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An honest money maiden speech

Advisory Board Member Steve Baker, MP for Wycombe, yesterday made his maiden speech in the House of Commons. The full text may be found here. The articles which most closely inspired the speech are here and here.

The following section of the speech — which we have annotated with links to relevant articles — made some key points about honest money:

As a trustee of a charity for economic education, I would like to give what is perhaps an alternative perspective on the cause of the banking crisis; I hope that Members will indulge me. I should like to put to them a proposition that is uncontroversial: around the world, the system of money is a product of the state. Our monetary system is characterised by private banking, with a fractional reserve controlled by a central bank, which determines monetary policy and has a monopoly on the issue of legal tender. A Monetary Policy Committee sets interest rates.

The banks have the legal privilege of treating depositors’ money as their own. In the words of Irving Fisher,

“our national circulating medium is now at the mercy of loan transactions of banks”.

In the other place, in the Banking Bill debate of 5 February 2009, the Earl of Caithness explained eloquently the base of 19th-century judicial decisions-and yes, our system of money has evolved since then-that enabled that situation to take place. He called it

“the fault which has led to every major banking and currency crisis during the past 200 years, including this one.”-[ Official Report, House of Lords, 5 February 2009; Vol. 707, c. 774.]

The Bank Charter Act 1844 ended the practice of banks over-issuing notes, but it left them virtually unmolested in their ability to issue deposit currency to be drawn by cheque. That loophole haunts us today. Unlike the situation in respect of any other commodity, in the case of money, price controls do not drive the product off the market. Artificially lowered interest rates increase the demand for credit, and decrease the supply of savings, but the legal privilege granted to banks means that they can meet demand by extending credit that is unbacked by real savings. There is a good argument to say that that causes the boom-and-bust cycle, the misdirection of resources in the capital structure of production, and over-consumption by consumers. That is the biggest problem that we face today.

We could talk about the moral hazard of having a state-backed lender of last resort and state deposit guarantees, and of the socialisation of the cost of failure; I only wish that I had time to touch on the accounting rules on derivatives. Perhaps that is for another day. My political hero, Richard Cobden, spoke on the subject. He held

“all idea of regulating the currency to be an absurdity”,

but I see that time is short; I shall have to save the rest of the quote for another day.

Today, money is a product of the state. The Bank of England controls the price, quantity and quality of money. Perhaps if we were talking about any other commodity, there would be far less confusion over and questioning of the cause of the crisis. If money is a product of the state, we should ask ourselves, “Is this a good idea?”

In the coalition, we have a Government ideally suited to be conservative to preserve what is good, but radical to change all that is bad. If we are to have a once-in-a-generation, fundamental review of the role of government, let us also examine government’s role in the system of money and bank credit.

25 comments to An honest money maiden speech

  • Traktion

    It’s good to see the issue being raised in parliament. Steve Baker is giving me hope that real change can be achieved, rather than just some tinkering around the edges of a broken system.

  • Current

    It is a long time since this was widely debated. In the 19th century there was a “monetary regime” type of debate.

    Personally, I think that it’s quite reasonable that money is a debt lent by customers to banks. I don’t have any problem with that aspect of it, but I don’t agree with the existence of a central bank and deposit insurance.

    Our challenge now is to unpick the problems correctly. To distinguish what is caused by the legal structure around banking and what is caused by the direct government interventions. We should be more careful about changing the former than changing the latter. It’s not just a simple matter of removing government interference, the most important part is to adjust the law so that banking can work afterwards.

  • […] was mightily impressed by the few words of Steven Baker in reference to his maiden speech on the issue in the House of Commons. It almost seems too good to be true that we have a sitting MP […]

  • Traktion

    Personally, I think there is an opportunity to make changes for the better. I have read Kotlikoff’s book on Limited Purpose Banking and I find the approach very compelling – not only does it solve a number of problems with the financial system, it also opens up much of the process to the free market.

    I think Kotlikoff does a good job of taking on full reserve banking, from a systemic risk perspective. He also persuaded me, along with government actions, that bailouts will always occur. The only place for fractional reserve banking, in my mind, is one where there is no deposit insurance, no limited liability and where plenty of wealth warnings are present.

    Either way, it is good to hear the topic is at least getting a mention and I look forward to hearing about monetary regime debates in the future.

    • To Traktion

      Many thanks for joining us in the debate. I am glad you have absorbed Kotlikoff’s book. I think all should read even though there are some problems with it. You may have missed it , but I did review it here, http://www.cobdencentre.org/2010/04/jimmy-stewart-is-dead/ .

      I personally think fractional reserve free banking can only be allowed to exist as either as described by the likes of Prof Kevin Dowd, Selgin, Horwitz and White , although my preference is to get to 100% reserve free banking as I believe that we will still have credit created business cycles albeit very limited. Their system also relies on a grant of legal privilege still to allow banks to function unlike my business and all other no bank businesses to not keep creditors whole at all points in time. One rule for one and one rule for the rest of us is not a good way to structure your banking system. This grant of privilege is incompatible with my love of Liberty and a sense of fair play. There is also a staggering gap between what the bank customer thinks he is doing when he deposits (saving his money, or placing his money for easy access for e.g.) and what the bank knows they are doing i.e. receiving a loan from him. They are largely dishonest entities. They call it your money when it is theirs! They call things “instant access savings” when the money is an on demand loan – totally duplicitous! I set my initial thoughts out here, http://www.cobdencentre.org/2010/03/free-banking-the-balance-sheet-and-contract-law-approach/ . I hope this may persuade you of the complete undesirability of any fractional reserve free banking in favour of 100% reserve free banking. If it does not, I hope it stimulates you further to get involved with this debate as it is a debate that is the most important in our current times.

      • Current

        > I personally think fractional reserve free banking can only be
        > allowed to exist as either as described by the likes of Prof Kevin
        > Dowd, Selgin, Horwitz and White , although my preference is to get
        > to 100% reserve free banking as I believe that we will still have
        > credit created business cycles albeit very limited. Their system
        > also relies on a grant of legal privilege still to allow banks to
        > function unlike my business and all other no bank businesses to not
        > keep creditors whole at all points in time. One rule for one and
        > one rule for the rest of us is not a good way to structure your
        > banking system. This grant of privilege is incompatible with my
        > love of Liberty and a sense of fair play.

        I don’t think you’re right about this. Firstly, there is a difference between the type of liability involved. As Mises mentions if you sell more bread tickets than bread then you will be called on them. But, money and money tickets can both serve the same purposes.

        The law isn’t unreasonable because the amount of money-substitutes that are likely to be redeemed at one time is small.

        To take an analogous example… One of my friends is organizing a music festival in the west of Ireland. I’m not sure the tickets he is selling are refundable. But, let’s suppose they are. In that case should the law require him to keep enough funds to refund all of the tickets that he has sold? Even though he knows and everyone else know that the percentage of people who hand their tickets in for refund will be small and in most case he’ll be able to resell the ticket afterwards.

        Also, as I mentioned earlier, banks don’t put option clauses on their money-substitutes because it was banned. The legal reasoning behind the ban in dubious. Why should banks not be able to do this? Other businesses can? If banks were able to do this then money-substitutes would definitely not come under the set of current liabilities which have to be kept whole by a normal business.

        Incidentally savings accounts in the US do have a mandatory option clause of 2-weeks. However, the banks never exercise it. Does this mean that if your scheme were implemented in the US then savings banks wouldn’t be affected by it?

        > They call things “instant access savings” when the money is an
        > on demand loan – totally duplicitous!

        I don’t see what’s duplicitous about that. An “instant access savings” account is exactly what it says on the tin. Are loans not a form of savings?

        This is something I find very dubious about the whole Rothbardian argument. On the one hand they say something like “those who have notice accounts must know that they are dealing with a loan”. Well, on the same principle surely those who have accounts that pay interest must know they are dealing with a loan too?

        • To Current

          Music festivals, grain silos, insurance companies, unlimited coffee offers are not banking.

          Music Festival: If your man offers a full refund, then he should perform should people have legitimate cause for a full refund. It is absurd to use this example as when someone deposits, they ALWAYS expect to get their money back when they want it. The Music Festival goers, expects to get a refund if the act does not turn up etc. You really do not do yourself any credit whatsoever arguing like this. This is the problem with the weak arguments put forward by defenders of all types of fractional reserve free bankers.

          I personally have no problem if people want to place money in casino type operations in the knowledge that their property rights are being diminished with the risk that they will get a much bigger return, but that they may loose allot as well. This is gambling or financial betting. That is fine for the sophisticated better, but not the 74% of people who think the money is theirs and not the banks!

          Banking is when someone deposits money for either safe keeping or on lending.

          Our Cobden Centre survey that we did at the back end of 2009 with 2000 people, conducted by ICM, shows 74% of the people believe they are the owners of the deposit and 16% thought the bank was. Also they said they place for easy access (16% for straight forward safe keeping) i.e. on demand or there or there about for 67% of them. This is why the examples you and indeed the great body of defenders of either the existing fractional reserve free banking with a central bank or just fractional reserve banking, are very irrelevant and misleading. I believe we will publish in full this week.

          Banks, like any other business can try to make arrangement s with their creditors to take longer to pay. I do not know about option clause banning so cannot comment.
          Duplicitous: Savings to most implies that your goods have been lent to someone once, not many times and therefore they can never be there at an instant. Call things what they are and there will be no confusion or problem for anybody.

          You may fimd this article of interest re the contract law status of a demand deposit…http://www.cobdencentre.org/2010/03/free-banking-the-balance-sheet-and-contract-law-approach/

          • Current

            > Music Festival: If your man offers a full refund, then he
            > should perform should people have legitimate cause for a
            > full refund. It is absurd to use this example as when
            > someone deposits, they ALWAYS expect to get their money
            > back when they want it. The Music Festival goers, expects
            > to get a refund if the act does not turn up etc. You
            > really do not do yourself any credit whatsoever arguing
            > like this.

            For this gig the promoter hasn’t promised any particular acts except himself. Which I think is quite a good business decision on his part.

            Anyway, your claim is that my example isn’t comparable to banking. Certainly it isn’t exactly. But, my point was to draw out the reasons for redemption and the discuss the legalities behind it.

            Let’s suppose my friend offers a full refund on all tickets. Now, some would say that is a current liability and so, under normal accounting rules it should be kept whole. That means that my friend cannot spend any of the money from ticket sales until after the concert has occurred. Under a law like that if he had insufficient cash to cover his ticket sales until the gig then he would be breaking a law.

            However, I doubt that a court would look at it that way. You write: “The Music Festival goers, expects to get a refund if the act does not turn up etc.” Exactly. Suppose my promoter friend offers these tickets and someone accuses him of breaking the law. The court were told that the promoter had taken sufficient steps to ensure that the acts do turn up and that the festival will go ahead as planned. In this case would the court condemn him because he had not kept his ticket liabilities whole? I think not because he would plead that he had reasonable grounds for believing that the ticket-holders would not call on their option of refund.

            The same is true of money. You write: “when someone deposits, they ALWAYS expect to get their money back when they want it.” That’s true, but it doesn’t mean they all want their deposits back at the same time. The bank can quite reasonably presume that only a proportion of account holders will want to redeem at any particular time.

            > I personally have no problem if people want to place
            > money in casino type operations in the knowledge that
            > their property rights are being diminished

            I don’t think that the property rights of a creditor necessarily are diminished. The idea of loans (as opposed to rents) are that the lender gives up the right over a piece of property. That action doesn’t diminish that persons “property rights”, it is an exercise of those rights.

            > with the risk that they will get a much bigger return,
            > but that they may loose allot as well. This is gambling
            > or financial betting.

            All businesses are, all of human life is. There is no hard-and-fast line between an entrepreneur and a speculator.

            > Our Cobden Centre survey that we did at the back end of
            > 2009 with 2000 people, conducted by ICM, shows 74% of the
            > people believe they are the owners of the deposit and 16%
            > thought the bank was. Also they said they place for easy
            > access (16% for straight forward safe keeping) i.e. on
            > demand or there or there about for 67% of them. This is
            > why the examples you and indeed the great body of
            > defenders of either the existing fractional reserve free
            > banking with a central bank or just fractional reserve
            > banking, are very irrelevant and misleading. I believe we
            > will publish in full this week.

            I agree that many people today don’t understand what a bank account is. I think the reason is mostly that deposit insurance and central banking have made banks so safe to the ordinary customers (though dangerous to the wider economy) that the ordinary customer doesn’t really have to know.

            But, this lamentable situation doesn’t mean that FRB is fraudulent *by nature*, or that FRB causes business cycles.

            > I do not know about option clause banning so cannot
            > comment.

            It’s in White’s book. It’s important here because the option clause meant that legally speaking a banknote was a timed debt. It gave the bank an option of too different ways to redeem. The bank could redeem in gold, or it could redeem after a period of time at a special penalty interest rate.

            > Duplicitous: Savings to most implies that your goods have
            > been lent to someone once, not many times

            Let’s say I deposit 10 ounces of gold in a fractional reserve free bank. Now, the bank keep 1 ounce of my gold as reserve. They then lend out 9 ounces of gold. They negotiate a bill for those 9 ounces of gold from the borrower. Then the borrower has 9 ounces of gold, he may open an account in that FRB free bank or another. Either way some of that gold will be lent out again. But, there is nothing illegitimate about this since there is another bill created for that debt.

            The situation is not much different to that for ordinary debts including timed debts. I may lend my mobile phone to Sarah for a week who then in turn lends it to Tim for a day.

            > and therefore
            > they can never be there at an instant.

            Of course they can be. All the bank needs to do is to make a sensible estimate of the amount of redemptions it will receive in a particular time. It can then use a fractional reserve. As long as the bank has made a reasonable provision there is no trickery involved.

            • To Current

              Music Festival

              The court would apply the 5 key tests on what forms a contract and look at case law to interpret. Currently banks when you deposit give you can undertaking to pay you back on demand, so a court would not be able to say “well they did not really mean on demand at all of the same time.” Therefore this is what they will need to do. They can’t in bank run situation. Contract law is in conflict with accounting law. It needs to be resolved.

              Property rights are diminished as when I deposit, I place immediate access purchasing power with a promise to give me that purchasing power back when I want it. In reality, when push comes to shove, I may not get that back at all as we know. This is a weakening of my property rights.

              No option clauses exist in current bank contracts. Historically I am familiar with the work of White.

              I have never anywhere said FRB is fraudulent. That is your imputation. As I have written many times before and the banking survey gives evidence to this, at best the relationship is very confused and law makers need to explicitly sort this out.

              Your last point, if they do maturity match, then of course there would never be a problem as there is not a problem with any 100% reserve company (all non bank companies unless they go bust). So in your telephone example , if all had agreed when phones get passed back, then fine, they would be 100% reserved and the system would work fine. Welcome to the world of supporting 100% reserve banking Current.

      • Traktion

        Tony,

        Actually, I found this site, while searching for more articles on LPB, so your review was the first page I read here. Having digested what this site is about, I actually had a swell of hope in my belly, that there are others out there, in influential positions, taking monetary reform seriously.

        I have heard the argument that FRB will always attract people in, as it delivers high returns in the short term, at expense of stability in the long term – people tend not to look too far into the future, so are drawn in. IMO, this is why the risk has to be clearly sign posted and reflected; no banking official license, no bail outs, no guarantees, no limited liability etc. Essentially, it needs to be shown as risky and akin to gambling/speculating, which wouldn’t be supported by the taxpayer.

        The above said, Kotlikoff makes a good point that bailouts will *always* occur, as it is politically damaging not to deliver them. Imagine, for example, that a FTSE 100 company has all their money in a FRB above, when it failed. Would the government stand by as it went down the chutes, if the bank failed? All those jobs lost, protests etc… I think the government (of any colour) would give in to pressure and FRB would once again have caused problems. With this in mind, I can certainly see the argument for *no* FRB, but regulating this could be difficult too. Instead, stipulating that business accounts can’t use FRB and/or just highlighting the many risks would be a more straightforward route – free banking, for the brave.

        BTW, for international trade, denationalised currencies, as proposed by Hayek, could be an interesting and long term solution. Day to day, it would be too much for many people to cope with, but it would surely make international trade easier. In the framework of LPB, I think this presents a usable ‘wrapper’ of sorts – some shares in mutual funds (which could be based on commodities, for instance) could be traded *as money*, which would present a similar free market money mechanism, without the day to day difficulties of exchange.

        • Current

          There is very little historical basis for the idea that “there will always be bailouts”. Yes, there have been bailouts recently, but in the past many large businesses have failed without being bailed out. Bailouts are a symptom of modern day Keynesian thought.

          You ask the question, what would happen if the FRB bank that a big business uses fails. Then surely the business would be bailed out. Perhaps. However, a big business can use more than one bank. A big business can also use commercial paper. Many such businesses do both of these things today. Most important, almost without except a big businesses has only a tiny proportion of it’s assets in bank accounts. So, if the businesses bank accounts were wiped out then it could sell a small asset and start banking with a different bank.

          What I don’t like about these discussion is that everyone seems to be supposing that Rothbard is right about FRB. Rothbard pointed out that fractional reserves subject banks to a liquidity risk. It a large number of depositors ask for their money back at once then the bank cannot serve them. This is the basis for the now popular phrase “banks are vulnerable to runs”.

          But, this doesn’t accurately describe how banks fail in practice. In practice they fail because of solvency not liquidity. NR failed because other banks believed that it’s liabilities were larger than it’s assets and so it could not meet it’s long term obligations.

          Now, I’m not saying that the Real Bills Doctorine is true. And I’m not saying the central banking and deposit insurance don’t create the business cycle. I think that they do. But, that theory – Austrian Business cycle theory – is quite different. It proposes that central banks monetary expansion shifts the interest rate unsustainably downwards, that this causes a more risks to be taken and the time-structure of production to be distorted. The bust and the fall in asset prices is the *consequence* of this distortion. This can’t be avoided by having 100% reserve banks, it will simply happen to other assets elsewhere held by non-bank businesses.

          Without getting rid of the central bank all of this stuff is attacking the symptoms not the cause.

          • To Current

            You may or may not be aware that current contributions to the Austrian Theory of the Business Cycle (ATBC) , such as myself and my co author A Evans never mention the interest rate at all. It is the size of the money base or monetary footprint itself that leads to boom and bust. You may find this paper of interest

            http://www.cobdencentre.org/?s=heterogeneous+entrepreneur ,

            http://mises.org/journals/qjae/pdf/qjae11_2_1.pdf .

            You may also like to read Huerta De Soto’s Money, Bank Credit and Economic Cycles, there is no mention in all 900 pages of the interest rate being a trigger for the ATBC,
            http://www.cobdencentre.org/literature/download/ – last down load on this page.

            So the ATBC is 100% about a credit induced boom, this is driven by the private credit creation mechanism of the banking system that can be edged very clumsily by the central bank one way or the other with varying time lags. This is not to say that interest rates do not play their role in time co ordination, structure of production misallocations etc , but the emphasis is more on the size of the credit creation itself (the monetary foot print) and where it enters the system – Cantillon effects etc .

            The reasons why under fractional reserve free banking in Scotland for example, there was still plenty of boom and bust in the following years, 1770,72,78,93,97, 1802-03, 1809-10, 1818-19, 1825-26, 1836-37, 1839, 47, is because the monetary equilibrium theory is not robust and adjustments in credit and fiduciary media take time , time enough to let boom and bust happen.

            With a 100% reserved environment, you cannot have a money inflation or a money deflation. Booms and bust may well happen for other reasons, one off adjustments to this system, technological, harvest failure massive commodity price fixing, government socialisation of large sectors of the economy and a whole host of other things, but a credit induced one = no for sure.

          • Current

            Toby,

            I’ll read your paper and De Soto’s book in the future.

            I generally think though that we have to deal with interest rates and the money supply. I don’t think the interest rate can be sidelined.

            > because the monetary equilibrium theory is not robust and
            > adjustments in credit and fiduciary media take time , time
            > enough to let boom and bust happen.

            Of course adjustments take time. However, I’m not sure how you can use that to claim that “monetary equilibrium theory is not robust”.

            As I said earlier the boom and bust in Scotland doesn’t really invalidate the theoretical case because Scotland’s economy was so closely tied to that of England.

            > With a 100% reserved environment, you cannot have a
            > money inflation or a money deflation.

            That means however, that whenever the demand for money rises then there will be a recession. And similarly, whenever the demand for money falls there will be a boom.

            Also, with a 100% commodity standard you can have money inflation and deflation. Let’s suppose silver is used for example. When the demand for money rises it’s price rises so silver from stockpiles and industrial uses will be directed towards minting. Similarly, if the demand falls then new supplies of silver will not be directed towards minting, and coins may be melted down for their silver content.

            I’ve been discussing this over at the Mises blog with a bunch of 100% reserve advocates. What’s interesting is that there are really several different reasons for supporting 100% reserves.

            For example, the commentator “Beefcake the Mighty” over at the Mises blog is mostly worried about interest rates. He thinks that fractional-reserve free banking could lead to artificially low interest rates. But, he isn’t against flexibility.

            I gather from your comments that you are against monetary flexibility. This is really a quite different position.

            To illustrate I’ll give an example I gave on the Mises blog. Let’s suppose that a government institute land-based money. The government specify that the unit of currency is a “weighted acre”. One weighted acre is capable of delivering a particular amount of crops per year. A set of private land-banks are formed. It is stipulated by the government that these banks must be 100% backed by land. The banks create accounts and issue notes that are certificates/titles for a particular amount of land in weighted acres. A customer may go to the bank and redeem his or her land. Or he may leave the land in the hands of the bank who will operate it for the customer. The banks could take a cut by selling the crops grown on the land.

            The point of this rather peculiar example is to show that monetary flexibility isn’t connected directly to fractional reserves. The land banking system I describe would be highly flexible in monetary equilibrium terms (at least if the country had enough agricultural land). If the demand for money were to rise then the private land-banks would expand by buying more agricultural land from normal farmers. Similarly, if the demand for money were to diminish then people would bring their land money certificates for redemption.

            “Beefcake” says that this system would be fine by him because the land-banks couldn’t really influence the interest rate. His argument is really against backing money using debt, which is effectively what FRB does. His point (which is from Mises) is that if normal FRB banks expand lending together then they bid down the rate of interest. A banking cartel could make the following calculation: “I know this debt isn’t worth as much as we’re paying for it, however, if we all pay this price for it then we’ll expand the money stock and with it the demand for money so overall we’ll win”. I agree with this but I don’t think such a cartel could really be formed. A set of private land banks however can’t do that because it must buy a “real” asset – land. That is, in my land banking example the price of land is exogeneous to the land banking system but in a debt-based FRB system the price of debt is somewhat endogenous.

            I think though that your point is different. As I understand it you are critical of flexibility per se. Would you be against “land banking” even though it’s 100% reserve?

            • To Current

              You say “That means however, that whenever the demand for money rises then there will be a recession. And similarly, whenever the demand for money falls there will be a boom.”

              That is correct.

              You say “I think though that your point is different. As I understand it you are critical of flexibility per se. Would you be against “land banking” even though it’s 100% reserve?”

              I do not like to get involved in hypothetical otherworldly conversations.

              If society chooses money to be backed by a commodity as for the vast majority of time we have been on this planet it has been, it would more than likely be some metal. If more metal is demanded and more is supplied, then so be it. This natural ebb and flow is unavoidable. In fact it would need to be as a miner would be relying on a price signal i.e. that there is more money demanded for him to dig / process more metal to get that profit. If the metal is precious enough then it is rare to have massive inflationary finds. When these have been, the have been well documented in history but they are actually seldom and few and far between. With moderate increases in the commodity production, purchasing power can still grow as productivity gains are greater than the increase in commodity supplied.

              My proposal to “fix” is an interim measure until we can then get consensus to go back to commodity money.

        • To Traktion

          I am glad we have been of some assistance to you. Re this part of your comment,

          “ The above said, Kotlikoff makes a good point that bailouts will *always* occur, as it is politically damaging not to deliver them. Imagine, for example, that a FTSE 100 company has all their money in a FRB above, when it failed. Would the government stand by as it went down the chutes, if the bank failed? All those jobs lost, protests etc… I think the government (of any colour) would give in to pressure and FRB would once again have caused problems. With this in mind, I can certainly see the argument for *no* FRB, but regulating this could be difficult too. Instead, stipulating that business accounts can’t use FRB and/or just highlighting the many risks would be a more straightforward route – free banking, for the brave.”

          Yes, they will always occur in the FRB environment in the current modern age when it has become acceptable and indeed expected to socialise private loss. Absent FRB and do Limited Purpose Banking and I could see no grounds why bail out, too-big-fail or any such subsidy should be offered, the LPB mutual close end and open end structure negates this requirement. Kotlikoff has a very real and workable proposal for sure that does not need this apparatus that bedevils the system today.

          I to agree with your last sentiments.

          I thank you for your comments.

  • […] primeiro discurso do deputado conservador Steve Baker nos Commons a 09 de Junho The Bank Charter Act 1844 ended the […]

  • Whig

    It’s great – although sadly very rare – to see an MP with an understanding of sound money. Such things are of little interest to the general public, alas, even if they could understand them in a rather less rarified form. Moreover, how many MPs were in the chamber for Stephen Baker’s speech (that’s not a comment on it’s value, more a comment on the attitude towards sound money).
    Far more people would have heard, for instance, Anatole Kaletsky on the Today programme praising the global system of fiat money and suggesting that government printing of such money as a reason to be optimistic about the world economy (yes I wept into my cereal). With this kind of viewpoint around, I’m less than sanguine. I’m sorry to be a pessimist, I wholeheartedly support your efforts and wish you the best!

    • To Whig

      Whig, do not be pessimistic; we are not here to do nothing. We are the first major grouping of people to get together to challenge this. There are more MP’s more think tanks coming around to our way of thinking (plus Congressmen, former Presidential candidates and MEP’s noted academics). We are here to succeed. Remember in 1968 you would have been considered as a wide eyed mad man if you thought that the state should not produce your car or provide your fuel or water. This fiat system will collapse at some point in time as we refuse to address the crisis of 2008/08. We socialised the massive credit created debt and now we are having sovereign debt problems. What now? As some point it will collapse and we need to be presenting answers and the way forward.

      At this point in time, all I would ask is that wherever possible you promote us and make other people aware that we exist. Write for us as well if you have something to say. There is much reason for hope.

      Thank you for joining the debate.

  • […] This is the man Steven Baker wants to honor.  In his maiden speech in Parliament on June 8, Baker called for sound money: Artificially lowered interest rates increase the demand for credit, and decrease […]

  • Trully a man of integrity and honour to bring such a point across in the House of Commons. A fantastic speech, which elequantly conveyed an aspect of society that tends to be overlooked. Many MP’s tend to see the financial problem in a very micro way, unable to see the larger picture, something that I’m delighted to say Steve Baker is not guilty of.

    We, at Call4Reform, look forward to working with such MP’s in order to highlight the problem of money creation. A draft legislation created by ourselves can be found at http://www.bankofenglandact.co.uk whilst our campaign movement can be found at http://call4reform.org