I HAVE long suspected that the financial industry was totally in charge of everything including governments. Thanks to Dr Jim Macgregor in his letter (February 8) for confirming in his straightforward way that I was correct. I am certain that I am not alone.

The question that arises is what, if anything, can be done about it? I think that the answer is “absolutely nothing”.

Writing to the press serves as an education to those who read papers such as The Herald, but what happens next? I think that all too often letters as important as this will be forgotten like yesterday' s news and no one with power will start to act and nothing will change. Is it once again a matter of put up and shut up and ultimately die, because if one is of no use (as judged by those in financial power), they don't actually care about the masses.

Will some charismatic leader please step forward?

Ian Gray,

Low Cottage, Croftamie.

CONGRATULATIONS to The Herald for publishing discussions on the creation, nature, use and abuse of money, and the abdication of state responsibility through its privatisation (Letters, February 7 & 8). Correspondents touch on the root of the chicanery responsible for successive financial crises and the continuing economic malaise that permeates the purview of the global banking cartel.

Money (paper or electronic) is created out of nothing as government debt to be spent into the economy as a claim on the government which accepts it in payment of taxes or fees. Thus state action gives this government liability its value.

Bank money is a claim for payment by the bank, but is accepted by the government, which has granted banks a money-creating privilege, backed by government authority and implemented via bank laws and the laws of contract and the courts. As other correspondents reflect – this privilege is being egregiously abused by the present banking system.

The classic analysis is Georg Friedrich Knapp’s State Theory of Money (1904, English translation 1924). Modern money is government-backed IOUs, including paper money which now represents only 5-10 per cent of created money; the remainder is created by private banks as credit by simply entering it in a ledger and lending it to customers as for example, mortgages, credit card debt, student loans and the like.

This lending at bank interest rates (often usurious – whereas government currently charges effectively zero interest) is a free public gift to the private finance (there IS a magic money tree) which largely caused the 2007-8 financial crisis and is stoking up the next (much bigger) one as quantitative easing has mainly inflated unsustainable asset bubbles and the gross personal excesses of the 0.1 per cent.

While global GDP is just $77 trillion, global financial assets have grown to $225 trillion since 2007, according to McKinsey Global Institute. Thanks to unregulated markets in credit, the burden of global debt continues to rise. In 2015 the overhang of debt was at 286 per cent of global GDP, compared with 269 per cent in 2007.

Financiers have made vast capital gains by siphoning rent (interest) from debt, but also, like Carillion and its backers, by draining rent from pre-existing assets or government concessions such as land, property, natural resource and utility monopolies rail, forests, hospitals and prisons.

As Professor Michael Hudson writes in Killing the Host: How Financial Parasites and Debt Bondage Destroy the Global Economy (2016), "the financial sector’s aim is not to minimise the cost of roads, electric power, transportation, water or education, but to maximise what can be charged as monopoly rent.

All of this results from state abdication of the public good of money and credit creation, wrested from it by the financial interests who now own the very government itself – just look at the revolving door between finance and government/civil service.

If you want to know where this is taking us – soon – read Professor Steve Keen’s Can we avoid another financial crisis? (2017). Short answer: No. And this one will be catastrophic. Until governments return the public goods of money, credit and finance to democratic control – or better – ownership, we face nothing but crisis and debt peonage.

Dr John O'Dowd,

3 Downfield Gardens, Bothwell.

THE irony of Dr Jim Macgregor's letter (February 9) and the headlines of the following day ("Cash to boost the health of poorest goes to GP salaried", The Herald, February 9) cannot have been missed by many. I have met Dr McGregor on a number of occasions and I have no doubt he must be shaking his head in despair. Knowing him I can say with certainty that not every GP is a banker.

Duncan Carmichael,

Ardoch, Selkirk.