The following arguments represent a general criticism of various ideas asserting a creation of money out of nothing. Those who don’t know the work of professor Huber which the present article is meant to refute (Monetäre Modernisierung, 2016 Metropolis) need not be afraid. The following text may be read and fully understood without such knowledge. I will systematically contrast the view of orthodox money theory with the view proposed by the adherents of money ex nihilo (prefixed “N”). For further reading I recommend “Creating Money out of Nothing: The History of an Idea” by Mike King – an excellent survey which, apart from providing a very useful historical summery, contains logical arguments supplementing those the reader will find in the following analysis.*1*
I have already dealt with money creation ex nihilo with regard to Central Banks. Now I want to consider the same problem in view of commercial banks. Continue reading Money creation out of nothing – fact or illusion?
To leave nature to our children and grandchildren undestroyed by the ever more weighty ecological footprint of present generations – within Europe, this demand meets with broad understanding. Nowadays there is little doubt that the steady increase in the consumption of resources wreaks havoc on the world’s natural resources, even as the residuals of industrial production tend to pollute air, water and soil to an ever-increasing worldwide scale. Continue reading Good Governance: Let it be ecosocial!
Irving Fisher’s 100% Money – are banks criminal institutions?
Whoever tends to see the main evil of our time in the concentration of economic and ultimately political power in a few hands, will be skeptical as to promises of salvation based on mere technical modifications, be it in the sphere of money or anywhere else. Such promises were made more than half a century ago by the American economist Irving Fisher who proposed a reform of the monetary system. He wanted to introduce what he called 100% Money. At his time the proposal attracted some attention and does so again nowadays. It seems to offer a simple and seemingly plausible explanation for the current crisis as it is based on the assumption that banks act in a criminal way! Continue reading On Money and Banks
Regarding the extent of credit, supposedly “created” by the commercial banking system, the most fantastic ideas present themselves to the public. I’m not talking about mere verbal inaccuracies, based on vague definitions. If I call commercial credits (or the corresponding savings deposits) by the name of “money” so as to make them undistinguishable from the coins or notes of a central bank, then commercial banks must in fact be considered the creators of vast sums of money, as they are the places were deposits and corresponding credits are to be found. Money properly speaking – the money created by central banks – will then represent nor more than an infinitesimal fraction of the total amount of „money“ to be found in the economy. Continue reading The Money Multiplier – a dead end of economic theory