Recovery and My Arse

I keep seeing cries for economic recovery. ‘If only we can recover’, they wail, ‘everything will be alright! We must work towards a recovery!’ No it won’t and no we shouldn’t. Here’s why.

At the moment, and for some time now, our continuing money supply has depended upon us tacitly condoning bank fraud. The only legal way money can get into the economy is for banks to create it – out of nowhere by using their computer keyboards to credit accounts – and stick interest on the top, all the while pretending the money appearing in thoseĀ  accounts as a consequence is existing money that’s being loaned.

They make a lot of profit from this dishonest arrangement and, as I understand it, that’s fraud.

In the period before the 2007/2008 crash, banks were creating money into the economy like billyho, which means they were indulging in a lot of fraudulent activity. Now things have changed down several gears, the banks are only occasionally fraudulently creating new money, pretending it’s loaned, and profiting from the interest earned on it.

The economy is shrinking as a consequence. The cry, from those who don’t understand how our economy works (I’m including most politicians in this, of all parties), is that we must increase bank lending once more, or what they thought was bank lending, which we know to be in reality bank creation of money – at interest.

in other words, we go back to the bad old days, where the only way we can get money into the economy is to “borrow it” even in the sure knowlegde that in the long term we’ll never be able to pay it back.

So, even if the banks did go back into fraud overdrive and created loads of money actually into the working economy so there was plenty to go round for a short time, because we have to pay them interest on this made-up money we’d be a hell of a lot worse off in the long term.

And anyway, such a situation is, ahem, mathematically unsustainable in the long run so eventually our economy would seize up anyway.

Is this what we want?

No it isn’t, so please let’s stop all this nonsense talk about any ‘recovery’.

 

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