Money and Banking:

PDF Money and Banking

Money and Banking:

In The Web of Debt by Ellen Hodgson Brown (2007/8), referring to the United States, Brown asserts that in the US, “the power to create money needs to be returned to the government and the people it represents” and as a result “Federal (national) debt could be paid, income taxes could be eliminated and social programs could be expanded; and this could all be done without imposing austerity measures on the people or sparking runaway inflation”

In 2017, many nations had Net National Debt near or more than 100% of their GDP. Japan stands out with a Net National Debt of 153% of its GDP. Norway, on the other hand had negative Net National Debt (ie a Net National Savings) of 90% of its GDP. Interestingly, South Africa allegedly had a national debt of 50.1% of its GDP per the CIA and 47.9% of its GDP per the IMF, but now apparently, is budgeting for a national debt approaching 100% of its GDP by 2024 (see here), this eruption of debt is expected in only seven years since 2017. That is alarming to say the least.

The purpose of DDF Money and Banking Policy is to emulate, as near as possible, Norway’s performance, and as little as possible, Japan’s.

Open market operations introduce money into the market or remove money from the market. A reserve bank will buy government stocks from banks and others, for cash, thus increasing the money supply, or will sell government stocks to banks and others, for cash, reducing the money supply. The government stocks (usually interest bearing bonds) are effectively money borrowed by government from or lent to the market. The incentive to hold bonds is the interest they earn.

This raises the question of what is the source of money (I.e. how is money created?) When government (or anyone) goes to the market for loans, banking institutions do not rush into their vaults and collect the amount of the loan and give it to the borrower, they write a journal entry, saying, debit the borrower for an interest bearing amount, and credit the borrower’s current account by the same amount. Thus they create from nothing, at the cost of a journal entry, any sum they want, be it a Million, a Billion or a Trillion or however many of those multiples the borrower wants to borrow and the lender is prepared to lend. The point being, that government (or others) borrow money for which there is no cost and pay interest to the lender for that privilege. This has to be the biggest financial confidence trick in mankind’s history.

While the lenders create the money by lending, they do not create the interest and this creates a permanent shortage of money and ongoing cycles of inflation

To fix this, one can either issue the money, free of interest, as needed, to meet the needs of a society, or one can vest the debt creation of money in the hands of government and or a Sovereign Wealth Fund, the interest being for the credit of taxes and or public spending and or investment in and for the public good.

So, any government which can print interest bearing bonds can also print non-interest bearing money, thus by-passing the financial sector and avoiding the burden of debt and of interest, which burden is ordinarily paid for by the tax-payers, or, more correctly, by their children or even their children’s children, because bonds can mature at some future date, ranging anything from 1 to 30 years from the date of issue.

To reform this system of Debt based money or to adapt it for the benefit of society as a whole, the DDF propose the following:

Money creation will be vested in the South African Reserve Bank (SARB), which will be wholly owned either by the state, directly, or by the Sovereign Wealth Fund. The DDF’s preference is that the Sovereign Wealth Fund (a proposed Chapter Nine institution) should wholly own the SARB.

The remit of the SARB shall include being the only institution able to create and control the availability of money, in whatever form, for use within South Africa, and shall do so to benefit the South African economy and the greater South African society. While profit will be possible and indeed be encouraged in the money affairs of South Africa, that profit remit shall not be the primary objective of the monitory systems of the country.

The SARB shall set the upper limits of all interest rates, and as part of controlling the money supply, the availability of credit to subsidiary players in the money market (viz. Commercial, industrial and community banks and their clients).

The SARB shall determine the interest rate at which it will advance money to Secondary players (Registered Banks) in the money market. This will be the Primary Bank Rate (the Prime Rate). The SARB shall thus also control the interest rates at which subsidiary players can advance money to their clients, as follows.

The SARB shall set the maximum mark-up possible in secondary and tertiary financial transactions. The maximum mark-up charged by secondary players may not exceed 100% of the Prime Rate and the mark up charged by tertiary players may not exceed 100% of the rate charged by Secondary players, respectively.

Thus, if the Prime Rate charged by the SARB is ½% per annum, the Secondary players (registered banks) cannot charge more than 1% pa on loans advanced to their clients, and their clients (Registered Financial Institutions or private individuals), in turn, may not charge interest on loans advanced to their clients greater than 2%.

The absolute maximum lenders may charge may not exceed Prime + 100% + 100%, thus at prime of 1/2% this maximum would be 1/2% +1/2% + 1%. A secondary lender may not charge a mark-up equal to the sum of the secondary and tertiary rates, nor in effect, act both as a secondary and a tertiary lender to any client.

These numbers are provisional and will be subject to negotiations between the market players, from time to time.

Similar restrictions will apply to the rendering of contract, service and administration fees or any other non-interest charges. Thus the maximum fees charged by lenders to their borrowers shall be set by the SARB and may not be charged more than once for any given debt. Short term debts which are rolled over in the guise of new debts shall be deemed to be a single debt for the purposes of fees and shall not accrue multiple charges.

Secondary and Tertiary lenders cannot advance more funds than they have at their disposal, whether arising from SARB issues and or from investments and or from deposits from their clients and or from advances from their suppliers. Thus Secondary and Tertiary lenders cannot create money in any form whatsoever. Secondary and Tertiary financial organisations must at all times operate as solvent institutions, that is, they may not advance more moneys than they have on deposits, as above. In effect, this would end the system of fractional reserve banking.

As the SARB shall at all times advance or issue moneys that already exist or which it creates for those purposes, the SARB shall, by definition, always operate as a solvent institution. Following on from that, government and therefor the SARB should be constitutionally prohibited from borrowing money for any purpose whatsoever.

The SARB shall advance to its secondary lenders the funds needed by them to meet their demands for credit in the normal course of business, but shall do so in order to satisfy the needs of the economy, not in order to maximise profit.

The Sovereign Wealth Fund shall acquire and own in part or in full, some commercial, industrial and community banks, which it shall operate on an equal footing and in fair competition with other (non SWF owned) commercial, industrial and community banks. Community banks will include specialist banks, such as but not limited to Building Societies. This adds a competitive element to the market place that is presently missing.

Commercial, industrial and community banks shall be prohibited from using client deposits as investment funds, and in effect, the said banks may not act as investment banks nor by any means at all (including but not limited to trading through subsidiary or associate business entities), bypass or negate those restrictions.

This will also impact on the interest banks and other deposit institutions will pay their depositors and have a general downward impact on all rates throughout the financial services sector.

It is anticipated that this will also reduce the rate of inflation as it reduces the cost of money and the cost of any transaction for any good or service paid for with money. This in effect will stabilise the value of money, which is normally eroded by inflation.

A subsidiary goal of these policies is to reduce inflation to zero. This of coarse will not be possible if the supply side of the economy lags behind the demand side and goods and services become scarce in the face of robust demand. So no single policy can achieve a stable economy, instead all economic policies must work hand in glove toward that goal.

What will cease is private institutions lending to the state, at no costs to themselves and at the same time at profit to themselves, which profit burden has historically and ultimately been born by the taxpayer.

The effect of this will be, in time, to eliminate Sovereign Debt and achieve the goal of having a South Africa which has a Net National Savings (like Norway’s in 2017), as opposed to a Net National Debt, like Japan’s in 2017. The ability of the economy to eliminate sovereign debt was demonstrated in the TEAL models, See here

This also means that any taxes, however collected, (under a DDF administration it would be by means of TEAL), would be used to serve the needs of South Africa and it’s peoples and not to swell the coffers of the private banking fraternity.

The goal is for South Africa to be a DEBT FREE and a TAX FREE SOCIETY.

Recent Posts

New World Order and 2021

New World Order: Globalists and Classic Socialists are saying there will be no more cash, a single world government, a single world military, a single world (Global) economy and a single world currency, and, they are not saying it, but it is a given, a single ruling elite.

That is what classic socialism and corporate capitalism want, ironic that they want the same thing. Centralised control of wealth, the means of production and the market place, and a compliant and obedient population.

The so called great reset will see all debt forgiven in return for which you lose all private property and all your rights and all your freedom and instead pay rent for everything you use or possess. Well, that would be a bad deal for everyone who has ever striven to maximise their property and minimise their debt.

The NWO want a universal basic income as a means of enforcing that compliance. They want forced immunisation (against seasonal flu, which is what covid19 is). What for? Just to boost the coffers of Bill Gates and his cronies and to subjugate the population.

I am as angry as a rattlesnake and oppose these ideas en toto..

They did not invite us to Davos. They did not ask us about their grand plans and had they, we would have said no. So now we are saying no.

In South Africa we have four vehicles to express that sentiment. Doubtless there are others.

Civics Movement of SA (Cmosa) (, promoting democracy at community level, Direct Democracy Forum (DDF) ( promoting democracy at a national level, Democratic Forums (DemForm) ( promoting Democracy at an international and global level, and Rock Solid News (RSN) ( , a news service that is not bought and paid for by the establishment.

In part, these vehicles are still being built but we want their web presence up and running for early 2021.

We want to tell the establishment that we are the 99% and they are the 1%, and they should know their places.

That is my response to the Covid19 conspiracy and the plandemic and the lock-down and the destruction of our lives, our liberty and our right to pursue happiness.

Happy New Year. May 2021 restore our lives, our liberty and our right to pursue happiness.

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