The Rothchilds have a particularly sordid history and have attained much power in the financial sector.
onlooker wrote:I guess someday do away with money. Some kind of barter system and simply rewarding people with tangible benefits for a tangible contribution to society.
onlooker wrote:No K, I did not say they are all Jews. I too dislike the antisemetic references that seem to pop up when discussing the Cabal or Elite. Yet the Rothchilds are from accounts I read quite a power hungry family. As for the term Illuminati, that is bandied about by media and people in almost a generic manner, when in fact this group is a very specific group. So apologies I should stick to using just Cabal or Elite.
davep wrote:Money as equity rather than debt would be a good start.
radon1 wrote:davep wrote:Money as equity rather than debt would be a good start.
How would this work?
Monetary Reform Act – A Summary (in four paragraphs)
This proposed law would require banks to increase their reserves on deposits from the current 10%, to 100%, over a one-year period. This would abolish fractional reserve banking (i.e., money creation by private banks) which depends upon fractional (i.e., partial) reserve lending. To provide the funds for this reserve increase, the US Treasury Department would be authorized to issue new United States Notes (and/or US Note accounts) sufficient in quantity to pay off the entire national debt (and replace all Federal Reserve Notes).
The funds required to pay off the national debt are always closely equivalent to the amount of money the banks have created by engaging in fractional lending because the Fed creates 10% of the money the government needs to finance deficit spending (and uses that newly created money to buy US bonds on the open market), then the banks create the other 90% as loans (as is explained on our FAQ page). Thus the national debt closely tracks the combined total of US Treasury debt held by the Fed (10%) and the amount of money created by private banks (90%).
Because this two-part action (increasing bank reserves to 100% and paying off the entire national debt) adds no net increase to the money supply (the two actions cancel each other in net effect on the money supply), it would cause neither inflation nor deflation, but would result in monetary stability and the end of the boom-bust pattern of US economic activity caused by our current, inherently unstable system.
Thus our entire national debt would be extinguished – thereby dramatically reducing or entirely eliminating the US budget deficit and the need for taxes to pay the $400+ billion interest per year on the national debt – and our economic system would be stabilized, while ending the terrible injustice of private banks being allowed to create over 90% of our money as loans on which they charge us interest. Wealth would cease to be concentrated in fewer and fewer hands as a result of private bank money creation. Thereafter, apart from a regular 3% annual increase (roughly matching population growth), only Congress would have the power to authorize changes in the US money supply – for public use -not private banks increasing only private bankers’ wealth.
Conclusion
This paper revisits the Chicago Plan, a proposal for fundamental monetary reform that
was put forward by many leading U.S. economists at the height of the Great Depression.
Fisher (1936), in his brilliant summary of the Chicago Plan, claimed that it had four
major advantages, ranging from greater macroeconomic stability to much lower debt levels
throughout the economy. In this paper we are able to rigorously evaluate his claims, by
applying the recommendations of the Chicago Plan to a state-of-the-art monetary DSGE
model that contains a fully microfounded and carefully calibrated model of the current
U.S. financial system. The critical feature of this model is that the economy’s money
supply is created by banks, through debt, rather than being created debt-free by the
government.
Our analytical and simulation results fully validate Fisher’s (1936) claims. The Chicago
Plan could significantly reduce business cycle volatility caused by rapid changes in banks’
attitudes towards credit risk, it would eliminate bank runs, and it would lead to an
instantaneous and large reduction in the levels of both government and private debt. It
would accomplish the latter by making government-issued money, which represents equity
in the commonwealth rather than debt, the central liquid asset of the economy, while
banks concentrate on their strength, the extension of credit to investment projects that
require monitoring and risk management expertise. We find that the advantages of the
Chicago Plan go even beyond those claimed by Fisher. One additional advantage is large
steady state output gains due to the removal or reduction of multiple distortions,
including interest rate risk spreads, distortionary taxes, and costly monitoring of
macroeconomically unnecessary credit risks. Another advantage is the ability to drive
steady state inflation to zero in an environment where liquidity traps do not exist, and
where monetarism becomes feasible and desirable because the government does in fact
control broad monetary aggregates. This ability to generate and live with zero steady
state inflation is an important result, because it answers the somewhat confused claim of
opponents of an exclusive government monopoly on money issuance, namely that such a
monetary system would be highly inflationary. There is nothing in our theoretical
framework to support this claim. And as discussed in Section II, there is very little in the
monetary history of ancient societies and Western nations to support it either.
The key feature of this plan was that it called for the separation of the monetary and credit functions of the banking system, first by requiring 100% backing of deposits by government-issued money, and second by ensuring that the financing of new bank credit can only take place through earnings that have been retained in the form of government-issued money, or through the borrowing of existing government-issued money from non-banks, but not through the creation of new deposits, ex nihilo, by banks.
radon1 wrote:Ah, we've started to look at it a while ago... It can be best briefly summarized as follows, probably:The key feature of this plan was that it called for the separation of the monetary and credit functions of the banking system, first by requiring 100% backing of deposits by government-issued money, and second by ensuring that the financing of new bank credit can only take place through earnings that have been retained in the form of government-issued money, or through the borrowing of existing government-issued money from non-banks, but not through the creation of new deposits, ex nihilo, by banks.
https://www.imf.org/external/pubs/ft/wp ... p12202.pdf, right in the beginning of the Introduction section.
This actually gives rise to lots of questions/issues. Let's pick up one:
Sam borrows from a bank from the bank's available "retained earnings in the form of government-issued money". In a couple weeks Sam deposits some money into another bank, out of purely personal financial reasons, not planning any clever scheme. In effect, it's no different from the fractional system, Sam is just a conduit between the two banks who could lend directly to each other in absence of the "anti-ex-nihilio" restriction. Nothing changed, really, except much heavier regulation, - the fractional system is still in place. Why bother then (with all this heavier regulation)?
davep wrote:Not at all. Banks will need to have 100% reserves. Any speculative activity would be performed by entities that aren't banks.
onlooker wrote:Radon, this fractional systems is unsustainable...
ralfy wrote:Fractional reserve systems aren't self-regulating because banks operate through competition and price mechanisms.
radon1 wrote:ralfy wrote:Fractional reserve systems aren't self-regulating because banks operate through competition and price mechanisms.
In the context, the self-regulation via objective markets forces was meant, not an organizational self-regulation.
Another common misconception is that the central bank determines the quantity of loans and deposits in the economy by controlling the quantity of central bank money — the so-called ‘money multiplier’ approach. In that view, central banks implement monetary policy by choosing a quantity of reserves. And, because there is assumed to be a constant ratio of broad money to base money, these reserves are then ‘multiplied up’ to a much greater change in bank loans and deposits. For the theory to hold, the amount of reserves must be a binding constraint on lending, and the central bank must directly determine the amount of reserves. While the money multiplier theory can be a useful way of introducing money and banking in economic textbooks, it is not an accurate description of how money is created in reality. Rather than controlling the quantity of reserves, central banks today typically implement monetary policy by setting the price of reserves — that is, interest rates.
In reality, neither are reserves a binding constraint on lending, nor does the central bank fix the amount of reserves that are available. As with the relationship between deposits and loans, the relationship between reserves and loans typically operates in the reverse way to that described in some economics textbooks. Banks first decide how much to lend depending on the profitable lending opportunities available to them — which will, crucially, depend on the interest rate set by the Bank of England. It is these lending decisions that determine how many bank deposits are created by the banking system. The amount of bank deposits in turn influences how much central bank money banks want to hold in reserve (to meet withdrawals by the public, make payments to other banks, or meet regulatory liquidity requirements), which is then, in normal times, supplied on demand by the Bank of England. The rest of this article discusses these practices in more detail.
davep wrote:Objective market forces? What are they? All the major banks were technically insolvent in 2008 and were bailed out. Where's the market-forces self-regulation in that? And fractional reserve as you describe it is a myth.
radon1 wrote:davep wrote:Objective market forces? What are they? All the major banks were technically insolvent in 2008 and were bailed out. Where's the market-forces self-regulation in that? And fractional reserve as you describe it is a myth.
Of course they were insolvent and were bailed out, not arguing with that. So what? Let them sink thus paralyzing the entire money circulation system? What's next? Trade via barter? Think that anyone would be better off out of it? It would hit everyone very badly, including every Joe.
Market self-regulation: economy is on an upswing -> people borrow more -> people deposit more thus extending the banks' lending capacity -> banks lend more -> people borrow more -> money supply grows; economy is on an downswing -> the same things happen but the opposite way -> money supply contracts. Deleveraging, hopefully orderly. Automatically. Can be disorderly, but this is not my fault - welcome to capitalism.
Never said that statutory reserve limits are in any way binding to money supply - they may or may not be, but this needs further exploration, I am not so deep into this matter. I was talking about the market-ascertained multiplier. My understanding is that the statutory reserve limits are more a risk management tool rather than money supply one. The latter is regulated more via interest rates.
The point is, fractional banking is the very heart of the financial sector and thus of capitalism. The attack on fractional banking is an attempt to improve capitalism by way of killing capitalism.
I am not unhappy with capitalism. I am not unhappy with those who are unhappy with capitalism and want to dismantle it. Just making the point, that prior to dismantling capitalism, the alternatives have to be thoroughly thought over. Make sure that you are not cutting the branch of the tree on which you are sitting, just in case.
There can be some secret cabal that are sitting out there and conspiring over how to retain their power, this would be quite natural. But thinking that crashing this cabal and shutting down fractional banking is the same thing is an utter delusion. A group of interests and an indivisible attribute of an economic order is not the same thing. This is like paining a yellow wooden fence into red and saying that this fence is now made of brick because we painted it red.
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