The New Money Text Book

Authors Preface

On reading this book you may find arguments restated over and over.  The reason is twofold.  Until we hear a new truth stated three times, it does not seem to register.  Also the need for monetary reform  is repeated in so many different parts of life, that the same theme comes through in each of them. Those who read this book may only have an interest in their own speciality. To learn what is appropriate to their own specific problem, they may need to refer to their section of the book, and will expect to find it there.

Introduction

Allow me to start this book about money, by reminding you of some simple facts concerning money, which sometimes get forgotten. First of all money only exists if somebody makes it.  And I do mean make it.  Making money is different from earning money which has already been created.  The creation of money, the manufacture of money, the bringing into existence of money, which previously did not exist, is entirely different from acquiring money. Money does not exist in nature, money is man-made stuff.

If the private individual manufactures money it is said to be forging money or counterfeiting money.  There is a tacit assumption that only the Government has the right to manufacture new money by minting base metal coinage or printing banknotes. We do not expect private institutions to have a privilege denied to the individual.  But if we look behind the scenes to see what is actually happening,  we find that money is created and issued by private financial institutions such as banks. Banks no longer hold deposits equivalent to the amount that they lend.The private individual is permitted by the Government to ask a private financial institution to “lend”or in reality “manufacture” some money out of thin air. Then it is lent it to him or her, with the proviso that it is called credit and not money. Credit becomes money the moment it is borrowed. That is the mechanism by which new money is made or manufactured. As you can see if you look hard enough, this is fraud.