Bill Totten's Weblog

Saturday, July 31, 2010

Enact the Bank of England

(Creation of Currency) Bill 2010

by gswanson (July 03 2010)

Forcing millions of ordinary people to borrow their means of exchange into existence from the banks at their own risk and expense, in the form of over-priced mortgages and other loans, and then taxing them to service government debt on top of that, severely limits economic independence and freedom of choice. If the definition of a slave is not ill-treatment, but the fact that he or she has no say in their own policy, the decision to tax the people to save the banks, without any offer of a vote or any discussion of alternative means of creating new purchasing power, reduces large swaths of the population to slavery.

The Bank of England (Creation of Currency) Bill 2010 proposes a simple reform which will dramatically reduce taxes, while at the same time expanding and maintaining infrastructure and providing decent public services.

The Bill establishes as its Universal Principle that: "Throughout the entire banking and deposit taking system ... every credit to an account must be matched by an equal debit from a different account". Only the Bank of England will be exempt from this requirement, thereby enjoying sole right to create all of the UK's new money, both cash and non-cash.

Enactment of the Bill will complete the work of The Bank Charter Act of 1844, which made it as illegal for the commercial banks to print notes as it already was for them to mint coins. Under the Act it will also be illegal for them to create non-cash money in the form of "credit". In effect, the money supply will be nationalised without any need to nationalise the banks, which will continue to compete for their profits in the open market – with the difference that they will now confine themselves to borrowing and lending money which already exists.

With money recognised as a public utility, the MPC [Bank of England's Monetary Policy Committee] will be responsible for issuing or withdrawing it from circulation directly, instead of depending on the blunt instrument of interest rates to control inflation; and any new money created can be spent into circulation on public works and services as indicated by voters in the usual way, at general elections.

The Bank of England (Creation of Currency) Bill 2010 is online, with detailed explanations and FAQs, at

Why the contribution is important

Nothing is more important to most people than material security. Until we have an adequate income, we have no time to worry much about civil liberties. This Bill offers us a chance to restructure the economy, focussing on the production and distribution of goods and services for all, rather than the multiplication and manipulation of financial units for the benefit of a few.

The most basic civil liberty is a decent standard of living. Establishing a sound financial and economic system should therefore be the priority of any government. The Bank of England (Creation of Currency) Bill 2010 shows how it can be done.

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Bill Totten


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