Switzerland to vote on banning banks from creating money

Telegraph (UK) ^ | 24 December 2015 | Mehreen Khan

[Lorianne]

Switzerland will hold a referendum to decide whether to ban commercial banks from creating money.

The Swiss federal government confirmed on Thursday that it would hold the plebiscite, after more than 110,000 people signed a petition calling for the central bank to be given sole power to create money in the financial system.

The campaign - led by the Swiss Sovereign Money movement and known as the Vollgeld initiative - is designed to limit financial speculation by requiring private banks to hold 100pc reserves against their deposits.

"Banks won’t be able to create money for themselves any more, they’ll only be able to lend money that they have from savers or other banks," said the campaign group.

[Lurker]

No more fractional reserve for you.

L

[Jack Hydrazine]

Still Report #486 - Swiss Send Monetary Reform for a Vote
https://www.youtube.com/watch?v=bGFu7OSxeIk

[Dilbert San Diego]

Can I ask a stupid question?

Where does money come from? I know about the fractional reserve concept. But where do the original dollars come from? Who puts that money in circulation? How does it end up in the bank? If the money is backed by gold or other precious metals, who decides the value or buying power of the cash backed by the precious metal? Who decides what the precious metal is worth?

[RegulatorCountry]

If they’re required to keep 100 percent of their deposits, what do they have to loan or invest in order to provide a return to depositors?

[SaveFerris]

Why one of these, of course!!! ;)

[SeeSharp]

It's not a stupid question. Banks create money by simply making entries in their ledgers. When you take out a loan they don't give you cash. They write you a check. Right? Most money (something like 96% in the case of the dollar) exists only as numbers written in ledgers at banks. The Federal Reserve was setup as a cartel to regulate how and when banks could create new money so that no bank could get a competitive edge by being sounder.

I think the best definition of banking I've come across it that banking it the art of lending the same money to multiple borrowers at the same time.

[SeeSharp]

If they’re required to keep 100 percent of their deposits, what do they have to loan or invest in order to provide a return to depositors?

They would not be able to lend money out of demand deposits. They would only be able to lend their own funds or contracted deposits (e.g. Certificates of Deposit).

[SeeSharp]

If the money is backed by gold or other precious metals, who decides the value or buying power of the cash backed by the precious metal? Who decides what the precious metal is worth?

Ideally the market will determine the value of the money. Money has value independent of the precious metals that back it. The value of money is determined just like the value of anything else: by the supply of it and the demand for it.

Note that precious metal coins almost always trade at values higher that the value of the precious metal they contain. Otherwise coins would always end up getting melted instead of traded. Coins are useful in ways that a blob of gold or silver is not, so the market assigns them a value of their own. HTH.

[PAR35]

It doesn’t say that the reserves have to be in cash (at least in the excerpt).

[buffaloguy]

It will become much more difficult to get a home or auto loan.

[FreedomNotSafety]

Later.

[RockyTx]

in the US.
if a bank gets a deposit $1.
it can loan out 90 cents.
some of the 10 cents is deposited at the FED

...........
in Swiss.

a bank can loan money it never had.

it is somehow made good by their central bank,
and I guess it is better than scrip or an IOU.

[Cheerio]

You need to take a course on the US Banking system. The entire banking pyramid is a scheme of unbelievable proportions that if you truly get into the guts of it you would not believe it. Do you know what happens when you deposit $1,000 in your local bank in the morning? As of 2012 the reserve requirement was only 10% meaning that bank that just took in the $1,000 in the morning could make a loan after lunch for %900 and not have to go to other banks or the Federal Reserve discount window to make up the short fall when they closed up shop that evening. The person that took out the loan of $900 after lunch now has $900 to play with and that only cost the bank $100 to produce. So the new loan of $900 can do the same thing and on and on depending how fast that money can turn over in one day.

There is no easy answer as to where the money comes from but if you ask a liberal looney RAT they will tell you that all money belongs to the Government, and they are the ones that tell you how much you get to keep.

All Your Money Belongs To Government

Murphy went on, claiming "there is no such thing as 'taxpayers' money': It is the government's money to do what it will with in accordance with the mandate it has been given and for which it will have to account."

Dan Mitchell, whose indispensable blog brought Murphy's statement to our attention, said the rant "truly gives us a window into the soul of statism" and correctly labeled it a "poisonous ideology."