The question of how money is created will be debated in parliament for the first time in 170 years

The question of how money is created will be debated in parliament for the first time in 170 years

This week, one of the most important debates in the 21st century is set to take place in parliament.

Campaigners from Positive Money have been successful in persuading MPs to bring the question of how money is created, what usury is, and information about the fiat system into mainstream public debate.

The discussion will be entitled ‘Money Creation and society debate’ and will involve MPs from the Labour party, Tories, Green party, and Liberal Democrats.

Although many talks have taken place in the House of Commons about how tax is spent, and various aspects of personal finance, debate about the real crux of the system that tries to get at the heart of how money is created has not occurred since the 18th century.

In a system where both entire countries and individuals are trapped in a cycle of seemingly endless debt, the discussion of how money is generated has never been more pertinent.

Barely a day goes by in the news when we don’t hear of public funds disappearing into a black hole, tax money being misspent, or someone being kicked out of their homes.

At the same time, there is an ever growing gap, not just between rich and poor people, but between rich and poor countries.

This is leading to a situation, where the top 1% own 99% of the wealth on an individual and national level.

Of course, this feeds into other problems, such as inequality, starvation, conflict and the control of trade.

Essentially, if you control the money, you control the world, and all of the economies, cashflows and influential people therein.

With this in mind, having a debate about how this money is generated in the first place, and more importantly, who controls it, is critical.

For the first time in 170 years, this discussion is taking place, and although it will not itself change the status quo, it certainly will set the scene for further awareness and debate.

There is also a lot of evidence that both politicians as well as the public are largely ignorant of how the system actually works.

The Bank of England’s own figures showed that 7 out of 10 MPs believed that only the government can create money, when in fact 97% of money is created by the banks, who then go on to create debts and loans.

This new parliamentary debate has so far had Cross-party support, with a number of leaders expressing support for a debate on money creation.

Commenting on the findings, Caroline Lucas, Green Party MP, said: “The debate that Positive Money has started is an incredibly important one. We all need to better understand the role that money and its creation plays in our economy.

“There is no doubt that our financial system and the ecosystems on which we depend are at the point of collapse. We can tackle both problems simultaneously if we’d only admit their interdependence. If we’d only recognize that how we spend money and how we create money, has an impact on our environment.”

According to figures published by Positive Money – the organisation bringing the initiatives forward, two-thirds of the British public believe that banks take people savings and lend those savings to borrowers – suggesting that the public do not understand that private banks create money out of nothing.

A spokesman for Positive Money, said: “In a time when finance literacy is becoming compulsory in education, a better understanding of how banks and money work is vital.”

Positive Money also revealed that between 2000 and 2008, the amount of money – and debt – in the UK economy doubled as a result of money creation by bank lending. This is the process which controls the rise and fall of world economies.

Furthermore, in 2011-2014 just 8% of new loans were made to businesses. The majority of new loans are directed to financial markets and mortgage lending, which is why they both have such a major influence on our national economy.

In 1844, Sir Robert Peel brought in the Bank Charter Act, forbidding the private banks from printing paper money.

However, campaigners at Positive Money argue that this needs to be updated to include electronic money.

On Thursday November 20th, a new precedent will be set when the question of how money is created, once again enters the public sphere.

Speaking about the discussion, Michael Meacher, Labour MP, added: “The key issue which this country has got to face up to is the restoration of democratic accountability via the control over the money supply.”

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