Money - I have a theory about that

Maybe we have got everything the wrong way round? Incessant publicity or news mongering these days insists that financial markets want Europe to fix things. It seems that we have all borrowed too much, but the corollary of that is the someone lent us too much, and who was it? The banks!

So maybe the right way forward is for Europe to fix the banks? And there is a lot to be said for that. After all money belongs to society, it is something we have created to allow us to trade. It is not a plaything for banks to make their financial instruments, or products. Finance is after all a service not a productive industry, they have no such things as products, and should only provide services. And they are not very good at that.

Most of their business just involves swallowing up capital, making it go round and round faster, if the capital becomes too scarce then they avidly look for other ways to get or create some. For example, inflated house prices, they get millions on their books in assets by promoting higher and higher, bigger and bigger house prices and bubbles. Credit cards and loans and sharks - again a licence to print more money, and they regularly lend 10-50 times more money than they actually have, its called leverage.

Then if they make a mistake and some of their loans go bad, that is we don't pay up, then they bully us for more money saying their will be a global crash. Maybe but it might be just what is needed. The problem is how to protect you and me and our savings, no problem to write off our debts! Thank you!

Its just that the banks take little or no risk on their loans, you buy a house, it belongs to them as they just advanced the money on a loan and kept the deeds. You start to pay it back. Now the market in houses falls and your house is not worth what you paid for it - more common to day than you might think - you are in what they call negative equity, you do not have the asset value to pay off your loan. But the banks has lost nothing, they still have the value of the loan you signed up to. Surely they should take a risk too? If the house market falls, their assets should also have lower value? No?

Money I repeat is ours not the banks. We earn it, we spend it, they just facilitate it going round. The huge debts built up today are a misuse of money and entirely the banks fault.