Munich Personal RePEc Archive

People's Power: The Power of Money

Kees, De KONING (2013): People's Power: The Power of Money.

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Abstract

Money can create jobs and thereby incomes for individual households, but money can equally destroy jobs and income. Added values can be created with the assets which are based on the savings levels -the net worth of individual households- but the "money managers": a government, a central bank, banks and (international) bureaucrats can also create losses to the savings level. This dilemma should be at the heart of economic thinking. For instance in the U.S in 2006 a dollar saved and used for a home mortgage loan only returned 69 cents in home value increase. In 2007 a dollar saved and used in the same way lost 2.5 dollars. Banks moved the goalposts from relying on the income of individual households to wanting their money back out of the assets -the homes-. Individual households were never asked. The effects were that all 132 million home owners were affected rather than the 5.3 million doubtful debtors. This paper sets out the causes of such money destruction. It also explains that money can act in a positive manner to repair the damage done. Banking reforms, quantitative strenghthening as opposed to QE, economic easing and changing the focus of national accounting away from economic growth to Country Profit -the increase/decrease in the net worth of individual households are discussed.

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