97% Owned - Money: Root of the social and financial crisis | Free Documentary

how

money

is created where it comes from who benefits and what it is for what is a monetary system what is the

money

behind the monetary system for centuries the mechanisms of the monetary system have remained hidden and the curious eyes of the population have not yet The impact as much At the national and international levels it is perhaps insurmountable because it is the monetary system that provides the foundations of international dominance and national control today, as these same foundations are being shaken by crises. The need for an open and honest dialogue about the future of the monetary system.

The system has never been bigger. This economic

crisis

looks like a cancer if you just wait and wait thinking that this will go away just like a cancer will grow and it will be too late. What I would say to everyone is to prepare, there is no time. right now to wishful thinking the government is going to fix things the government does not rule the world Goldman Sachs rules the world we are on the brink of a perfect storm in a position as corrupt and entrenched interests lurking in the corridors of power for whom there is no reason to give up privileges they feel are justly deserved own plan for the NHS has a police report has a plan to reduce the deficit do you trust the government calm down and behave like an adult and eat what you can?

If it's beyond you to leave the chamber, go away, it's no coincidence that boom ambassadors become a real cyclical problem around the year 1700, when William Paterson founded the Bank of England, just in your mind it's funny, no It's not funny, it's embarrassing, the system is inherently unstable as a result of the international power it provides to the dominant parties because at its core lies the idea of ​​how can I get something for nothing. Statistical analyzes have discovered that every time an empire begins to approach its own demise, I found that its currency will be the subject of debates, there is no guide to how this whole system works, to give you an example, a BBC researcher working in one reel, the person in the

documentary

went to the Bank of England, so can you give me a guide? about how money is created and they just said no.

This

documentary

will investigate and explain this ever-changing system and the impact it has both nationally and internationally. In 2010, the UK's total money supply was 2.15 trillion pounds, 2.6 percent of this total. It was physical cash fifty-three point five billion the rest two point one trillion or 97.4% of the total money supply was money from commercial banks three percent of the money is created through the central bank and that money essentially if If you created a ten pound note you could sell it to a bank to put in their ATM and the bank would have to return that 10 pounds or buy it for 10 pounds;

Mae wouldn't charge interest on that money, but that money is then essentially transferred to the Treasury and that's it. It is a form of fundraising for the government called sinirage. When the Bank of England creates a ten pound note, it cost around three or four pence to print that note and they sell it to the major banks at face value, i.e. ten pounds. and the profit, the difference between printing the note and selling it for a tenner, goes directly to the Treasury, so in effect all the profit we make from creating physical money notes goes to the Treasury and reduces the amount of tax we have to pay.

Over the past ten years, that run, around £18 billion in 1948 notes and coins, made up 17% of the total money supply. This was a contributing factor to the government's ability to finance post-war reconstruction. It included the establishment of the NHS in just 60 years. Banknotes and coins had been reduced to less than 3% before 1844. Banknotes were created by private banks and the government did not benefit from their creation. Before industrialization, multiple forms of money coexisted, so the type of currency increased and the type of currency sponsored by the government. Fiat money is a relatively recent phenomenon in the 1840s, there was no law preventing banks from creating their own banknotes, so they used to issue paper banknotes as a sort of proxy for what you had in your bank account in instead of you taking your heavy metal coins.

Leaving the bank and then going and paying someone with them, you could get your document that said how much money you had in the bank and you could give it to someone and they could use it to go get the heavy metal coins from the bank now. Over time these paper bills became as good as money, people used them instead of going to the bank for real money and obviously as soon as the bank realized that what they were creating had been became, you know, the dominant type of money in the economy they realized that by creating more of it they could make a profit, you know, they can just print some new bills, lend them out and get interest on top of that, and they did that, ya You know, up until the 1840s, in the 1840s, they pushed it went too far and that caused inflation to destabilize the economy, so in 1844 Robert Peel's Conservative government passed a law that took away the power to create money commercial banks and returned it to the state, so since then the Bank of England has been the only organization authorized to create paper banknotes, since then everything has become digital and what we now use is money, it is digital numbers that commercial banks can create out of nothing.

The problem was they didn't include that in it. legislation your deposits demand deposits held in banks by individuals or electronic forms of money that essentially what establishes demand deposits are today most of the money in circulation is electronic money in your bank are bank deposits to the seeing that simply that is in you know our account so in a way the legislation has to catch up with the evolution of electronic money and the way in which banks actually operate the money held in bank accounts is called demand deposits . This is an accounting term that banks use when creating credit.

Banks follow the same process when creating loans, all money held in bank accounts is an accounting entry. The reality now is that most money is not paper or metal coins, it is digital, it is just numbers in a computer system. You know, it's your Visa debit card, it's your electronic card. you know, the ATM card is plastic, you know, they are numbers in a computer system, you move money from one computer system to another, it's all one big database and this digital money is what we are now using to make payments with us, what we really use. to run the economy I think a lot of people in the UK probably think that the government or the central bank has control of most of the money in circulation and issues new money to put it into circulation, but that's not the case, it's the private banks that create the vast majority. of new money in circulation and also decide how to assign the official terminology for this accounting entry is commercial bank money when banks make loans to the public they create new commercial bank money when a customer pays only commercial bank money is destroy the banks they keep the interest When it comes to profits, there are many misconceptions about the way banks work.

There was a survey done by the Cobden center where they asked people how they thought banks actually operated. About 30% of the public thinks that when you put your money in the bank. It just sits there and it's safe and you can understand why because you know every kid has a piggy bank that you keep putting money in and then when it's a rainy day you break it and take that money out and spend it like that. Many people maintain this idea of ​​banking, you know that there is a safe place to keep your money so that it is there when you need it.

The other 60% of people assume that when you put your money into it, it says you transfer it to someone. Who wants to borrow it? So you have a pensioner who continues to save money throughout her life and then her life savings have been lent to some young people who want to buy a house, but banks don't really work like that at the moment. In the UK, the creation and control of money is largely in the hands of private banks, with between 97 and 98 percent of the money created being created as bank debt money. We call it when banks issue money to put into circulation, as loans, essentially, this is very poorly understood.

In fact, it's not a conspiracy theory, it's not a far-fetched theory, it's the way the Bank of England describes the process when banks make loans, they create new money. Some economists will figure out how the monetary system works, but if you don't. You don't realize how money works and you think you know that everyone saving is going to work out well for the economy. What really happens once you understand how the monetary system works is that if everyone starts saving the amount of money that is in the economy. shrinks and we have a recession, so most economists don't have this picture of this fall, they don't understand all the elements of the system, they rely on assumptions, you know, they receive knowledge without going into details and you know money is the money. center of the economy, if you do not understand where it comes from, who creates it, who creates it and when it is created, then how can you understand the entire economy when the vast majority of the money we use now is not cash but electronic money? whoever is creating the e-money is making the profits from creating that money and obviously creating e-money is much more profitable than creating cash because there is no production cost at all, so while we have eighteen billion Over the course of a decade of profits from cash creation – banks actually created £1.2 trillion between 1998 and 2007 – the UK's money supply tripled.

£1.2 trillion was created by the banks, while £18 billion was created by the Treasury. Many people think when I say this or when you say this or when positive money says this that we are all a bunch of crazy people but on March 9, 2009 the Federal Reserve government Ben Bernanke gave the first broadcast interview to the governor of the Central Bank of the United States. of America ever and the day before he had bailed out AIG and that is an insurance company even a bank actually to the tune of about one hundred and sixty billion dollars, so the system of journalists now mr.

Bernanke, where did you get $160 billion for banks to create new money every time they extend credit against existing assets or make self-payments, which primarily involves expanding assets when a bank buys securities like a corporate bond or government to which the bonus adds? its assets and increases the company's bank deposits by the corresponding amount. New money from commercial banks enters circulation when people spend the credit the banks have extended to them. I found that door knocking from August last year until their August 2009 round with the general election or eight nine eight nine months I guess door knocking is that when you try to explain how the monetary system works there is an almost inherent refusal from people to accept that such a strange situation can really exist.

You can't possibly know. I mean, you can't say thank you, you can't, thank you, don't create money out of nothing, that's ridiculous, they can't do it, they lend money to their depositors, most people have an idea of ​​what the money is like, they are accustomed to their own way of handling money and trying to implement their own idea of ​​how their small family economy works into the national economy and of course it just doesn't work, it just doesn't work at all, in 2008 the outstanding loan portfolio of Credit created by banks, also known as commercial bank money, amounted to over two trillion pounds in 1982, the ratio of notes and coins to bank deposits was one to twelve, by 2010 the ratio had increased to one to 37, that is, for each Treasury pound created.

There was £37 of bank-created money in the ten years before the 2007

crisis

. The money supply of UK commercial banks expanded by seven to ten per cent each year. A seven percent growth rate is equivalent to doubling the money supply every ten years. The amount of money they are creating out of nothing is simply incredible: 1.2 trillion in the last 10 years and that money has been distributed according to the priorities of the banking sector, you don't know, the priorities are. Society's own banking sector has grown since 1980. Between two point five trillion dollars and $40 trillion in assets in 1980, global banking assets were worth 20 times what the world economy was then, in 2006 they were worth 75 times according to the UN, like the followingThe graph shows the total banking assets of UK banks as a percentage of GDP remained relatively stable at between fifty and sixty percent until the late 1960s, after which it soared dramatically and the real money What you can earn in the world today is not by producing anything at all, but simply through forms of speculation, basically making money with money which is the most profitable and by far the largest form of economic activity that exists in the world today.

Today, banks are no longer restricted by how much they can lend and therefore how much new credit they can create. You're welcome, they are restricted only by their own willingness to lend. The question of allowing banks to create money. There are two main issues. Firstly, the fact that they create this money when they make loans, so it ensures that we know that we have to borrow all of our money. the economy of banks as such to have a healthy growing economy, the government needs to implement strategies that allow for increasing debt. The only way the government can create additional purchasing power is by digging, itself and us, into the second big problem.

The problem with allowing banks to create money is that they have the incentive to always create more. You know they create more money if they issue a loan. They receive the bonuses, commissions and incentives to create. You know how to lend as much as possible. You have to develop a sales culture. What did you do? They hired an incredible guy, a lovely guy, Andy Hornby, who came from Asda to turn the bank into a supermarket retail operation, if you trust the bankers to control the money supply, the money supply will just grow and grow and grow as well. level of debt to the point where it will collapse when some people cannot pay the debt and then they will stop listening to politicians and journalists say you know we have been living beyond our means we have become dependent on debt we have to control our spending and living within our means is not possible in the current system you know the reason why everyone is in debt now is not because they have been borrowing recklessly, we have not borrowed all this money from an army of retirees who have been saving all your life, money in the current system is you know it was created when banks make loans so the only way in the current system that we can have money in the economy, you know, the only way that we can have money for companies to negotiate is whether we have borrowed everything from the banks and it is the complete opposite of What the conservative parties are doing today is that savings must be created before we can help the National Health Service and it is because economists They have completely confused those things both in terms of monetary policy and economic thinking and because most people still harbor the old. old-fashioned view that you need to save before you can save, unless we have the mess we find ourselves in today.

One of the reasons we find it difficult to understand the banking system and credit creation is that we leave school with no money and go and get a job as an apprentice plumber, we work very hard all month and at the end of the month someone it puts money in our bank, so for us the logic is that you work and then you get money, you actually get savings. I would never have gotten that job if the credit hadn't been created in the first place. It's a really big conceptual misunderstanding and it's not something the public is simply guilty of.

Economists don't understand these things that money doesn't come from. economic activity many people I have encountered assume that if you have people, if you have businesses and you have people doing things, somehow money comes from the process of people doing things. It's making things and growing things and selling things and producing things that somehow the money just comes out, it's not like oil in the car, you have to put it in and I see David Cameron talking about how we need an economy that's not based on debt. But we need a savings based economy he just doesn't know what he's saying it's ridiculous it's absolutely absurd and shows his complete lack of understanding of how our monetary system actually works what he's essentially saying is that we need a moneyless economy if everyone saves we would have a massive disappearance of money, which is essentially what a bank write-off is, essentially it's people defaulting on their debts, which essentially is just the disappearance of money, but if people didn't take on the debt, then it's just a situation So. like an amateur understanding of how our economy works and how the monetary system works and how money is actually created, so I really laugh seeing what people say and everyone just regurgitates what they've learned. each other and they hear the same things and that makes me really nervous when I hear people talk about yeah, we need more regulations, we need to regulate the way banks actually are and the upside is it's all just a big curtain of smoke and working on all the symptoms of a major illness, which in reality is that we have to analyze the monetary system that is how money is created and if we don't want any debt then we are basically saying that we don't want money and Yes we want an economy without money, with the exception of the 3% that were created debt-

free

, you know that is a paradox under the current system.

If we as a public go into more debt, that will put more money into the economy and we'll be there's going to be a boom when there's a boom it's easier to borrow so people go into even more debt and eventually you know, the cycle continues it becomes easier and easier to get into debt until some people die and then you know they default they can't pay their mortgage that's what happened in America you know it happened first in subprime America and then you know that this causes a wave of defaults that will spread to the entire economy, the bank becomes solvent and then we enter a

financial

crisis. and then the bank stopped lending and you know they were lending excessively during the boom and then they stopped lending and then that court makes the recession even worse, people lose their jobs and then they become even more dependent on debt just to survive Basically you know we have a system where we have to borrow to have an economy, we have to be indebted to the banks and that guarantees massive profits for the banks, this is the boom and bust cycle and I have said it before , Mr.

Vice President North returns to the boo and net bank lending must rise forever. We are paying interest on every pound, even if you think the money belongs to you, someone somewhere is paying interest on that money. The banking system has such a big impact. in the world, but only because it supplies our nation's money supply, we have to protect them, we have to subsidize them, we have to allow them to continue because the disaster of a banking collapse affects us enormously and anyone who says that they should not have bailed out the banks does not understands very well the nature of our monetary system, which is like eliminating a large part of our money, but also bailing out the banks is perpetuating a system that is never going to work anyway, so whatever we do we will always have this cycle until we separate how money is created and banking, then banks can do whatever they want, they are a normal business like everyone else.

There is also a major Democratic problem here when you have these. Private for-profit banks create up to £200bn a year and pump it into the economy where they want, basically where it suits them, whether that's pumping it into less toxic unitary derivatives or pouring money into property bubbles. She is making housing more expensive. One hundred billion pounds in 2007 of new money coming into the economy creates an office and where it is spent that effectively determines the shape of our economy, so whether we are going to allow anyone to create new money or not, and we should at least have some democratic party. control over how to use that money, I mean, would you rather have that money been used for healthcare, do you have to deal with some of the environmental issues to reduce poverty or would you rather have it to make houses more expensive so that none of us can afford to live in a house, you can see it as a subsidy, a special super subsidy to the banks for the right to create money that should be for the benefit of the public and spent through a democratic process.

There is also another form of money that is effectively an electronic version of cash and is a type of money that commercial banks use to make payments to each other. Major banks don't want to carry large amounts of money with them because it's dangerous, inconvenient and, you know, expensive. You have to hire security guards for that kind of money, so what they do is pay each other in an electronic version of cash known in the industry as central bank reserves. They hold this electronic cash in accounts at the Bank of England. but as a member of the public you can't access this electronic cash, you can't get an account at the Bank of England, what they do is they effectively sell this central bank money to the banks and they do that by creating it. out of thin air and use this money to pay off bonds to buy bonds from the major banks, so the major bank will come with a bond which as you know is effectively government debt and they will give it to the Bank of England and in return The Bank of England will write some new numbers into the bank's account at the Bank of England so effectively that they are creating reserves at the central bank for nothing.

The Bank of England creates reserves at the central bank by increasing the credit available in the settlement bank's account with the Bank. of England, the Settlement Bank, in return, deposits bonds or sells assets as collateral for reserves. A total of 46 banks maintain central reserve accounts at the Bank of England. Smaller or foreign banks hold accounts with one of these 46 banks to enable them to accept or make payments in sterling before March 2009, the Bank of England would ask each of the major settlement banks how much reserve currency they needed; The settlement banks would then exchange a bond for the reserve currency and agree to repurchase the bond for a specified amount at a price.

At a specified future date, the settlement banks would receive interest at the base or policy rate on the central bank reserves they held. since the crisis. Clearing banks' central reserves have soared dramatically when bank customers transfer funds from their account to someone else's account, a process called intraday clearing. It happens that the amount of central reserve currency that Bank A holds in the Bank of England is reduced by the corresponding amount that Bank B receives. This is the importance of the central reserve currency for banks before the credit crisis if a bank had a shortage of central reserves in the bank. of England to meet its obligations, then the bank would have to borrow reserves from other banks with interest.

If you sell something on eBay, you know that the deal won't be complete until you put some money in your account. You know most people really want to see it. the money in your account before they are happy to do a deal, now the banks are more or less the same, but they want to see the money in your account at the Bank of England before considering the deal completed e.g. If you are buying a house from someone who banks at a different bank, then what will happen after you have spent a quarter of a million on a house is that you will tell your bank to transfer some money to this sellers bank. of houses and well, the bank will do it.

What we really need to do is instruct the Bank of England to transfer two hundred and fifty thousand from your account at the Bank of England to the house bank and that money will actually move between the Bank of England accounts when that money is moved and the Banks will consider that the payment has been made, you know, it has been settled, they don't actually deal with the amount of money that we have in our accounts, they deal with this special money that can only be used at the central bank, there are millions. of people across the country transferring money between each other using only a few major banks, these banks can keep a count in their computer systems and many of the movements usually cancel each other out at the end of the day the five major banks RBS Lloyd's HSBC Barclays and Santander hold over 85% of all deposits as there are a limited number of banks in the system central reserve money can only move around them in a closed loop money simply circulates through the system one and again and yes Think about it, a one pound coin could be used to make a billion pounds in payments if it were circulated a billion times, that is effectively the system you have now, you have a small pool of real moneywhich is just going round and round in the system and has been used to make a huge amount of payments on our behalf just before the crisis, which was only twenty billion in the central bank accounts.

If they don't have enough central bank money then effectively they can't make payments and if that happens and very quickly the whole system grinds to a halt, so the Bank of England has the responsibility of making sure there is enough money in the system, their Requirements for banks to hold a specific amount of reserves have changed many times since 1947 at that time. Banks needed to maintain a minimum ratio of 32% of cash or Treasury bill reserves to deposits in 2006. The corridor system was introduced where banks could set their own reserve targets each month. The rules changed again in March 2009 when the Bank of England introduced quantitative measures.

Quantitative easing in effect gives settlement banks the central reserve currency for

free

. The central reserve currency is what is known as real money in the fractional reserve model, but the fact is that banks can hold as much money as they want and the central reserve currency. It is itself a form of fiat money that is not backed by anything, so there is no longer a significant fractional reserve. If we look back at the history of the last hundred and fifty years, we begin with the development of a gold standard that actually serves to In the 1880s and 1890s, we were essentially countries that painted themselves with a particular defined value of gold and then had an agreement to fix that value and maintain that value to exchange gold between them to make sure that all the balances were there and also to try. and restrict, expand or contract activity in their own economies to ensure that the equilibrium of the particular fixed prices that disintegrated after the First World War is maintained.

I mean, this is where the whole thing breaks very important dislocations in the international monetary system at that point. That point is not really resolved until the Bretton Woods agreements are achieved at the end of World War II in which everything is paid in dollars and the dollar is pegged to gold, so the backing of gold is removed or it is said that there is a Definitive you know, kind of solid money behind the paint, the money in the credit, money that we all use here, they kind of took it away After Hiroshima, Tokyo wondered when the next atomic bomb would fall, they did that wonder in 1944.

At Bretton Woods, the United States and the United Kingdom began to negotiate how to govern the world economy, the world monetary system and created with the World Bank and the IMF a series of other institutions designed to manage the global currency and a gold standard still existed. but this gold standard was going to be tied to the dollar all the gold in the world had moved from London to Fort Knox and all the currencies in the world were tied to the dollar this system was designed to manage the types of imbalances to avoid credit crises or For the countries, credit crises are known as balance of trade deficits, that is, when they cannot pay their bills and their currency collapses, the currencies were managed and the system remained stable as long as the Americans played the supervisory role.

Now, who knows the big story? about how that all came to an end, so the amount of money that was needed to pay for the Vietnam War (which is exactly what I was trying to get in the oil crises) was another factor that meant that the Americans no longer respected their role or played their part. The French were a little worried that President Nixon was not entirely honest. and they were worried that precisely what we described was happening that Nixon was printing money when he shouldn't have been printing money and they were worried that there wasn't enough gold to respect the French franc exchange rate, so they sent a gunboat into New York Harbor - very politely ask for our gold back, please, did you get your gold back?

I guess they didn't and the Bretton Woods system came to an end and this is the point at which we enter the modern era of Historically, the

financial

system the creation of money was tied to a commodity, often gold, but today it is tied to nothing, which means there is nothing to back our money, this piece of paper is just a piece of paper, where does this leave us and if money is not based on anything? Why do we think it has any value? I'm sorry, because we can still go change it. What someone else was going to shout.

In fact, the word credit comes from a belief correct since the collapse of the dollar gold standard in 1971 and deregulation. of the financial system the creation of money has grown exponentially the World Economic Forum meeting in Davos today has called for the need for credit within the economy the global economy to expand by 100 trillion dollars 100 trillion US dollars one trillion It is 12 knots, one hundred billion, if you want to imagine, it is a 1 followed by 14 knots, they believe that this expansion of credit will create a boom because now there is more money in the economy to make investments.

The emergence of digital currencies is fascinating. It really transformed everything because the private banks have just been completely freed up to dominate and create the monetary system that works for them and works for the people who run the private banks. If we want a growing economy under the current sail, we have to have a growing debt, it is not possible. You know this is something that very few people really understand, especially the politicians who run the economy, which is a scary thought, as the money supply grows, there is more money available that can be invested in productive avenues, however, It can also be used for betting. and drive up asset prices Inflation is an increase in the general price level of goods and services in an economy over a period of time in which the general price level increases.

Each monetary unit buys fewer goods and services as the money supply grows and there is more currency available, more money available for investments, which can generate growth, but there is also more money available for purchases of goods and speculation, which generates inflation. Basically, inflation is what happens when too much money chases too few goods and services, so there is too much of it. money for the real output of the economy in the seven years between 2000 and 2007, the money supply doubled and the banks, you know, the central bank, the Bank of England, at that time I was under the impression that they had it under control because they were saying you know prices aren't going up that much, of course, they were just looking at the prices at their local corner store, they weren't looking at the price of housing and housing is, you know, the biggest expense that the most people will increase. house prices and may make you feel like you are getting richer, but as your wealth increases the effect is that your children's wealth is actually decreasing, so in fact there is no net gain of wealth because their children will have to.

They pay even more when they want to buy a house, so in effect there is no kind of net increase, they will have to earn even more, they will have to go into even more debt so that the increase in house prices does not increase. create additional net GDP value for the economy, what they actually do is redistribute wealth to those people who already have houses (that's you, the richest people) and take it away from the poor who can't afford to move up. housing ladder, so it's another example of a very regressive policy that actually allows house prices to just inflate makes everyone feel like things are going well and people spend more money on other things, they take away the value liquid from their homes, but it does not create new jobs, it does not improve quality. of the economy does not help our trade balance does not help the public deficit it is a zero-sum game in August 2011 85.5% of consumer bank loans were guaranteed as mortgages on homes if someone creates money that can only be spent on one thing is housing, then the price of that thing is going to rise between 2000 and 2010, they created more than a trillion pounds of new money, 500 billion pounds alone in the three years before the crisis, that's why the House prices rose as they did. there's nothing special about houses it was just all this strange money being pumped into that market if the money is spent in the economy a lot of money goes into houses for example into mortgages that's an increase in the amount of money in the economy. without a corresponding increase in production activity in GDP, non-GDP spending is what causes inflation and in the UK we have had it in spades, we have had this huge housing boom and the main cause of the In In my opinion, the real estate boom is the enormous amount of speculative credit created by banks to invest in houses.

If houses were cheaper, it would be easier to build more. They would build a little more. There would be fewer huge houses with hardly any people. For them, London would not be the center of some kind of very rich speculative orgy in which all the richest people in the world want to get a property in London because they consider it a great asset. Houses would be seen primarily as places to live. what places to invest the important thing to think about is that if you are a bank and you have to make a loan, you have options, you can give that loan to a small business and you will know that the risk to you of defaulting on that loan is actually Quite high because that small business, the owners of that business have limited liability, which means if the business goes bankrupt, you as a bank get nothing in return, essentially, you know that's it, so it's a high risk. compared to the loan. your money to someone with some collateral with a house behind it, like a mortgage, so there's kind of a simple incentive for banks to rather invest money in homes than a small business, that's a real problem or if you expand that on the entire economy because it means that there is an incentive to put money into speculative rather than productive investments, so again we have to think about how to create a monetary system that is more balanced between those two types of speculative and productive investment than the rest.

The government shows very little reluctance to regulate the housing market and to re-regulate the amount of money banks put into homes. We don't decide who creates credit for what. Now we leave that to a couple of guys at a bank to basically decide. A bubble occurs when there is very high inflation in the price of a specific good or service over a short period of time. The idea of ​​tulips and their relevance is that we have seen the first financial bubble and we have put an end to the tulip trend. Black tulips were a mythical ideal that someone could genetically engineer through cultivation after many generations and became a craze in the Netherlands in the 1630s.

What they didn't realize was that many of the

root

stocks Very rare cases in tulips were caused by a virus and not genetic at all, but they were traded to the point that tulip bulbs were worth ten times the average annual salary of a person who worked in the tulips. Netherlands. There was a futures market for tulip bulbs because, obviously, you planted them. now, but you don't know what is going to emerge from the earth, so we already saw four hundred years ago that a monetary system or a financial system is not something that exists in the abstract somewhere out there in the ether, but something that was going to happen . with states enhance commerce and the way they interact with each other, unlike tulips which are a disposable luxury, houses are both a necessity and a luxury and as such are ideal as a vehicle for money and the creation of bubbles, a home is perhaps the most valuable possession. most people aim to inflate house prices this way allows the nation to expand its money supply without affecting inflation data the additional purchasing power created increases perceived wealth relative to other nations and therefore creates power relative is a way of increasing monetary power without investing in the productive growth of industry, but certainly if we consider Great Britain and the United States as outstanding examples of this, these are countries with very high rates of private home ownership, so that we have a good basis for trying to carry out these types of policies offline.

I think it was quite deliberate in the US case - always explicit how Alan Greenspan, as head of the Federal Reserve, when faced with a stock market crash in the late 1990s, deliberately lowered interest rates to almost zero, everyone can borrow very, very cheap, in particular it is very easy to borrow against a house because it is not a joint and it is potentially something thata bank can say. Well, okay, we're not just lending your money and making sure that you actually have a house and that's great because you know we can get it back, but I'll tell you this when you always take them back, but they can do this and it bothers them, which drives the expansion like that occurring within the US and the UK, where something similar will take place over the next decade, that is, it is also a reflection of an underlying weakness of these governments. that they just like the will and possibly the ability, but they forget more, it comes down to the will to challenge the financial markets, challenge big capital and say we are going to do something different now and you are going to have to accept it because we have been democratically elected and you, frankly, don't, and we have the mandate to do this, we're going to make this happen, it's all part of the plan, what are you saying about your foreign holdings in Holland or in the Netherlands?

They had during a period of initially trying to become independent from Spain and trying to raise money to get an army liberated it was a financial innovation, they innovated in public lotteries to raise money, they had public subscription, this was the idea that led to the idea of the shares a piece of the stock that anyone could invest in, which meant that around two-thirds of the population invested in tulip bulbs in the 1630s, after independence, these instruments were applied to finance the expansion Why was such a small country able to stand on its own? against much larger countries, for example Spain and Portugal, who had the benefits of their empires for over a century with respect to the Netherlands, why could they compete based on what resources?

Well, they had a more efficient, more involved and broader-based financial system with these instruments that they had innovated and that I love to generate more money at a given time than anyone more quickly now inflation can be avoided if the amount of money that enters the economy is regulated in a way that does not cause it to exceed the actual activity that is happening in the economy now, the best way to do this, in my opinion, is to ensure that money is issued into the economy only for productive investments into productive goods and services, so that money comes in to help a small business startup.

It creates jobs, which creates additional purchasing power, which means no inflation during its history. Almost all central banks have employed forms of direct credit regulation. The central bank would determine the desired nominal GDP growth, then calculate the amount of credit creation needed to achieve it, and then allocate it. creation of credit both between different banks and types of banks and between industrial sectors, unproductive credit was suppressed, making it difficult or impossible to obtain bank credit for purely speculative large-scale transactions, such as current large-scale bank financing for World Bank hedge funds. He acknowledged in a 1993 study that this mechanism of intervention in credit allocation was the core of the East Asian economic miracle.

There are all kinds of things that governments have done in the past very successfully in various countries. Of cases and not often without success in this country, but you know the examples that come to mind, like South Korea and Japan , often in East Asia where governments are very specific about how they are going to rebalance the economy and select sectors and decide where investments should be made, I think that has to start happening in the UK because we are in a recession of the demand side instead of looking at a supply crisis, it is necessary to have a system where credit is allocated to productive channels where credit is allocated to construction.

High speed rail links where credit goes towards building houses rather than giving people money to inflate house prices, so it's pretty simple in that sense and the current system is simply set up not to do that, basically the creation of money by private companies. Banking for non-productive use causes real inflation and, as such, is a tax on the purchasing power of the medium of exchange. The average for most people has gone down over the last eight years and they are also now on a pretty steep decline as we enter the recession, i.e. the steepest actually as it seems to go back to about the decade 1930s, but in that way, real income is declining.

The fiat currency created allows private banks to extract Wells from the economy and, over time, results in a gradual decline in living standards. As people become poorer, they become even more dependent on debt, and this at a time when efficiency and machination have improved dramatically. We know we go back to the 1960s and we were expected to, we expect an era of leisure, what will people say what the TV shows were talking about? Once people can do with all their free time, you know, and now we have more. people are working harder than ever and spending more than ever, which looks great, you know, when you spend more, there was their oil, you know, but if you're not actually benefiting from what you're spending, if you spend the money on childcare costs and transportation costs. you know, etc., you just know the cost that people in the past didn't have to pay because you know you could walk to work and you know that one remaining family member was able to stay home and be a permanent homemaker. so in reality you are a lot, in reality you are not better, the only ones who are under pressure when you have such enormous pressures, there are days that you know, I am unaware that the same, me, four nephews and nieces, are facing difficult times, she will be forced to work. you know, it's very difficult to just keep a roof over there just get a roof over there just keep a roof over there people are getting poorer in real terms it's because the price is always going up because there's all this strange new money being pumped in The banks They get into the system and they're creating all this debt, so at the same time as prices go up and things get more expensive, we get deeper and deeper into debt.

You know, our wealth and the returns we get. What you get from working is less and less when you can't deal with poverty when you have a financial system and a monetary system that distributes money from the poor to the very rich. Any distribution you try to do in the opposite direction. The direction is: you know, effectively, it's a person in the wind, we look at issues like, you know, rising inequality. An obvious way to address inequality is to, for example, have, for example, a redistributive tax system, you know, you tax the rich, you give some money to the poor, you move around. a little money on the scale, that's all well and good, but if you completely overlook the fact that there is another redistributive system that takes money from the poor and gives it to the rich, then you're not really going to address this inequality and the way that a debt based monetary system works, it guarantees that for every pound of money there will be a pound of debt, now that debt will normally end up with the poor, these kind of lower middle classes, those people end up with debt and they end up paying interest on that money which then goes back into the banking sector and is distributed to people who work in the city or on Wall Street and what this system generally does is distribute money from the poor to the rich essentially distributes money. from the poorest regions of the United Kingdom to the city of London and also distributes money from all the small businesses, knows all their small factories throughout the United Kingdom and distributes that money to the financial sector, we have a system whereby the activity The Supply process occurs under the same roof as the same organization that is responsible for profiting by bringing together borrowers and lenders, i.e. a bank, so a bank creates our nation's money supply and makes loans for profit.

The government cannot allow the banking system to fail. because if it did, more than 97% of all money would disappear. Therefore, in the event of a crisis, the risk is transferred to the taxpayer, but even in normal times banks received numerous guarantees and benefits beyond the right to create money. I know Bank of America is a very large bank. Turns out I have $32 per person between us. How sure do I have that this money is safe? Well, all deposits up to $10,000 are insured, they are insured by the federal government in Washington, that's my guarantee, yeah, have you heard that the federal government has about two hundred and eighty billion dollars in the hole?

Banks receive large safety nets from the government, the taxpayer guarantees eighty-five thousand pounds as deposit insurance and the Bank of England provides liquidity insurance in case the bank leaves without reserve currency, someone wrote that a large investment bank is like a giant vampire squid wrapped around the face of humanity, hypnotizing politicians who throw money at banks unconditionally, no matter what damage is done, destroying the planet, forcing cars to do things that make life. better goodbye schools goodbye playgrounds goodbye jobs the bankers we rescued then gave themselves bonuses that were bigger than the first wave of public spending cuts Britain alone gave the bank more money than it costs to put a man on the moon six times more, where did he do it? our money is gone who let the banks get away with it why can vampire squid ever be useful?

No government is yet brave enough to tame them maybe they need a plan the spending cuts agenda is an attempt by the government to transfer debt from their account to that of the public this is the government's response to bank bailouts and is needed in a debt-based monetary system where increasing purchasing power is a result of increasing debt and we are a debt diversification that provides overall stability and market trust policies such as student policies. Rate increases and privatization of utility and industry assets follow the same pattern. The problem we face, I think, is that there has been a transfer of business from public debt to private debt, which is essentially a way of transferring risk. from a sort of UK limited company in the government to people's bosses and it will be the most vulnerable people who will have the most debt, so it is an unprecedented policy framework that the government is embarking on where transfers the risk today. who is most vulnerable and if there is another financial shock if there is an oil shock, for example, the people who will pay the fine are the poorest people in society or homeowners, for example, will fall into negative wealth if rates interest rates rise even by one point. or two per cent are going to be really big problems so I don't think it's a sensible way forward at the moment and it's regressive and it's certainly not fair in the terms that the government is talking about and it's certainly not. a case where we are in this together as more of the country's resources and industries are privatized, the private sector becomes more indebted, as a result more money is created and there is a boom, some private equity firms have taken this theory to the extreme .

In a practice known as a leveraged buyout, in which a company is purchased at an often inflated price and the purchase price is transferred to the company as debt, the company becomes responsible for financing its own purchase. These debts are often so large that the company needs to reduce staff salaries and research activities when it has to factor interest as a business if it has to factor interest payments on its goods and services then it has to charge a perpetually higher price As it takes on more and more debt, an increase in diversification depth results in an increase in the money supply.

When the money supply increases, more money is available for productive activities and consumption, which is the condition for a boom. . It's questionable whether we're going to get out of this recession or whether we're going to just continue down the path we're on now, however, if we do, when we get out of this recession, when growth starts again, look at what happens to the debt, it will increase and it will continue to increase and the faster the economy grows, the faster the debt will increase and then we will give it another 3 to 5 years and we will go back to where we were, you know, the debt will be too much, people will start to default again, it's kind of of system we're trapped in now, can't we?

You can't grow the economy without increasing debt and debt is something that will bring down the economy. The only option in the future is to reform it to prevent banks from creating money as debt. By fixing the monetary system, we can prevent the banks. let us never cause another financial crisis and we can also make the current cuts in public services and tax increases and theincrease in the national debt is necessary, the current monetary system allows the banking sector to extract wealth from the economy without providing anything productive in Why do we have all this technology?

You know all this new efficiency and yet now it takes two people to finance a home, whereas in the '50s it only took one person working and the reason for this is not because you know them. washing machines and everything is more expensive it is because of all the debt and it is because effectively the banking sector shouts it to everyone else, so a growing banking sector is not a sign that you know it is not a good thing if the sector banking is growing. is that it is becoming less efficient or it is becoming parasitic on the rest of the economy and you know, we can talk about the banking sector becoming 4% 5% 6% of the GDP, what is happening to the rest of the economy is becoming 96 95 94 percent of GDP we have to shift to this now, you know, if we want to have a chance to address any of the other big

social

problems, we have to solve the problem of money, the poorest . in the world pay for crises even when they have not benefited from booms, often reckless and speculative, such as the real estate boom in Ireland that preceded that crisis, as you know, over the last 30 years we have seen income differentials increase So the rich have gotten much richer and the common people have not stayed the same or have gotten poorer and one of the ways the economy kept going was by providing cheap credit or providing debt to those same people who already They couldn't afford things and so they kept buying and when it collapses it is those same people who have to pay once again even though in many ways they were the victims the first time and as a result of the crises the Bank of England has brought in debt corporate and repackaged it at lower interest rates, but the average person is being asked to pay more than ever to take out overdraft loans and credit cards.

The depths between the very rich or between governments can always be renegotiated and always have been throughout world history. There is nothing written in stone, generally speaking, when you have debts of the poor with the divisions, suddenly the debts become a sacred obligation, more important than anything else, the idea of ​​​​renegotiating them becomes unthinkable. Can you pinpoint exactly what would keep investors happy? make them feel more secure, that's hard personally, it doesn't matter, that can be seen, I'm a trader, I don't really care about that because if I see an opportunity to make money I do it, so for most traders we don't really care It matters a lot how they are going to deal with the tea how they are going to fix the economy how they are going to fix the whole situation our job is to make money from it and I have personally been dreaming about this for three years if you know what to do you can make a lot of money from us.

Maybe I had a confession which is: I go to bed every night I dream of another recession I dream of another moment like this I dream of another recession I dream of another moment like this you can make a lot of money with the way you can look at Europe now and see that the new prime minister has not been elected essentially imposed Papademos former Goldman Sachs employee the new prime minister and finance minister of Italy Mario Monti former Goldman Sachs employee the new president of the European Central Bank former Goldman Sachs employee you already know what they need the university to see these people appearing absolutely everywhere that is the way to change what we have what has been interesting about all this I suppose it is the question of democracy that is opening up in a very marked way in Europe, so we have a government of bankers essentially imposed on you bankers, who more or less got us into this mess, to put it quite crudely, but that's a good first approximation and then you say, well, bankers, the people who, Therefore, you will come out of this and it is deadly, they will rule your country now if there is a serious question about democracy that has been opened here by the way the banking crisis pushed more than a hundred million people back into poverty.

Mortality statistics for people who fall into poverty increase enormously for a wide range of reasons, so the banking crisis is not just about making us poor it was also about killing people and guess what, we haven't really gotten to the bottom of it. This, we have never held anyone accountable and we have not done the radical reform work that we really needed to do because we wrongly thought that if we destabilize the position further, it will make things worse and guess who made the decisions. All the people who were there in the first place. I think you should know that one of these businessmen's business is murder.

His weapons are modern. They are thinking. 2000 years old, look, I was there when the secretary and the chairman of the Federal Reserve came those days and talked to members of Congress about what was going on, it was around September 15, here are the facts and we don't even need to talk Of these things, on Thursday, around 11 a.m., the Federal Reserve noticed a tremendous reduction in money market accounts in the United States to the tune of $550 billion that were being written down and withdrawn in a matter of an hour or more. Two the Treasury opened a window to help inject 205 billion dollars into the system and they quickly realized that they could not stop the tide that we were having an electronic run on the banks they decided to close the operation they closed the money accounts and announced a guarantee of two hundred and fifty thousand dollars per count so that there would be no more panic out there and that is what really happened if they had not done that, that their estimate was that at two in the afternoon five and a half billion dollars would have been withdrawn of the United States money market system would have collapsed the entire US economy and within 24 hours the world economy would have collapsed when money is withdrawn internationally from one currency to another the reserve currency moves from the National Bank of one country to the foreign bank reserve account Foreign banks have relationships with local banks that allow them to hold foreign reserve currencies without being part of the central bank scheme at the local central bank, for example when transferring £1,000. in euros, a UK bank will agree an exchange rate with a eurozone bank, perhaps 1.15 euros to the pound, the UK bank will then transfer a thousand pounds of central reserve currency to the partner bank from the European Bank, while the European bank will transfer 1,150 euros of reserve currency to the European partner bank of the UK bank what happens when currencies and the exchange rate system are no longer managed what are some of the first consequences devaluations speculation imbalances in which some countries would accumulate more and more what are accumulated there are currencies other currencies the reserve currency must be spent in the country of origin or exchanged for other currencies most foreign banks do not have deposit accounts outside their borders nationals and, as such, the foreign exchange reserves they hold do not return to them in the form of deposits, when a country accumulates trade imbalances, accumulates reserve foreign exchange in the case of surpluses or spends its own reserves in the case of negative trade balances.

Palace trade is basically due to the difference between what is sold abroad and what you are buying abroad now, the characteristic of the United Kingdom is that for a very long period of time there has been a deficit and something called balance visible trade, which is trade in things, but things that you can see, so it's goods that you would recognize things that you can point to containers are cars computers things that you would see in a store that has had a substantial deficit because I think it opened in India , opened in the early 1980s and is essentially not like that.

It has not disappeared since then and if something has expanded more and more, the type of currency is that it cannot be used directly for domestic spending. The money can only be spent abroad or on imports. A country with a large deficit in the balance. commercial depends on its creditors to spend The imbalances accumulated in its own market without the help of Keynes, for example John Maynard Keynes, at the end of the Second World War, his original proposal for what became Bretton. Woods, on a set of institutions established there, such as the IMF and the World Bank, said that there would be a kind of International Clearing Union, this relates particularly to the commercial side rather than not looking at the financial side directly, but the principle It was that I knew that once the trade balances had been opened, everyone would bank through an international clearing bank and that is what would force everyone to eventually reconcile the imbalances that appeared in the real economy, but not there is such a mechanism.

The cumulative net trade imbalance for the UK is around 800 billion. In essence, what has happened is that for many years some countries have had large trade surpluses and others large trade deficits; Countries with trade deficits have been spending more than they have been earning, so they have had to borrow abroad and we have been doing this year after year in countries like the United States and some other countries in Europe. I can't go on and there are two ways this can come to an end and we're seeing this or other countries in Europe, if they can't find new ways to become competitive then their ability to repay debts is called into question.

Another way of doing it that we have followed is that we have a credible plan to pay off our debts and the value of sterling has decreased. fell by 25 per cent to make our exports more competitive and attractive to foreign buyers and to make it more attractive for British consumers to buy from British producers rather than foreign producers, that is what we have done to establish a framework to rebalance our economy and I am sure that is the right way to do currency war, also known as competitive devaluation, is a condition in which countries compete with each other to achieve a relatively low exchange rate for their currency at As the price to buy a particular currency falls and so does the real.

The price of exports from that country, the national industry receives a boost in demand both at home and abroad, which has made British exports look considerably cheaper, so they have recovered a little, but As the rest of the world now seems quite unstable, it decided to fall again, so what we are seeing is something that we have almost a kind of anarchy and, in a way, the growing alikum. This is what has happened in recent years, where even Brazil's Finance Minister has been more vocal about it and speaking out. about currency wars talking about the desire of national governments when they face a big recession they think if we could export more we can get out of this recession if we want to export more we depreciate our currency that makes huggers cheaper everyone else buys them We will all be better off now, the problem here is that if it depreciates, it's like everyone else is against their things becoming more expensive, so they are not very happy about it, they also want to depreciate and this is where You can see how the competitive rounded evaluations are broken. to decrease the value of its national currency a national central bank sells reserve currency on the market creates this currency out of nothing by writing numbers on a computer during the long phase of commodity money the exchange rate would depend on the amount of gold silver or copper contained in the currencies of each country in a similar way after the arrival of paper money and the gold standard the exchange rate depended on the amount of gold that the government promised to pay to the holder of the notes these amounts did not vary much in the short term and as such, exchange rates between currencies were relatively stable after World War II.

The currencies were pegged to the dollar and the dollar was backed by gold. This system came to an end in 1971, so we have a modern financial system where money is now organized chaotically. There is no exchange rate because there is no gold standard system to support, so we don't need it. In fact, we believe that the market will solve all exchange problems. Whether your currency should be worth more than mine is a reflection of your economy scaled back relative to mine and if that changes the currency and exchange rate can change and if we need that to happen it will magically happen because of market efficiency and the pursuit of profits and you know the rest.

I think it determines the value of a currency in relation to another currency. by the market if more people want to buy a currency than sell it its value increases if more people want to sell its value decreases the value is set by individual banks as they buy andthey sell currencies they will adjust the exchange rate feature in the latest study I read in 2007 every day in the currency markets three point two trillion dollars are traded every day who knows what the global GDP is fifty again brucey major sixty that is closer the point is to think about that exchange that happens every day there are about 260 business days a year It takes a few weeks to equalize the global value of each economic transaction that happens everywhere every day of the year and obviously it takes a few weeks to all this currency trade and, very, very regularly, if you go abroad, you change it into another currency which is a form of In currency trading, you are exchanging your pounds for any rose or yen or whatever, that happens with quite regularly and that is a conventional part of the negotiation process and they are large corporations that have to do this on a regular basis. becomes something that people question and when people say "well, wait, this is speculation", that's when people realize that currencies move mixed with each other and if their value moves side by side Another, there is always an opportunity to try to make money from those changes in value and therefore you can speculate on it and that is the more questionable end of the market, that is the part of the market that things like a tax on financial transactions They will try to eliminate because the assumption there and it is What is not incorrect is that this only produces instability for everyone else, but these people want volatility in the market because that is how they make their money, they want to encourage it and they encourage it by trading and speculating in the same way they do it.

By 2010, the foreign exchange market had grown to become the largest and most liquid market in the world, with an average of four trillion dollars of currency exchanged each day. Volatility creates a need. What effect does it have on countries, especially perhaps small ones, like developing countries? They are suddenly huge and fluctuate instantly. What do they have to do to cope? Increase your production and sell more, lower the price and possibly even become poor once you sell into the international system. It becomes something really quite peculiar, quite peculiar in a A lot depends just on the sentiment and beliefs about what an economy is like and a lot more depends on what the economy might or might not be doing and that can change very, very quickly because you know that If it is only some of these beliefs about currency that are bearable, then we can continue believing this until, no matter what, if that belief changes, it can change very quickly in a financial market, the process of financial contagion can take place. here in just a few minutes, seconds, even then you can go from being a seemingly quite stable and robust economy. to being someone who suddenly sentiment has turned against you and you find that the markets are messing with you and often you can't be much more than just being the next door neighbor to a country that is currently in trouble with many of countries of the world.

Financial crises over the past 30 years have been caused by rapid withdrawals of the nation's currency or the currencies of an entire region. This type of activity is often known as financial warfare. It has benefited major institutions quite substantially, then Goldman Sachs, for example, or anyone else. The big bank has fared somewhat better with this set of arrangements than it would have done in a formal regulated environment. It has made people very rich. It is a noisy financial market that is expanding enormously. Anyone who is involved in that is interested in seeing a deregulated world in the world.

In the case of the UK, we have a government that has argued quite openly, deliberately and aggressively against any form of regulation being imposed on those financial markets, but it is not the case that someone is behind the scenes pulling the strings, but that's how the thing works quite deliberately, whether it's a Vernie in front of you, that's the world as it is, it's making some people very rich, they're very happy with it, I think it's a way of economic war, much of the change in the The way the global economy has functioned over the last thirty years is the result of this debt, this Third World debt, because it has given the rich countries, the banks and the sector financial enormous amounts of power and control over the poorest parts of the world, where much of the resources are the ones we like to use and they are being used in a way that many people have compared to a form of colonialism;

It is a very real direct form of power that has been used over those countries to force them to establish order really in the interest of the richest segments of the world do it and as a result of that, corporations have not only become absolutely omnipresent, But the financial sector has made enormous amounts of profits and has become absolutely ubiquitous. It has become even bigger than that and the real money being made in the world today is not by producing anything at all, it is simply through forms of speculation. , basically making money from the money that is the most profitable and by far the most profitable. the largest form of economic activity that exists in the world today to protect themselves vulnerable countries need to accumulate currency from rich countries you create these currencies from nothing the Netherlands the first governor general of Indonesia the man who built the trade routes fortified them I mean by that they built forts along them and fought against the Spanish fleets and the British fleets.

It was said about the development of the Dutch Empire dispute. The Dutch trade was that we cannot trade without war and war without trade money and power, so reserves have become the way in which you can insure yourself against what speculation who you put speculation speculative attack fall of the markets bubbles when a country succumbs to a speculative attack it is asked to deregulate its markets and adapt its financial system to that of the dominant party the big problem it faces Most developing countries that fell into a debt crisis was that the de facto powers of the world, the International Monetary Fund, which in many ways governs the global financial system, were told that the way to get out of debt is actually to first restructure your economy, especially to increase your exports, so that you can earn more dollars and then be able to pay off your debt, which is usually in dollars or some other foreign currency, unfortunately time and time again that has been proven not to be the case.

In reality, countries reduced their public spending to the core, so they stopped growing, they stopped having growth potential and what they did produce was destined for the export framework, it was destined to create dollars, etc., so They were bearing fruit. their debts, but they weren't developing their own economy at all, they were paying much, much, much more in debt payments than they were spending on health or education or anything else and their debts kept getting bigger and bigger and bigger, the country becomes a vassal. state that allows large corporations to exploit its natural resources and its workforce is not even a shadow there is no great mystery about what is happening it cares about the way the world operates it is light it is quite forceful I mean, during the last thirty years you have something practically everywhere, it certainly spreads almost everywhere, that is usually labeled as neoliberalism, this idea that you should have floating exchange rates, we see weak regulation, particularly in the financial market, it is a Minimal government interference, our participation in what the market does and that's pretty much how the world works. operates and then there are the institutions and the one that is after spending at this point is the IMF, they were actively trying to enforce this state of affairs, so it is not a big shadow, if you understand what I mean, there are people behind the scenes somewhere trying to manipulate things.

This is actually quite evident, this is happening and this is how throughout my entire adult life, this is actually where it starts to seem like this is how the world of the world operates and it has caused some people to become very, very rich huge concentrations of wealth, so when the International Monetary Fund intervenes to try to alleviate a country's debt problems, it imposes a set of conditions and in the 1980s and 1990s they called that set of conditions structural adjustment structural adjustment program and it tends to take very similar forms wherever it happens and, in fact, we can see structural adjustment programs essentially being implemented today in countries like Greece, Portugal and Ireland, where countries are instructed to decrease the amount they spend on the public sector and are instructed to liberalize their commercial market. and liberalize their capital markets so that money can enter and leave their economy much more easily and the idea is that this will encourage investment coming from richer parts of the world and that all their problems will be solved from this investment and In reality, this has been proven time and time again to be completely unfounded.

In reality, what happens is that it destroys nascent industries and capabilities in these developing countries, and the developing countries become completely dependent on the goods and services of the developed countries and also the capital of the developed countries. One of the things that the International Monetary Fund is very interested in is telling countries to reduce the taxes that multinational corporations have to pay when they come and operate in a country because, of course, then you will encourage more multinational corporations to come in. . What it also means is that the profits that those multinational corporations make leave the country just as quickly and the country itself does not benefit and today there are many developing countries that have almost no tax base, they have not developed a tax base. . at all and that is why they are even more dependent on the international capital markets and the money markets to create debt and that is why there are so many countries in the world that have really been stripped of their sovereignty that it is very difficult to see how democratic societies can evolve. or function when in reality a government depends more on the dictates of the International Monetary Fund and the money markets than on its own people, what we have seen since the 1970s is a spectacular increase in a series of phenomena that have had a series of a simulated effect on the changes in the financial system that have led us to the shiny metal in the steel business that is there, in case you don't know, I am putting the city of London to compensate for the lack of a Value based on commodities Underlying currencies Financial institutions developed securitization as a means of managing risk.

You know that you develop securitization as a means to try to stabilize the entire system. This is a set of financial processes and financial innovations that really accelerate from the '70s and '80s onwards. a chaotic system that needed to manage risk and you had to innovate you needed derivatives options futures you have new markets in volatility management tools who knows where the term hedging is distributing your risk managing your risk insuring against your risk precisely until very recently you know Until the In the 1960s, the Securities and Exchange Commission was quite clear that Co derivatives that were not based on real products, such as agricultural products, for example, pork belly futures or whatever, would in fact essentially reduce gambling and , therefore, trading in it was not allowed. and that changes in the '60s and everyone can trade, you know, currency futures, things that are not based on actual products that are traded at some point in the future, but are based on the movement of some of the currency prices once the system of fixed exchange rates is in place.

Obviously this is greatly accelerated, so when you roll back government regulation here, the market takes over with its own products here and the theory is that the market regulates itself better and is more stable than if it had a government. interfering in all processes. Right now, the efficient market hypothesis, the idea that you know you set up a financial market, they're fast, everyone in them is well informed, everyone watches very carefully what everyone else is doing, so it's very stable. and reflects real changes in the market. The economy is not only driven by panics, manias and speculative bubbles.

That's really going to happen if there is movement up and down, it's because something real is happening and traders and investors in the financial market respond to that is the efficient market hypothesis. practice, but I think what you see in 2008 is a kind of end to that process, the emergence of this very important crisis, the belief that it will simply be self-stabilizing, self-regulating, very calm, it continues, I mean, the practice continues of anyway, but I really don't knowYou can argue in the same way that they used to say that it is good or that it is necessary or that this is right for the world.

In the last decade we had a new innovation, something called a credit default swap, a way to buy insurance against the company you invested in goes bankrupt and in 2002 they were worth less in total less than a trillion dollars in 2007 they were worth sixty trillion dollars, that is, five years, everyone suddenly sits back and thinks: oh, these CDOs that we have created don't really provide the kind of stability that we thought that the mathematics that goes into risk is complete nonsense, it turns out that there is a lot more risk associated with trying to securitize risk and securitized debt in the way we have done than we thought and we believe that these things are now futile, the attempt to get more and more complex ways of regulating and shaping the influential markets and trying to make a quick buck from it, actually helped produce the opposite effect of what their apologists said, which led to a spectacular collapse.

What we saw as a result of this very different situation was a phenomenon above all, a sector above all it grew and that was the financial sector, while the financial sector benefits enormously from the current monetary system, the system is neither stable nor fair, the assumption in What the Bank of England does now is that the cash we have is backed by government debt that the government can back as promises by the fact that it can tax the public so what they are implying is that the cash is backed by government debt when the government debt is backed by the government's ability to raise cash from the public time and time again over the last 30 years we have seen private debts transformed into public debts and, ultimately, the price for that debt is paid. by the public in the debtor country that is why spending cuts are necessary the system is designed to make certain people very rich at the expense of the citizens and taxpayers of a nation the system reduces the standard of living for the majority and distributes this wealth among the privileged, what we are left with is a financial system since the early 70s that does not have fixed exchange rates and that suddenly has increasingly open financial borders and that has central banks having to manage without have no control because there is nothing here where gold is used. to be chaotic they have to quantitatively ease they have to lend as a lender of last resort throughout history monetary systems were designed to give an advantage to the dominant international power and this power defends itself and expands fiercely and I flee from encounters with an incredible pokeyman a The American flag is burned at the height of the demonstration, both President Johnson and Francisco Franco, our new loss in public projects had a tension in Spanish-American relations or in the car or in my heart, many Americans throughout the The world knows America. does not take war conventions into account or loses the objection, what I would like to see is a new type of currency backed by something that is scarce and that we really need and really value something like energy or renewables for example.

Some kind of currency backed by kilowatt hours would be very interesting to me. We need to start valuing the things that are most scarce and that we need to survive as a human race in the long term and support an international currency with something like that. will generate a huge investment in, for example, renewable energy, if that is the main international unit of account that is being used, another option is a basket of currencies, so you know you can mix the value of different currencies to create one currency very solid. what people rely on, perhaps even better would be a basket of commodities with which to back international currencies, nothing was possible internationally, one way or another to bring together all these competing, increasingly competitive national economies , and say: "let's all sit down." and draft an agreement something like the Bretton Woods Agreement that will allow other library forests to let you know that some currencies can be painted on different buses and goods that are more appropriate for their national economies.

You can fix this if you could. For that to happen then would be good and you can see how that would begin to create a kind of order in the international macroeconomy because, otherwise, the real difficulty is missing, the only political question is that who knows is going to do this, who is the The force that is going to make this happen, creating a monetary system that is quite unstable is possible and can be achieved, what are international organizations for, if it were not for that purpose? This is George George worked in a big bank in the city of London, but one day, without warning, George's bank hit the bus, luckily the government bailed out the bank and George kept his job, but the greedy government wanted something In exchange for the help, they demanded a higher tax on George's salary and a bonus for someone with an expensive lifestyle.

Like George, a shock like this can be devastating now George is struggling to pay the rent on his Riverside apartment in central London, but the tires on his Aston Martin are wearing out and driving is barely legal unless the situation of George gets better or unless someone like you helps him and George. He may even be forced to walk past the next Savile Row tailors and buy his suit at a Topshop or even if George had something to celebrate, he can no longer afford the champagne to celebrate with George. He is not alone, many others are suffering like him and not.

You know how long it will be until the good times return, but with your help, George can change his life. A simple monthly donation from you can put a little sunshine back into George's life. Just £395 will help him celebrate minor achievements with a magnum bottle of Cristal champagne. Just nine hundred pounds will help George buy a new set of tires for his 2000 Aston Martin. pounds can help George regain his self-esteem with a suit from a prestigious Savile Row outfit, but even a small amount will help, just £200 will buy a meal for George and his girlfriend. Experience just an extra £200 will buy you a drink when adopting a banker, not only will you support someone like George in a time of need.

You'll also support the City of London's trendy wine bars, the city's luxury car manufacturers and the Taylor's of Savile Row. You will do your patriotic duty to support Britain's biggest industry in its time of need and when good times come. Come back and George will get the bonus back from him. The taxes you pay will help fund the public services the rest of you depend on, so please, until good times return for George and those like him, will you give today?