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Old 15.04.2018, 13:00
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Vollgeld initiative - 10 June vote

Any thoughts on the Swiss Psyche to vote Yes and the likely consequences for the private banks?
https://www.vollgeld-initiative.ch/
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Old 15.04.2018, 13:08
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Re: Vollgeld initiative - 10 June vote

Sounds like a great idea!

Tom
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Old 15.04.2018, 13:11
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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/
100% reserve banking would mean that banks would need to keep 100% of the money we bring in at hand, meaning they cannot lend this out and cannot make profit with it, so it is to be expected that having your money on the bank becomes more expensive, banks can than only lend out their profits and their own capital and nothing of the money which is brought in, this would mean that banks have much less money to lend out for consumer and business investments, so it is likely that due to the much higher demand than availability for money which this creates that lending money becomes more expensive, since most of the money has to be gained from across the border due to the internal shortage.

I find this a dumb initiative for people who for some weird reason keep thinking that banks create money since they have no clue how reserve banking works.

Banks creating money is to me a myth for alu-foil hat wearers, and I cannot imagine that the Swiss people would agree to this, I think this one gets shot down with large majority of the votes (I may hope so at least)
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Old 15.04.2018, 13:40
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Re: Vollgeld initiative - 10 June vote

Thankyou for making me laugh with your ref to 'alu- hat' wears. Thanks for the clarification on the reserve banking, if the private banks hold tons of gold, couldn't they use that as their reserve on deposited funds? I am sure I am missing a big point here. I was wondering whether there would be an impact on gold prices should the SNB take fullcontrol.
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Old 15.04.2018, 13:47
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Re: Vollgeld initiative - 10 June vote

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100% reserve banking would mean that banks would need to keep 100% of the money we bring in at hand, meaning they cannot lend this out and cannot make profit with it, so it is to be expected that having your money on the bank becomes more expensive, banks can than only lend out their profits and their own capital and nothing of the money which is brought in, this would mean that banks have much less money to lend out for consumer and business investments, so it is likely that due to the much higher demand than availability for money which this creates that lending money becomes more expensive, since most of the money has to be gained from across the border due to the internal shortage.

I find this a dumb initiative for people who for some weird reason keep thinking that banks create money since they have no clue how reserve banking works.

Banks creating money is to me a myth for alu-foil hat wearers, and I cannot imagine that the Swiss people would agree to this, I think this one gets shot down with large majority of the votes (I may hope so at least)
Banks do create money. Where do you think it comes from?
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Old 15.04.2018, 13:59
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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?
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.
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Old 15.04.2018, 14:10
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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.
For one the interest, not much now but could be up again.

For example for a high yield bond you can still get 5-6 %, what is the current rate for borrowing money to finance a house?

M&A, other corporate financing, FX hedging etc
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Old 15.04.2018, 14:12
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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.

Sadly I now know no more about banking than 5 minutes ago.

But I did learn never to go on a pub crawl with you.
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Old 15.04.2018, 14:16
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Re: Vollgeld initiative - 10 June vote

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For one the interest, not much now but could be up again.

For example for a high yield bond you can still get 5-6 %, what is the current rate for borrowing money to finance a house?

M&A, other corporate financing, FX hedging etc
Interest is not new money, interest is existing money that the lender earns somehow and pays to the bank as a commission for lending the money, and it is partly to cover for the risk of the bank not getting their money bank.

What would you think it would cost for you to bring your money to a bank who is not allowed to invest it partly elsewhere, so they cannot make any profit on it. They do however have costs by keeping that money, first your interest has to go since they cannot pay such anymore which makes banking across the border more interesting, and secondly it is likely that the costs of maintaining an account would go up which makes banking across the border also more attracting.
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Old 15.04.2018, 14:19
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Re: Vollgeld initiative - 10 June vote

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Sadly I now know no more about banking than 5 minutes ago.

But I did learn never to go on a pub crawl with you.
In the end it is very simple, a bank is allowed to lend out 90% of the money people put into their bank accounts, the bank uses this money to make a profit.

This initiative wants that banks keep 100% of this money on hand and thus disallow banks to earn money with your money. There are tremendous side effects to this.

This 90% is used to give us mortgages, it is used by companies to invest, it is this 90% which gives the banks their income to pay for their costs.
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Old 15.04.2018, 14:27
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Re: Vollgeld initiative - 10 June vote

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In the end it is very simple, a bank is allowed to lend out 90% of the money people put into their bank accounts, the bank uses this money to make a profit.

This initiative wants that banks keep 100% of this money on hand and thus disallow banks to earn money with your money. There are tremendous side effects to this.

This 90% is used to give us mortgages, it is used by companies to invest, it is this 90% which gives the banks their income to pay for their costs.
I understand the initiative (and it's going to fail imho), but I'm still not going on a pub crawl with you.
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Old 15.04.2018, 14:33
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Re: Vollgeld initiative - 10 June vote

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I understand the initiative (and it's going to fail imho), but I'm still not going on a pub crawl with you.
Better do, I never discuss politics or finance when drunk. A nice game of darts, dancing or talking about football is much more interesting at such moments
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Old 15.04.2018, 14:39
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Re: Vollgeld initiative - 10 June vote

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Better do, I never discuss politics or finance when drunk. A nice game of darts, dancing or talking about football is much more interesting at such moments
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.
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Old 15.04.2018, 14:41
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Re: Vollgeld initiative - 10 June vote

Can't get the video in, so just a link.
https://www.youtube.com/watch?v=VVtHTN0Mbwc

I'm sorry, this is in German. (There will probably be no English campaigning done )

And should you just want to prolong enjoying your German knowledge, you can watch this for a laugh:
https://www.youtube.com/watch?v=6eTGs3tF7iw
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Old 15.04.2018, 15:22
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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/
Perhaps it might be a good idea to post a summary of what it's about, in English please.
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Old 15.04.2018, 15:36
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Re: Vollgeld initiative - 10 June vote

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Perhaps it might be a good idea to post a summary of what it's about, in English please.
Your wish is my command

They actually did an English version of the campaign-site.
(yeah, well, part of it at least).
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Old 15.04.2018, 15:42
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Re: Vollgeld initiative - 10 June vote

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Your wish is my command

They actually did an English version of the campaign-site.
(yeah, well, part of it at least).
And here's the PDF with the details in English, which I'll save for curing insomnia at some point:
https://www.vollgeld-initiative.ch/f...witzerland.pdf
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Old 15.04.2018, 15:48
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Re: Vollgeld initiative - 10 June vote

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Your wish is my command

They actually did an English version of the campaign-site.
(yeah, well, part of it at least).
Quote:
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And here's the PDF with the details in English, which I'll save for curing insomnia at some point:
https://www.vollgeld-initiative.ch/f...witzerland.pdf
Thanks, I had a quick look and can confirm that it starts inducing sleep after around 45 seconds of reading.
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Old 15.04.2018, 16:18
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Re: Vollgeld initiative - 10 June vote

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100% reserve banking would mean that banks would need to keep 100% of the money we bring in at hand, meaning they cannot lend this out and cannot make profit with it, so it is to be expected that having your money on the bank becomes more expensive, banks can than only lend out their profits and their own capital and nothing of the money which is brought in, this would mean that banks have much less money to lend out for consumer and business investments, so it is likely that due to the much higher demand than availability for money which this creates that lending money becomes more expensive, since most of the money has to be gained from across the border due to the internal shortage.

I find this a dumb initiative for people who for some weird reason keep thinking that banks create money since they have no clue how reserve banking works.

Banks creating money is to me a myth for alu-foil hat wearers, and I cannot imagine that the Swiss people would agree to this, I think this one gets shot down with large majority of the votes (I may hope so at least)
"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 ...
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Old 15.04.2018, 16:39
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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.
interest.

It's a debt-end monetary system. There is never enough money in the economy's money supply to pay off exiting debts (due to interest) - and so new money needs to be continually loaned into existence to keep the ball rolling.
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