Banks creating money is not the problem - high interest & borrowing 4 speculation lead to default & crises @AnnPettifor #ReinventOurEconomy
— Jubilee Scotland (@jubileescotland) September 11, 2014
And then there’s the bit about “borrowing for speculation” leading to problems. Well yes, quite. Under full reserve (that’s a system where private banks cannot create money), people can speculate as much as they want, as long as they’re funded by shareholders, not depositors. That way, a collapse in those speculative ventures does not lead to banks collapsing and economic collapse, credit crunches, etc, as pointed out by Mervyn King and Alan Greenspan, not to mention two or three Nobel Laureates. See section 2.32 of the MPRA paper featured at the top of the column on the left.