The Grip of Death

by Michael Rowbottom

This immensely readable book exposes the way money is created and the dire consequences that has on the economy and our lives. It reveals that only 3% of our money supply is issued by the government in the form of notes and coins. The rest comes into circulation as debt to the banks and building societies.

The Grip of Death dispels the myth that these institutions lend their depositors' money to borrowers. They don't. If they did, it wouldn't be available to their depositors. Banks and building societies create new money out of thin air, every time they credit the account of a borrower. So 97% of the money supply comes into circulation as debt on which borrowers have to pay interest.

If no one borrowed there would be no money to finance the economy, except the miniscule amount issued by the government. This is seen to a large extent during times of economic depression when banks are reluctant to lend and start calling in their more risky loans. In boom times the banks fall over themselves to lend money. How much money there is around is determined, not by the needs of the community but whether or not the banks can make a profit.

Over the centuries, governments have passed their right to provide the money supply to private banks. Instead of creating what money is needed to finance government spending, they borrow from the private sector the shortfall from taxation, thus creating the national debt which taxpayers have to pay in the future. The Grip of Death advocates that the government should create some money, not as debt, but to be spent on public services. There is no need for the perennial cry of "there's not enough money. Public services must be cut back." Money is man-made and should be made available if something is socially desirable and practically possible. Money, controlled now by the banks for their own profit, is our master. It should be our servant and used for the good of society as a whole.

Mike Rowbottom goes into the often catastrophic effects our system of debt-money has on all parts of the economy and our lives, ranging from why businesses go bankrupt to the burdens of third world debt. He puts forward eminently sensible and well-thought out proposals to remedy the situation.

For anyone wanting to know how our money system works, The Grip of Death is required reading.

Reviewer unknown