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Explaining DMC

Democratic Money Creation (DMC) is a proposal to change the way in which money is created, owned, and distributed.

Over 95% of modern money is now in the form of bank deposits. Less than 5% is in the form of notes or coins made by the mint.

The 95% is created by our banking system. This is done by banks making loans which, when spent, become someone’s bank deposit. Since no one’s deposit is ever reduced to make a loan, the amount of deposits is increased by the amount of new loans.

When deposits are used to repay loans, this cancels out deposits, and reduces the money in existence.

This system has several consequences:

  1. At the point of creation, all money is the property of the banking system.

  2. Since all new money is created as loans, all of society’s money is owed to the banks as debt. The community has no money at all in net terms.

  3. As the cost of consumer production includes the incomes paid to us to produce consumables, plus capital costs and overheads, our incomes alone cannot buy it all. If all consumer products are to be sold, the money supply must be regularly increased to enable this. All countries must increase the money (debt) in existence each year by at least 10%, and they do.

  4. This results in burgeoning debt. In trillions, America’s debt is $90, and the world’s is $200.

  5. Costs and prices must forever increase to service this increased debt. Inflation is the consequence, as is widespread financial hardship.

Because banking elites have the power to costlessly create our money and own it, their influence over the media, education and public policy in all areas is enormous, and usually decisive. If political democracy struggles against this, it is usually ineffectual.

So, what does DMC suggest?

  1. 1. That a National Credit Authority be established with court-like powers to determine the amount of any needed money supply increase. This would be done by measuring the national economy with National Profit and Loss Accounts and Balance Sheets, in the same way that companies do these accounts.

  2. This NCA would be empowered to create money to the extent that a deficiency of consumer purchasing power exists, and to distribute this money as a national dividend on the basis that all people would receive an equal share.

  3. Banks would continue to finance production in the normal way, but would no longer be permitted to finance consumption, as this would be done through the National Dividend.

This would mean that:

  1. The National debt would no longer increase every year. Indeed, the national dividend’s debt free funds would be available to progressively pay it down.

  2. Debt charges in prices and taxes would atrophy thus reducing costs and prices. 

  3. Mortgage and debt repayments would no longer dominate our lives and public policy.

  4. In receiving “money votes” on the same basis that ballot papers are distributed, we would add economic democracy to political democracy.

  5. The mega-funding for the Great Reset would be disabled.


The increase in personal sovereignty which DMC offers, while beyond the reach of so short an explanation, would bring cultural, social, economic, and political benefits which, while perhaps dimly perceived at present, will progressively be available to ourselves and future generations.

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