If the Noose is Still Tightening and, you Still Think It’s Austerity, the Former Governor of the Bank of England Will Tell You*

I think it would be interesting to know a bit more about the Banking System and why people and countries accumulate debt.

Hwaairfan's Blog

If the Noose is Still Tightening and, you Still Think It’s Austerity, the Former Governor of the Bank of England Will Tell You*

“Capital must protect itself in every possible way, both by combination and legislation. Debts must be collected, mortgages foreclosed as rapidly as possible.

“When, through process of law, the common people lose their homes, they will become more docile and more easily governed through the strong arm of the government applied by a central power of wealth under leading financiers.

“These truths are well known among our principal men, who are now engaged in forming an imperialism to govern the world. By dividing the voter through the political party system, we can get them to expend their energies in fighting for questions of no importance.

“It is thus, by discrete action, we can secure for ourselves that which has been so well planned and so successfully…

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6 thoughts on “If the Noose is Still Tightening and, you Still Think It’s Austerity, the Former Governor of the Bank of England Will Tell You*

  1. trump signed another of his executive orders this morning eliminating much of the 2010 Dodd-Frank financial regulatory measures enacted in response to the 2009 economic crisis. I’m sure this will be welcomed by conservatives but I believe the quote attributed to Thomas Jefferson remains true.

    The philosophy trump actually seems to believe is that of Montagu Norman. My concern is the result of his action could result in the next financial crisis.  Unfortunately, it probably will require several years before the results are fully felt and by then, hopefully, he will be out of office.

  2. The reason countries accumulate debt, Aunty, is really quite simple. Because 97% of all money is created by banks as loans, 97% of all money creation is debt-based. There are basically two types of debt: private debt (credit cards, mortgage, business and student loans) and public debt (government debt). When banks are creating insufficient money for an economy to function smoothly, government must borrow money. Basically this is what recession is – when banks are creating insufficient money to run the economy. The two best films for explain how money is created are Money as Debt:

    and 97% Owned:

    The only way to end the debt problem is to ban private banks from creating money and to restore this function to government.

    1. Thanks for all these explanations, Stuart.

      I have difficulty understanding all this. As I grew up in Germany after World War Two my understanding of the economy was straightforward and simple. For your work, you received a set amount of money. From your earnings, you saved as much money as possible. You refrained from taking up a loan. For whatever you wanted to buy, you saved up the money for it first. Under no circumstances would you take up a loan.
      I am talking about average wage or salary earners, not about business people. So why would wage or salary earners take up a bank loan?

      It was different when we established ourselves in Australia in the 1960s. First of all we needed a bank loan to purchase a secondhand car, for public transport was totally inadequate and the distances were astonishing! We bought a block of land quite some distance away from the nearest town, for this was where it was cheapest and we could pay it off quickly. After we had no more debt on the block of land, a building society gave us a loan to have a very simple low cost cottage built on our land. The instalments to pay off this loan on a monthly basis were very reasonable. My husband was on very low wages at the time and I could stay home to look after our three little children.

  3. Yes, Uta. Things were different in Australia. We soon learnt that saving up in Australia was not the way forward. My parents were almost sick with the idea of borrowing money to buy a block of land.

    And today; for having still somehow stuck to my parents credo never to borrow and managing to have some savings, we loose our pension.
    We should have been good Aussies and borrow to the hilt, and get a pension.

    Fortunately we still get a small Dutch and Finnish pension that all people receive, no matter rich or poor who have worked and paid tax. It is not means tested.

    It’s a different world out here in Australia (US).

    1. Same in Germany, Gerard. Both Peter and I get a small German pension each from Germany because we worked in Germany for more than five years and paid taxes. Our Australian pension is not effected because one can receive a bit of extra money and still get the full Australian pension.
      My parents too would never have contemplated to take up a bank loan. It was unheard of.

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