BANKING REFORM: IN THE OPPOSITION TO THE FEDERAL RESERVE BANK BILL

Carter Glass explaining in 1913 that the Reichsbank & private ownership was model for Fed 

When the ALDRICH plan was before the country, the European bank which its sponsors most often cited as a helpful example for the United Stats and the one to which they gave more attention in their report than to all the others combined was the IMPERIAL BANK OF GERMANY. The following brief description of the control of the REICHSBANK is taken from an interview with two of its officers, which was published by the monetary commission:1

[The capital] is ALL PRIVATE OWNERSHIP ... the government owns no shares. [In our organization] we have, so to speak, three boards: first, the Curatorium; second, the Direktorium (president and directors)' third, the Central Ausschuss [or Central Committee]. The Curatorium is composed of five members. The chairman is the Chancellor of the Empire. The Emperor appoints the second member, and it has been the custom to appoint the Prussian Minister of Finance. The Bundesrath [the upper house of the imperial legislature] appoint from among their own number three members, which completes the Board ... In the Chancellor lies supreme poser although he has exercised it but once in the history of the bank. pg 15

Strip private banks of their power to create money ~ Martin Wolf

Wolf highlights the fact that the ability of banks to create money requires governments and taxpayers to underwrite the banking system: “Banking is therefore not a normal market activity, because it provides two linked public goods: money and the payments network. On one side of banks’ balance sheets lie risky assets; on the other lie liabilities the public thinks safe. This is why central banks act as lenders of last resort and governments provide deposit insurance and equity injections. It is also why banking is heavily regulated. Yet credit cycles are still hugely destabilising.”  “What is to be done? A minimum response would leave this industry largely as it is but both tighten regulation and insist that a bigger proportion of the balance sheet be financed with equity or credibly loss-absorbing debt. … A maximum response would be to give the state a monopoly on money creation.“

 “Printing counterfeit banknotes is illegal, but creating private money is not. The interdependence between the state and the businesses that can do this is the source of much of the instability of our economies. It could – and should – be terminated.”
“Our financial system is so unstable because the state first allowed it to create almost all the money in the economy and was then forced to insure it when performing that function. This is a giant hole at the heart of our market economies. It could be closed by separating the provision of money, rightly a function of the state, from the provision of finance, a function of the private sector.”

Why not Public Bank 25:44
How does the world look without Banks

Max Keiser and Stacy Herbert talk to Simon Dixon of BnkToTheFuture.com about banking’s future. They ask him: why not get rid of banks? Dixon believes a world without the current banking infrastructure - from traditional banks to venture capitalists - is possible thanks to bitcoin and blockchain technology.
In the second half, 12:57 they ask Sandeep Jaitly of FeketeResearch.com, why not a public bank? Jaitly’s public bank, however, is very different from anything you’ve ever seen or heard before.

 

MONEY REFORM

 

POSITIVE MONEY VS. THE BANKS THAT RUINED EVERYTHING

Could These 3 Simple Changes to Banking Fix the Economy?
@PositiveMoneyUK @Vollgeldreform

Our money system guarantees that
-- inequality --
will get worse

Inequality Why are the rich getting richer?

Our money system guarantees that inequality will get worse -- Here is the evidence:

1. The current money system distributes money from the bottom 90% to the top 10%

Because 97% of the money in the UK is created by banks, someone must pay interest on nearly every pound in the circulation. This interest redistributes money from the bottom 90% of the population to the very top 10%. The bottom 90% of the UK pays more interest to banks that they ever receive from them, which results in a redistribution of income from the bottom 90% of the population to the top 10%. Collectively we pay £165m every day in interest on personal loans alone (not including mortgages), and a total of £213bn a year in interest on all our debts.

2. It transfers money from the real economy to the banks

Businesses are also in a similar situation. The 'real' (non-financial), productive economy needs money to function, but because all money is created as debt, that sector also has to pay interest to the banks in order to function. This means that the real-economy businesses - shops, offices, factories etc -- end up subsidising the banking sector.

3. It transfers money from the rest of the UK to the City of London

Banks pay their staff out of their profits, which in large part comes from the interest they charge on loans. Because most of the high earning bank staff work in the City of London, this results in a geographic transfer of wealth from the UK to those working in the City of London.

4. The instability that the system causes means that temporary and low-paid jobs are insecure

When banks cause a financial crisis it leads to unemployment. It tends to be low-paid and temporary contract workers who are the first to get made redundant first, so that instability in the economy has a bigger effect on those on low incomes with insecure jobs.

5. High house prices increase inequality

When house prices are pushed up by banks creating money, those on low incomes suffer the most. People on low incomes often can't get a mortgage big enough to buy a house, so they don't benefit from the rise in house prices. Meanwhile, those who can get access to mortgages can buy multiple houses for buy-to-let and benefit from artificial inflation in house prices. Younger people also lose out, as the cost of buying their first house swallows an ever larger amount of their income, while older and retired people who own houses benefit. This all increases inequality across different income groups and between the young and old.
 

Money Reform in Iceland, Netherlands, France, Denmark, Switzerland

ICELAND

A quarter of Iceland’s cabinet members held offshore companies  even the current prime minister. Sigmundur David Gunnlaugsson is suspected of having been influenced, also by personal interests in his fight against the banking crisis.”The exact moment Iceland's PM realizes journalists found his secret:  … #PanamaPapers

1. 2011 Iceland [ THE VIKINGS ] Declares Independence from International Banks 2011

   Iceland is free.  And it will remain so, so long as her people wish to remain autonomous of the foreign domination of her would-be masters — in this case, international bankers. Icelanders were traditionally fishermen and farmers until they decided to turn their country into a casino for global capital around the turn of the millennium. On April 9, the fiercely independent people of the island-nation defeated a referendum that would have bailed out the UK and the Netherlands who had covered the deposits of British and Dutch investors who had lost funds in Icesave bank in 2008.  At the time of the bank’s failure, Iceland refused to cover the losses.  But the UK and Netherlands nonetheless have demanded that Iceland repay them for the “loan” as a condition for admission into the European Union. President Olafur Ragnur Grimmson vetoed legislation the Althingi, Iceland’s parliament, had passed to pay back the British and Dutch. “These were private banks and we didn’t pump money into them in order to keep them going; the state did not shoulder the responsibility of the failed private banks,” Iceland President Olafur Grimsson.

   The voters’ rejection came despite threats to isolate Iceland from funding in international financial institutions.  Iceland’s national debt has already been downgraded by credit rating agencies, and now those same agencies have promised to do so once again as punishment for defying the will of international bankers.

2. 2012 ICELAND THROWS OUT THE BANKS
3. 2012 Top Economists: Iceland Did It Right ... And Everyone Else Is Doing It Wrong
4. 2013 --> 5 YEARS LATER <---
   Gunnlaugsson earned his spurs in years of outspoken campaigning against the foreign creditors who still haunt Iceland, particularly the British and the Dutch governments, which intervened after the collapse of Landsbanki – the bank behind Icesave – on 7 October 2008. Hundreds of thousands of ordinary British and Dutch savers had previously switched their savings into online Icesave accounts, attracted by market-beating interest rates and promises that: "You can also rest assured that with Icesave you are offered the same level of financial protection as every bank in the UK."  When the crash came, however, Iceland's deposit guarantee proved worthless, forcing the UK and the Netherlands to use their own taxpayer funds to compensate ordinary savers and sparking a poisonous diplomatic row. Gunnlaugsson's main pre-election pledges were to squeeze these foreign creditors – characterised as "hedge funds" or "vulture funds" – in order to bankroll a mortgage relief programme for all homeowners and a string of pro-business tax cuts.
   Iceland's rapid return to health hinged on a series of measures that Nobel laureate Paul Krugman later referred to as "doing an Iceland." Krugman, an admirer of Iceland's dramatic comeback, has recommended a similar policy cocktail for other nations in crisis. The rules are as follows: Allow your ailing banks to collapse; devalue your currency if you have one of your own; introduce capital controls; and try to avoid paying back foreign debts.
   http://www.spiegel.de/international/europe/financial-recovery-of-iceland-a-case-worth-studying-a-942387.html
5. Iceland's economy has solidly recovered.
   GDP growth will be 2.8% in 2015, and unemployment just 4.5%. However, foreign direct investments is still at historic lows. (Source: "Nation Hit First by Economic Crisis Dismantles Last Restrictions," Global Finance, August 2015) 
   Iceland is a successful case study on how to survive a sovereign bankruptcy and collapse. In June 2015, the government voted to unfreeze $9 billion in assets held by failed banks. It imposed a 39% exit tax to keep foreign investors from withdrawing the funds. Without the tax, currency withdrawals would be enough to send the krona plummeting.
6. 2015 Iceland Jailed Bankers and Rejected Austerity and its been a success

 

Why did Iceland succeed where countries like Greece and Spain failed?

Iceland's rapid return to health hinged on a series of measures that Nobel laureate Paul Krugman later referred to as "doing an Iceland." Krugman, an admirer of Iceland's dramatic comeback, has recommended a similar policy cocktail for other nations in crisis. The rules are as follows: Allow your ailing banks to collapse; devalue your currency if you have one of your own; introduce capital controls; and try to avoid paying back foreign debts.

Citizens Initiative organizes Money Reform in Iceland, Netherlands, France, Denmark, Switzerland
Fran Boait on Swiss Vollgeld referendum press-conference 1.12.2015
https://www.youtube.com/watch?v=xUgzDJldq1A
ban-banks-campaign.jpg in drupal fin pic FL-R folder
ban-banks-campaign2.jpg

Switzerland to vote on banning banks from creating money known as the Vollgeld Initiative

The Swiss National Bank was established with money creating powers in 1891. 
Referendum on radical proposal to give central banks sole money creation power will be held after petition gains 110,000 signatures
90% of all money in circulation in Switzerland is "electronic" money.

Members of the initiative committee for Monetary Reform (Vollgeld-Initiative) hand over boxes with more than 120.000 signatures at the Federal Chancellery in Bern, Switzerland. Geneva is home to some of the world's biggest investment banks.

3/2015 Switzerland may be key to changing how world banking functions. 

The country is the world’s safe harbor for storing wealth as well as home to the Bank for International Settlements (BIS).
Following in Iceland’s footsteps, Switzerland has petitioned for a new initiative that will severely cripple commercial banks by taking away their ability to lend money they don’t actually have.  Iceland has been in the spotlight the last couple of years after they began prosecuting criminal bankers. They began the process, which no other nation has done, after their economic collapse in 2008. In 2015, 26 Icelandic bankers were sentenced to prison for their role in the collapse.
According to The Telegraph:
Switzerland will hold a referendum to decide whether to ban commercial banks from creating money. The Swiss federal government confirmed on Thursday that it would hold a plebiscite, after more than 110,000 people signed a petition calling for the central bank to be given sole power to create money in the financial system. The campaign – led by the Swiss Sovereign Money movement and known as the Vollgeld initiative – is designed to limit financial speculation by requiring private banks to hold 100pc reserves against their deposits.
In Switzerland, where there is direct democracy, a referendum where the citizens get to vote on popular initiatives can be held if the motion gains 100,000 signatures within 18 months.  Switzerland may be key to changing how world banking functions. The country is the world’s safe harbor for storing wealth as well as home to the Bank for International Settlements (BIS). The BIS is a private company owned by many of the world’s central banks and is known as the heart of global reserve banking, known as the policy that allows banks to lend money they don’t actually have. This means that money is electronic, instead of backed by actual physical assets.  Taking this ability away from big banks would keep them from being able to manipulate the world’s economy.  There is criticism of the initiative, however. If it was successful, full power of physical and electronic money creation would be given to the Swiss National Bank, who is already the sole power with right to produce mint coins and Swiss banknotes. Now they would also have the power to create electronic funds, which currently are created when private banks issue things like lines of credit. Many believe that this changing of power, with the government having the final say in money creation, would not successfully solve the problems created by current banking practices.

Switzerland will hold a referendum to decide whether to ban commercial banks from creating money.

The Swiss federal government confirmed on Thursday that it would hold the plebiscite, after more than 110,000 people signed a petition calling for the central bank to be given sole power to create money in the financial system.
Under Switzerland's direct democracy, a referendum can be held if a motion gains 100,000 signatures within 18 months of launching. If successful, the sovereign money bill would give the Swiss National Bank a monopoly on physical and electronic money creation, "while the decision concerning how new money is introduced into the economy would reside with the government," says Vollgeld. The idea of limiting all money creation to central banks was first touted in the 1930s and supported by renowned US economist Irving Fischer as a way of preventing asset bubbles and curbing reckless lending. In modern market economies, central banks control the creation of banknotes and coins but not the creation of all money, which occurs when a commercial bank offers a line of credit. Central banks aim to influence the money supply with monetary policy and regulatory tools. The SNB was established in 1891, with exclusive power to mint coins and issue Swiss banknotes. But over 90pc of money in circulation in Switzerland now exists in the form "electronic" cash created by private banks, rather than the central bank.
The campaign - led by the Swiss Sovereign Money movement and known as the Vollgeld initiative - is designed to limit financial speculation by requiring private banks to hold 100pc reserves against their deposits.
"Banks won't be able to create money for themselves any more, they'll only be able to lend money that they have from savers or other banks," said the campaign group.
"Due to the emergence of electronic payment transactions, banks have regained the opportunity to create their own money," said the Swiss Sovereign Money campaign.
"The decision taken by the people in 1891 has fallen into oblivion."
Referenda on monetary matters are not new in Switzerland. Last year, the country voted by more than 78pc to reject a law calling for the central bank to increase its gold reserves from 7pc to 20pc.
Unlike the gold vote - which was seen as a precursor to re-introducing the Gold Standard in Switzerland - economists have been more supportive of the idea of "sovereign money" as a way to stabilise the economy and prevent excess credit growth.
Iceland - which saw its bloated banking system collapse in spectacular fashion in 2008 - has also touted an abolition of private money creation <http://eng.forsaetisraduneyti.is/media/Skyrslur/monetary-reform.pdf>and an end to fractional reserve banking.

A date for the
Swiss referendum
has not been set.

In October 2008, Iceland nationalized its three largest banks - Kaupthing Bank, Landsbanki, and Glitner Bank - which defaulted on $62 billion of foreign debt. As a result of the banks' collapse, foreign investors fled Iceland, prompting the value of its currency, the krona, to drop 50% in one week. The stock market fell 95%, and nearly every business in Iceland went bankrupt. (Source: "How Iceland Emerged From Its Deep Freeze," WSJ, July 5, 2015)  Iceland's banks got into this mess by using $100 billion in debt to finance foreign acquisitions. After the crash, many Icelanders turned away from the world and global trade. They began spending more time with their families and children, in the outdoors and with Icelandic books. Alcohol consumption dropped among young Icelanders, and the subjective feeling of happiness increased. A generation that is extremely well networked and excellently educated. Fully 95 percent are connected to the Internet with one third in possession of a university degree.  Half of the country's population being under the age of 35. The high rate of reproduction may also have something to do with the fact that Iceland views childcare as a state responsibility, with 90 percent of one- to five-year-olds going to daycare. Young parents also don't have to worry about their careers when they have children. Some 78 percent of the country's women are employed, the highest rate in the world.