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Enact the Bank of England (Creation of Currency) Bill 2010

2 Comments 24th January 2015

Forcing millions of ordinary people to borrow their means of exchange into existence from the banks at their own risk and expense, in the form of over-priced mortgages and other loans, and then taxing them to service government debt on top of that, severely limits economic independence and freedom of choice.  If the definition of a slave is not ill-treatment, but the fact that he or she has no say in their own policy, the decision to tax the people to save the banks, without any offer of a vote or any discussion of alternative means of creating new purchasing power, reduces large swaths of the population to slavery.

The Bank of England (Creation of Currency) Bill 2010 proposes a simple reform which will dramatically reduce taxes, while at the same time expanding and maintaining infrastructure and providing decent public services.

The Bill establishes as its Universal Principle that: “Throughout the entire banking and deposit taking system … every credit to an account must be matched by an equal debit from a different account.”  Only the Bank of England will be exempt from this requirement, thereby enjoying sole right to create all of the UK’s new money, both cash and non-cash.

Enactment of the Bill will complete the work of The Bank Charter Act of 1844, which made it as illegal for the commercial banks to print notes as it already was for them to mint coins.  Under the Act it will also be illegal for them to create non-cash money in the form of "credit".  In effect, the money supply will be nationalised without any need to nationalise the banks, which will continue to compete for their profits in the open market – with the difference that they will now confine themselves to borrowing and lending money which already exists.

With money recognised as a public utility, the MPC will be responsible for issuing or withdrawing it from circulation directly, instead of depending on the blunt instrument of interest rates to control inflation; and any new money created can be spent into circulation on  public works and services as indicated by voters in the usual way, at general elections.

The Bank of England (Creation of Currency) Bill 2010 is online, with detailed explanations and FAQs, at http://www.bankofenglandact.co.uk/.

Why does this matter?

Nothing is more important to most people than material security.  Until we have an adequate income, we have no time to worry much about civil liberties.  This Bill offers us a chance to restructure the economy, focussing on the production and distribution of goods and services for all, rather than the multiplication and manipulation of financial units for the benefit of a few.

The most basic civil liberty is a decent standard of living.   Establishing a sound financial and economic system should therefore be the priority of any government .  The Bank of England (Creation of Currency) Bill 2010 shows how it can be done.

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2 Responses to Enact the Bank of England (Creation of Currency) Bill 2010

  1. Herman Mittelholzer says:

    This is a very good idea, as it gives legislative substance to ideas already being put forward for banking reforms. The other advantage for Britain to be the first to adopt these new principles is that it sends a signal to the rest of the world, London being the financial capital, that the UK is innovating, by example, changes that will benefit the economies of every other country.

    Britain gave the world the industrial revolution, nuclear power, world time, television, the computer and the internet, to name just a few world-changing inventions, and now it’s time for the UK to step up and be the first to lead a change that will transform the way money is transacted, both nationally, and eventually globally.

    Someone has to be the first to end the insanity of the current system, so, let it be us!

  2. Graham Hodgson says:

    Yes. I like this. It is simple and direct and makes immediate and intuitive sense. Of course any monetary receipt into an account must be matched by a corresponding payment from an account. It’s astonishing that the banks have been allowed to get away with violating this simple principle for so long, and not only that, but unlike any other public corporation they are not required to disclose on the assets side of their balance sheets what liquid resources they do hold for meeting their own running costs and own-account trading operations, these being netted off on the liabilities side against “capital and other internal funds”. A corollary of this proposal would be that banks would be required to report the balances of accounts from which payments on their own behalf to customers, employees and suppliers were made, completing the disclosure of the distribution of actual money in the economy.

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