The Solution Begins With Glass Steagall

If Positive Money is not the answer, what can we do? The solution is actually not that hard.

We must begin with full Glass Steagall style banking separation now, today. Not this ring fencing nonsense being pushed by Mervyn King and George Osborne.

An analogy suggested to me, which I think is perfect, is to compare the financial system to a ship: naval architects invented watertight compartments in order to stop the ship sinking when holed. Full separation of retail and investment banking is equivalent to the watertight compartments and is the only way to guarantee the ship won’t sink. The ring fence idea is not watertight - there’s a gap at the top, just like the unsinkable Titanic.

If we were to separate the retail and investment banks in this way, the next step should be to look at the legitimacy of the “national” debt outstanding. I think we would find ourselves in the position that we could class 95% of the debt as gambling debt which we do not honour, and as a result of Glass Steagall, we could do that quite safely without risk to the economy or the retail banking sector. The investment banking sector would be permitted to sort out its own problems at this point. This is their biggest fear.

Then, as Positive Money demands, we look at how money is created, and (re)claim that process as a sovereign act. Then perhaps, with the correct consideration about how that was done, we would find we have no shortage of money to rebuild the nation.
Since as a result of writing off illegitimate national debt we are now free of all the interest payments to City of London parasites, we can use our new sovereign capability to create interest free money to rebuild the nation beginning with the real economic infrastructure we need to support a healthy economy - power, water, transport, plus health and education. This new credit would be issued in the form of loans to companies in the private sector, at a very low interest - repayable to the nation, not a bank. This credit would only be used for very large scale productive activities which become the driver for the wider real economy.

There will still be some pain for us - the small matter of a £2 trillion hole in the public sector pension pot, and a similarly sized hole in the national pension pot that we are all entitled to tap into. This money was stolen by the Blair/Brown governments. We also need to protect private pensions, currently invested in the global casino and losing money hand over fist, and savings.

Somewhere in there we need to shut down this parasite called the “Bank of England” which, as already discussed, is nothing whatever to do with England or Britain. Instead we would set up a national bank operating in the national interest, with full oversight and accountability.

And finally, we need to sort out the retail banking sector itself. For this we need a Lawful Bank.