Increasing the Money Supply

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An alternative method of increasing the supply of money. Read more at http://stableproductivemoney.wordpress.com/2009/03/24/a-better-way-to-increase-the-money-supply/

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Increasing the Money Supply

  1. 1. Increasing the Money Supply without creating loans Kevin Cox April 2009 http://www.linkedin.com/in/kevinrosscox
  2. 2. <ul><li>No inflation </li></ul><ul><li>Fewer asset bubbles </li></ul><ul><li>Quarantining of economies </li></ul><ul><li>Creation of community infrastructure without loans </li></ul><ul><li>Socially equitable </li></ul><ul><li>No cost to the government </li></ul>Outcomes
  3. 3. Creating a Loan $$ Money on deposit in bank Asset of $$ Value Borrower Bank
  4. 4. Creating a Loan $$ Money on deposit in bank Asset of $$ Value $$ Mortgage on Asset $$ Money on deposit in bank A Borrower Bank
  5. 5. Paying back a loan $$ Money on deposit in bank Asset of $$ Value $$ Mortgage on Asset $$ Money on deposit in bank A $$ Money buys or builds a new asset $$ Money paid back from asset earnings Borrower Bank
  6. 6. Paying back a loan $$ Money on deposit in bank Asset of $$ Value $$ Mortgage on Asset $$ Money on deposit in bank A $$ Money buys or builds a new asset $$ Money paid back from asset earnings Borrower Bank
  7. 7. Creating new money with a Loan No money on deposit Asset of $$ Value $$ Mortgage on Asset $$ Money on deposit in bank A $$ Money buys or builds a new asset $$ Money paid back from asset earnings Borrower Bank
  8. 8. <ul><li>Most loans purchase existing assets </li></ul><ul><li>New money can be used as collateral for another loan </li></ul><ul><li>Interest is paid on new money before the asset exists to generate interest </li></ul><ul><li>When assets reduce so too does the ability of banks to loan money. This results in a credit crunch. </li></ul><ul><li>Target inflation or devaluation of money is government policy </li></ul>Issues
  9. 9. Creating new money without a Loan Reserve bank creates Rewards Rewards given to population Citizens Reserve Bank
  10. 10. Creating new money without a Loan Reserve bank creates Rewards Rewards given to population Citizens Reserve Bank Rewards buys or builds a new asset
  11. 11. Creating new money without a Loan Reserve bank creates Rewards Rewards given to population Citizens Reserve Bank Rewards buys or builds a new asset Reserve bank removes restrictions on Rewards turning it into regular currency
  12. 12. Energy Rewards Market Place Sellers products must reduce ghg emissions Buyers have both Rewards and normal money Buyers Sellers Rewards given to those who consume less energy or whose activities produce fewer emissions Rewards money restrictions are removed once sellers products installed Rewards can be sold at a discount Sellers specify how reductions in ghg are to be measured Products must be investment and must be new Rewards attract no interest
  13. 13. <ul><li>Direct way to create money </li></ul><ul><li>Asset always created </li></ul><ul><li>Type of asset created specified </li></ul><ul><li>Interest only paid once asset is created </li></ul><ul><li>No assets required for collateral against a loan </li></ul><ul><li>Governments remain in control of increase in money supply </li></ul>Differences
  14. 14. <ul><li>No inflation </li></ul><ul><li>Fewer asset bubbles </li></ul><ul><li>Quarantining of economies </li></ul><ul><li>Creation of community infrastructure without loans </li></ul><ul><li>No cost to the government </li></ul><ul><li>Socially equitable </li></ul><ul><li>Minimum of regulations </li></ul>Outcomes

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