The banking fraternity likes to keep very quiet about their fractional banking system. This is how it works. First parliaments pass a law placing limits on how much money private banks are permitted to lend. Written into this law is the idea of 'capital adequacy ratio' which is then given to government as a tool for administering the law.

With a capital adequacy ratio of 10%, for instance, it is then unlawful for a bank to lend out more than £ 1 000 when their deposits are only £ 100. You thought only £ 100 got lent out, didn't you? Well that is what you were supposed to think. Baloney!

Instead of permitting banks to lend out £ 12 500 for every £ 1 000 pounds deposited, as with their present 8% fractional banking system, this ratio should be increased to 20% 'by decree'. This means the private banks could issue only £ 5 000 of deposits instead of £ 12 500, leaving the government to issue £1 500 of gold-standard coin and currency notes directly to individuals (not via companies as wages) as newly minted money to keep the economy in balance.

And if it is logistics you are worried about, then reinstate the County Mints and ask the Queen to give our Lord Lieutenants something really useful to do for a change.

Theoretically that £ 1 500 will eventually find its way back to the banks giving them another £1 500 to add to the £1 000 of deposits they had when all this started. But 'we the people' are not back where we started. With the money in the right accounts... those of the little people...there will be no capital strike.

Capital strikes are actually little different to labour strikes but are never talked about in polite company...just as rising stock market prices are not talked about as inflation but rising food prices are.

The demand from this newly minted money will be effective. No inflation, no depression and a well-overdue shift of power from money to work and from 'The Money Power' to...and here I will add just a touch of spice...to Girl Power.

We all know who is best at spending money.

 extracted from 'Through A Glass Darkly'
Stockholm, Sweden
May 1999