courtfool.info
The court fool reveals
secrets behind world events
list of articles
StartListOfArticles

Rutte versus Erdogan 12 March 2017
Burada patron değil, Erdogan değilim !

Rutte versus Erdogan 12 March 2017 Dutch prime minister prevents Turkish ministers from attending a pro-Erdogan meeting


The secrets behind money The secrets behind money:

The bankers hat

The magic of bankers The magic of bankers

Always growing debts

The cancer of bankers The cancer of bankers

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.

The banking system in short The banking system in short

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

Secrets of money, interest and inflation Secrets of money, interest and inflation

Debit, credit, banco! Debit, credit, banco!

Canadas_National_Debt_1940_1987
Politicians give billions away to private bankers...

A tale of two monetary systems A tale of two monetary systems

falling banknotes

Private banks or a bank of the government Private banks or a bank of the government. A comparaison.

From state debt to state money From state debt to state money

Towards a sound economy Towards a sound economy

Bank crisis? Reform!

Bank crisis? Reform! Bank crisis? Reform!

Wall_Street_Bull

the Derivative Scam Banking explained:
the Derivative Scam



The secrets behind the euro The secrets behind the euro:

The madness of the euro

The madness of the euro The madness of the euro

heavy euro

Out of the euro, and then? Out of the euro, and then?

hungry euro

ESM, the new European dictator! ESM, the new European dictator!

YouTube: The new European dictator

ESM robs the Treasuries in 3'51'' ESM robs the Treasuries in 3'51''

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

ESM, a coup d'état in 17 countries! ESM, a coup d'état in 17 countries!

Zeus rapes Europa

Zeus rapes Europa Zeus rapes Europa

Goldman Sachs captures Europe

How the Goldman Vampire Squid Just Captured Europe ESM: How the Goldman Vampire Squid Just Captured Europe

NATO rescues euro in Libya

NATO rescues euro in Libya NATO rescues euro in Libya

Obama and Sarkozy in Libya
Obama and Sarkozy in Libya

Hillary Clinton's emails about Libya Hillary Clinton's emails about Libya

Euromania

EUROMANIA by Peter Vlemmix EUROMANIA by Peter Vlemmix

Ascensao_e_queda_do_euro

Autores:
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

Exceptional offer
Exceptional offer:

Ivan Boyadjhiev, Confused Perspectives, 40 x 50 cm

Ivan Boyadjhiev, Confused Perspectives, 40 x 50 cm Ivan Boyadjhiev
Confused Perspectives
40 x 50 cm
Click here...




The secrets behind democracies The secrets behind democracies:

Power to the people

The road to democracy The road to democracy

The bizarre Dutch referendum

The bizarre Dutch referendum The bizarre Dutch referendum

Chicken_parliament

The chicken-parliament The chicken-parliament


secrets behind the war in Iraq The secrets behind the war in Iraq:

dollar_bill

Cost, abuse and danger of the dollar Cost, abuse and danger of the dollar

Iraq_Memorial

Iraq Memorial Iraq Memorial


The secrets behind the war in Afghanistan The secrets behind the war in Afghanistan:

Pipelines_to_9_11 / WTC

Pipelines to 9/11 Pipelines to 9/11


The secrets behind the accusations against IranThe secrets behind the accusations against Iran:

Raid on the nuclear fuel market

Raid on Nuclear Fuel Market Raid on Nuclear Fuel Market

Wipe Israel from the map? Wipe Israel from the map?


Farewell to growthFarewell to growth:

outlook_population

World Energy and Population World Energy and Population

World_Energy_Imports_Exports

Turning-point of humanity Energy crisis:
Turning-point of humanity




Facts and lies about the climateFacts and lies about the climate:

Climate Conference Paris 2015

Climate Conference Paris 2015 Climate Conference Paris 2015

The clockwork of the Earth and Sun

The clockwork of the Earth and Sun 1: The clockwork of the Earth and Sun

The activity of the Sun

The activity of the Sun 2: The activity of the Sun

CO2: scare, claims and fraud...

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

Uncover secrets Uncover secrets:

Sleepwalking

Wake up citizens? Wake up citizens?


HumorHumor:

Protest in Draguignan
There are alternatives to capitalism...

Protest in Draguignan Protest in Draguignan

Cartoons

More cartoons Click here fore many more original cartoons...


Treaties Treaties:


Treaty establishing the European Union (EU) Treaty establishing the European Union (EU)

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

Amendment article 136 TFEU Amendment article 136 TFEU

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

ESM Treaty establishing the European Stability Mechanism (ESM)

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

Vienna Convention 1969 Vienna Convention on the Law of Treaties 1969

Websites having published articles of the court fool Do you want to know who publishes the fool's articles?

Publishers

StartPublishers



11 Septiembre 2001
24h Gold
321 Energy
Aardewerk.be
Academie-Gaullisme
Ad Broere
Advivo.com.br
Afghan.nl
Aftershock News (ru)
Albe.ru
Aldeilis
Alexander's Gas and Oil
Alex Constantine's 9/11 Truthmove
Alfa Kappa
Aljazeera Com
Aljazeera Info
Altea te quiero verde
Alter du Lot
Alter Info
Altra Informazione
American Chronicle
American Iranian Friendship Committee
Amsterdam Post
Anarchiel
Andalous.ma
Anonymous France
Anovis Anophelis
Antifascist Encyclopedia
Apocalypse Total
Apokalyps Nu
Apollo Solaris
Aquarius Age
Argusoog
Arianna Editrice.it
ArmonyaX
Articles du jour
Artikel 7 Nu
At-Park / АТ-парк
Atlas Vista Maroc
Au bout de la route
Avant de voter
Averdade vos libertara
Avicennesy
Avizora
A voz do povo
Baltimore Chronicle
Bankiv Tomske.ru
Banque publique .be
Beaujarret 50'z
Beez Libre Info
Before it is news
Belém Livre
Bernard Sady
Bezformata.ru
Biflatie.nl
Blogapares
Blog Chalouette
Blog Chatta.it
Blog économique et social
Blogg.org
Blog World-citizenship
Bobo in Paraguay
BOINNK!!!
BouBlog
Brasilianas.org
Brood en spelen
Bullion Management Group
Burbuja.info
Business-Gazeta.ru /
БИЗНЕС Online
Cafe 415
Candombeando
Cantv
Carla Noirci's Log
CASMII
Caveat emptor
CawAilleurs
CDU Arouca
Cenex.com.ua
CGT Santé 46
Chatta it
Chipstone
Chris Roubis
Chiado Editora
Club Invest
Cogito ergo sum
Collectif de Remises En Causes de Besançon
Come Don Chisciotte
Comité Valmy
Conscience Citoyenne Responsable
Contre-Info
Correio Progressista
Corriera della Notte
Cosenostrea casanostra
Counter Currents
Crash Debug fr
Crise Systémique Globale
Critical Trend (bg)
Criticamente
Cross-Cultural Understanding
Dagboek van een belegger
Daily Motion
Daily Times
Dandelion Salad
Dazibaoueb
Déborah 33 Epée
De Echte Denker
De Kelderlander
De Lange Mars
Démocratie réelle Nimes
De Waarheid Nu
Démocratie capitaliste
Démocratie Réelle à Nimes maintenant
Démocratie royale
Democratische Partij v Solidariteit
Denissto.eu
De Reaguurder
De Vrije Chroniqueurs
Dialogue & Démocratie Française
Diário Liberdade
Diatala.org
Digitale Stad Eindhoven
Dimensional Bliss
Dire Giovani
Dissident News
Dit kan niet waar zijn.eu
Diário de Notícias - Cartaz
Djamazz Centerblog
Docplayer.ru
Dolezite.sk
ДОТУ.org.ua / Dotu.org.ua
Double Standards
Dove sono le ragazze
Doy Cinco
Dreamdash
Dutch Amazing Nieuws
Dwarslezing
E.J. Bron
Earth Matters
Económico Fórum pt
Economics Kiev /
Мировая и рыночная
экономика
Статьи и книги

EC-planet
Eco-Humanisme Radical.org
Edelmetaal.Info
Educate Yourself
E-Foro Bolivia
Égalité & Réconciliation
Eindtijd in beeld
Élections Algérie
EliteTrader.ru / Элитный Трейдер
El Libre Pensador
Elkhadra
Eltimir / Елтимир
End the ECB
End US Militarism
天涯社区 /
(End of the world community)

Enrico Sabatino
Entrelector
Es.Sott.net
Etienne Chouard
EU Alert
Europe 2020
Europlouf
Eurostaete eu
Eva Anárion
Evolution de notre civilisation
Facebook
Fai te
FCCI
FDESOUCHE
Ferra Mula
Filosofia e Tecnologia
Fimdostempos.net
Finanza.com Blog
Finanza Online
Focus στην Οικονομία
Folha diferenciada
Forexaw
Fortune F. Desouche
Forum démocratique
Forum des Alternatives.org
Forum.for-ua.com
Forum Mondiale della Alternative
Four Winds
Francisco Trindade
François de Siebenthal
Free Minds
Freedom Bytes
French News Online
French Revolution
Fronte di Liberazione dai banchieri
FTU.su
Fugada YouTube Forum
Future Fast Forward
Gabriele van Doorn
Geen Flauwekul
Generaal Pardon
Geografia e Luta - Prof. Mazucheli
Geopolitica blog
George Orwell Werkgroep
Gest Credit
Gianfranco Vizzotto
Gino Salvi
Global Echo
Global Economic Intersection
Global Faultlines
Global Order
Global Research
Global Systemic Crisis
Golden Heart
Gorod.Tomsk.ru
Город.Томск
Goto 2012
Goudstaven-goudstukken
草根金融服务社 /
(Grassroots Financial Service)

Grioo
Guerre Libre Info.org
Henry Makow
Het echte nieuws.be
Het uur van de waarheid
Hidden Mysteries
Ho visto cose che voi umani
Holland 4 MPE
Ho visto cose che voi umani
Hubbert Peak
Huffington Post
Iceberg Finanza
Il nodo gordiano
Imperiya / Империя
Indebitati
Indymedia
Indymedia Portland
Info Guerilla
Infomare Per Resistere
Information Clearing House
Informazione in Rete
Infos différentes
Infowars Ireland
Institute of Evolutionary Economics
Instituto Reage Brasil
Intellezione
Intermarket & more
International Business Times
InvestGraf
Investors Hub
Iran Blog
Iran Daily
Iran File
IRIB Iran French Radio
Irish Public
Irish Timez
Irissan
Islam City
Isxys / ΙΣΧΥΣ
Ivan Mutov
Jean Marie Lebraud
Joomla
Joop.nl
Jornal Fraternizar
Jornalggn.com.br
Jose Joa Net
Josè Maria Salvador
Journal la Mée
Journal Milénio
Journaux de Guerre
Kanie Tistory
Klein Paradijs
Klepsudra
Kollinos
Komitet / Комитет
Kostarof
L'éveil 2012
L'Observatoire de l'Immo
La banlieu s'exprime
Lanet Kiev
Las razones de Aristófanes
LeaksFree.com
Le Banquier Garou
Le Blog d'Eva
Le Blog de Nicole
Legion 5-9
Legio Victrix
Le Lot en Action
Le Metropole Cafe
Le Monde du Sud
Le Partisan de Gauche
Le Post
Les Indignés
Les moutons enragés
Leugens
Lettre d'Informations Stratégiques Internationales
Liberamenteservo.it
Libertatum
L.I.E.S.I.
Lit Corner
L'Olandese volante
Luminária
Macua Blogs Moçambique
Magok Vagyunk
Manifeste pour un débat sur le libre échange
Mapeni School
Marianne2
Marista Urru
Market Oracle cn
Market Oracle co.uk
MasterNewMedia
Mathaba News
Maurício Porto
Max 1967
Maxi News
MBM Hautetfort
Mecano Blog
Melochi
Mens en Politiek
Mercato Libero News
Metropolis
Mga Diskurso ni Doy
Michel Collon Info
Middle East Online
Mondialisation Ca
Money Files
Mouvement Politique d'Éducation Populaire
Na Sombra.org
Nato nella tana
Natural Money
Nervyoko-bis
Newropeans Magazine
News Follow Up
Newzz in Ukrain
Niburu
Nieuw-Nederland
Nieuws-Flash
Norma Tarozzi
Nota.to-p.net / НОТАРИАТ
Notizie Libere
Notizie Silcea
Nous les dieux
Novusordoseclorum
NucNews
Nya Politiken
Ocastendo Blogs
Occupy Amsterdam
Occupy Network tv
Oil Crisis
Olo's Ramblings
Oko-planet.su / Око Планеты
Onderzoek 9/11
One Base.com
Ons geld
Ontdek Islam
Openbare Bank be
Os Bárbaros
Osservatorio Sovranità Nazionale
Osvaldo Bertolino
Our World / НАШ МИР
Oxygene.re
Pakistan News Service
Palestine - Solidarité
Panier de Crabes
Paper Blog fr
Paperless Korea
Paraguay Tistory
Partage dialoguer avec jean loup
Parti de Gauche 34
Partido Comunista Brasileiro
Patrice Mars
PCF Bassin
PCF Cap Corse
Peace by Truth
Peak Oil .pl
Pensare Liberi News
Pensioenblog
Perunica
Peter Pan's Paradijs
Philippe Vedovati
Pintxo
Planeta Caos
Planete Non Violence
Plein Overheid
Politics & Current Affairs
Portal Luis Nassif
Portland Independent Media Center
Post Jorion
Post Switch
Pragmatic Economist
Pravda / Правда
Primavera do 11
Project for the Old American Century
Prova Final
Puszta Igazság
Quo Fata Ferunt
Raise the Hammer
Ravage Digitaal
Rayven
Real Infos
Real Wealth Society
Recuperare Credit
Relapsing Fever
Resistance
ReRuBabs
Réseau International
Resistance 71
Résistance FR
Resistenze.org
Resistir Info
Resurs.by
Revolta Total Global
Robin Good
Rodon
Rol Club
Rue 89
Rus Nevod
Sahar TV Iran
Saura Plesio
Schoonoord Web
Seigneuriage Blogspot
Sempre Vigili!
Shem.se
Siddharth Varadarajan
Signoraggio.it
Silver and Gold Shop
Silver Bear Cafe
Sociale Databank Nederland
Sociale Driegeleding
Sociologias
SOS-crise
Sott.net
Soutenir l'Afghanistan
Spartacus.info
Spazio Forum
Spiegelbeeld
Spraakloos
Sprookje Nieuws
Stampa Libera
Star People
Stienster Blogspot
Studien von Zeitfragen
Stop de bankiers
Storyo.ru / Страницы истории
Suciologicus
Sustainocratie
Svobodnoslovo / Свободно слово
Tegen Onzin
Textos A Voz do Povo.pt
The Movement
The People's Forum
The Pragmatic Economist
The Voice of Wakker Holland
The Wild, Wild Left
Tijdgeest Magazine
Time For Change
Timotv
Toine van Bergen
TomskNet.ru / Город.Томск
To-p.biz
Top-débats.info
Tora Yeshua / תורה־ ישוע
Trademan.org
Transatlantic Information
Exchange System
Transition Town Breda
Transcom Se
Triplo II
Truth Spring
Truth Move 9/11
Tunisia Today
Uitpers
UKIP Hillingdon
Um Novo Despertar
Uruknet Info
Vemiplast
Verborgen Nieuws
Vermelho.org.br
Verontruste Moeders
Veterans for America
Video data bg
Viewzone Magazine
Vilag Helyzete Blogspot
Vilistia
Visionair.nl
Vision Démocrate.net
V-Kontakte.ru / Вконтакте
Voix dissonnantes
Volya.ariy.org
Voprosik / Вопросик
Voy Com
Vrijspreker
Vues du monde
Vyacheslav Burunov
ВячеславБурунов
Wake Up From Your Slumber
Wakkere Mensen
Wall Street Pit
Want to know .nl
War and Peace / война и мир
Waterput klassiek
We Are Change Holland
We Are Change Rennes
Welcome Back UZ
Werkgroep George Orwell
What really happened
Wij worden wakker
Wiki Strike
Wisdia Encyclopedia
Worldissue Blog bg
World Prout Assembly
Wroom.ru
YouTube
Yursodeistivie / Юрсодействие
ZakonVremeni.ru
ЗаконВремени
Zebuzzeo
Zé Povinho no século XXI
Znanie-Vlast.ru
БезФормата.ru

Since 2006 the sites here above have published one or more of the court fool's articles. Some seem to be out of reach today, either because these websites or pages do not exist anymore, or because of other causes. To compliment them, I have chosen to keep them in the list.
Rudo de Ruijter

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:

StartTranslators

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
Михаил
Natalia Lavale
Nicoletta Forcheri
Peter George
Resistir Info
Traducteur sans frontière
Valérie Courteau

StartJoinTranslators

courtfool-faviconDo you want to translate too?

translator
Information stops at the linguistic borders. All translations on this site have been made by volunteers. If you speak more than one language, please consider translating an article too. Thank you in advance in the name of the thousands of people who will be able to read your translation.
Please contact:
Rudo de Ruijter
courtfool@xs4all.nl

Decrease text size
Increase text size

 

Towards a sound economy

by Rudo de Ruijter,
Independent researcher,
Netherlands

Sometimes money is compared with the blood of the economy. The credit crisis painfully demonstrated, that the economy depends on a permanent infusion of credits. As soon as the banks deliver a bit less credit, enterprises fail and the mass dismissals succeed each other.

We are made to believe, that the problems with the subprime mortgages were an incident. With a giga-capital injection, a bit more rules and better supervision the banking system would function correctly again. And oh yes, we must trust the banks again.

Main cause of the credit crisis

The main cause of the credit crisis lies in the bank/money system itself. The principle of the money system is, that money is brought into circulation by supplying credit and vanishes again at the moment the credit is paid back.

running on thin air

Western banks use two game rules: 1. in comparison with the lent-out amounts, they have to dispose of only 8% of capital. [1]; 2. they have to keep a small percentage of reserves in their pay-desk to perform payments for their customers and to hand out cash money. With these two rules the major part of the money, that customers have in their checking and savings accounts, is lent out (at Triodos bank this is 65% [2], at most other banks much more.) The lent out money is spent by the borrower and subsequently arrives in accounts at other banks. Now, the customers of the first bank can still dispose of their bank balance, while new bank balances have been created at the receiving banks . These new bank balances are the pretext for supplying new credits. This goes on and on. The bank balances are multiplied each time.

This system is called "fractional reserve banking". [3] The banks can fulfil only a fraction of their commitments. They have lent out their customers' money, although this money can be claimed immediately. They just gamble, that customers will never claim more than they have reserves in their pay-desk and that, if needed, the central bank will come to their rescue. The percentage that banks are not allowed to lend out (the so-called cash reserve) can be determined by law (in the US it was 1:9). In many other countries the central bank dictates the minimum percentage. (Before the crisis, for the Netherlands, I read there was a cash reserve percentage of only 3%.)

Each time a borrower spends money of his loan, the money moves to a following bank, that takes advantage of it to lend out most of it. So, the same money is lent out over and over again. In a 1:9 system the same money can be lent out 9 times. With a cash reserve of 3% it can be lent out 32 times. And each time when it is lent out, a bank collects interest.

The classical risk for banks is, that loans may not be paid back. That risk increases, when fewer new loans are put into circulation than those that are paid back. Then the available money in the country decreases. For the banking industry an environment in which the money supply permanently grows has fewer risks. The central bank sees to it, that the money supply keeps growing (the so called 2% inflation.) When needed, banks can borrow from the central bank, with stocks or bonds as collateral.

When the government borrows money, the amount of money in the country increases, too. Of course, the biggest increase is caused by the multiplier factor, that banks realize themselves. When the multiplier factor rises, loans can be paid back more easily. The income of the bank rises, too. So there is a natural tendancy to lend out higher percentages each time. The banks can also impose more and more requirements on the borrowers to lower the risks. However, the consequences of this dynamic is that the cash reserves decrease.

The purpose of the cash reserves is to supply cash money to the customers and, mainly, to perform payments between the accounts at different banks. When a customer of bank A makes a payment to an accountholder at bank B, a bit of the cash reserve of bank A moves to bank B. And as soon as a customer of another bank makes a payment to a customer at bank A, it increases its cash reserve again. So, the money goes forward and backward between the banks. In the past, it could take three days to make a payment to a customer at another bank. Banks then needed quite a lot of cash reserves. Since then, the payment system has been modernized. Payments go to the destination bank the same day, and the same money can be used for thousands of payments between banks the same day. For mutual clearance of payment orders only a little cash reserve is needed.

The banks have also taken care, that their customers hardly need bank notes (cash) anymore. At first, employers were obliged to pay wages in bank accounts. Everybody at one time got checks or forms for payment orders, which have been followed by plastic payment cards and internet banking. In the Netherlands, for a few years now, the debit card is more and more imposed for all small expenses. For each euro we don't keep in our pocket, the banks can lend out a multiple amount...

Although a growing money supply is needed to lower the risk of system crashes by failing loans, the multiplier factor ends up causing more and more instability in the money supply and causing smaller cash reserves. As soon as a bank has to book a loss, this not only decreases its capital, but often also its cash reserve. When a bank has less than the 8% required capital (compared to the outstanding loans), or too little cash reserve left, then, according to the rules, the bank has lost the game. The subprime mortgages caused the system to get stuck in 2007, but, in fact, any somewhat bigger losses, like for instance on Third World loans, could have triggered the crisis. The banks simply had too few reserves left to take losses. And once one bank gets in trouble, it can easily spread to other banks, because banks borrow money and buy securities from each other to optimize their balance sheets. The fact that the subprime mortgages were wrapped up as a complex financial product only made the effect bigger. But the main cause of the crisis is not the loss on the subprime mortgages, but the structurally decreased capacity of banks to take losses. And that is the consequence of the natural dynamic within the "fractional reserve banking" system.

Taken hostage

In many countries the governments were called on for help to save the banks. This is remarkable, for the banking system functions outside any democratic control. The directors of central banks took the ministers of finance to international meetings (or took them in) and extracted inconceivably high loans for the banks. All of us, we are guarantors with our future tax money. However, the banks would pay a market conform interest on these loans. To put it otherwise, they will charge their customers for it: you and me. In fact the ministers of finance were put against the wall. The banks were not allowed to fail; they were too important.

The power over the money has been given away by members of parliament in the past. They had no idea about what money was and how the system worked. Now the banks determine how much money there is in circulation and how much the population must pay for this service. The multiplier factor of money also leads to a shift in power within the country: banks make more and more investment decisions, while the government makes fewer. And because there is more and more money available, more and more things become buyable. This has led, for instance, to the dismantling of many state tasks. Services, that are important for the functioning of society, like public transport, post, telephone, water and energy supply have been thrown in the hands of the financial benefit seekers. Private companies would perform better. But in fact, it hides a shift in power due to the "fractional reserve banking".

We still pretend, that we live in a democracy, but the parliament has no say anymore over money, one of the most important factors in society. To get the power over money back inside the democracy only small law changes are needed. Unfortunately, today's parliamentarians, except a very little number of them, still don't understand anything about the money system. That is a pity, because by taking back the power over money and with an adequate bank reform, they would be able to stop the credit crisis almost immediately. [4]

Bank reform

Described in short, this bank reform could look like this: the central bank becomes a state bank, part of the ministry of finance. The state bank is the only bank that creates money for loans. The parliament decides which sort of loans must get priority in the interest of society. These loans can be supplied at favorable conditions. This way, the parliament gets much more influence over the shaping of society.

Todays' commercial banks become server counters for the loans from the state to the public. They manage the checking and savings accounts of their customers on behalf of the state bank. They cannot dispose freely anymore of this money and cannot multiply the balances. However, they will be allowed to collect funds to lend out.

Ethics

If the treasurer of the local sports club would use the money unseen to invest it and enrich himself this way, he takes the risk to be condemned. But when bankers manage the money in our checking accounts in this way, they go free.

The corrupt rules for banks have originated long ago, when gold smiths, and later bankers, were bent upon fooling their customers. [5] The only difference between what happened then and what goes on now is, that the system has become official and the law allows it. Of course, this practice is kept secret as much as possible. You will not find any website of a bank or of a central bank, that clearly explains how a bank works and how the system functions. At schools - except for a few very rare exceptions - the subject is not covered, and even in most economics studies it is not part of the curriculum.

In particular from 1913, after the establishment of the Federal Reserve Bank in the US, the bankers have succeeded in obtaining their own legal framework in many countries and have seized the power over the local money. In each of these countries one bank has been given the role of the central bank. The names of these central banks keep up the appearance, that they are governmental entities, whereas, on the contrary, they became independent from the local parliament and government, be it step by step in some cases: De Nederlandse Bank N.V. (1914), Bank of Canada (1935), National Bank of Danmark (1936), Deutsche Bundesbank (1957), Banque de France (1993), Bank of Japan (1997) and so on. On their bank notes, there were often portraits of kings and statesmen. In many cases the appearance that money would be of the state was corrobated by the fact that  the state kept the responsibility to mint coins. On the coins too, there were often trustworthy portraits. When necessary, even religion was invoked. The Dutch guilder coin had the inscription "God be with you" in the side. (Note of Alice Cherbonnier: US money says, "In God we trust.")

Eternal economic growth

It is thanks to the potential for economic growth and the increasing availability of raw materials and energy during the last century, that the money multiplier did not lead to problems, but even pushed the economic growth.

My thesis is, that today's bank system is a danger to the future of humanity. The permanent inflation, that is inherent to this system, forms an impulse for ever more economic activity in order to compensate for the loss of value of the money unit and to obtain a bit of the additional money put in circulation. In my opinion, this is also where the stubborn believe comes from, that an economy must grow to be healthy (and not, for instance, from a spontaneous desire of the working class to work harder all the time.)

Sustainability, on the contrary, supposes an equilibrium with our environment. Our environment does not grow along with the increase of our economic activity and population. It is destroyed by it. [6]

We need to get rid of our inflationary banking system as soon as possible and put the power over money back where it belongs in a democracy: in the parliament.

 

Further notes:

[1] The 8% capital requirement is the standard from the Basel Accords of 1988, on which all kinds of exceptions apply. This way, for loans with mortgages on housing, banks only need to have a counterpart of capital equal to 4% of the outstanding loans. For loans to other banks the requirement is still lower most of the times and for loans with a state guarantee it is 0%. http://www.bis.org/publ/bcbs04a.htm & http://www.bis.org/publ/bcbs04a.pdf?noframes=1

in 2004 the European Commission proposed to lower the 8% to 6% and the 4% to 2.8%.

http://europa.eu/rapid/pressReleasesAction.do?reference=MEMO/04/178&format=HTML&aged=1&l anguage=EN&guiLanguage=en

The Basel II Accords of 2006 offer more possibilities to (big) banks to choose the most favorable method to determine their risks. http://www.bis.org/list/bcbs/tid_22/index.htm

[2] At Triodos Bank 65% is lent out.

     http://www.triodos.com/com/whats_new/ latest_news/general/response_fin_crisis

[3] http://www.mises.org/story/2882#3 see chapters Fractional Reserve Banking, Central Banking, Deposit Insurance. Note, that Murray N. Rothbard (1926–1995) was a defender of the return of the gold standard, like, for instance, US Congressman Ron Paul still is. Although understandable, seen from a historical US' perspective, a money system based on gold has many disadvantages. Countries without gold mines would have to buy gold (which means deliver goods and services to the gold mining countries) for the only purpose of disposing of a national means of payment. Each time when more gold comes on the market, they will be obliged to buy more of it, to prevent their currency to devaluate against currencies of countries with increasing gold stocks. The gold mining industries would, in many aspects, get supra-national power, even more than the Fed today. Gold has no stable value. Its pricing can be influenced by holders of big stocks, like the gold mining industries and central banks. Even big numbers of small buyers and sellers, when triggered by fear or greed, can influence its price. All these price fluctuations can form a danger for any economy that has its money pegged to gold. Still more than today, gold would trigger conflicts, oppression and wars.

[4] Bank crisis? Reform!

     http://www.courtfool.info/ en_Bank_crisis_Reform.htm

[5] Secrets of money, interest and inflation.

     http://www.courtfool.info/ en_Secrets_of_Money_Interest_and_Inflation.htm 

[6] Energy crisis: turning-point of humanity.

     http://www.courtfool.info/ en_Turning_point_of_humanity.htm 

 

published 4 June 2009

 

For reactions and reply you can contact the author via www.courtfool.info .

If you wish, you may copy this article and forward it or publish it in newspapers and on websites.

Should more people read this article?

On the internet the readers have the power! They decide which information goes around the globe! You may not be aware of it, but if each reader sends a link to 3 other interested persons, it only takes 20 steps to join 3,486,784,401 people! You want to see it happen? Use your power!

3 x 3 x 3 x 3 x 3 x 3 x 3 x 3 x 3 x 3 x 3 x 3 x 3 x 3 x 3 x 3 x 3 x 3 x 3 x 3 = 3,486,784,401

 

If you don't want to miss the next publication, then click here:

flag UK   I would like to receive an email as soon as another article appears in English.
If the link doesn't work, please send an email.
address: courtfool@xs4all.nl
subject: Subscribe articles EN