Posted on 04/02/2015 7:10:35 PM PDT by aMorePerfectUnion
Who knew that the revolution would start with those radical Icelanders? It does, though. One Frosti Sigurjonsson, a lawmaker from the ruling Progress Party, issued a report today that suggests taking the power to create money away from commercial banks, and hand it to the central bank and, ultimately, Parliament.
Can’t see commercial banks in the western world be too happy with this. They must be contemplating wiping the island nation off the map. If accepted in the Iceland parliament , the plan would change the game in a very radical way. It would be successful too, because there is no bigger scourge on our economies than commercial banks creating money and then securitizing and selling off the loans they just created the money (credit) with.
Everyone, with the possible exception of Paul Krugman, understands why this is a very sound idea. Agence France Presse reports:
Iceland Looks At Ending Boom And Bust With Radical Money Plan
Iceland’s government is considering a revolutionary monetary proposal – removing the power of commercial banks to create money and handing it to the central bank. The proposal, which would be a turnaround in the history of modern finance, was part of a report written by a lawmaker from the ruling centrist Progress Party, Frosti Sigurjonsson, entitled “A better monetary system for Iceland”.
“The findings will be an important contribution to the upcoming discussion, here and elsewhere, on money creation and monetary policy,” Prime Minister Sigmundur David Gunnlaugsson said. The report, commissioned by the premier, is aimed at putting an end to a monetary system in place through a slew of financial crises, including the latest one in 2008.
According to a study by four central bankers, the country has had “over 20 instances of financial crises of different types” since 1875, with “six serious multiple financial crisis episodes occurring every 15 years on average”. Mr Sigurjonsson said the problem each time arose from ballooning credit during a strong economic cycle.
He argued the central bank was unable to contain the credit boom, allowing inflation to rise and sparking exaggerated risk-taking and speculation, the threat of bank collapse and costly state interventions. In Iceland, as in other modern market economies, the central bank controls the creation of banknotes and coins but not the creation of all money, which occurs as soon as a commercial bank offers a line of credit. The central bank can only try to influence the money supply with its monetary policy tools.
Under the so-called Sovereign Money proposal, the country’s central bank would become the only creator of money. “Crucially, the power to create money is kept separate from the power to decide how that new money is used,” Mr Sigurjonsson wrote in the proposal. “As with the state budget, the parliament will debate the government’s proposal for allocation of new money,” he wrote.
Banks would continue to manage accounts and payments, and would serve as intermediaries between savers and lenders. Mr Sigurjonsson, a businessman and economist, was one of the masterminds behind Iceland’s household debt relief programme launched in May 2014 and aimed at helping the many Icelanders whose finances were strangled by inflation-indexed mortgages signed before the 2008 financial crisis.
Apparently not, you're still spouting ignorance.
Then give up.
But on your way out the door, why don't you take a shot at explaining how the (private corporation called the) Fed's monetary policies are counted as "part" of the credited "assets" of the affiliated "loaning" banks to "support" their "fractional" reserves.
Pretty please?
I've got popcorn. Go ahead.
The Fed isn't private.
Fed's monetary policies are counted as "part" of the credited "assets"
I don't speak stupid. Or conspiracy.
Can you translate that into English?
Love that fake quote.
politicians creating money. yea, that’ll work.
just look to the US to see what politicians do with the money they received (spoiler: 65% of US federal tax revenues are given directly to other people... to buy votes)
Oh, dear, I’m quite sure you’ve got that backwards.
Wiki: Fractional-reserve banking is the practice whereby a bank takes in deposits, creates credit or makes loans, and holds reserves (to satisfy demands for withdrawals) that are less than the amount of its customers’ deposits.
That's not what the Fed says.
In April and May of 2008, Bloomberg reporters Mark Pittman and Craig Torres asked the Federal Reserve Board to disclose records under FOIA relating to the $2 trillion in taxpayer-funded emergency lending programs.
The Fed denied the request because the records sought by Bloomberg were housed at the Federal Reserve Bank of New York ("FRBNY") which, argued the Board, is not an agency and thus not subject to FOIA.
I don't speak stupid. Or conspiracy. Can you translate that into English?
No problem, FRiend. By "Fed monetary policies" I meant things like how a total of $16.1 TRILLION in secret loans were made by the Federal Reserve between December 1, 2007 and July 21, 2010, including:
Citigroup – $2.513 trillion
Morgan Stanley – $2.041 trillion
Merrill Lynch – $1.949 trillion
Bank of America – $1.344 trillion
Barclays PLC – $868 billion
Bear Sterns – $853 billion
Goldman Sachs – $814 billion
Royal Bank of Scotland – $541 billion
JP Morgan Chase – $391 billion
Deutsche Bank – $354 billion
UBS – $287 billion
Credit Suisse – $262 billion
Lehman Brothers – $183 billion
Bank of Scotland – $181 billion
BNP Paribas – $175 billion
Wells Fargo – $159 billion
Dexia – $159 billion
Wachovia – $142 billion
Dresdner Bank – $135 billion
Societe Generale – $124 billion
“All Other Borrowers” – $2.639 trillion
---
Now it's your turn for some answers. Starting with how this isn't the real fractional banking and not a genuine conspiracy. And leave Wikipedia out of it - I'm not interested in hearing you speak stupid. Try English.
Are you the best they've got?
Interpolation beyond comprehension....never mind refraction, and synthetic permutation in a solid plane of one parameter....I understand you perfectly.....
How's that?
The development of modern business methods, starting, as much as any time, during the 1600s, originally in Netherlands and UK, had at least as much to do with the world’s climb out of poverty as the various industrial developments. So I’m talking about the last few hundred years, not the last few decades.
Indeed, since those industrial developments were financed by the business methods, industry was at least as dependent upon business as the other way around.
As is so often the case, your Wilson quote is a fabrication. I’m also unclear why we should be impressed by the supposed opinion of a man as awful as him.
http://www.salon.com/2007/12/21/woodrow_wilson_federal_reserve/
I think present-day finance is out of control, but the notion that we should return to something like 1600 is just ludicrous.
Nobody has still bothered to respond to my question. What happens to a modern economy when the amount of credit available for loans suddenly contracts by 80% or 90%?
I’m fairly sure nothing good.
Here’s the whole article.
http://en.wikipedia.org/wiki/Fractional-reserve_banking
It’s not really all that difficult. The definition of fractional reserve banking is a fact. Whether it’s a good or bad idea is a matter of opinion.
That's not what the Fed says.
The "shareholders" got $1.7 billion in dividends, the US Treasury got $98.7 billion last year.
Does that sound like a private firm?
Starting with how this isn't the real fractional banking
Ummmm....why would you think central banks need deposits to make loans?
Fractional reserve banking is what commercial banks do, not central banks.
Ahh, the old “nobody can possibly have a different opinion than I do unless he’s a paid tool of the oppressors.”
Sadly, the banksters aren’t paying me.
I have no desire to defend much of what goes on in “finance” today. If I did have the desire, I don’t have the knowledge. This stuff makes my head hurt.
BTW, for an excellent description of the way fractional reserve banking works, watch the bank run scene from It’s a Wonderful Life.
I guess George Bailey was a bankster, too.
Yes, I’m the best the fake quote police have.
Your question is to narrow to be taken seriously. You pretend the 1600's use of a nation's people and lands to finance wars was legitimate, and that such claims of "assets" by royalty to back loans by international bankers is somehow different from the independent Federal Reserve loaning the US government its own currency at interest based on the lands and people of this nation as collateral.
And "Other Than That," you ask why fractional banking shouldn't be used to further exploit the generation of debt under such a system, when the assets of the supposed "loan" can be inflated at any time by "loans" from the Fed upwards of trillions of dollars?
Please.
Aw crap. That means the Federal Reserve, and thus the United States, will be nuking Iceland soon. They gotta nip this in the bud.
It's not difficult. It is a fact.
Fractional-reserve banking is the practice whereby a bank takes in deposits, creates credit or makes loans...that are less than the amount of its customers’ deposits.
Kinda like my post #24,
Fractional reserve means they hold a fraction of deposits. Which means they loan less than their deposits, not multiples.
“Our central bank, the privately held “federal reserve” has always had that power, printing fiat money then charging interest on it.”
Please tell us where you send the interest payments that the Fed charges you on your money. So far I’ve never received a bill for the interest owed on my cash hoard. Inquiring minds want to know.
Does that sound like a private firm?
Yes it does, since you're talking about shareholders. Shareholders make up a private firm. Citizens make up a public entity subject to regulatory oversight - which the Fed itself refuses to acknowledge, BTW.
And add for your numbers, they are utterly meaningless for lack of context or verifiability since the Fed refuses to be audited - and gets away with that refusal precisely because they are a private firm, and not a government agency.
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