Richard Werner: Debt Free & Interest Free Money

Dr Werner discloses facts about money creation that are at the core of every modern economy. About how the creation of the essential money that is needed to sustain growth is founded on debt. This suits banks, of course. Governments have huge debts, to banks, and few people realise that it does not have to be like this. Taxes are needed for paying for decades of past interest on government borrowing. Banking is an extracting mechanism. It extracts resources from the economy, through interest payments and the taxation needed to cover the debt burden of the government. Why borrow from banks and pay interest when there is an alternative way of money creation and allocation? Governments could create the money and allocate it into circulation through its spending programmes.
Nearly 1000 years ago Winchester in England was the centre of such a money creation system - debt free and interest free. The tally stick system was used. It expanded the money supply needed by government and it was without debt. Tally sticks were accepted for tax payments. It worked for centuries. The system was not popular with banks who prefer to create the money supply and charge interest and so their way has come to dominate. But with modern technology we have the possibility of launching an alternative money creation system without the burdens we suffer under, and which would be even better than the proven tally stick system.

[@kulturfreund6631]

The talley stick system worked very well for over 720 years. England‘s first half time as world power was embedded in that era.

[@evasvendsen5682]

Richard Werner is one of the best!

[@dfvcosworth1283]

Bring Back The Bradbury. On the 7th August 1914, in order to avoid a run on the banks, the Treasury issued Treasury Notes signed by John Bradbury - a form of national credit backed by the credit of the nation. We require that the Treasury immediately restarts issuing such interest-free money, based upon the wealth, integrity and potential of our country. Such an initiative would completely remove the hold the banks have over the nation, and would kickstart a productive economy.

[@MrAnon1916]

Was this note debt-based? Or debt-free?

[@SuperFordCortina]

@@MrAnon1916 Debt FREE , NO interest. Look up the American Green Back / Abraham Lincoln used it during the Civil War.

[@WilhelmDrake]

Debt-free money does not exist. Money is interest free. The $5 Canadian Note in my pocket represents a non-interest bearing (interest free) debt of the Federal Government.

[@conors4430]

That’s amazing, all my life I wondered why it is that banks can keep your money if they fail and not let you in the doors. I always assumed they were just lending money they had on their savings books or in capital raised or invested. I also assumed that every government makes money and is in charge of the entire money supply. I also never really understood the concept of interest. If I lend my friend $100 and he tells me he is going to pay it back in a week. Why do I get to keep raising the price to be paid back when it is higher than what was initially borrowed? It eventually means that he ends up with less money and I end up with more, meaning he needs to borrow more and the cycle just becomes more extreme.

[@hakimvlogs6579]

Guys .. this is why Islam is the truth and way forward

[@concord39]

Thanks for uploading this, I hope Werner will talk more about this subject "Debt Free and Interest Free Money" in "some next video". Werner is one of the sharpest brains in this and can talk about it in a simple way :-)

[@leeanderson2912]

Ancient Rome "coined" or produced the money it needed for whatever project it needed to fund. Its a very old idea. I believe the Banks like the current Parasitic system better than what Dr. Werner has talked about. So that's what we are stuck with.

[@alexanderworkchannel]

Excellent - Time to put into practice

[@charlesponzi9608]

Still waiting.....

[@akatYouT]

Charles Ponzi .... and still waiting :(

[@logat1847]

@@akatYouT you will be waiting for a long time

[@xyzsame4081]

One of the side effects: housing would become so much more affordable. The people having savings would get less interest. Before you panic - the decreased cost of living would more than offset that for regular folks. - Especially the life insurance industry would not like it - they also buy a lot of government bonds (governments usually do not take out loans for their debt, they issue bonds). These are investments for wealthy and rich people. Sure the regular person also benefits a little bit of the interests paid by the government - with taxes - when they have a life insurance contract. But compared to the cost of living the tiny gains possible are trivial. The costs for interests show up in the calculation of every product and they add up in a long line/over several levels. The companies doing the transport or supplying the machine, or the raw material, or some parts, or in the office supples, the company car, ... This is especially true if an investment is long term (like housing, these loans run over 20 years and longer). So less money would be sucked from the bottom to the top.

[@kingofthepaupers]

Jct: Nice of Werner to mention Tally Sticks as the best model at the end: The record most successful case was in the British Isle, Where "Tallies," sticks of money, left King Henry I with smile. Accountants in the Treasury would split the stick in two, One half would be the money and the other half its due. A tally worth a pound of gold to pay the King's expense, The other half amounted to taxation that made sense. The only question left is how the tax should be assessed, For goods and services? A simple formula to test. For services, he'd levy tax at end of every year. For assets, tax to pay depreciation. It was clear. The tax collectors through the land all had an easy way, Since people had their tallies and enough the tax to pay. The tallies funded projects and could pay for everything, With tallies matching tax, a hero, Henry I, their King. For over 700 years, the tallies were in use, But having lost control of money now is Crown's excuse.

[@redmotherfive]

I'd love to hear Werner and Graeber discuss this.

[@andrewdussault2315]

Me too, now I’m sad.

[@elguapo3811]

global "burn your bank down" day, what would be a good date for that?

[@eroceanos]

This needs to be a number one topic in academia. I want to do doctoral research into public banking and interest free money. But it might be hard to find funding for this...

[@akatYouT]

eroceanos don’t give up. They’ll want to marginalise you for sure, I’m guessing no ‘respectable’ (establishment) universities will take you as they are just as responsible as the private sector for perpetuating the indebtedness of the masses. But someone will take you.

[@kingofthepaupers]

Jct: Nice to hear someone explain Great King Henry's interest-free government-issue tally stick currency as the ideal model for government finance. That's the same as the Argentine Solution, provinces paying workers with small-denomination bonds anyone could use for Taxes, Power, Medical and licenses. Broke in 2001, all foreign debt paid off in 2006.

[@muhammadarham7442]

Any books on this where we could purchase?

[@md.miranshahchowdhury5443]

Many government/Central banks issued asset and commodities based paper money.

[@GenghisVern]

Corruption is certainly the problem confronting any government. The monetary system won't resolve that directly. However, without withdrawing the money power from private interests, there is simply no way to prevent the corruption. Unfortunately, with notable exception, progressives haven't taken up the issue of monetary reform.

[@GenghisVern]

Still based on debt though, correct? Good point about QE. Debt-based currency is ultimately a demand on labor. Isn't there an alternative? Currency as a demand on resources, or privilege perhaps? Nationalizing debt is better than what we have now, but what's the difference between owing our souls to JP Morgan or to BoE? Subtlety?

However, it was not said that money without debt does not go together with the multiplication of money in banks.

[@glennt1962]

I love the way these two are so nonchalant about the whole subject, when in fact it is such a big ripoff to the people. There are many US made vid about this I've been watching for many years.

[@xxczerxx]

Glenn Thomas I think on some level they accept the argument is a candle in the wind - in Princes of the Yen, Werner outlines the sheer power (legally /authoritatively speaking) of the CBs and in turn bank behaviour and it does seem like an act of futility to even bother questioning their actions or trying to correct it.

[@gabbar51ngh]

Austrian economics have been calling central banking a scam from the beginning

[@GenghisVern]

Yet currency existed for millenia, in various forms, which didn't involve banking at all. The early Roman Republic, the English tally sticks, Colonial Scrip? In these cases, taxation drove the value of currency... taxes to land etc or other "privilege". Trading for labor or commodities was a secondary effect. Taxes were levied on the aristocracy and their titles. I think there's a progressive argument for this. sorry.. don't mean to troll the thread

[@GenghisVern]

Paul Grognin (sp?), the guy who did the Money as Debt series, has an idea on digital coin which sounds somewhat familiar here. I haven't gone into it too deeply yet, but I find his analysis quite accurate. Personally, I've been looking at a concept I call "microcurrency", a means to finance a political organization using internal fiat, but I'm far from making a nice video about it :) Money should be a utility for distributing goods and services. I'd like to see a video on your idea.

[@patrickbateman783]

*Grignon 😎👍

[@ishwarlxm6333]

True because King Henry 1 used this system around the 1100ds..

[@md.miranshahchowdhury5443]

Banks are not Beneficiaries rather they earn spread maximum 3% after paying borrowed money.

[@GenghisVern]

I find that interesting. Ii don't think the function of the state will ever simply "dissipate", regardless of the infrastructure we create. Progressive ideas may be crude, but they have immediate application. As a tool of politics, I think monetary reform should be taken up directly. The radical right has been doing this for decades under JBS, "end the Fed" etc, but with a serious gold fetish that won't quit. An alternative view should be supported IMO

[@kentheengineer592]

Everyone Can Be there Own Money Supplier as a Business With Little Cost to No Cost, But People Would Still Need to Produce Varies Forms of Property for Society to Be used for the Purpose of

[@treyquattro]

a 26 year mortgage at 6% compounded annually results in having to pay back 4.5x the original loan amount, or 3.5x the original loan amount in interest payments alone, without the principal. Not sure why the interviewer says you pay back double at 6% which is a woeful underestimate. Mind must be going...

[@johnemonroe]

It would be 4.5 x if you went 26 years without making any payments, Mortgages do not work that way. Because you are paying the interest every year, you don’t pay interest on the interest, and because you pay off some principal every year, the amount of interest each year declines. The original amount is correct.

[@GenghisVern]

This is very good, and I've been following monetary reform for several years now. The question I've had is how to generate demand for government-issued currency. I would suggest that taxes be based on privileges that government provides in the form of land, severance and pollution taxes. Spending would therefore have value in the economy to provide for civil protection, infrastructure and social welfare. Just thinkin' out loud :)

[@yatapote]

🔥

[@kentheengineer592]

Money Can Have Equivalents Assets To Serve As Advance Payment Without Going Into Debt, Take the Claimed Ownership of Money Under a Trustee And Master Budget of a Trustee of a Business Organization and Split the Money Based on SOP per Job

[@MrTrollBeast]

What do I write in the search bar to find how this tally stick like system works?

[@mrl2583837]

Bill Still does 3 hour documentary called the Money Masters where he explains the Tally Stick. Let me know what you think.

[@aerobique]

find peter joseph

[@conors4430]

The whole idea of interest is bonkers, if I lend my friend $10 and he agrees to pay it back to me within a week I don’t see why I get to charge him for that if he fulfils his end of the deal. If you’re making money off money then somebody is always going to be in the negative. Similarly with my bank deposits, I couldn’t give a shit if my money earns money, I’m not putting it in the bank to earn money, I’m putting it in the bank to keep it safe, at least that’s the theory. Such a vital public resource shouldn’t be in the hands of profit making individuals. It works with health care, the money in circulation is no less important than healthcare

[@charlesponzi9608]

Bank deposits with no interest is a bad thing when there is inflation.

[@redmotherfive]

15 bankers dislike this video.

[@bilalafridi324]

And cant we have a system of interest free debt

[@adelchidipalma9857]

yes its supposed to be interest-free, but because we have criminals as government the bankers are allowed to rob us all.

[@u6848]

@@adelchidipalma9857 this is so sad. I'm afraid of my future now. 😢😢

[@adelchididipalma4906]

@@u6848 in the next few years, all cities town of the world will be deserted. no food in stores I have a farm in Costa Rica and working on being self sufficient in food. you are welcome to visit us.

[@robertsmith-cj6gl]

So where is the door that leads out of this insanity?

[@maxxxstrong4577]

*OY VEY* 🔯👺🔯

[@Enlevar]

Bingo

[@adelchidipalma9857]

Dear Richard , why are you not exposing the fact that have never been in the lending business.

[@adelchidipalma9857]

I am starting Real Money currency and digital, I convent the value of land into money.

[@jabel6434]

Whose land, Adelchi ?

[@cyberft]

13 years latter and Werner is now completely against this proposal and pro banks because of the totalitarian inevitability of governments.

[@NoMoWarplz]

Why do you say that? Where can I can get that? TY.

[@cyberft]

@@NoMoWarplz kzbin.info/www/bejne/ioC5daSLbNFliKcsi=8XAABBgWXVCWBVgw

[@MrTrollBeast]

ask yourself why is debt important if you have a two different tickets, one gets you gold and the other gets someone out of "debt from created money" what would you rather, gold or anything that an individual can offer?

[@Alhaweeee]

The gold ticket doesn't need a photo showing my bullion in the vault, yet, by itself is strong enough to free the indebted 3rd (maybe 4th) party! And the main point missed in your strange very old and primitive assumption here is, the prof is leaning towards simple 1-1-1 straight transactions i.e. A buys from B, both have their accounts at the same bank-period. Another way rather simple, there's gold only and one bank only, how you solve it??!!!

[@adelchidipalma9857]

R. Werner is correct that banks do not lend, and cannot lend as such they have no right to charge interest if they disclose all material facts in the contract, which they don't. For each approved credit the banker omits material facts to defraud the customer, in Canada the bankers violate Section 397 (1) (B) of the criminal code and other 19 criminal acts. Thus the customer doesn't owe anything. But don't try to fight in the courts because the bankers also bought the so called governments and the judiciary of most Western nations, only if we reach critical mass of people taking decisive action will get rid of these criminals and repudiate all debts. The banks offer an important service but cannot charge interest only service charges . Because all so called loans are a fraud all debts must be repudiated. if not these bankers will bankrupt all nations and foreclose on all assets an kill most people. Its already happening.

[@akatYouT]

Dictum1 not sure I understood the last half of what you wrote - can you explain?

[@jameskimmorley]

@@akatYouT bank loans are fraud, a contract created in undisclosed fraud cannot stand, thus no debt should be serviced, contract is null and bank in fact is liable for damages to the 'customer'. modern money is being used to extract the value/energy/spirit from the world, and is nearing its end game

[@johnemonroe]

How does it violate 397 1 B? When I take out a loan all material facts are disclosed in the agreement which is pages long. Just because many people don’t understand it does not make it criminal. laws-lois.justice.gc.ca/eng/acts/c-46/page-85.html#h-122658

[@adelchidipalma9857]

@@johnemonroe I have explained the reason (s), the banks do not disclose all the material facts, the banks commit about 20 criminal acts each time they approve a loan. You are one who doesn't understand the monetary system its simple but its made to appear complex to confuse the people. Its criminal for several reasons, 1 is that the contracts the word borrower and the bank lentds money is used which is not a fact. then they charge interest which are mathematically impossible for the people collectively to pay. they cannot lend depositors or their own money, in fact techicallyi its the alleged borrower who lends the bank the asset the bank doesn't disclose this material fact. the bank converts the asset into currency. there is accounting fraud also because they make an entry of the amount the promissory note as their assets and then enter the same amount as liability which they recognize they owe you the amount so they owe you it can't be a laon. capish? Banks cannot lend even if you beg them and promise to pay 100% interest. Its a fraud like everything else, it took me 40 years to figure it out. And three institutions where not able to prove that they made me a loan. get your own evidence write to the bank and demand the origin of the so-called mony they supposedly lent you, see what happens and they have an obligation to disclose this info, but they will not.

[@johnemonroe]

@@adelchidipalma9857 your explanation is unclear. What is wrong with using the word borrower? When I borrow from a bank I am a borrower. It is certainly possible for borrowers to pay the interest. Almost all borrowers do. It is not possible for everyone to pay off their loans at once, money flows, there are always new people borrowing as existing borrowers pay off loans. There are of course some who never pay off their debt, either going bankrupt or dying with debt. When banks make loans they create a loan and a deposit at the same time. They pay interest on the deposit and charge interest on the loan. That is the way economics works. Nothing nefarious secret or illegal about it.

[@GenghisVern]

I've already seen criticisms of Hoppe. Seriously, don't get sucked in the Austrian thing. It's a dead end.

[@gabbar51ngh]

Elaborate

[@stefanutoluiz]

3:20 'it´s been done in the past' - it´s called hyperinflation

[@mistersir3020]

Isn't this the exact opposite of what he says in other interviews, where he warns for central bank digital currency (debt-free money) and the central banks destroying commercial banks? Also, banks DO create a lot of value (at least if they're doing their job well). They are supposed to evaluate potential borrowers for their ability to pay back in the future, and they take on the risk of a few of the borrowers defaulting on them. For this risk and for the work expended to analyze the borrowers' business plans, they get interest.

[@habadabadaaa]

And the humble analysts of course do not manipulate, deceive, exert undue political control and more to the tune of having inimpeachable sovereign status (in relevant cases) and towering over the masses in glass palaces while they decide who and what ends get funding. The fact is, banks started (at least enough of them) as ruthless money makers and have to be bullied by the state with strict measures into behaving beneficially (or as the state intends). If banks interests allign with sustainable enonomic development for the common good. that is workable, but they are a node where heaps of corruption and bad incentives can and empirically do occur. Powerful States can overpowerthem or compensate for bad policy, though. Just as an example, China can kill corrupt billionaires and bankers and the USA can compensate bad policy with bullying the rest of the world to take they money for oil payments and other reasons or get a few aircraft carriers knocking at your door. I'm just formulating my thoughts here, but I do think that clearly Werner makes some good points and thinks in relevant directions

[@kulturfreund6631]

@ habadabadaaa Well said. The US Government and financial elite enjoy the privilege of the US$ being the (goldless) world reserve currency which allows them to buy on the world market goods and services with money created as they like, and money other nations have to work and deliver for. It‘s by this system that the US can buy cheaply foreign goods and make the rest of the world pay for their military. - Buying the bill collector the gun he’ll then point at us.

[@unlockcorona2084]

central bank and government is two separate things, government money is when finance ministry issue the money

[@mistersir3020]

@@habadabadaaa Of course, banking like many industries these days are thoroughly corrupt and need simpler, harsher regulations.

[@Enlevar]

Silvio Gessell

[@robertsmith-cj6gl]

Secured party creditor. Move to the private side

[@djamestersimarmata4366]

Let us see the reality. Money does continuously "work" with a compound interest formula 365 days per year, while human beings do work around 250 days per year (it could be less), and 115 days rest. Money works 115/365 or 31.5% of the year. Who enjoy the "work" of money in the production system? The owner. This is worse than the "surplus value" from Karl Marx. Prof. Margrit Kennedy says that 30-50% of the costs of goods is to pay money interest. So the product share for human-working in the production system is squeezed by the non-working money, going to the money owner, which is also just sitting there. The share of money could be increased by more put the money to buy robots, automatization system, and so on. Money beget more money.

[@nthperson]

Actually, the current system is not universally beneficial to all financial institutions. Here in the United States, thousands of banks have failed just since the 1980s. This was caused as much or more by wrong-headed deregulation, which made it very difficult for smaller, community banks to compete with money market funds and the huge global bank holding companies.Critics of the status quo might read a page from Adam Smith's Wealth of Nations and his discussion of the history of the Bank of Amsterdam, a bank of deposit that took in bullion and gold coins, created new coins of a uniform metallic content, then issued to owners of this coinage certificates of deposit (i.e., receipt money). It is worth considering a global network of such banks of deposit (publicly owned, perhaps), each of which mints (or has minted on its behalf) coinage of a uniform content. This coinage would then become a global form of legal tender, represented by receipt currency. With this system in place the exchange rates between receipt currencies would always be one-to-one based on the precious metal units on deposit. The coinage could be minted with, say, a 20-to-1 ratio of silver to gold in order to create an adequate monetary base.The deposit banks would be prohibited by charter from acting as lending institutions. Depositors could establish themselves as lenders if they so desired.

[@rjb6919]

Good luck to anyone who attempts this at a government level - didn't work out well for JFK

[@akatYouT]

RJ B it certainly didn’t! I wasn’t aware JFK attempted this.

[@joyebinger7869]

@@akatYouT Abraham Lincoln did aswell. What do these people have in common

[@mktwatcher]

The U.S. Govt. could eliminate the Private Federal Reserve overnight !

[@scienceofobliteration2671]

Look up, who's the financial minister of the US. Who makes up a large portion of the senate? Who runs the banks? There might be dual-citizenship involved.

[@hakimvlogs6579]

Guys .. this is why Islam is the truth and way forward

[@jorgeponce5512]

As much as I dislike the current TBTF modus operandi of the largest financial institutions, this presentation sounds so feeble.

[@mohdshariq5814]

I suggest Islamic Finance for the present Debt problem. Islamic Finance based on risk sharing rather than interest on principal

[@mbrp5107]

Why i only find one comment that mention islamic banking, Mr Werner need to talk about this.

[@brucetsai7732]

表白安其

[@kentheengineer592]

Lul Money Is An Obelete Concept That People Are Still Baffled Over But Thats Just Because They Dont Think About History of Money From a Certain Perspective

[@bilalafridi324]

Is it necessary to have paper money cant we have a system purely of gold or silver which has value in itself Wont the system pave it way on its own.... Paper money is ruining the world cut trees you get $100 or whatever you want

[@Achrononmaster]

First bit of your blurb is a crock of sh*t mate. Only _currency-using_ governments like member states of the EU+eurozone have debts to the bank (ECB in that case). Most other _currency-issuing_ governments (UK, USA, Aus., Canada, Japan, NZ,...) have no debts to banks proper since the governments issue the currency. When they sell bonds it's an interest rate maintenance operation (a swap of reserves for interest bearing securities) this is not a government funding operation. Sovereign governments in fact do not use bonds for funding,[^] nor do they use taxes for funding. And can always make all payments due so cannot be insolvent (since they're the monopoly issuers of a fiat currency, which is just an accounting record, non-convertible to anything real like gold). These currency-issuing governments use taxation to _drive the demand_ for the currency (and limit inflation) and must issue the currency first before anyone can pay taxes or buy bonds, at least at inception. [^] They (the officials) may (ignorantly or fraudulently, take your pick) _say_ they are issuing bonds for funding, to "cover deficit spending," but that's actually impossible --- when the government spends it is a "reserve add," so if they want the interest rate to not fall to natural zero they will sell bonds to maintain a positive rate = a "reserve drain." They're not operationally selling the bonds to pay for anything, since they've already made the payments. Similar with taxation: taxes are a reserve drain, and so offset inflationary impacts of _prior_ government spending, it is not a "pay for." When you issue your own currency (like most governments outside the eurozone) you never need to borrow it or tax it to pay for a single g'damn thing. Such "monetarily sovereign" governments licence banks to issue credit money, they can shut down these private banks at any time, or place them under statutory management if they issue credit recklessly for speculation, and such governments are not beholden to the private sector (politicians only _think_ they are --- they think incorrectly). The tragedy is the politicians generally to not know they control the currency. So they implement austerity and kowtow to the private banks --- thoroughly needlessly. Betraying the public trust. State tax-driven currencies are a public service and simple public monopoly, the state currency system should not be being run like casino gambling chips for private banks who the State licences to create credit money. If you licence private banks to create credit money (as Werner correctly describes) you have to control them on a tight regulatory leash, since you've created dangerous beasts.

[@kokknarr]

True forehead ray tracing