War On Cash: a trick to increment the commercial bank electronic money, created by air
Since the worldwide war on cash started, a huge increment of almost-illegal electronic money has been created by air and inflated into the economic system by commercial banks.
Let me introduce a basic concept, that probably contrasts with the most common opinion or understanding.
Sovereign money is the money that a central bank brings into circulation. At the moment, this consists only of the coins and banknotes in circulation.
This legal tender makes up only 3–5% of the money in circulation. 95–97% is electronic money or book-money, which is created by the commercial banks at the click of a button to finance their business (bank loans, mortgages, and unfortunately financial products too).
Most people believe that the money they have in their bank accounts is real money i.e. real US Dollars, Euro, Pounds, Indian Rupees and so on.
This is totally wrong!
Money in a bank account is only a liability of the bank to the account holder, i.e. a promise the bank makes to provide money, but it is not itself legal tender.
The way the money system works today doesn’t comply with the intention of most of the Constitutions (“The Money and Currency System is a matter of the State”). The National Banks (Central or State banks) alone should be able to create electronic money. Most of constitutions are so old that cannot figure out the concept of electronic money -
The intentions stated by constitutions have the obvious consequence that the owners of the money must be the citizens, not private organizations.
Commercial 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, or even, if necessary, money that the National Banks provides them.
However, commercial banks, to feed their exhaust balance sheets depauperated by the financial crisis, have invented the trick of the “war on cash”, helped by their pervasive lobbyists, trying to convince the population to use the electronic money created, controlled and owned by them in any kind of transaction with the leading excuse to combat criminality.
So now it is clear what is the intent of commercial banks and their “War on cash”.
It is to reduce the remaining 3–5% of legal tender to almost zero, definitively subtracting the control of money off the States, the Central Banks and at last but not the least - the Citizens.
Online resources:
(1) A lost century in economics — Three theories of banking and the conclusive evidence — Richard A. Werner — Centre for Banking, Finance and Sustainable Development, Southampton Business School, University of Southampton, United Kingdom- International Review of Financial Analysis (2015)
(2) The Euro area adjustment: about halfway there — J.P. Morgan — Europe Economic Research — (2013)
(3) How do banks create money, and why can other firms not do the same? An explanation for the coexistence of lending and deposit-taking — Richard A. Werner — Centre for Banking, Finance and Sustainable Development, Southampton Business School, University of Southampton, United Kingdom — International Review of Financial Analysis (2014)
(4) KPMG — Money issuance — Alternative Monetary Systems
(6) Prof. Richard Werner — Banking Industry Exposed & Solutions Presented — Dublin April 2016 -
