increasing the money supply
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Increasing the Money Supply without creating
loans
Kevin Cox April 2009http://www.linkedin.com/in/kevinrosscox
No inflation Fewer asset bubbles Quarantining of economies Creation of community infrastructure
without loans Socially equitable No cost to the government
Outcomes
Creating a Loan
$$ Money on deposit in bankAsset of $$ Value
Borrower Bank
Creating a Loan
$$ Money on deposit in bankAsset of $$ Value
$$ Mortgage on Asset$$ Money on deposit in bank
ABorrower Bank
Paying back a loan
$$ Money on deposit in bankAsset of $$ Value
$$ Mortgage on Asset$$ Money on deposit in bank
A
$$ Money buys or builds a new asset
$$ Money paid back from asset earnings
Borrower Bank
Paying back a loan
$$ Money on deposit in bankAsset of $$ Value
$$ Mortgage on Asset$$ Money on deposit in bank
A
$$ Money buys or builds a new asset
$$ Money paid back from asset earnings
Borrower Bank
Creating new money with a Loan
No money on deposit Asset of $$ Value
$$ Mortgage on Asset$$ Money on deposit in bank
A
$$ Money buys or builds a new asset
$$ Money paid back from asset earnings
Borrower Bank
Most loans purchase existing assets New money can be used as collateral
for another loan Interest is paid on new money before
the asset exists to generate interest When assets reduce so too does the
ability of banks to loan money. This results in a credit crunch.
Target inflation or devaluation of money is government policy
Issues
Creating new money without a Loan
Reserve bank creates Rewards
Rewards given to population
Citizens Reserve Bank
Creating new money without a Loan
Reserve bank creates Rewards
Rewards given to population
Citizens Reserve Bank
Rewards buys or builds a new asset
Creating new money without a Loan
Reserve bank creates Rewards
Rewards given to population
Citizens Reserve Bank
Rewards buys or builds a new asset
Reserve bank removes restrictions on Rewards turning it into regular currency
Energy Rewards Market Place
Sellers products must reduce ghg emissions
Buyers have both Rewards and normal money
Buyers Sellers
Rewards given to those who consume less energy or whose activities produce fewer emissions
Rewards money restrictions are removed once sellers products installed
Rewards can be sold at a discount
Sellers specify how reductions in ghg are to be measured
Products must be investment and must be new
Rewards attract no interest
Direct way to create money Asset always created Type of asset created specified Interest only paid once asset is
created No assets required for collateral
against a loan Governments remain in control of
increase in money supply
Differences
No inflation Fewer asset bubbles Quarantining of economies Creation of community infrastructure
without loans No cost to the government Socially equitable Minimum of regulations
Outcomes
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