Trading Floor

Claudio VitariAssociate Professor in Management and

member of the endowed chair Mindfulness, Well-being at work and Economic Peace

2Money in our society Specialization of labor means that we must acquire most

of what we need by trading with others. Money has been in many cases politicized and

monopolized, and made an instrument of power. Whoever controls money controls the exchanges the

economy and the society

3The Substance of Modern Money is Credit

Modern money is nothing more than credit - a promise.

Money typically takes the form of1. Bank deposits that are created when banks

make loans, or2. Currency notes emitted by the central bank.

4DebtMoney

Mortgage note

Banks create money in the form of deposits or account balances when a loan is granted.

Bank

MortgageNote

(asset)

AccountDeposit

(liability)

The Creation of Bank Debt-Money as Deposits

As interest accrues, the supply of money available for repayment becomes deficient.

5Money as debt by commercial banks

The Growth ImperativeInstitutionalized interest/usury forces growth.

Money is kept artificially scarce Money is mis-allocated Money is expensiveConcentrates power and wealth in the hands of a few

unelected people who are unresponsive to the needs and wishes of the people.

6F=P(1+i)n

Geometrical exponential money growth in theory

7The Central Government-Central Bank

The Bank of England was the prototype central bank.

The banking cartel enjoys special privileges granted by the English government.

The English government, in return, gets to spend as much as it wants without regard to limited tax revenues (by deficit spending).

8Monopoly and debt expansion

Credit Monopoly by the banking cartel headed by the central bank, whose currency is granted the privileged status of Legal tender

Credit money lent into circulation at interest, which requires the:

Endless expansion of debt By lending to either the private sector or the public

sector.

9Money growth in practice

10

AlternativesAlternatives The money we use is simply a social construction, a The money we use is simply a social construction, a

collective agreement to accept a certain form of collective agreement to accept a certain form of measurement, store of value, and unit of exchange. measurement, store of value, and unit of exchange.

Once we accept that money is not a thing out there, Once we accept that money is not a thing out there, external to us, but a social construction, it follows that external to us, but a social construction, it follows that we can change it.we can change it.

We can make collective agreements to use other We can make collective agreements to use other forms of money that will operate (at least) as forms of money that will operate (at least) as effectively as the money issued by states. effectively as the money issued by states.

11

12

Mutual Credit

The WIR business circle cooperative (Wirtschaftsring) was founded by the entrepreneurial middle-class in Switzerland in 1934 as an answer to the money scarcity of the Great Depression, and still thrives after 75 years.

60,000 business members $2 billion in transactions

cleared annually.

13

Barter Exchanges

In 2008, about 250,000 North American companies conducted barter transactions worth more than $16 billion.

About $11 billion of that involved small and medium sized businesses.

07/23/2010 Thomas H. Greco, Jr.13

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Money power

Whoever controls the volume of money in any country is absolute master of all industry and commerce.

- James A. Garfield US President - assassinated Those who create and issue money and credit direct the policies of

government and hold in the hollow of their hands the destiny of the people.

- Sir Reginald McKenna, former President of the Midland Bank of England I sincerely believe, with you, that banking establishments are

more dangerous than standing armies; and that the principle of spending money to be paid by posterity, under the name of funding, is but swindling futurity on a large scale.

- Thomas Jefferson, US President, principal author of the Declaration of Independence (1776)

Slide 1Money-the Key FactorThe Substance of Modern Money is CreditThe Creation of Bank Debt-Money as DepositsDysfunctions of Political Money and BankingSlide 6The Central Government-Central Bank NexusEssential Elements of the Political Money SystemSlide 9Slide 10Slide 11A Successful Mutual Credit Clearing AssociationCommercial Trade (Barter) ExchangesMoney the Primary Lever for Centralizing Power and Concentrating Wealth