In this issue of AlJazeera’s “Counting the Cost” the current system of money is explained and reveals some interesting facts:
Only about 3% of all the money in circulation is created by the central banks. The rest is created by the banks upon issuing loans. So basically the banks can create money out of nothing and as a result the central banks lost control over the system.
It is also noteworthy that we can’t repay the debt, simply because as a result of this system there is more debt than actual money.
The system has lost its accountability. If the bets of the banks go well, they make a fortune, if they don’t the tax payer bails them out. Its maybe the only business in the world, where nothing can go wrong and this, of course, has a large impact on how banks handle their risks.
Maybe, we have to go back to a local bank system, which again restores accountability.
Finally, its not all about the banks, also we as citizen of our respective countries should again learn to live within our means. We should start to live the life we can afford and not leverage. Do you carry any credit card debt? That may very well be the beginning of a what ends in a financial crisis.