Michael Moore does it again. He’s like the little boy who dares to tell us “the emperor is wearing no clothes”.

“It’s a crime story. But it’s also a war story about class warfare. And a vampire movie, with the upper 1 percent feeding off the rest of us. And, of course, it’s also a love story. Only it’s about an abusive relationship.

“It’s not about an individual, like Roger Smith, or a corporation, or even an issue, like health care. This is the big enchilada. This is about the thing that dominates all our lives — the economy. I made this movie as if it was going to be the last movie I was allowed to make.

“It’s a comedy.” — Michael Moore

And if you prefer to hear about these ideas from a man in a suit, here’s Chris Anderson, editor-in-chief of Wired magazine.

» Read more

Here is a great poem he wrote about money and banking…

The Matrix

Basic Info:

• Money Today
• A Brief History of Money

Money Books:

• Money Books
• More money books
  • see also Money downloads

Money Videos:

• Money as Debt
• The Matrix – A Poem by Paradox
• Zeitgeist Addendum
• Zeitgeist – The Movie: Federal Reserve
• The Money Masters
• New American Currency
  • see also http://delicious.com/uniteddiversity/money+video

Money Downloads:

• Money downloads

More

• http://delicious.com/uniteddiversity/money
• http://p2pfoundation.net/Category:Money

What’s more, in order to make a guaranteed profit, the banks create money out of nothing, lend it to us at interest, and then demand we pay back more money than exists! Collectively we are left in the impossible situation of always owing more money than actually exists.

Instead of telling the banks where to go (by creating our own money systems based on collective mutual advantage and reciprocity), we then scramble to the banks and beg them to lend us more money. This situation is utter madness.

Money for nothing.

Creating money out of nothing first emerged in the 13 century, at goldsmiths’ benches (or bancos) in Italy, when receipts issued for deposits of gold, goldsmiths’ “tokens of promise to pay”, began to be used for trade because they were much easier to exchange than the gold itself. Goldsmiths soon realised that depositors would never try to retrieve all of their gold at the same time, and so cleverly, or perhaps deviously, began to issue tokens (i.e. create money) for gold they didn’t have (i.e. out of nothing).

This was the beginning of both western “promise to pay” paper currencies and of the so-called “fractional reserve banking” systems that persist today – “fractional reserve banking” being the fancy name given to the process that enables banks, like the goldsmiths before them, to create more money than they hold, out of nothing.

Money and War

The ability to create money out of nothing inevitably gave bankers, and the banking system as a whole, a significant amount of power – a power that was increased substantially during the 17th century when “a deal was struck between the governments and the banking system. The banking system obtained the right to create money as “legal tender” in exchange for a commitment always to provide whatever funds the government needed” – Bernard Lietaer, Future of Money

This power was first granted to the Riksbank in Sweden (then called the Bank of the Estates of the Realm) when in 1668 the crown needed urgent money to fund a war against Denmark. Similarly, the Bank England was founded in 1694 when King William of Orange needed an extra £1.2 million to fund a war against the French.

At Bretton Woods, 250 years later, war was again instrumental in the shaping of today’s global economic (dis)order. A year before the end of World War II, on July 22nd 1944, the Bretton Woods Agreement was signed in New Hampshire, USA and the US dollar became the de facto currency of the world. Under this agreement, 44 countries “had to fix their currencies to the US dollar, and the US committed in counterpart to keep its dollar convertible into gold upon request from any central bank at the fixed rate of US$35 per ounce of gold.

A new institution – the International Monetary Fund (IMF) – was created to police the system…(and it) worked well for over two decades until President Johnson introduced his “guns and butter” strategy during the Vietnam War…This triggered an unprecedented dollar outflow from the US … (and) it was these substantial dollar holdings in the hands of foreign central banks that were to force President Nixon in 1971 to renege on the convertability promise of dollars into gold” – Bernard Lietaer, Future of Money

Thus, when Britain and France wanted to convert dollars into gold, and Nixon said “no”, dollars – the linchpin of global economic system – were no longer backed by a fractional reserve of gold, but by nothing. Since that time, the dollar has represented a promise from the US government to redeem the dollar with – another dollar. This further increased US influence in global monetary policy and, with currency exchange rates left to the whims of the market, inaugerated an era of unprecedented monetary instability; today’s “global casino” of international trade, completely dominated by speculation, had been born.

So, under the present banking system, we allow banks to create money out of nothing, so long as they hold a fractional reserve, not of gold, but of money previously created out of nothing. This is a pretty clever a trick (more devious even than the Italian goldsmiths), but it’s still only half the picture: modern banks don’t just create money out of nothing, they create it by lending it to us at interest, insisting that we pay back more money than actually exists! – we have to pay back what we’ve borrowed (i.e. the money we’ve allowed the banks to create out of nothing) plus interest (i.e. money that doesn’t even exist).

Paying back more money than actually exists is, of course, impossible – unless, that is, more money is created, by issuing more loans and creating more debt. This “debt imperative”, the perpetual need for more money to pay back our ever-expanding and constantly spiralling debt, leads in turn to a “growth imperative”, the need for perpetual economic growth. Unfortunately, we now know conslusively that perpetual economic growth is neither possible nor desirable.

How money works today.

How money works today is completely ludicrous.

It pits people against each other and guarantees that the rich get richer while the poor get poorer.

To understand how, imagine there are only 2 friends and a bank, and that in order to buy food, pay their rent, and trade amongst themselves, the 2 friends need money that only the bank can create.

The bank (actually an already wealthy 3rd person) creates £20 and gives £10 to each of the 2 friends.

All the bank asks is that both pay back £11 next year. Since the 2 friends need the money to eat, they agree, gratefully accepting the £10 that helps them to fulfil their immediate needs.

They even promise (because the bank insists that they do) that if they are unable to pay back the £11 next year, they will allow the bank to take some of their belongings as payment.

The problem is, it is totally impossible for both to pay back £11, because the bank only created £20, and 2 x £11 = £22 – more money than actually exists.

The only way either of the 2 friends can pay back the £11 is to get the extra £1 they need off the other.

This leaves their friend with only £9, unable to repay their £11 debt.

The 2 friends are now pitted against each other, both desperately trying to get the extra £1 they need off the other in order to avoid having to hand over some (or all) of their belongings.

Whatever happens, in the end at least one of them is going to lose some of their belongings, and it s the bank (the already rich 3rd person) that is going to get them.

Basically that s how banking works, and that s why bankers (the rich) get richer and the poor get poorer.

Now, with the global economy struggling on all sides with economic collapse, climate change and peak oil very much beginning to kick in, I thought I share a few more good reads on the subject.

Hopefully lots and lots of people will read these books and we can finally move away from Money as Debt madness towards a saner banking system. :

[amtap book:isbn=0816649634]

“A firsthand view of local currencies that are providing alternatives to global capital.

Is conventional money simply a discourse? Is it merely a socially constructed unit of exchange? If money is not an actual thing, are people then free to make collective agreements to use other forms of currency that might work more effectively for them? Proponents of “better money” argue that they have created currencies that value people more than profitability, ensuring that human needs are met with reasonable costs and decent wages—and supporting local economies that emphasize local sustainability. How did proponents develop these new economies? Are their claims valid?

Grappling with these questions and more, Money and Liberation examines the experiences of groups who have tried to build a more equitable world by inventing new forms of money. Presenting in-depth profiles of the trading networks that have been constructed both historically and more recently, including Local Exchange Trading Schemes (England), Green Dollars (New Zealand), Talente (Hungary), and the barter system in Argentina, Peter North shows how the use of currency has been redefined as part of political action, revealing surprising political ambiguity and a nuanced understanding of the potential and limits on alternative currencies as a resistance practice.”

[amtap book:isbn=0002559471]

“Only our limited ideas about money are keeping us poor…”

Funny Money is written like a travelogue and features the new alchemists of the USA who have found new ways of conjuring money out of next to nothing. After reading this book, you will never think about money in quite the same way again.

It was this book where I first read about Deli Dollars, a precursor to Berkshares (which has recently inspired the Totnes Pound and the Lewis Pound here in the UK).

See my draft proposal for Sustainable Enterprise Agency (.pdf) that I wrote back May 2002 after reading this book

[amtap book:isbn=0979560810]

“Our money system is not what we have been led to believe. The creation of money has been “privatized,” or taken over by a private money cartel. Except for coins, all of our money is now created as loans advanced by private banking institutions — including the private Federal Reserve. Banks create the principal but not the interest to service their loans. To find the interest, new loans must continually be taken out, expanding the money supply, inflating prices — and robbing you of the value of your money. Web of Debt unravels the deception and presents a crystal clear picture of the financial abyss towards which we are heading. Then it explores a workable alternative, one that was tested in colonial America and is grounded in the best of American economic thought, including the writings of Benjamin Franklin, Thomas Jefferson and Abraham Lincoln. If you care about financial security, your own or the nation’s, you should read this book.”

[amtap book:isbn=1893520021]

Civil Rights lawyer Edgar Cahn came up with the idea of Time Banking whilst ill in hospital feeling useless. It occurred to him the as a legal expert he wasn’t useless but that whilst in hospital he was totally reliant on the nurse’s and doctor’s time.

He thought about it some more and realised there are probably thousands of older people who feel useless but aren’t. He convinced Elderplan (a health insurance company for old people in US) to give the idea ago and they got some of their customers to try it out.

The results were amazing. Just getting old people to earn time credits by calling each other up to check up on each other had a radically positive effect on their health – so much so that Elderplan started letting those that participated in the system part-pay the insurance premiums in time credits!

And its not just old people either. Everyone can benefit from building new trusting social relations and the sense of community belonging that time banking can induce.

Which is why now, time banking has become one of the most widespread models of community currency/ mutual credit systems in the world.

[amtap book:isbn=0230007848]

“In this book, Ann Pettifor turns her attention away from the debt crisis affecting developing countries and examines the issues of debt affecting the first world or OECD countries. She examines the history and roots of where the current international debt crisis stems from – economic liberalization – and the restructuring of the international financial architecture in the early 1970s. The book goes on to explore the implications of high international indebtedness for governments, corporations, households and individuals. An important and unique contribution is Pettifor’s discussion of the justice and morality of debt, particularly for individuals.”

[amtap book:isbn=0954972759]

“The contribution of Douglas-Orage to the incorporation of the non-market sectors of the economy – health, education, social security, the environment – is crucial. The power grab of the banking system that Douglas and his associates identified almost a century ago, have come into a lethal flowering. In the long-overdue reassessment for what passes as economic science, their ideas will require careful attention. The Hutchinson Burkitt book is mandatory for preparing ourselves for the task.”

[amtap book:isbn=0944435351]

“Dr. Jaikaran has made a compelling case that our civilization is piling up too much debt, causing debt inflation and creating dangerous monetary conditions. He also provides intriguing information about who owns the Federal Reserve (it’s not who you think), how banking really works, the history of money, where our money comes, what banking systems might offer safer alternative systems from and other important facts.”

[amtap book:isbn=095552170X]

“Here is a disquieting dispatch from someone deeply embedded in the financial world and all us amateur punters should sit up and take note. Do not say later you were not warned.” –Lord Desai, Emeritus Professor of Economics, London School of Economics

[amtap book:isbn=0275953769]

“We must rethink our centralised monetary system as part of a larger re-examination of existing political economy, according to Solomon. In questioning the passive acceptance of a federal monopoly in producing money, the author challenges prevailing notions of “progress” and “economic life”. Advancing the idea of local currencies to promote a political economy based on empowerment, self-reliance, and ecological permanence, the book discusses three viable systems, all of which are possible under federal and state laws: barter, customer discounts, and local scrip not pegged to the US dollar. The business and practical aspects of each of these systems is considered. This work should be of interest to scholars, students and policy-makers in political economy, money and banking, public finance and public policy.”

[amtap book:isbn=1897766335]

An early title written by Frances Hutchinson who worked on the book with Mike Rowbotham (author of the excellent Grip of Death, see Money Books)