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  #21  
Old 15.04.2018, 16:48
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Re: Vollgeld initiative - 10 June vote

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"Banks creating money is to me a myth" ...
I am not a banker, and far from being an economist, but a quick Google of 'Fractional Reserve Banking and Money Creation' indicates that many others believe that money IS being created by banks ...
Up to now each one of them has failed to state how private banks create money.

And many people believe the earth is flat, does not have to mean that the earth is flat.
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  #22  
Old 15.04.2018, 18:10
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Re: Vollgeld initiative - 10 June vote

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Up to now each one of them has failed to state how private banks create money.

And many people believe the earth is flat, does not have to mean that the earth is flat.
The earth is not flat. Banks create money.


'In practice, if the central bank imposes a required reserve ratio (RRR) of 0.10, then each commercial bank is obliged to keep at least 10% of its total deposits as reserves, i.e. in the account it has at the central bank. In a detailed example: A person deposits $100 in a bank. The bank keeps $10 as reserves in the central bank. To make a profit, the bank loans the remaining $90 to a customer. The customer spends the money and the recipient of the $90 deposits them with their bank. That bank keeps $9 as reserves in the central bank, and then lends the remaining $81. And so on, until the loans become so small that they dissolve to zero. In the end, an amount approximating $1000 is expected to be net added to the money supply.[21]'

-https://en.wikipedia.org/wiki/Money_creation
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  #23  
Old 15.04.2018, 18:25
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Re: Vollgeld initiative - 10 June vote

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This I not about federal or national banks who operate as an extension of governments, this is about private banks, and private banks do not create money.

EXAMPLE:

You bring 1.000,- to the postbank
Postbank lends out 90% and has to keep a minimum of 10% at hand.
I lend that 900,- from the Postbank to get drunk in a bar.
The barkeeper brings that 900,- to the Postbank.
Postbank lends out 810,- from the barkeepers 900,- and keeps 10% at hand.

Where exactly is new money being created? The balance stays the same.
Well, you believe you have this 1000. The barkeeper thinks he has 900. The next guy thinks he has 810. With a 10% reserve, there can be 10'000 worth of money in the economy, starting with the initial 1000, the rest is created by loans. The bank owes 10'000 to some people and 9'000 is owed to the bank by some other people.

The balance stays the same, but you have effectively 10'000 notes competing for goods and services and 9'000 debt, on which the bank can charge interest.

https://en.wikipedia.org/wiki/Fracti...eserve_banking
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  #24  
Old 15.04.2018, 18:35
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Re: Vollgeld initiative - 10 June vote

Yes I know how it works, the bank does nothing else than giving out 90% of money that people have brought to the bank. And people want to change this to 0%

I hope they do know what side-effects they are voting for if they say Yes, I fear of lot of them don't.

customer: Can I have a loan?
bank: No sorry we don't have money to borrow to you.
customer: Well that sucks.
bank: But we can lend it elsewhere and lend that out to you, it is just more expensive for you, since you pay your rent, and our rent. Also the risk will be more expensive, since if you do not pay we do not just less money like we did in the past, we still have a loan to pay and need to find this money elsewhere or refinance it.
customer: Nah, leave it, it's cheaper to get a loan in another country.
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  #25  
Old 15.04.2018, 18:42
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Re: Vollgeld initiative - 10 June vote

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Yes I know how it works, the bank does nothing else than giving out 90% of money that people have brought to the bank.
I don't think you know how it works. The bank effectively gives out +/- 1100% of money that people have brought to the bank.
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Old 15.04.2018, 18:46
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Re: Vollgeld initiative - 10 June vote

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If you spend 900 CHF to get drunk in a bar then it's a bloody miracle if you still manage to breath, let alone talk, dance, or throw darts.
Clearly, you hvae never been to Norway.

Tom
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Old 15.04.2018, 18:46
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Re: Vollgeld initiative - 10 June vote

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This I not about federal or national banks who operate as an extension of governments, this is about private banks, and private banks do not create money.

EXAMPLE:

You bring 1.000,- to the postbank
Postbank lends out 90% and has to keep a minimum of 10% at hand.
I lend borrow that 900,- from the Postbank to get drunk in a bar.
The barkeeper brings that 900,- to the Postbank.
Postbank lends out 810,- from the barkeepers 900,- and keeps 10% at hand.

Where exactly is new money being created? The balance stays the same.
FTFY (in the name of accuracy).

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It would appear that I have suffered a humour malfunction.

If you spend 900 CHF to get drunk in a bar then it's a bloody miracle if you still manage to breath, let alone talk, dance, or throw darts.

I've been out (with bankers) often enough to know that you really have to be imaginative to spend 900 per person on drink alone.
That's because you only associate with poor people like bankers. I use 1000CHF notes to light my 15'000CHF a shot sambuca.
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  #28  
Old 15.04.2018, 19:10
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Re: Vollgeld initiative - 10 June vote

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I don't think you know how it works. The bank effectively gives out +/- 1100% of money that people have brought to the bank.
No they don't.

Simple question:

How much must have been deposited into a bank to be able to loan out 10.000,-?
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  #29  
Old 15.04.2018, 19:12
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Re: Vollgeld initiative - 10 June vote

They borrow it themselves and reduce the negative interest they have to pay on positive balances
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  #30  
Old 15.04.2018, 19:13
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Re: Vollgeld initiative - 10 June vote

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Clearly, you hvae never been to Norway.

Tom
We once ordered a cocktail in Danmark in a club in the 80's which costed by then 600 Danish Kronor.

10 of those and 900 CHf is gone...

(But truth has to be told, my average bar spending gets not even close to it, but it is easily doable)
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  #31  
Old 15.04.2018, 19:16
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Re: Vollgeld initiative - 10 June vote

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They borrow it themselves and reduce the negative interest they have to pay on positive balances
How does lending out money bring your own balance down?

If I have 100K on hand, or have 100K lended out to my neighbour. My balance is the same.
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  #32  
Old 15.04.2018, 19:18
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Re: Vollgeld initiative - 10 June vote

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How does lending out money bring your own balance down?

If I have 100K on hand, or have 100K lended out to my neighbour. My balance is the same.
I never said it brings the balance down, it changes your interest rate
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  #33  
Old 15.04.2018, 19:20
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Re: Vollgeld initiative - 10 June vote

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Banks do create money. Where do you think it comes from?
Orell Füssli and De La Rue?
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  #34  
Old 15.04.2018, 19:24
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Re: Vollgeld initiative - 10 June vote

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Any thoughts on the Swiss Psyche to vote Yes and the likely consequences for the private banks?
https://www.vollgeld-initiative.ch/
The same old twaddle, just the failed gold standard all over again.
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Old 15.04.2018, 19:44
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Re: Vollgeld initiative - 10 June vote

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No they don't.

Simple question:

How much must have been deposited into a bank to be able to loan out 10.000,-?


answer: +/- 1000

"..an initial deposit of USD 1000 will end up creating a total of USD 10’000 in new money."

https://quickonomics.com/how-to-calc...ey-multiplier/

it's been explained now 3 times for you, in simple terms, how private banks create money.
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  #36  
Old 15.04.2018, 20:30
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Re: Vollgeld initiative - 10 June vote

Every common-or-garden retail bank operates on fractional reserve banking.
If this passes, banks will have to match deposits to lending.

The side effects will be awesome.

Some random thoughts...

- If withdraw 50k chuffs, they have to call in that lending from a homeowner or car loan or whatever
- The number of mortgages they can issue drops massively, or called in, or expected to be paid off: implies tax system changes
- More Dacias for cash, fewer BMWs on lease (ha ha ha)
- (insert side effect here)
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  #37  
Old 15.04.2018, 20:58
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Re: Vollgeld initiative - 10 June vote

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Every common-or-garden retail bank operates on fractional reserve banking.
The downside of direct democracy - how many people in the street understand what fractional reserve banking or sovereign money is?
(even after reading the blurb?)
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  #38  
Old 15.04.2018, 21:01
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Re: Vollgeld initiative - 10 June vote

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The downside of direct democracy - how many people in the street understand what fractional reserve banking or sovereign money is?
(even after reading the blurb?)
Who cares?

Bankers are all wankers!

Tom
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  #39  
Old 15.04.2018, 21:26
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Re: Vollgeld initiative - 10 June vote

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answer: +/- 1000

"..an initial deposit of USD 1000 will end up creating a total of USD 10’000 in new money."

https://quickonomics.com/how-to-calc...ey-multiplier/

it's been explained now 3 times for you, in simple terms, how private banks create money.
A 1.000,- can only end up being the start for a larger number on both the negative and the positive, since these two are balancing there is no new money, there is in total still the same amount.

For a bank to be able to lend out 10.000,- a minimum total of 11111.11 has to be deposited.

1.000,- ends up being a 10.000,- deposit, 9.000,- outstanding and the rest on hand (which is a debt the bank has towards the client(s), because each time a deposit gets made 10% needs to stay within the bank. It just ends up with the bank having deposits, loans and the 1.000,- on hand. If you add all of these together the sum is 1.000,- which tells us nothing new has been created.

If I do not understand than clearly something in my math is wrong, please tell me what is?
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Old 15.04.2018, 21:56
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Re: Vollgeld initiative - 10 June vote

This does seem like an interesting proposal.
It seems that the Island of Guernsey has effectively been doing this since 1817 ... "using the money creating powers of the state to finance public projects since 1817" ?!!! (just Google 'guernsey money creation').
As this obviously means the banking industry potentially has so much to lose, I think this initiative is very unlikely to be voted in.
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