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Move Your Money protests - good idea but is it enough?
Matteo Pescarin

Move Your Money protests - good idea but is it enough?

Written by Jan Skoyles Tuesday, 06 December 2011
Are the Move Your Money protests enough to make our banking system change? I don't think so - I think we need to be changing our money not where our money sits.

Last week I attended a meeting at Parliament entitled “Ignoring Money: Why The Vickers’ Commission Will Not Prevent The Next Crisis”. The main thing I took away from the meeting was a comment that Harry White, a pensioner from Cardiff (travelled down specially) said at the end:

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This is so ludicrous and obvious to the average citizen - we need a stable store of value. If we want GDP stable then we should have an inherently stable money supply,”

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Mr White was right, this is so obvious to the public, but yet policy makers and central banks fail to grasp the facts that are staring them in the face. This led me to think about what the public have been doing on the back of their rising discontent. Last week I wrote about the Occupy protests and acknowledged the need for protest but said they needed more direction. I believe that many of their demands can be met by a return to sound money. This leads me onto what another group which I would like to talk about this week: The Move Your Money project, the group behind Bank Transfer Day.

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The Move Your Money Project

The Move Your Money project is a non-profit campaign that encourages individuals and institutions to divest from the nation's largest Wall Street banks and move to local financial institutions. Little has changed to prevent another financial crisis or to end 'Too Big To Fail,' and with Congress unwilling to act, we are encouraging individuals to take power into their own hands by voting with their dollars and no longer contributing to a financial system that has led our country astray. We are a campaign that gives people real, concrete actions they can take to create a more sane, stable and localized banking system.

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Bank Transfer Day was on the 5th November – a date clearly chosen because of its association with Guy Fawkes and his ‘gunpowder plot’ to blow up the British House of Lords. Whilst the day did not cause much hardship for banks, the event was still exceptionally well subscribed. According to a Credit Union National Association (CUNA) survey, Credit Unions raked in 650,000 new accounts and $4.5 billion in deposits in between 29th September and the first week of November. Bank Transfer Day itself, the 5th November, saw 40,000 new credit union accounts and £80million in deposits. The month of September alone was more successful than the whole of 2010 in terms of credit union sign ups. Interestingly, but not coincidentally, the 29th September was the day the Bank of America unveiled its ill-fated $5 monthly debit card fee.

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More sophisticated - albeit short term - protest

Those numbers are nowhere near big enough to bring down the banking system, but they are big enough to get the media’s attention which means more people will be coming to the realisation that they too can ditch the banks. The movement also adds weighting to the current zeitgeist that is economic and civil unrest. The numbers add credibility to the reasoning behind the Occupy protests. The Occupy protests may be without direction but they are certainly not without merit. Bank Transfer Day adds justification to their cause. Even though November 5th has now passed, similar movements and dates are continuing to spring up – all requesting people to abandon the banks. Today the Occupy Wall Street protestors have been disbanded, but whilst offshoot #Occupy groups continue to camp around the world, the Bank Transfer protestors are silently carrying out a more sophisticated protest, which could be hugely significant if they just realised the power they have.

As with the #Occupy groups, I believe the Move your Money/Bank Transfer/ Balance Transfer protestors are missing a trick here. They are failing to protest to those who have caused the real damage – the government, the money printers, the central banks – all those responsible for the inflation and devaluation of our money supply. Protesting against the banks’ services and lack of respect is all very well but really what we’re most angry about is the risk our money now faces and the ease of which its value is destroyed.

It can be argued that credit unions, over banks, are a more stable influence on the economy on the basis that they do not operate on a fractional reserve basis. They do not leverage your deposits. They merely facilitate P2P lending – one saver lends to one borrower. Therefore they are not in the business of creating money – something which banks very much are. Money creation or credit creation is very much one of the chambers in the heart of this financial crisis, slowing the blood flow would definitely make an impact but it will not bring about monetary change.

We should be protesting with the type of money we have – protecting ourselves from credit creation which leads to inflation. Just because your money is in a credit union does not mean that its value is protected. The money you move from one evil bank with a bailout badge into a brand new friendly credit union account is still the same money – it is still worthless, un-backed, paper money. When all of the debt-ridden countries have effectively imploded they will be taking our fiat monetary system with them. The credit unions are unable to protect your money from macro impacts such as inflation, hyperinflation, deflation, recession, interest rates, quantitative easing and monetary policy. This protest is a protest with a short-term impact and will count for nothing when the economy goes bust and our fiat money disappears.

97% vs. 3%

We all know where I’m heading with this – gold. Gold is money, and unlike paper money it has value. It has outlasted any other attempt at a fiat currency. No fiat currency has ever survived more than 40 years and such systems have always been inflationary. Un-backed money is at the mercy of governments and banks. Governments inflate the money supply as it is a short-term quick solution which enables them to pay for election promises and ‘solve’ crises. Banks multiply the money supply for even less moral reason. The power they have to multiply the money supply is immense. Ben Dyson, founder of Positive Money couldn’t put it any better:

The money that they create, effectively out of nothing, isn't the paper money that bears the logo of the government-owned Bank of England. It's the electronic money that flashes up on the screen when you check your balance at an ATM. Right now, this electronic money makes up over 97% of all the money in the economy. Only 3% of money is still in that old-fashioned form of real cash that can be touched.

It would be impossible for them to have such an extent of power if the monetary system were backed by gold. If the bank protestors were to protest by transferring their wealth from paper into gold (sounds good doesn’t it?) then not only would the banks dislike it but it would protect their wealth. By placing money into precious metals one would not only protect themselves against the inflationary effect of credit creation (often known as QE 1/2/3 etc) but it would also help to reduce inflation in the economy. Gold rather than cash reduces the ability of banks to carry on creating electronic money – the drug that keeps the system going.

On the Irresponsibility Scale, printing money surely tops it all. Short of cash? Print it! Our own Ministers have apparently told Angela Merkel to do precisely that. I am in favour of free schools, but I must admit that the President Mugabe School of Economics was not precisely what I was thinking of. With money printing and resulting inflation all pay for the mistakes of some. How 2011. JP Floru, Adam Smith Institute.

Allocated physical gold is outside of the banking system and is the owner’s and theirs alone. If we remain on the our current fiat currency system then the best we can do is sit back and watch the governments and central banks continue to devalue our savings and income through money printing, or electronic multiplication, and bad Keynesian economic decisions. Several politicians and bankers, including our very own Mervyn King, have acknowledged that we are now heading for a depression worse than the Great Depression (what’s greater than great? Massive?).

Moses Principle

We are now in a situation world-renowned gold-analyst Alf Field refers to as the Moses Principle. When Moses guided the Israelites across the desert it took them 40 years. During that time those that were middle aged or older upon entering the desert would have most likely died and the young who made it to the “promised land” would have been born in the desert. Therefore very few who made it to the “promised land” would’ve known anything other than desert life and so it is unsurprising that the new land was a land full of ‘milk and honey’. We are in a similar situation today - we have been out in the financial desert for the last 40 years.


Very few of us actually know what any other monetary regime would be like. At present we have come to a sandstorm on the edge of the desert. We need to be careful to not lose our way and walk back into the dunes, but instead keep walking until we reach the land of milk and honey – sound money. The protests against the banks are our opportunity to reach the land of sound money. But if we merely protest by moving our money rather than changing our money then we will forever find ourselves walking into thicker and longer sandstorms.

Jan Skoyles

Jan Skoyles

I have just graduated from Aston University with a First in International Business and Economics. I now work for The Real Asset Co, writing and researching. I have an interest in sound money and the campaigns and protests for change which are currently gaining momentum. I believe that there can and will be change in our monetary system - there has to be.

Twitter: @Skoylesy
Website: www.therealasset.co.uk

4 comments

  • Comment Link keith gardner Monday, 09 January 2012 11:00 posted by keith gardner

    i think the point was missed. the point of moving your money is to end the control the usurers have on the money supply, putting that control into a non-profit institution, where the shareholders are those with a savings account of the credit union.

    the proposal that gold is sound and honest money is the same nonsense that got us where we are today. gold is a commodity, not money, and a rare natural resource of that. for the government to declare gold to be legal tender would be a corruption of the free market in gold.

    if you want to store your money in gold, you're free to do that now at free market prices. gold isn't too stable in valuation when the government isn't manipulating the value, is it?

    legal tender is a creature of the state and should remain a creature of the state. money is a means of exchange. it is not a store of wealth. money, to be effective for it's purpose, should be inflationary, since it is inflation which is necessary for economic growth. when a person is born, you'll need to add more money to the circulation. when someone hoards the money, you'll need to add more money to the circulation so that others can continue to trade. if you want a store of wealth, you'll have to find a good investment in the free market.

  • Comment Link keith gardner Monday, 09 January 2012 11:19 posted by keith gardner

    you've solved no problems with gold as money. you only replaced the institution of slavery with another institution of slavery. those who don't own existing gold must provide goods and services to those who own gold or borrow gold at interest, which is not interest on capital goods, but rather the theft of usury, in order to pay their taxes and trade with others.

    the problem is usury with the debt-based money you call fiat money. the problem will also be usury when government declares gold to be legal tender. you might want to look up the definition of fiat. the government declaring gold to be legal tender is the definition of fiat money.

    the solution is legal tender whose value is regulated by the congress and which is created and spent into circulation by the congress debt-free. the forces of usury would seek to control inflation rather than allow it when inflation benefits the public rather than the usurer.

  • Comment Link keith gardner Monday, 09 January 2012 11:25 posted by keith gardner

    a good way to store your wealth would be at a non-profit bank, drawing interest, with a public debt-free legal tender not based on fractional reserve banking whose value is reasonably maintained with an inflation rate set by congress. you can invest in gold or other things, but let the buyer beware, any investment is a risk.

  • Comment Link Lee Hyde Thursday, 02 February 2012 20:43 posted by Lee Hyde

    I find myself agreeing with @keith on this one. The issue isn't fiat currentcy per se, it is fractional reserve banking hands money creation to private financial institutions to their benefit. Fraction reserve banking, and this perverse form of fiat currency we have today, enablies private financial institution to levy a charge on money creation. Which logically leads to net nominal tranfer of wealth to them (and the richest), which in turn triggers rising wage demands from the average worker who quite rightly wishes to be free of this usury. That is inflationary.

    I have my concerns with the notion of representative commodity currencies in general, less so those which use a 'basket' of varied commodities. Principally because the encourage central banks to hoard great quantities of often rare commodities to sever as collateral (if that's the correct word) for their respective currencies. This practice invariably inflates the prices of the chosen asset. Imagine if you will, that the USA decided tomorrow to base its currency on a Rhodium standard. Rhodium is already an expensive commodity (if not the most expensive kg for kg), a fact related to its numerous industrial uses, most importanctly as a catalyst. It is however logical to assume where the US treasury to hoard rhodium for a hypothetic rhodium backed currency, it would inflate the price of rhodium and might just make its use in industry untenable or at best inflate a wide range of goods (basically everything) on offer to day. Gold and silver were good choices in ages past purely because they were rare, maleably and had little value outside of serving as a commodity currency (they were too soft to be used for anything structural, and they electrical conductive properties where worthless to medieval kings and the warlords of ancient greece). However, more and more, gold and silver are finding uses in fields (including catalysis) and a wholesale switch to gold and/or silver backed currencies might jeopodise the progress of some rather compelling fields of scientific and technological development. A 'basket of commodities' approach might limit such effects, but not entirely, as it would still impede a free market in any commodities the 'basket fillers' chose to prey upon.

    I'm curious, having mentioned Ben Dyson, why you seem to have completely dismissed the prospect of a reformed and sovereign fiat currency within the framework of a full reserve banking system as PositiveMoneyUK does. Their proposals seem sound enough to me, going so far as to divorce the money creation process from the political process and targetting money creation/destruction with inflation targetting (although I'd substitute in some variation of price-level targetting myself). The value of a fiat currency is, after all, determined by the supply/demand and the money markets confidence in it as a store of wealth and mode of exchange. Just as the value of gold is also largely dominated (esp. in a recession) by the confidence that traders have in it as a store of wealth and (less so) as a mode of exchange. There's little difference between the two (fiat and commodity currency), except of course fiat currecy lacks the requirement to hoard potentially valuable (beyond a value as a wealth store) commodities.

    In all, an interesting article though. I'm enjoying your blog, especially your previous posts vis. land value and the merics of a land value tax. :-)

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