Ex Nihilo: The Truth About Money
A new, must-see video on money creation and its consequences from the Cobden Centre
I’m pleased and excited to recommend a brand new video on money creation from the Cobden Centre For Honest Money And Social Progress.
Cobden is an independent, UK-based educational charity whose scholars tirelessly advocate for a free society based on honest money. I share their fundamental premise that attaining sound money will require a broad-based understanding of how our current money-creation system works.
Cobden’s been a sturdy intellectual ally since I started writing this column nearly two years ago. I heartily recommend you subscribe to their website publications, which are free.
Many months in the making, the film is titled Ex Nihilo: The Truth About Money. It’s directed by the tireless Clive Davis, who’s become a friend and colleague as we pursue the goal of bringing public light to modern money creation and its consequences. The one-hour video is divided into three sections.
Part One, “What they don’t tell you about money,” will shock most viewers by making clear that modern money is created in commercial banks with nothing more than a few mouse clicks and signatures – that is, “ex nihilo,” meaning “out of nothing” in Latin. Most people, including many politicians and economists, are not aware of this fundamental fact. At about 6:30 into the film, Yaron Brook, Chairman of the Board at the Ayn Rand Institute, sums up the ignorance problem: “For most people,” says Dr. Brook, “monetary policy and monetary economics is a black hole. They have no conception, no understanding of it.”
(Dr. Brook resonates with my similar expression from September 2022 when I began an essay thus: “Money creation is a black hole in the universe of economic knowledge: practically no one understands it.” (see Money Creation: Who Cares? )
Part Two, “The money-mad economy and the “superbubble,” tells the story of progressively radical central bank involvement in money creation and the problems these policies, such as asset bubbles. As I do, Ex Nihilo’s producers believe that most sovereign nations have taken on an unpayable level of debt that will end in ruin if they do not address the problem realistically – and soon. At 40:00, Gordon Kerr, a research fellow at the Institute for Research in Economic and Fiscal Issues, thinks central banks are nearing the end of their road, likening the current monetary system to a “Soviet-era mono-bank.”
Part Three, “Saving the system: steps to reform,” prescribes a public education and awareness program. Don’t miss Daniel Hannan’s pithy diagnosis of the sovereign debt problem at 56:00. Minister of Parliament Steve Baker – who may be the most money-aware politician in office today – closes with this:
“When the bubble of debt goes wrong, we are going to need an educated public to elect the right politicians who are willing, to be honest about the troubles we face and how we’re going to get through them.”
Yes, Mr. Baker, exactly.
In addition, we all must learn how to protect our savings from the economic fallout that will arrive in convoy with a sovereign debt crisis. Education in money creation is an excellent first step to knowing how.
So, starting with this excellent video, let the sound money restoration project begin – from the bottom up!
In my July 16 Stack, I announced that I’m developing a nine-lesson course on money creation and its consequences. The current plan is to present the course beginning in late August or early September. It will be offered live, via Zoom, on the Ayn Rand Center -UK Youtube network, where I’m a frequent guest. Course development is on schedule so far. Very soon, I’ll present a detailed course outline in this Substack forum.
Thanks for reading HardmonyJim. I encourage questions and comments, favorable or critical.
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HardmoneyJim
August 1, 2023
It's gratifying to see so many serious thinkers discussing what has been obvious and ignored for so long. For an industrial society to survive, sound money is essential.