Wednesday, 26 October 2011

Million ££ Pound ££ Prize Question

Okay, enough ranting from me. I thought I'd offer you a competition instead, with a MILLION POUND PRIZE !!!! I often hear the defenders of bankster capitalism claim that banks 'create wealth' or that private banks are vital to our economy. We can't tax or regulate them too much, for example, or we'll scare them away to Switzerland and Hong Kong, which would apparently be a disaster for us, because .. err .. well because banks 'create wealth' don't they?

I'd like to know more about this magical wealth creation process that occurs in banks, because I'm a bit hazy on the details at the moment and I'm sure some genius neo-liberal economist (perhaps one who works for a bank?) will be able to answer my question, given that I'm offering a good old capitalist incentive: what an economist might call a 'price signal'. That's right folks, I'm prepared to pay a MILLION BRITISH POUNDS to the first person to offer a satisfactory answer to the following simple question:

How do private banks create wealth?

That's it. Just post your answer in the comments, leaving a contact number or email and the first good answer will get £1,000,000. That's a MILLION POUNDS. 

Small print: Of course, you will not object if I pay this in the form of a credit card specially issued by the newly created Bank of Insane Gibberish, with £1,000,000 credit on it (based on the £10 note I hold in my piggy bank as cash reserves).


  1. Chris, you're a fool/genius! Don't you realise you've just answered your own question! By establishing your own private bank and issuing £1 million credit it on it, you've just "created" £1 million of potential wealth! All you need to do now is issue the card to yourself (as you've rightly won it from yourself). Whatever you buy with it is collateral which can be marked against the bank's reserves as contributing to its capital. That capital in turn can be used as "soft money" that the bank can invest and pass that investment to the vendor's bank when they process their credit card payments in a few months time. It's just that simple! And best of all, the system is foolproof! There's no way it can crumble, backfire or collapse, so all you protestors can just go on home. There's nothing at all to worry about.

  2. Or did I just totally undermine your subtle point by posting a lengthy, non-subtle explanation?

  3. Who is this 'Chris' whereof you speak? :p I like your answer, Tristan, but it isn't quite sufficient to win, I'm afraid.

    You see, by creating £1 million in credit, I would be creating 'money' or more precisely 'debt', rather than real 'wealth', unless you mean wealth for myself, of course. So, when I talk about 'wealth creation', I mean actual goods and services; you know, useful 'stuff' rather than just the money to pay for them. After all, any fool can create money, if you let him, but it takes skill to create something of genuine worth. But I suspect you knew that!

  4. The lucky winner will spend some of the £1 million prize money (if they can find someone who'll accept your currency), and save some of it. Most of the people he spends his money with will, in their turn, spend some of it and save or invest some of it, and so it will continue, passing through the economy. The turnover of businesses in receipt of the money will have increased, making it easier for them to get a loan, or meaning that the business can be sold at a higher price. So the increased turnover in itself represents wealth - an asset that can be used to generate income. Any money that's invested in the business could, if invested wisely, generate wealth by enabling innovation to take place and increasing productivity.

    So, provided that your currency is accepted as payment, you will eventually have created wealth, not just boosted income. Your money isn't debt in the normal way that banks create money as debt, as your money isn't a loan, it's a prize, with no obligation to repay.

    It's just like quantitative easing. Except that your system of QE works better than the one used by the Bank of England, where the banks just sit on the money and use it to plug the big black hole in their balance sheet. At least your prize money will get out into the real economy!

  5. It is really interesting to realise that your money is only worthless because not enough people have bought into it. You need to think big like James McCormick; better known for his £50 million bomb detector fraud (

    Enlighten wisdom can be sought here in a quote from the movie "Men in Black"...

    "A person is smart. People are dumb, panicky dangerous animals and you know it. Everything they've ever "known" has been proven to be wrong. A thousand years ago everybody knew as a fact, that the earth was the centre of the universe. Five hundred years ago, everybody knew that the Earth was flat, and fifteen minutes ago, you knew that humans were alone on it. Imagine what you'll know tomorrow."