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Clarification

(Shann Turnbull provides the following clarification in regard to this sentence which appeared in his article for the Oct./Nov. 1995 issue of World Citizen News:
"The good news for governments is that they will be forced to reclaim the role of creating official money and credit for their central banks and for licensed banking systems.")

This sentence infers that governments are going to create money and credit FOR their banking system. This is not exactly true, since the banking system would no longer be allowed to make loans without first obtaining deposits, as is already the case with saving banks and credit unions.

There would no longer be any "fractional" banking that allows the banking system to create credit. Only the government would be able to create credit, and it would do this without adding the cost of interest charges.

Because I wanted to write a short, stand-alone article, I did not explain "fractional" or "full reserve" banking. My original copy may have been too abbreviated to communicate the nuances of my logic to the World Citizen News editor who made the changes. So please note that the original sentence read:

"The good news for governments is that they will be forced to take back the role of creating official money and credit from their central bank and the licensed banking system."

Shann Turnbull


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