{"id":2954,"date":"2016-12-07T00:00:00","date_gmt":"2016-12-06T11:00:00","guid":{"rendered":"https:\/\/ourplanet.org\/don-richards-our-parasitic-banking-system-makes-its-money-by-getting-people-into-debt\/"},"modified":"2023-05-11T19:15:31","modified_gmt":"2023-05-11T06:15:31","slug":"don-richards-our-parasitic-banking-system-makes-its-money-by-getting-people-into-debt","status":"publish","type":"post","link":"https:\/\/ourplanet.org\/greenplanetfm\/don-richards-our-parasitic-banking-system-makes-its-money-by-getting-people-into-debt\/","title":{"rendered":"Don Richards: \u201cOur parasitic banking system makes its money by getting people into debt!\u201d"},"content":{"rendered":"

Each time a bank makes a loan, it essentially creates money as debt. <\/strong>\n<\/p>\n

This system results in problems such as increasing levels of household debt and inflating property prices.<\/p>\n

It ensures a rapidly widening income gap.<\/p>\n

In New Zealand we are allowing our children to go into debt slavery!<\/p>\n

First they have student loans; then they may have a mortgage, and then they are expected to save for their retirement.<\/p>\n

If we continue with this system we will fail as a society.<\/p>\n

In this interview Don Richards, co- founder of Positive Money New Zealand, talks with Lisa Er about the problems and the solutions.<\/p>\n

Positive Money New Zealand began when Sue Hamill and Don Richards had the current debt based system explained to them in 2010, while watching, \u201c Money as Debt<\/a>\u201d. When they learnt that New Zealand operated under the same system - they customised the UK campaign to the New Zealand
\n situation.<\/p>\n


\n \n<\/p>\n

Don explains how new money is introduced into the economy by private banks as loans and is shown by water coming though the tap. <\/p>\n

As they create the money themselves, the only constraint is people\u2019s ability to take on higher and higher levels of debt. This created money distorts the
\n property market and allows house prices to increase year in and year out, irrespective of demand.<\/p>\n

Banks make enormous profits from money creation \u2013 more than $5,000 million dollars each year - $10 million dollars a day and most of that money disappears
\n overseas. Imagine what we could do with $10 million dollars a day. It is a huge drain on our economy. <\/p>\n

There is however a bigger problem. When people repay their loans, that money disappears from the economy, which is represented by money going down the
\n drain. <\/p>\n

Loan money that is repaid to the banks cannot then be lent out again because as the original loan money was created from nothing it must return to nothing.\n <\/p>\n

In banking terms money is \u201cdestroyed\u201d when people repay loans. This is ridiculous and is probably what the former governor of the Bank of England, Sir
\n Mervyn King, was alluding to when he said \u201cOf all the many ways of organising banking, the worst is the one we have today\u201d.<\/p>\n

For our economy to work, more people must get into debt than get out of debt.<\/p>\n

In times of recession, people take out fewer loans as confidence in the future declines, and more people repay their loans. The banks also get nervous
\n as their confidence in people\u2019s ability to repay loans diminishes and they lend out less money. <\/p>\n

Governments make matters worse by introducing austerity measures, cutting back on their spending. This further reduces the amount of money in the economy,
\n prolonging any recession.<\/p>\n

When confidence picks up, people take on new loans faster than the old ones are repaid, banks become bolder and lend more and the government spends more,
\n creating a boom. This is the boom and bust cycle which is an artificial construct based on a flawed monetary system.<\/p>\n