• Our current system shows that digital money does not have intrinsic value
• Money as Debt - video by Paul Grignon (Jeff says fractional reserve explanation is faulty)
• We must have confidence that money is backed by productive capacity.
• Commercial banks create money out of nothing -- but you must repaythe loan by real world effort.

5. Unit of account: a social convention.
6. Money: commodity or simply public utility (infrastructure)?

• The fallacy of the gold standard.

7. Inflation: New money does not necessarily create inflation.

• PMC advocates the creation of debt free money to fund beneficial programs.
• Concentration of wealth aggravated by tax structure.
• A universal basic income (NB -- created without incurring bank debt) would be spent back right away into the economy.

8. Commercial exchanges use the unit of account, not barter per se.

9. Significance of the definition of money.

RESOURCES
Videos
Credit to: John Turmel: the argument that money printing is not, in and of itself, inflationary.
Turmel video: Debt Money is Good
Paul Grignon (video): Money as Debt
Books
David Graber: Debt: The First 5000Years
Stephen Zarlenga: The Lost Science of Money
Website
Michael Hudson, economist 

1. Commercial banks, central banks (e.g., Bank of Canada) and state or national banks.
2. Federal Reserve System vs Bank of Canada
3. Central banks (including BoC) does not hold on to retained earnings: it returns them to government.
4. Bank of International Settlements dictate rules for all central banks.

LOANS PROCESS
5. Money creation at the retail level (e.g., mortgage loans): a mere keyboard entry, repayable in real money earned.
6. Fallacy of loans as drawn from depositors’ funds: a widely held misconception, even among experts.
7. Fractional reserve lending: an antiquated notion.
8. Capital adequacy requirements: a seeming deliberate obfuscation: a veil of complexity.
9. FI’s reliance on probability estimates, but they are not exactly transparent.
10. BoC does publish material and has some degree of transparency.

PROFIT MOTIVE
11. The decision process for business loans is primarily conditioned by the banks’ profit motive.

INTERACTION BETWEEN CENTRAL and COMMERCIAL BANKS
12. The central bank is either:
- creating money for the government, or
- purchasing securities in the secondary market (government-issued securities bought and sold by large institutions, pension funds, and commercial banks).
13. Securities are issued by fed government when it has a shortfall in funding the budget.
14. Provision in legislation for either commercial banks or the central bank to create money ex nihilo is either non-existent or difficult to find. The officials deflect the question.

15. Summary

Argument of PMC: While there is nothing wrong with corporations making profit to create wealth in a free market system, the objection is that the commercial banks have appropriated what we would consider to be a public utility or vital public infrastructure, namely, money creation.

RESOURCES
Jeff’s video and pdf files on money creation; in particular, scroll to ‘capital adequacy requirements’.

Authors mentioned:
Eustace Mullins - The Secrets of the Federal Reserve - The London Connection (orig. published 1952; 1993)
Stephen Mitford Goodson - see next

LINKS
Here is a fairly comprehensive set of resources on the late Stephen Mitford Goodson, finance expert, historian, author, money reformist and ex-director of South Africa Reserve Bank.

Stephen Mitford Goodson (1948 - 4 August 2018)
INTERVIEWS
in chronological order:
Podcast: Andrew Carrington Hitchcock discussing the circumstances of Goodson’s death. September 2018.
Podcast interview with Andrew Carrington Hitchcock Aug 2017 (detailed)
Video - televised interview on ‘Straight Talk’ in South Africa 16 July 2017
Podcast interview with Dr Peter Hammond (Hitchcock’s frequent guest) 20 December 2016
Podcast interview with Deanna Spingola (Republic Broadcast Network) 01 Oct 2012

PUBLICATIONS
Books
Inside the South African Reserve Bank: Its Origins and Secrets Exposed
A History of Central Banking and the Enslavement of Mankind 
The Genocide of the Boers
Adolf Hitler and the Third Reich
Hendrik Frensch Verwoerd South Africa's Greatest Prime Minister
Rhodesian Prime Minister Ian Smith The Debunking of a Myth
General Jan Christian Smuts The Debunking of a Myth

Search author at these sites:
https://www.blackhousepublishing.com/
https://www.barnesandnoble.com
https://www.abebooks.com
https://www.amazon.com/

Articles (several) - search at:
https://barnesreview.org/

A History of Central Banking - unofficial audiobook with commentary - search at:
https://www.bitchute.com/
https://odysee.com/

RESOURCES
John Turmel video: Big Lie of Economics: Inflationgate Hides Shift B Inflation.
Eulogy for author mentioned: Bernard Lietaer (d. 2019, age 76).

15. The BoC acquires securities, i.e., aborbs interest-bearing bonds in return for (newly created) money paid to the Fed Gov. The Fed Gov holds the newly created money in its Consolidated Revenue Fund (actually held within the BoC itself). In the BoC ledger, the bond is listed on the Asset side, while the money created for government is listed on the Liability side of the ledger. 

16. On the other hand, the PMC Plan suggests: issue money without a debt instrument being tied to it. The BoC could simply type the numbers on a keyboard and establish the money in the government’s account, without the need for the fed gov to repay either principal or interest. This would replace the conventional practice of funding the budget only through taxes and borrowing.

17. People can’t seem to get outside this box that money creation must be tied to a debt instrument.
18. Primary market: any interest that the BoC makes on the bond goes straight back to the fed gov. It does not hold retained earnings.
19. The PMC proposal is commendable in that it advocates a gradual, incremental transition. 

20. Jeff’s suggestions: revise rules for the BoC Board of Directors: Directors should hold office for an extended period; advocate more effectively for their regional constituents, and undergo training to understand monetary creation and the true causes of inflation. 

21. What about the approach of setting up alternative community currency systems? 

22. Alternative community currency systems can work, but they always seem to suffer problems of scalability and acceptance; also, they would eventually require a central authority to interact efficiently.

23. The existing infrastructure of fiat currency is perfectly adequate; it’s simply a matter of using it properly. 

24. Are the institutions reformable? Jeff concedes it will take numbers... but the BoC is already demonstrating the proof of concept. Rather than using exotic financial instruments (derivatives, etc.) let’s experiment with the functionality that the BoC already has at its disposal.

25. Comparison with Ellen Brown’s solution of public banking. The Bank of North Dakota is a great practice -- but it still uses the debt instrument for money creation. A low rate of interest can be construed as a mere service charge, but eventually, the PMC advocates money creation on a debt-free basis altogether. The public financing utility should be removed from the private financial sector.

RESOURCES
Jeff’s suggestion: go to the Progressive Money Canada homepage: 15 minutes to read the material and watch the videos: ‘transitioning to a better money system’ and ‘banking for a better world’.

The other video Jef mentioned: Modern Money, Forget Theory, Part 2

The players:
TAXPAYERS/CONSUMERS
FED GOV
BANK OF CANADA (central bank, a crown corp.)
COMMERCIAL BANKS (private shareholders)

Interactions:

PRIMARY MARKET

Fed Gov issues securities (bonds, treasury bills) in order to get cash to pay for govt programs.

Securities pay to the holder both interest and eventual principal repayment.

They are acquired by the BoC, using MCAAKE (trademark!) = money created as a keyboard entry.

Interest earned on securities held by the BoC (making up usually 13% of total issue) is returned to the Fed Gov.

SECONDARY MARKET

The Bank of Canada first absorbs all marketable securities.
The BoC then auctions off to institutions incl. commercial banks the securities not held by itself (i.e., about 87% of issue).
The commercial banks are allowed to use MCAAKE to complete these purchases.
The BoC holds the money it receives from commercial banks in accounts called “settlement balances”.
The BoC pays interest on the settlement balances, using its own MCAAKE.
Quantitative Easing (QE): significantly increased bank liquidity facilitated by the BoC.

LOANS MARKET

Commercial banks lend to creditworthy consumers and businesses at interest, using MCAAKE.
Problem: taxpayer/consumer is on the hook to pay interest using real money earned over time.
In the aggregate, the amount of money in circulation is insufficient to allow debtors to pay the interest.

2. Is the PMC proposal inflationary?
Reflexive talking point: “government spending causes inflation.”

3. Major causes of inflation in recent times.

Energy prices; downstream effects and artificial rises; QE and stock market speculation; real estate institutional purchases. Govt relief money: minimal effect on inflation. “Corporate greed” is really a result of the institutional set-up.

4. Hyperinflation: essential causes.

5. Straw men and the real problem.
We point to the structural setup that channels wealth from the general populace into private hands.

6. PMC - a (truly!) modest proposal: 
a. already exisiting practice; 
b. gradual in implementation; 
c. requires only a mandate from parliament;
d. the Bank of Canada Act in its preamble has not changed.

7. COMER inititative.

8. Jeff says: please see website resources, where you can see plain language explanations.

RESOURCES

BoC pdf: Settlement Balances Deconstructed June 2022

Progressive Money Canada:
money creation page
hyperinlfation page

To continue -- others not discussed yet:
6. Joseph Huber; Ben Dyson: Sovereign money and Central Bank Digital Currency
7. Paul Grignon and self-issued credit, perhaps based on time units 
8. Ray, Mosler, Kelton, MMT Modern monetary theory
9. CH Douglas and social credit; applications in Japan, Alberta, British Columbia
10. Bitcoin and crypto currency
11. Possible response of central bank: Central Bank Digital Currency (CBDC)
12. The PMC Transition plan applicability in the US and elsewhere.

2. Interest rates explanation:
a. TheBank of Canada sets the overnight rate (a range, whose low end is the policy rate). The commercial banks use this rate to settle their accounts daily among themselves.

b. Bank of Canada website: “The public doesn’t access this overnight market to borrow or lend money.”

c. Rather, the policy rate is the benchmark for the much higher mortgage and other loan rates to the public.

3. Settlement balances (approx $400 billion[?]) earn interest for commercial banks – before, at 0.25%. Now, they are paid at the policy rate 
4.25% (as of Dec 2022). How were the settlement balances established? Recall from Episode 5:

Jeff: Correct.
Ed: ... the amount that it used to purchase the security, and then the entities that sold it to the Bank of Canada the securities in the first place, these various institutions, banks and so on, they say, hey, you have to pay interest on [the amounts for] these bonds that we sold you. So the Bank of Canada says, okay, that's no problem. I'll create money out of nothing and pay you interest and provide you with all kinds of liquidity on these settlement balances that you have on account with us.

Jeff: Right.

Ed: The crucial thing about that is that the commercial banks exercise their privilege to create money out of nothing in order to purchase those bonds, and then they are due back these principal and interest payments [correction: settlement balance account interest payments].

Jeff: Correct.

4. PMC does not currently have a solution to the problem of how to finance house purchases, but acknowledges that this is one of the many important areas that must be addressed by reforms.

5. Contrary to textbook implications, the requirement for “reserves” disappeared (back in 1994).

6. It was the Canadian Centre for Policy Alternatives that blew the lid off the fallacy that Canadian commercial banks did not require government bailouts in 2008-2009 -- they most certainly did.

7. Capital adequacy requirement rations are in place, but a) there is a time lag to accomplish this, and b) these obscure and seemingly arbitrary requirements are determined by the banks themselves in a system that, for them, is self-serving.

8. In the “circular flow of income” diagram, are banks really just innocuous “intermediaries” in the financial system?

9. These and similar misconceptions permeate the higher education economics materials.

10. Evidence for deliberate corruption of academic curricula: the “philanthropic” foundations; cultural Marxism; American imperialism.

11. Evidence of moneyed interests at the root of major historical developments makes the case: monetary reform is perhaps the essential and most underrated issue of our time.

RESOURCES
Points 11, 12:
Norman Dodd  Foundations: The Enemy Within (historical intro + interview; control of education starts at 51:40)
William Lind  Political Correctness and Cultural Marxism (documentary)
Yuri Bezmenov  Psychological Warfare, Subversion and Control of Western Society (lecture)

2. Circulation vs saving. Is it correct to incentivize keeping money in circulation (example of Wörgl, Austria: a time stamp on the scrip denoting a diminishing value of the money over time), or is it better to encourage saving? PMC supports savings, as it wants to empower people in the creation and distribution of money.

3. Quantity of issue. How does the quantity of money, and its point of entry into the economy, get decided under the PMC plan? Jeff wants to empower the board of directors of the Bank of Canada, as each is already a regional representative.

4. Gold standard. Jeff has refuted already in an earlier episode the Austrian idea of the necessity for hard money; i.e., a gold standard. And yet we see reports of central banks, notably China (but not the Bank of Canada), acquiring huge quantities of gold. Does the gold standard actually make sense after all?

5. Usury vs interest. Is there a difference? Is it legitimate to charge interest for funds lent to build a productive business? PMC says that as long as there’s contracts by mutual consent, it’s all fine. The current banking system limits choice.

6. Financialization of the economy: the upper loop (exotic financial products) drains wealth from the bottom loop (the real productive economy). PMC says we do not need the upper loop.

7. Schools of thought in monetary reform: statist, quasi-statist, and populist/decentralized. Dick Eastman and E.C. Riegel, for example do not like the idea of state control at all in spending decisions.

8. UBI vs Dividend. The Universal Basic Income is actually funded by taxation, but the CH Douglas Social Credit ‘dividend’ is public money created and distributed by a state bank. PMC says: the dividend and the centralized spending (the first phase of the PMC plan) could run concurrently.

9. Does PMC opt for state control? Not really! In the PMC proposal, the government would not have a free hand. We would move incrementally towards an altered parliamentary system where the public has much more significant and direct decision-making power by referendum. 

RESOURCES
Point 4:
realcurrencies.com Anthony Migchels
Our speculation about central bank gold acquisition seems validated in this article by analyst Pepe Escobar:
Global South: Gold-Backed Currencies to Replace the US Dollar
Point 5:
Barbara Tuchman A Distant Mirror
Point 7:
Dick Eastman (interviews) vimeo channel