Posts Tagged ‘Paper currency’

If he didn’t repeat himself yesterday, then I might not have known that he said the same thing back in 2015….

Bank of England governor trashes textbook theory and rips apart the workings and effects of the global financial superstructure, read the original speech here from three years ago

…and another blog which probably analyses it better than me here

Their world imagines self-interested, atomistic agents, coolly calculating odds over all future possible states of the world, writing and trading contracts with each other, all frictionlessly enforced, all achieving mutually beneficial – indeed socially optimal – outcomes.

Of course, markets only clear in textbooks. In fact people are irrational, economies are imperfect, and nature itself is unknowable.

When imperfections exist (which is always), adding markets can sometimes make things worse.

Mark Carney timeless quotes can be found throughout this speech


For anyone not familiar with the work of Ann Pettifor – one of the few to correctly call the coming of the financial crisis a number of years prior to it arriving, and one of the main proponents of the Jubilee 2000 campaign which cancelled a portion of third world debt – please search for her various articles, lectures and opinions online.

Associated with Keynesian economics and the Labour party, her views may be dismissed by some, however upon closer inspection, I was interested in her view on the creation of money, and what this meant for resolving the debt and economic problems facing the developing world.

She is principally part of the PRIME think tank/research group, which has a number of papers on its site proving an alternative voice on economic issues

The above lecture at the LSE discusses her latest book, ‘The Production of Money: How to Break the Power of Bankers’, and gives an insight into her theories.

What I wish to highlight, are the following;

  • The issue of commodity money, and how scarce resources should not be used as a basis of any monetary system
  • The recognition that a fiat monetary system, can and should be used for the benefit of the population – outside the control of private banks, but in the knowledge that an entirely man-made system should be used to achieve a level of prosperity in all societies
  • There are certainly many socialist aspects to these beliefs, such as exerting capital controls and spending money into existence in terms of health, education and social expenditure thus increasing national debt, however interest ideally should not be necessary when such a system is implemented
  • There are some similarities with what Positive Money are advocating, but it seems there are specific differences, as this discussion points out…



The extent of discussion around so called Helicopter Money is symptomatic of the wider issue that central bankers are truly at a loss around the issue of secular stagnation and the obsession to inject growth however possible.

Whilst the idea of money printing or quantitative easing is a reality for developed nations, no longer the preserve of failed states (or do we admit the first world is indeed a failed state?), the notion of money being made freely available to the pubic is still more fiction than fact.

However this article is worth a read, as it sets out how such a move could work and the considerations needed. I find it revealing in the workings of some aspects of monetary policy, however it does omit the amount of money creation performed by commercial banks, something which needs to be acknowledged on a wider scale

City AM – Helicopter Money




Please view this article on Central Banks’ attempts to harness aspects of Bitcoin’s technology for their own means of control

“Ironically, the technology that was meant to liberate money once and for all from the dead hand of the state may end up imprisoning it even further”



A few of my previous posts have covered attempts by various parties to introduce their own versions of a financing method closer to what is perceived as genuinely riba-free.

To name a couple, Ansar Finance in the UK, Grameen Bank from Mohammed Younus have made an effort to shed light on alternative models which are closer to interest-free financing, in that an interest derived rate is not charged to the customer.

Ofcourse, the wider context of this should not be forgotten – the money itself, the paper (or digits) we use as a means of transaction – is of interest and IS interest itself. Given this fundamental fact, one cannot escape true defined RIBA in any such method outlined in these endeavors.

However, designing alternative models can expose the wider audience to the weaknesses of the mainstream Islamic Banking practices, which are all in name not in spirit, and I find it refreshing and worthwhile to introduce different forms which may be used as a stepping stone to something widely accessible and equitable in future, Insha Allah.

Contributing to this intiative, are LARIBA, a US based institution who have introduced their own version of what they feel is a RIBA-free mechanism. Judge for yourselves weather you feel their method is actually viable, however this company has been established since the late 1980’s and I favour their understanding of the monetary system, even though they still resolve to make use of it. They too understand and are upfront with their clients about the debt enslavement aspects of interest based loans, and also draw attention to the wider Islamic Banking industry which still uses interest rates in their products.

Their website has a number of worthy materials on related topics which I would also like to recommend.

Allah (SWT) knows best about their intentions and actions.



Islamic peer-to-peer cryptocurrency


My appreciation goes to a blog reader for forwarding this link;

Bitcoin for Islamic Finance

I am personally highly dubious of any thought of assessing Bitcoin or any crypto-currency as sharia compliant. However the article raises some fair points, in my humble opinion. One argument would be that this is still a medium created by Man, unlike a real commodity.

Moreover, given the impact of the ‘Sharing Economy’ now taking hold via peer-to-peer websites, we need to ask whether money as we know it is essential to all transactions anyway. More on this in an upcoming post…

Make up your own minds, send me your comments


MoneyWeek-History of Money

Please view this document, pages 5-7 only, as a supplement to the already documented history of Money which has been posted on this blog and elsewhere.

The key points I noted from this account, are as follows;

  • “Debt is the slavery of the free..” Publilius Syrus, Roman Author. Again, this brings into question the entire notion of the ‘Free World’ and our understanding of contemporary freedom. This, together with the enormous volume of man-made law and rules, in countries that are often seen as beacons of liberty, expose our false reality.
  • When covering the early days of Goldsmith banking practices, the report includes mention of how depositors demanded a share of the profits, or what became interest received on assets held by the ‘bank’. I highlight this point as it is an essential component in the risk-reward mechanism within capitalism; the risk of losing ones holding is compensated by these interest receipts, thereby an acknowledgment that your deposit is being lent and it is not fully guaranteed to be returned if requested
  • The fallacy of reserve ratios: the fraction which must be held in reserve, or not lent out, is still far larger than anything tangible that can back it up. Therefore it can never control the act of lending out multiple amounts, which continue to expand the money supply, and thus asset prices and inflationary pressure.
  • This piece reiterates the ‘false’ gold standard that existed pre-1971, where only a percentage of the money supply in certain regions was backed by Gold. During this era, nations were effectively dabbling in a mixture of fiat and commodity money, which didn’t stop the USA from printing freely when the need arose in the 1960’s.
  • ‘The greatest credit bubble in history’..‘The modern monetary system relies on ever-expanding debt to function..’ Put simply, how can this be a preferred system to live by, when we are all living on borrowed time and our reality is being carefully managed and MANIPULATED constantly to keep the bubble afloat. How can trust ever count for anything.
  • As the piece continues it states..‘as debt grows, so the cost of servicing it rises and you have this never-ending bubble of expansion that requires people to work harder and harder and business to expand and expand..’ put this in perspective when Governments talk of deficit and debt reduction, austerity measures, GDP growth, ageing populations, quality of life. This is an inter-generational struggle which will continue until it collapses