Two weeks ago today I was enjoying a Private Members Tour of the Houses of Parliament. The sense of history and steadiness of our Parliamentary institution hit me; that for all the fads and passing modern views, there is something solid about our rule of law and semi-open elected members debate. Somehow the outlook for our Great British future didn’t seem so bleak while standing in the Queen’s Robing Room, as it does reading the daily broadsheets back home in Devon.
But maybe I was wrong. Maybe that’s exactly the problem, that standing in the Houses of Parliament underneath ancient portraits of Kings and Queens, one stands in an institutional bubble, quiet and ethereal above the noise of the masses outside the high-level security and walls. I have now lived in Devon for 14 years, when once I lived, studied and worked in the capital. And it is true to say that no-one who has always lived in the metropolis can faithfully represent someone who has always lived in the countryside. How can a society that values designer clothes and £2500 gold phone covers, represent the down-to-earth hard working communities across our nation’s counties, north and south.
So the following figures – although shocking – are actually not a surprise to me. “Money creation affects almost every aspect of our lives and is directly connected to almost all public policy, including public and private debt levels, house prices, and rising inequality, but it’s very poorly understood. A recent poll found that 7 out of 10 MPs believed that only the government can create money, when in fact 97% of money is created by banks when they make loans, as recently confirmed by the Bank of England.” (Positive Money Press Release)
You, our clients, are way more educated and awake as to the origins of money, the fiat currency system and the traditional value of Gold and Silver than the average MP. The British Parliament will debate ‘money creation’ for the first time in nearly 200 years next week, with MPs across most of the UK’s political parties expected to make a contribution. The debate, entitled ‘Money, Creation and Society’ will be pondered on November 20, hosted by a number of high profile MPs, including Green party MP Caroline Lucas and UKIP MP Douglas Carswell.
“Positive Money, an organization that wants to “democratize money and banking so that it works for society and not against it” lauded the debate as a “significant breakthrough.” They say it will create “an opportunity for MPs from all parties to learn about the issue, ask questions and deepen their understanding” of alternative financial systems. Positive Money has encouraged MPs to ask questions about the “creation” of money in central banks, how it affects the wider economy, including housing and welfare, and how much power Parliament should have over the printing of money. According to the group, “most MPs lack a sufficient understanding of money creation, leaving them ill-equipped to legislate on important policy.” The debate’s announcement comes as the government launched a formal consultation this week over the use and benefits of alternative currencies, especially electronic money such as Bitcoin and Litecoin. According to a statements made by the Treasury on Wednesday, the government are examining whether alternative money could be a source for jobs and future economic growth.”
In our opinion the most obvious solution is right under MP’s noses – literally. Gold and Silver. The amount of Gold decorating the Houses of Parliament inside is enough to ensure two armed guards stand watch at all times. Admittedly, most of this Gold is found in the House of Lords rather than the more basically decorated House of Commons, clearly separating the Crown from the people. But even so, if the stats are to be believed, how is it that our elected Members of Parliament are so asleep as to the origins of our current fiat paper monetary system, when the ‘timeless’ value of Gold is literally staring them in the face?
And the really key word in the upcoming Parlimentary debate’s title is the word “Society”. If every member of the Great British Society / Public was aware of the advantages of holding physical Gold and Silver in the current monetary climate, then society could totally change the direction of our monetary system. An example of this came to mind this week as I was driving to work. Remember the time it seemed inevitable that the euro would be our currency? Remember the time every shelf, advert and restaurant menu had on it the price in GBP and then right next to it, the price in that funny little euro symbol? We were all told it was only a matter of time before we would switch. I can remember that feeling of annoyed inevitablitity and powerlessness. So I personally didn’t swap to euros and continued to use my pounds, assuming I would cling on to the end and be overtaken by the crowd going in the other direction. But it never happened. We all felt the same. We – the British public – didn’t change our pounds. We didn’t buy, order or do business in euros. And slowly the unthinkable happened. Those silly little euro signs on our supermarket shelves and petrol stations started to go away!! And now I can barely find them.
I believe in the public taking up their constitutional right and taking part in debates, voting and together changing the way Great Britain is run. If we all owned Gold and Silver, like our grandparents used to, we would be well placed to weather any currency storm, plus well educated to affect the public debate and turn back at least some of what has gone wrong with this country.
And so we are faced with a historic debate. “Speaking to RT, New Economics Foundation senior economist James Meadway said the last time the issue of money creation was debated in parliament was in 1844, where politicians “stopped banks issuing their own currencies,” leading to an economic crash three years later.
“The crash of 2008 drummed home the point that we cannot just leave the institutions that look after our money to their own devices. How banks operate, and how money is created and supplied by them, are so central to the economy – but so dysfunctional – that widening public debate and discussion of the money system has to be a good thing,” he said.
“That said, the last time Parliament debated money creation, it managed to come to entirely the wrong answer – following conventional economic theory at the time, Robert Peel’s Bank Charter Act in 1844 stopped banks issuing their own currency. “When a banking crisis erupted anyway in 1847, the Act had to be suspended to allow the system to continue functioning at all.” Meadway urged politicians to ignore modern “orthodoxy” and be “more prepared to think about alternatives.” The debate comes as senior economists warn the UK’s economic recovery is “slowing down” citing risks from a flailing Eurozone and the UK government’s austerity program.” For further reading on this, please see my recent article on Deflation.
We believe the answer is the same as it’s always been – to link the economy to the Gold Standard, and to make sure you, your family and friends own Physical Gold and Silver. Prices are at an incredible position at the moment, a real buying opportunity. There is nothing worse than realising too late what the answer was. We can see what the answer is now, because history in every economic crisis teaches us the same conclusion. Gold and Silver are true money, currenices are not. Our clients know this but let’s hope next week our elected MP’s are reminded of this too.