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The Truth is out: Money is Just an IOU

posted by LaminatorX on Monday March 24 2014, @11:25PM   Printer-friendly

Anonymous Coward writes:

"http://www.theguardian.com/commentisfree/2014/mar/ 18/truth-money-iou-bank-of-england-austerity

Back in the 1930s, Henry Ford is supposed to have remarked that it was a good thing that most Americans didn't know how banking really works, because if they did, 'there'd be a revolution before tomorrow morning.'

Last week, something remarkable happened. The Bank of England let the cat out of the bag. In a paper called "Money Creation in the Modern Economy", co-authored by three economists from the Bank's Monetary Analysis Directorate, they stated outright that most common assumptions of how banking works are simply wrong, and that the kind of populist, heterodox positions more ordinarily associated with groups such as Occupy Wall Street are correct. In doing so, they have effectively thrown the entire theoretical basis for austerity out of the window."

 
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  • (Score: 0) by Anonymous Coward on Tuesday March 25 2014, @12:16PM

    by Anonymous Coward on Tuesday March 25 2014, @12:16PM (#21028)

    Just consider what might happen if mortgage holders realised the money the bank lent them is not, really, the life savings of some thrifty pensioner, but something the bank just whisked into existence through its possession of a magic wand which we, the public, handed over to it.

    OK, I've considered it. Nothing would change. The article later alludes to a revolution that might occur re:Henry Ford's quote, but I don't see it. What are people going to do? Stop paying their mortgage? OK now you're arrested by the cops for squatting in someone else's house. Then what will you do? Fight the arrest? Good luck, you'll just be killed. I don't understand what the author honestly thinks is going to happen once people realize it's all a sham.