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Victory for Positive Money as Bank Of England explains in its own words.
Bank of England seems to have gone out of their way to explain, in near comprehensible language, how money is created.
This admission is a great pat on the back for Ben Dyson, who with the team at Positive Money, have been publicly pressing the issue.
We have numerous quotes from bank officials mentioning in the past how money is created, but this publication represents an attempt to communicate with industry professionals and armchair economists alike, how money actually works these days, stressing that many text books are somehow wrong.
If those documents are too dry for your taste, you may prefer the painstakingly carefully scripted interviews below, shot amongst the racks, stacks, shelves of impressive tungsten bars in a secret London location.
While I cheered to hear that "in fact loans create deposits, not the other way around" and many other truthes, I was soon frustrated with this lifeless, contrived interview, which must have been vetted at the highest level, and I started to realise other problems. For example, what changed, why and what does that change mean.
Most explanations of modern money involve debt, and interest. Neither word was mentioned in 10 minutes. Nor was the crash of 2008, or inflation, or recession, or sustainability, or growth, or bitcoin. Instead we have an explanation showing how, on the balance sheet, Quantitative easing is not creating money from nothing. So that's all right then, nothing to see here.
We should be aware that the bank is in a very difficult position, having to explain this stuff and maintain law and order.
It is well enough that people of the nation do not understand our banking and monetary system, for if they did, I believe there would be a revolution before tomorrow morning. Henry Ford
So this extremely narrow telling of the story of money enables the bank to normalise these horrendous practices which occur on balance sheets, the bank is there provide stability after all, and the wider implications are put well beyond the bank's remit.
Positive Money can now move the debate forward. Building on the abundance of high quality video materials they have already, the Where Does Money Come From? book, and now this presentation by the B of E, we need to be steering this discussion towards things like: