The court fool reveals
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courtfool-favicon New:
Bizarre referendum in the Netherlands

The bizarre Dutch referendum new article The bizarre Dutch referendum

courtfool-favicon The secrets behind democracies:

courtfool red key The road to democracy

courtfool red key The bizarre Dutch referendum


courtfool yellow key The chicken-parliament

courtfool-favicon The secrets behind money:

sign a loan
If you just sign here, I will give you a balance of $ 1,000 and you will owe me $ 1,000 plus interest.

courtfool red key The banking system in short

exchanging mutual claims
With just a tiny little bit of money bankers can pay each other millions...

courtfool red key Secrets of money, interest and inflation

courtfool yellow key Debit, credit, banco!

Politicians give billions away to private bankers...

courtfool red key A tale of two monetary systems

falling banknotes

courtfool red key Private banks or a bank of the government. A comparaison.

courtfool red key From state debt to state money

courtfool red key Towards a sound economy

Bank crisis? Reform!

courtfool red key Bank crisis? Reform!


courtfool red key Banking explained:
the Derivative Scam

courtfool-favicon The secrets behind the euro:

The madness of the euro

courtfool red key The madness of the euro

heavy euro

courtfool red key Out of the euro, and then?

hungry euro

courtfool red key ESM, the new European dictator!

YouTube: The new European dictator

courtfool TouTube key ESM robs the Treasuries in 3'51''

Keep quiet! We build Europe!
Keep quiet! We build Europe!"

courtfool red key ESM, a coup d'état in 17 countries!

Zeus rapes Europa

courtfool yellow key Zeus rapes Europa

courtfool red key ESM: How the Goldman Vampire Squid Just Captured Europe

NATO rescues euro in Libya

courtfool yellow key NATO rescues euro in Libya

Obama and Sarkozy in Libya
Obama and Sarkozy in Libya red key Hillary Clinton's emails about Libya


courtfool TouTube key EUROMANIA by Peter Vlemmix


Rudo de Ruijter
Yannis Varoufakis
Costas Lapavitsas
James K. Galbraith
Gerard Dunénil
Michael Hudson
Ed Dolan
Jacques Nikonoff
Jean-Claude Paye
Eugénio Rosa
Jorge Figueiredo

courtfool-faviconThe secrets behind the war in Iraq:


courtfool red key Cost, abuse and danger of the dollar


courtfool no key Iraq Memorial

courtfool-faviconThe secrets behind the war in Afghanistan:

Pipelines_to_9_11 / WTC

courtfool red key Pipelines to 9/11

The secrets behind the accusations against Iran:

courtfool red key Raid on Nuclear Fuel Market

courtfool yellow key Wipe Israel from the map?

courtfool-faviconFarewell to growth:


courtfool red key World Energy and Population


courtfool red key Energy crisis:
Turning-point of humanity

Facts and lies about the climate:

Climate Conference Paris 2015

1: The clockwork of the Earth and Sun

2: The activity of the Sun

3: CO2: scare, claims and fraud...

courtfool-favicon Uncover secrets:


courtfool yellow key Wake up citizens?


Protest in Draguignan
There are alternatives to capitalism...

courtfool no key Protest in Draguignan

courtfool no key Click here fore many more original cartoons...

courtfool-favicon Treaties:

stroke Treaty establishing the European Union (EU)

stroke Treaty on the Functioning of the European Union (TFEU)

stroke Amendment article 136 TFEU

stroke First version of the Treaty establishing the European Stability Mechanism (ESM)(not ratified)

stroke Treaty establishing the European Stability Mechanism (ESM)

stroke Treaty on Stability, Coordination and Governance in the economic and monetary union (TSCG)

stroke Vienna Convention on the Law of Treaties 1969

courtfool-favicon Do you want to know who publishes the fool's articles?



courtfool-faviconSpecial thanks to:

Christine, Corinne, Francisco, Evelyne, Françoise, Gaël, Peter, Ingrid, Ivan, Krister, Jorge, Marie Carmen, Ruurd, Sabine, Lisa, Sarah, Valérie & Anonymous...

courtfool-faviconAcknowledgements for translations:


Alter Info
Carlo Pappalardo
Come Don Chisciotte
Ermanno di Miceli
Ivan Boyadjhiev
Jorge G-F
Lisa Youlountas
Jose Joaquin
Manuel Valente Lopes
Marcella Barbarino
Marie Carmen
Mary Beaudoin
Michel Ickx
Natalia Lavale
Nicoletta Forcheri
Peter George
Resistir Info
Traducteur sans frontière
Valérie Courteau


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Rudo de Ruijter

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Bank crisis? Reform!

By Rudo de Ruijter,
Independent Researcher

This article describes a proposal for a bank reform, with which the enterprises are protected against the antics in the banking world and which enables better economic policy, also in hard times.


There are many analyses about the causes of the bank crisis. Many explain it like a consequence of greed, insufficient regulations and failing control by central banks.

Governments were completely surprised when the banks started to fall and they were suddenly confronted with the consequences. Ministers of Finance got carte blanche to get the banks back on track with billions of euros of support. All this because they are so important to the economy.

But the billions of euros disappeared like cans of oil in a leaking gearbox. The cog-wheels did not want to start moving. Meanwhile more and more enterprises fail from the lack of credit. Entire countries are getting in trouble and fall in the tutelage to the International Monetary Funds. [1] Some analists forecast, that the crisis could last for some years...

And, as if unrelated, the continuing growth disturbs the climate. Our rules and values are dictated by consumption and greed. And ever more public services are sacrificed at the altar of Wall Street...

There is an alternative. Governments can take over the supply of credit. When money becomes state money, we don't need to depend any longer on the solvency / liquidity mechanism of private banks, that can get stuck again, any time, if, somewhere in the world, rotten securities are circulated. In today's international, speculating and bubbling jungle of profiteering, you may be rather sure the next crisis is in the making somewhere already.

I think it is nonsense to let the enterprises fail because of incidents in the banking world. I think it is shortsighted to rescue private banks with billions of tax money, buying them or supplying liquidity and guarantees. Sure, when the state helps these banks, the banks must pay back with high interest. Fine. But this simply means, that the banks will pass on these costs to you and me as their customers. One way or the other we are screwed!

This article describes a proposal for a bank reform with the following objectives:

  • end the crisis;

  • money creation / credit supply based on economic and social interests;

  • prevent credit supply from drying up by incidents in the banking world;

  • prevent conflicting policy between government and central bank;

  • set up parlementarian control over money creation;

  • give the central bank, in addition to the existing acceleration and break pedal, a steering wheel;

  • unbind the credit supply from economic growth;

  • guarantee the best possibilities for prosperity, also during worse times.


1. Today's credit supply

Central bank is independent

At the moment nearly all central banks are independent from governments. Banks and central banks determine how much credit is supplied and how much the users of the money must pay for it. The central bank influences the economy. In the words of the Dutch central bank (DNB N.V.): "The interest functions as the acceleration and break pedal of the economy." [2]

Two captains on one ship

Most countries now have an economy with two captains. the policy of the central bank determines the room for action of the government. When the govenment wants to stimulate the economy, while the central bank keeps the interest rate high, the government won't have much success.

Money multiplier

M1-Money multiplier Fed St Louis

The money of loans, when paid to a supplier of goods, is deposited in another bank, that lends it out again. This way the amount of money in the economy is multiplied. (See “Debit, credit, banco!”) When the credit supply hitches, the available money can decrease with tens of percents within a few months. (Click on graphic of the Central Bank of Saint Louis.)


2. Short look back

Before the establishment of central banks bankruptcies were the greatest barrier to the growth of the banking sector. In 1913 the Federal Reserve was set up. This private institution would keep a reserve of the banks, with which banks in troubles could be rescued. This way, affiliated banks could lend out more money, while the "trust" of the public was increased. The Fed obtained independency from the government. Politicians did not have a clue about what money was and the bankers promised to take care of it.

Private or state, but all independent from government

Trust is the magic word of the banking sector. When the public doesn't trust the banks, it doesn't bring its money to the banks and the banks cannot lend out money. This is also the reason, why private central banks usually pretend to be state banks. In reality, private as well as nearly all state central banks are independent from governments. (See: "Secrets of money, interest and inflation")

The role of central banks evolved over time and differed from one country to another. In some instances they were financiers of wars, at other times they were stimulators of agriculture or industry. Most of the times they were regulators of the banking sector and later they also intervened in the payments between banks. With the interest rate they influence the exchange rate, the economic activity, the inflation and the benefit margin of banks.

Meanwhile, the banking world has grown into a badly arranged international, financial jungle, in which social and business interests are sacrified to the laws of greed and the expanding money mass. In this regard, many central banks have followed a policy of laisser-faire.


3. Short look ahead

So, for the coming years a recession has been predicted, that, in my opinion, is unnecessary, if the government takes up the responsibility for the credit supply.

Foreign debt US

US_Trade Balances 1960-2004

Because of all the news about the credit crisis we seem to have forgotten how, in fact, it all started. Since 1973 the US has built up a skyrocking foreign debt, that grows explosively. It is only by borrowing money at ever higher speed, that it manages to keep the dollar upright. (See "Cost, abuse and danger of the dollar") The export of subprimes represented only a small part of it. The bailout rescue program for the banks will be financed with loans. It will be a credit bubble of incredible size, that will cause an enormeous devaluation of the dollar. When the dollar collapses, a world wide financial chaos seems predictable to me.

When this happens, countries will only be able to limit its consequences, when their credit supply is in hands of the government, that won't have to be guided by shortsighted profiteering and hungry stock holders.

Forecast energy

Energy by source

A more serious problem is the forecast of a decreasing availability of energy. (See "World Energy and Population”.) We all know we are consuming finite energy sources. For generations we have become used to consume these reserves at a faster pace all the time. We were sure, that after that, other energy sources would be found...

Most of us spontaneously prefer to deny that the end of growth is at the door. This denial is not so much about the the fact that the available data would not be reliable. Many people simply cannot imagine the world otherwise as with growing populations and economies.

There are also people, who still confuse energy "reserves" and energy "supply". And we like to fool ourselves with our production of sun and wind energy, that, in fact, amounts to only 1 percent of world's energy consumption. So, amazingly, we just act as if the problem does not exist.


4. Bank reform

The credit supply must become independent of the faith that the public has in the banks. To put it in an other way, the credit supply must become independent of the deposit and savings balances.

The credit supply should not depend on a banking mechanism, that can easily get stuck when an incident disturbs the liquidity and solvency of some banks.

The credit supply must also be able to function normally in times when there is no economic growth and the population is shrinking. [3]

I see the solution in a bank reform, in which today's central bank is replaced by a central bank of the government, who, as sole issuer of money, will take up the responsibility for the credit supply.

The credit supply based on solvency and liquidity of private banks will be abolished and with that the multiplication of fictive money. [4]

Banks will become the serving counter between the central bank and the public. The central bank can then steer the money mass and the value of the currency-unit precisely.

Today's central bank uses one interest rate as acceleration and break pedal of the economy, as if all sectors of the economy must always be stimulated or slowed down in an equal way. This leads to many unwanted side effects. This crude way can be refined by setting up interest rates by sector. This way the central bank not only has an acceleration and a break pedal, but also a steering wheel. Economic policy can be implemented in a targeted, more precise way.

The guide should not be the biggest and fastest benefits, but the quality of the society and the needs for the future. In times of economic prosperity it is usual that parlementarians don't look much further than the length of their term. However, we put children on the world for 75 or 80 years. Therefore, it would be more logical, that - at least - we evaluate, if there will be enough energy, food and water for the coming 75 years.

Total transactions with 'money' from loan

The policy of central banks is aimed at permanent inflation. [5] This way, the burden of the interest is shifted from the borrowers to the users of the money, and the risk that loans are not paid back decreases. (See: "Secrets of money, interest and inflation") Also, moderate inflation appears to have the possibility of being a stimulant for the economy, when there is an increase in energy, raw material and work force. That has worked quite well during the last century. So it is not by hasard, that our economic model is based on eternal growth of input, output and population.

Because today's system is based on the permanent growth of the money supply, when the economic input and output decrease, more and more bubbles of money without real value appear, which will collapse sooner or later. By centralizing the credit supply and making it independent from economic growth, it will be possible to steer the economy and keep the best possible prosperity, even in times of economic down turn.

World population

Most people are not yet aware that we are on the eve of energy shortages, that will - one way or the other - lead to a sharp decline of the world population. [6]

One way is look ahead and use our brains. If there will not be enough energy and food in the future, we must put less children on the world. The less children there are, the better the possibilities will be for a high quality of life.

Energy imports and exports

The other way is wait stupidly until famines and wars will decrease the numbers. The countries that rely heavily on energy imports might well be the potential aggressors. Most of these countries are united in the NATO, which has its head quarter in the country that imports most energy per inhabitant: Belgium. (See: “Energy crisis: turning point of humanity”)


A few practical points

The privileges of central banks sit on articles of law. Changing articles of law is a matter for parliament. Many members of parliament probably don't have the slightest idea about what money is and how it works. "Secrets of money, interest and inflation" and "Debit, credit, banco!" offer a short and easy-to-understand introduction.

Nearly all available economic books are about the growth economy. That makes it a bit more difficult to get insight. Because of the theories of the growth economy, many people confuse economic growth and prosperity.

Starting up a central bank of the government is not an expensive matter. Money is just a "debt with collateral" and can be created out of nothing, like most existing money today. [7]

The "nationalization" of central banks doesn't have to be expensive either. In its most simple form it consists in withdrawing privileges. The employees could receive a proposition to come and work for the new central bank of the government.

Banks will remain necessary as middlemen between the central bank and the public. The criteria for the credit supply are determined by economic policy and its execution by the central bank. Today's criteria of profiteering, liquidity and solvency of individual private banks will no longer determine the supply (or not) of loans.

For the public not much will change. People can keep their bank accounts. However, I think, in the future more and more people will choose more consciously for co-financing useful projects.

The euro

The euro is the currency of the European Central bank in Frankfurt. This is a private institution, owned by the private central banks from the affiliated countries. The ECB and these central banks are independent from the governments. [8] The euro is not an obligation for the European Union. For instance, the Bank of England is a nationalized bank with its own currency.

By itself, a common currency in the European Union is a pleasant thing. However, the enormeous power of the bank consortium ECB forms a threat and a hollowing of the democracy. The unbridled creation of money already led to the sale of most public tasks like post, telegraph, telephone, public transport, gas, water and electricity supply, police and prison tasks. The population is at the mercy of the big money. The room for action of the governments is more and more reduced.

I don't think, that the ECB will be inclined to give up its power. A new European currency should be created by governments that share a vision about the shape of society now and in the future. For this, any country of the European Union could take the initiative.


[1] Iceland, Hungary and Ukraine marketsNewsUS/idUKLJ43131520090119


[2] Interest is the accelleration and the break pedal (De Nederlandse Bank N.V.) interest-rates-and-inflation/general/index.jsp


[3] « World Energy And Population », graphic 14 en_World_Energy_and_Population.htm 


[4] Money multiplier; « Debet, credit, banco ! » en_Debit_credit_banco.htm 


[5] Central banks promote the permanent inflation (pretended 2%) as "Price stability" ! pdf/students/leaflet_en.pdf  , page 10


[6] "World Energy And Population", Paul Chefurka en_World_Energy_and_Population.htm


[7] Until 1971 the US-dollar was backed by a quantity of gold. Backing money with the value of precious metals not only has the disadvantage of possible speculations, but also means that foreign suppliers of these minerals automatically become owners of the represented value. Fiat money, on the contrary, sits on recognition of debt, the promise of a service in return. Because it is created out of nothing, the danger of abuse by financial authorities (for instance inflation) is higher.


[8] ECB follows its own policy orga/independence/html/index.en.html

4 February 2009


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