a even smaller group controls the whole economy is a good idea?
    3.You want to create an economy where people dont have to loan to fund their business, but as far as I know people always want more and more, that is where credits came from.

  40. this video doesn't make sense. which is ok. its just a summary of things positivemoney thinks needs to be done. but imo it'll turn off most lay people because they'll just be left thinking "why don't i get this?? oh nevermind, its too complicated"

    a longer version is needed, that actually explains the points made, & this video needs to link to it

  41. I understand the problem with the debt based system, although the debt only gets out of control if the growth is too low, or inflation is too low. The problem I have with the committee system that who gets to choose who sits on the panel, and it will be too unresponsive to changes in the economy, If a way to self-regulate the injection of money organically, that may be better. Yet the West has intentionally fought inflation sine the 70's with high-interest rates, eventually leading to each cycle being lower than the previous one. It seems obvious to me that is precisely want you would do if you wanted real debt levels to skyrocket, didn't they see it coming, or was that intended? A consistently high level of inflation is considered bad for savers, decisions about investment can factor in inflation, provided the bond market is stable. Does anyone know if an economy can sustain high inflation, high interest rates for savers, lower rates for borrowers to encourage borrowing, without the bank losing money. It seems to me that since lending is far higher than saving, it wouldn't matter if the difference was negative. What would then stop the central bank or government then resetting the real value of money at the end of each year?

  42. i believe frankly that it's impossible. this monetary system made it possible to colonize countries, make them fall to their knees in front of the power of the west. no politician would choose to let go a very effective and very damaging mean to colonize other countries.

  43. Good luck. Dept has become weaponized. The ruling elite use it to keep us controlled by them. Along with the divisive narratives they keep drilling at us through mass media.

  44. The ONLY way that the monetary system can change is if the public become aware of what the situation is. Then the 'free market' will find a solution. We need to keep the government out of the money supply. It is that simple.

  45. better idea is create an other form of money
    3 forms
    Central bank reserves
    Bank credit
    (new Type)

  46. Actually there is only one thing that will fix all debt, and that is to kill every money lender removing fiat debt.

  47. #(UBI) – Let's start there… Then – #(UBHC) & #(UBK-16) merit/aptitude based education… Tax, Debt, & Interest free! 3 basic stand alone programs to start! No strings attached! We will see growth, stimulus, & surplus real quick! We must take the power away from the World Banks & Corrupt Politicians, to "The Committee", An unbiased, uninfluenced body of some sort… yet to be constructed or created! This should be our next priority! And they should be Elected, Short Term Representatives. By The People, Of the People, For the People! A public COOP if you will… where everyone has a vested interest! For the success and good of all.
    Bottom Line… By "The Committee". Supply should always strive to meet demand & match the population growth rate. Thus excluding Boom/Bust cycles of both micro & macro economics.

  48. I was really looking for a solution to the current Money Creation problem that doesn't make any sense to a 10 year old kid or a 50 year old person. I think I found it here!

  49. 1. All rules were made by Government. It's bullshit. If money is free if debt.It will become unlimited .Money is something that happened not something that will happen. It's not credit but a record for payment .

  50. There is no real solution because there is more created money debt than existing money and you can NOT cancel out created money debt without retiring(destroying) the money as well.

    It’s a game of musical chairs people

  51. I'm very interested in this idea but I've got a brain injury and I have trouble imagining HOW we could get this going, how it would or could work, because it is so different from how things are now and although I'm an artist my imagination isn't that good and the steps to get to this utopia (?) are ENORMOUS. I did economics at A-level in the UK many decades ago but now my brain is totally boggled by even 'simple' things and especially notions such a time, numbers and money.

    I would like to learn more but with my brain injury & extreme fatigue and all info being too complicated and not knowing WHO is telling the truth = I don't know if I can, sad. But I DO know that I'm VERY stressed about information, healthcare, insecurity, money, income/benefits, jobs, environment, housing and pretty much everything, and services, and trying to find quality products and housing and services that are safe, NO risk, accessible, affordable and are fit for purpose and adapted to my disability appears to be impossible, why – when there are LOTS of people like me throughout the world? All this has made me VERY ill. PLEASE can we fix it and fast? If not why not?

  52. How does one country do this when the rest of the world are printing money? Love what you guys do btw

  53. If you were to print $ into the local scene where the local or local business spends it, then others inflate their prices..

    Almost need a pay day spend day where printed money can only give the retailer 10% profit per item etc. Otherwise if I were a retailer I'd push prices on my goods up because everyone else would to capture the printed dollar

    Pay into new superannuation account where business is the only thing allowed to be bought by superannuation companies. But then family business would be squeezed out.

    Sound's like a balanced approach is needed. Money printed everywhere as town by town proposition where can only be spent locally. Speculative markets would then take 15yrs to bust instead of 7..maybe a start

    Speculative money could be cashed in at lower and lower percentage rate. Eg. 99% after bust/recession down to 90% conversion to cash or gold equivalent, before peak

    Tough call. No committee would be free of influence if given power over banks.

    Just like a spider Web. Every week in news, they have to say simply how many people are in what asset bracket and what debt bracket. It's probably fairest way. Not who's in the brackets/pyramids, simply how many in each and when new a higher/lower (lowest is homeless of course) bracket created

    Land for land. If you buy a home you must also buy a natural landscape of the same size, or grow one. It would bring nature to the forefront and people with homes/land already must buy a nature block of land within 50yrs or something.
    In other words, protect land as you buy land and develop it. You get paid nature/carbon money to supplement you block payments. Nature/carbon money comes from polluters so ultimately energy/business/transport remains in control of own destiny and economy

  54. This guy is stupid. He's clueless about how monetary systems work. One might as well listen to a baby crying, that's how "informative" this is. Everything you hear in this video is nonsense.

  55. We need a Federal Reserve or committee to regulate the money supply because we have an inherently UN-stable system.

    IF we share natural wealth equally, we have a system more akin to an organism that automatically maintains a steady state (steady body temperature, for example).

    If we charge fees proportional to pollution put or natural resources depleted, and set the fees just high enough to bring and hold impacts to levels that most people (random poll) say are acceptable, we will get rising fees when the economy is expanding. This will put a damper on further expansion, thus preventing an unsustainable boom.

    When the economy slows, fees for pollution permits, etc., will fall, thus providing improved conditions for business. The slowdown will automatically bring the conditions that favor business expansion. A complimentary factor will be the decline in natural wealth stipend (derived from environmental impact fees) that will motivate some people who are largely or entirely reliant on that stipend to meet their living expenses to enter the job market or increase their working hours. This increased availability of labor also provides a counter-cyclical influence.

    Equal sharing of natural wealth promotes justice and sustainability:

  56. Sorry to say, but the solution is already here. Buy Bitcoin, and forget this Ponzi scheme called fiat.

  57. If you dont remove (interest) from loan then poor will be poor prices will go up and rich will become more rich because of no risk of lossing money
    On banks should be allowed to do investment no loan should be given to generate interest
    While installment on product is differnet

  58. This is literally what Guernsey already dose, with a significant amount of success. The government has no debt, the average standard of living is high and the tax rates are low. Although the banks still have the power of fractional reserve banking, which means they can still find away to claw back more power in the future.

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