There is a widespread view that reducing national debts and deficits, or “consolidating” them, causes austerity or would hinder the recovery. The reality is that reducing structural debts and deficits and “stimulus debts” is easily done without any significant deflationary effects. In...

Deposit insurance is beneficial in that it ensures everyone has a safe method of storing and transferring money. That is a basic human right. Unfortunately deposit insurance also supports a commercial activity, namely depositing money at a bank with a view to the bank earning interest for the...

Everyone has a soft spot for pensioners. This probably explains most peoples’ unquestioning approval of pensioners’ travel concessions. However, it is argued here that concessions do not make sense because pensioners would be better off with the cash equivalent of their concessions....

In an economy where privately created money is banned, i.e. where the only form of money is state issued money, there is no obvious reason why interest rates would not settle down to some sort of genuine free market level. On the assumption normally made in economics, namely that GDP is...

The majority of the money supply is issued by private banks, not central banks. However a system that restricts money creation to central banks has been advocated for many years by leading economists. There is no reason interest rates would not be at some sort of genuine free market rate under...

There are two main forms of money: state issued money (so called “base money”) and money created by private banks. It is perfectly feasible to have either type of money predominate and in most economies nowadays, private money predominates. Introducing private money to an economy which uses...

There is a glaring flaw in using artificial interest rate adjustments to regulate demand: the GDP maximising rate of interest is presumably the free market rate, thus in order to maximise GDP, artificial interference with interest rates should be minimised. That in turn means demand is best...

The arguments for government borrowing do not stand inspection, thus the effect of such borrowing is to artificially raise interest rates above their free market level. Since GDP is maximised where prices are at the free market level, absent good reasons for thinking otherwise, it follows that...

Most of the money in circulation is created by commercial banks, and it is precisely that form of money creation that explains most bank failures. In contrast, full reserve banking is a system under which that form of money is banned: all money is created by the central bank. There is a very...

One of the main activities of banks is accepting deposits, lending on most of the money concerned, while telling depositors their money is safe, which it quite clearly is not, because loaned on money is never totally safe. That is fraud: indeed when any other financial institution does that...