Britain and banking: Back to the 1830s
2012 07 12
By Lee Williams | Independent.co.uk
Unparalleled levels of imprudent lending; corrupt banking practices; soaring inflation and rising unemployment; government bank bailouts and an economy dependent on increasing levels of debt to sustain growth. Sound familiar? It would have done to Britons in the 1830s. The fact is that we have been in a remarkably similar economic crisis before and the reasons for it could be almost identical.
In Britain during the early 19th century, paper money was not as we know it today – all reassuringly bearing the head of the Queen and the stamp of the Bank of England. Back then, the Bank of England had the monopoly on the creation of metal coins but private banks – literally – had a license to print money of the paper variety and stick whatever images they liked on it. The result of the bank’s power to print money had disastrous consequences: inflation, as too much money flooded the economy and unsustainable lending, as banks lent out more in paper money than they could possibly back up with real reserves.
George Cruikshank’s famous bank note of 1819, a comment on stringent measures to protect the paper currency by hanging forgers. (Getty Images)
When the bubble finally burst in the late 1830s, catalysed by a similar crisis in America (sounding familiar again?) the ensuing lack of confidence in the system led to a run on the banks which had to be hastily curtailed by the Bank of England bailing out a prominent northern bank (how about that one?). In 1839 a similar predicament forced the Bank of England into the ignominious position of having to borrow £2 million from France.
The problem was ultimately resolved by an act of parliament. In 1844 the Bank Charter Act curbed the private banks’ ability to create paper money and ultimately phased it out altogether. The power to create money was now solely in the hands of the Bank of England, a situation which today we think of as the norm, so much so, in fact, that money being created willy-nilly by any private organisation with sufficient (or even insufficient) funds is pretty much unthinkable.
But wait a minute, because, unthinkable as it may be, that’s exactly what is going on today. The causes of our modern banking crisis may be uncomfortably similar to what happened in the 1830s. Today it’s not paper money that the banks have a license to print, but electronic money.
Read the full article at: independent.co.uk
Barclays rate rigging crisis shows ’corruption at heart of banking’
Barclays chairman quits bank after interest rate-rigging scandal
Government by the Banks, for the Banks: The ESM Coup D’Etat in Europe
CNBC Admits We’re All Slaves To Rothschild Central Bankers Global Government
Bank downgrade "shocker" aims to plant fear & panic
More Icelandic bankers arrested
The Biggest Financial Scam In World History
Financial Collapse At Hand: When is "Sooner or Later"?
Latest News from our Front Page
Spraying Chemtrails to ’Reduce Pollution’
2014 03 11
The noxious smog choking Chinese cities is globally notorious, with photos showing the grey darkness that swallows citizens as they try to go about their lives. The thick clouds sometimes turn day to night, and wreak havoc for those with respiratory ailments. Reports of how toxic and damaging the smog is to humans and the environment completes the nightmare scenario, ...
Missing flight: Why are the phantom phones ringing FOUR DAYS after mystery disappearance? (Perhaps not underwater?)
2014 03 11
Many desperate and devastated families of the missing Malaysian Airlines Flight are clinging to hope. For days they have been waiting anxiously for any word from officials about the status or location of the plane and its 239 passengers. Some of the family members have been able to ’connect’ to their missing loved ones via cellphones - the phones ring ...
Has Blackwater been deployed to Ukraine?
2014 03 11
Notorious U.S. mercenaries ’seen on the streets of flashpoint city’ as Russia claims 300 hired guns have arrived in country
Speculation was growing last night that American mercenaries had been deployed to Donetsk after videos emerged of unidentified armed men in the streets of the eastern Ukrainian city.
At least two videos published on YouTube earlier this week show burly, heavily armed ...
Pyramid of the Sun Turning to Dust
2014 03 10
All we are is dust in the wind, so the saying goes, but it’s troubling when it happens to great ancient monuments that we assume will be around forever.
Pyramid of the Sun, Pirámide del Sol, Teotihuacán, México (Wikimedia Commons)
New Scientist reports that the Pyramid of the Sun in Mexico is turning to dust and could collapse:
The Pyramid of the ...
Elephants Never Forget A Voice
2014 03 10
According to a new study, wild elephants are discerning listeners who can differentiate between various human languages, genders, ages, and more. Such surprising skills continue to marvel researchers.
Not all the intellectual surprises are on the large animal front. Research has shown that crows are extremely intelligent, some dogs recognize over a thousand words and have the intellect of a toddler, ...
|More News » |