Increasing the Money Supply without creating

loans

Kevin Cox April 2009http://www.linkedin.com/in/kevinrosscox

No inflation Fewer asset bubbles Quarantining of economies Creation of community infrastructure

without loans Socially equitable No cost to the government

Outcomes

Creating a Loan

$$ Money on deposit in bankAsset of $$ Value

Borrower Bank

Creating a Loan

$$ Money on deposit in bankAsset of $$ Value

$$ Mortgage on Asset$$ Money on deposit in bank

ABorrower Bank

Paying back a loan

$$ Money on deposit in bankAsset of $$ 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

Paying back a loan

$$ Money on deposit in bankAsset of $$ 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

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

Most loans purchase existing assets New money can be used as collateral

for another loan Interest is paid on new money before

the asset exists to generate interest When assets reduce so too does the

ability of banks to loan money. This results in a credit crunch.

Target inflation or devaluation of money is government policy

Issues

Creating new money without a Loan

Reserve bank creates Rewards

Rewards given to population

Citizens Reserve Bank

Creating new money without a Loan

Reserve bank creates Rewards

Rewards given to population

Citizens Reserve Bank

Rewards buys or builds a new asset

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

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

Direct way to create money Asset always created Type of asset created specified Interest only paid once asset is

created No assets required for collateral

against a loan Governments remain in control of

increase in money supply

Differences

No inflation Fewer asset bubbles Quarantining of economies Creation of community infrastructure

without loans No cost to the government Socially equitable Minimum of regulations

Outcomes