How banks create money out of thin air

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AND loaned out at interest! AND the depositor can still ask for his/her money back!

Let’s not get sidetracked. There’s actually more to the world’s problems than just Donald Trump and Turkey’s RT Erdoğan.

This is clip is from a NZ source – but the same situation exists the world over:

http://tvnz.co.nz/seven-sharp/paying-interest-loan-never-existed-video-5336329

The ending is a bit weak – so you only need to watch the first few minutes.

Will there be a coup against Erdoğan in Turkey?

I still hear people in Turkey – local citizens and foreign friends – insisting that the failed 15 July attempted military coup in Turkey was actually staged by President Erdoğan in order to cement his hold on power. Well, I know there are also US citizens who believe that George W Bush was behind the 9/11 destruction of the World Trade Centre in New York City. Maybe he was, and I am certainly no fan of that man Dubya – but still I find it hard to believe he was so evil that he would authorise the murder of thousands of his own citizens in order to maintain his hold on the reins of power.

newsweek

and who’s backing Newsweek?

In that context, I am printing in full an article that appeared in Newsweek in March this year, predicting that Turkey’s President would be overthrown by a military coup, and that the US government would be happy to see it happen.

This guy Rubin is an interesting character. I’ve left in the links he made to other sources: “mad sultan”, “aspiring caliph” etc. Definitely weird! But also disturbing, in the light of what actually happened on July 15.

Turks—and the Turkish military—increasingly recognize that Erdoğan is taking Turkey to the precipice.

BY MICHAEL RUBIN ON 3/24/16 AT 11:21 AM

This article first appeared on the American Enterprise Institute site.

The situation in Turkey is bad and getting worse. It’s not just the deterioration in security amidst a wave of terrorism. Public debt might be stable, but private debt is out of control, the tourism sector is in free-fall and the decline in the currency has impacted every citizen’s buying power.

There is a broad sense, election results notwithstanding, that President Recep Tayyip Erdoğan is out of control. He is imprisoning opponents, seizing newspapers left and right and building palaces at the rate of a mad sultan or aspiring caliph. In recent weeks, he has once again threatened to dissolve the constitutional court.

Corruption is rife. His son Bilal reportedly fled Italy on a forged Saudi diplomatic passport as the Italian police closed in on him in an alleged money laundering scandal.

His outbursts are raising eyebrows both in Turkey and abroad. Even members of his ruling party whisper about his increasing paranoia which, according to some Turkish officials, has gotten so bad that he seeks to install anti-aircraft missiles at his palace to prevent airborne men-in-black from targeting him in a snatch-and-grab operation.

Turks—and the Turkish military—increasingly recognize that Erdoğan is taking Turkey to the precipice. By first bestowing legitimacy upon imprisoned Kurdish leader Abdullah Öcalan with renewed negotiations and then precipitating renewed conflict, he has taken Turkey down a path in which there is no chance of victory and a high chance of de facto partition.

After all, if civil war renews as in the 1980s and early 1990s, Turkey’s Kurds will be hard-pressed to settle for anything less, all the more so given the precedent now established by their brethren in Iraq and Syria.

Erdoğan long ago sought to kneecap the Turkish military. For the first decade of his rule, both the U.S. government and European Union cheered him on. But that was before even Erdoğan’s most ardent foreign apologists recognized the depth of his descent into madness and autocracy.

So if the Turkish military moves to oust Erdoğan and place his inner circle behind bars, could they get away with it?

In the realm of analysis rather than advocacy, the answer is yes. At this point in election season, it is doubtful that the Obama administration would do more than castigate any coup leaders, especially if they immediately laid out a clear path to the restoration of democracy.

Nor would Erdoğan engender the type of sympathy that Egyptian President Muhammad Morsi did. When Morsi was ousted, his commitment to democracy was still subject to debate.

That debate is now moot when it comes to the Turkish strongman. Neither the Republican nor Democratic front-runners would put U.S. prestige on the line to seek a return to the status quo ante. They might offer lip service against a coup, but they would work with the new regime.

Coup leaders might moot European and American human rights and civil society criticism and that of journalists by immediately freeing all detained journalists and academics and by returning seized newspapers and television stations to their rightful owners.

Turkey’s NATO membership is no deterrent to action: Neither Turkey nor Greece lost their NATO membership after previous coups. Should a new leadership engage sincerely with Turkey’s Kurds, Kurds might come onboard.

Neither European nor American public opinion would likely be sympathetic to the execution of Erdoğan, his son and son-in-law, or key aides like Egemen Bağış and Cüneyd Zapsu, although they would accept a trial for corruption and long incarceration.

Erdoğan might hope friends would rally to his side, but most of his friends—both internationally and inside Turkey—are attracted to his power. Once out of his palace, he may find himself very much alone, a shriveled and confused figure like Saddam Hussein at his own trial.

I make no predictions, but given rising discord in Turkey as well as the likelihood that the Turkish military would suffer no significant consequence should it imitate Abdel Fattah el-Sisi’s game plan in Egypt, no one should be surprised if Turkey’s rocky politics soon get rockier.

Michael Rubin is a resident scholar at the American Enterprise Institute. A former Pentagon official, his major research areas are the Middle East, Turkey, Iran and diplomacy.

WTF? – Some thoughts on money, banking and global slavery

swiss-bankingHats off to the Swiss! I never thought I’d see the day when an initiative to reform money and banking originated in in that little haven for the world’s mega-rich to stash their ill-gotten gains! Just goes to show how much things have changed/are changing!

I hope and pray promoters of the move can get the message across to enough of their fellow citizens before the referendum is held – and I imagine they will have plenty of opposition. The Swiss have this nifty system whereby, if a petition carrying enough signatures is presented to their parliament on any issue, it automatically triggers a national referendum.

vollgeld-banner-de

Working for sovereign money

The Vollgeld Initiative did just that – and the government is now committed to asking their people whether they want to remove from private bankers the right to create money. Well, you can bet those bankers won’t let that happen without a hell of a fight! If our experience in New Zealand with the referendum on electoral reform is any indicator (and I’m sure it is), the forces of established finance and capitalism will focus all their considerable might on retaining their inalienable right to rip off their fellow earthlings to feed their own greed.

No date has as yet been set for the referendum – and no doubt large sacks of Swiss francs will be expended by interested parties on mounting a huge propaganda campaign to persuade Swiss voters that supporting the Vollgeld Initiative will herald in the end of the world as we know it. Others might argue that would not be altogether a bad thing!

Up until the 1980s we had a political party in New Zealand committed to doing exactly what those Vollgeld people want to do. The Social Credit movement won twenty-one per cent of votes cast in our 1981 General Election, but was denied fair representation in parliament by the ludicrously undemocratic electoral system operating in those days. Nevertheless, shocked out of their complacency by the strength of public support, the forces of reaction combined to deprive Social Crediters of even their minimal parliamentary representation and effectively wiped out the party as a voice for change.

homeless

NZ today – Paradise lost

According to Knight Frank Research, New Zealand now has “the world’s most frenetic property market”, with houses in Auckland selling for an average of $NZ 1 million. Young New Zealanders starting out in life are naturally unhappy they can’t afford to buy a house – something that previous generations took for granted. They are blaming, with some justification, foreign (and local) “investors” for driving up prices. But check this out: an article in the NZ Herald finance section noted, more or less as an aside, that “banks are having to borrow more money on the international market to fund their lending because of a slow-down in retail deposit growth.” So, can someone please explain why banks in New Zealand have to borrow US dollars (I suppose) from abroad and convert them into NZ dollars to lend to people in their own country?

Point One: Banks do not lend the money deposited in accounts to other borrowers. They actually create new money for lending by means of the fractional reserve system (see below).

Point Two: I understand that, if I want to import goods from abroad into New Zealand, I will probably have to use some internationally accepted currency – or work out some kind of bilateral agreement (see below). I totally fail to see, however, why I should have to borrow foreign currency from an offshore bank, and convert it into NZ dollars for spending on something, such as a house, that already exists in my country.

dollars_ap

Good as gold?

The United States government is currently holding in custody an Iranian gentleman with Turkish citizenship, Reza Zarrab, on charges of money laundering. The charges relate to transactions that came to light in December 2013. It seems that Zarrab was facilitating a deal involving the Iranian and Turkish governments, a major Turkish bank, and a large amount of gold, with the aim of circumventing a United States trade embargo on Iran.

Well, certainly it’s not a nice thing to go behind your friend’s back and make deals to his detriment – but let’s look at the background. The United States slapped trade sanctions on Iran in 1979 after an Islamic revolution ousted the Shah, a US puppet who had ruled the country since a CIA-sponsored coup overthrew the democratically elected government of Mohammed Mossadegh in 1953. The revolution came after 26 years of misrule during which the rights of most Iranians were subordinated to the interests of the United States oil lobby and a local elite. The Ayatollah Khomeini came to power, 52 American diplomats were taken hostage and held for 444 days, President Jimmy Carter’s reputation was irreparably tarnished, and anyone who wanted to remain friends with America was obliged to cut ties with Iran.

Turkey and Iran are next-door neighbours. They are Muslim countries and their people have a history of close ties going back millennia. They are natural trading partners, and both have goods and services the other needs and wants. Turkey complied with the US’s trade embargo for decades, at considerable cost to its own economic well-being. It’s not always easy, however, for America’s allies to know what they have to do to keep Uncle Sam happy, since his government has a record of switching allegiances and stabbing former allies in the back to suit the short-term interests of its financial backers.

Increasingly, sovereign governments are looking at ways of implementing bilateral deals with trading partners to avoid having to use American dollars and comply with self-seeking American restrictions. Russia, China, and now Turkey all seem to be looking into this very sensible strategy.

Nevertheless, they have to be careful. It may look like common sense, but the present world financial order was set up for a reason – and it wasn’t just to facilitate international trade, and certainly not to improve the lot of the common man and woman in every corner of the globe. The international financiers who control most of what goes on in the world have ways of enforcing compliance with their will, or at least of punishing governments that fail to comply.

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Migrant workers in Saudi Arabia. Spot the Arab

The United States government propped up financially and militarily the despotic 29-year regime of Hosni Mubarak in Egypt. When an Arab Spring uprising forced Mubarak’s removal, and Egypt’s first democratic election chose a Muslim to replace him (as you might expect an overwhelmingly Islamic country to do), the mavens of global finance withdrew their support, precipitating an economic crash that led to Mohammed Morsi’s ousting and the reinstatement of a military junta.

Venezuela, possessor of the world’s second-largest oil reserves, is currently experiencing a disastrous economic crisis largely as a result of plunging oil prices. Global oil prices are at their lowest levels for fifteen years, primarily because of the US transforming itself from an importer to an exporter of crude oil. Why would they risk the enormous long-term environmental damage of the oil fracking process? The US has a long history of interfering to ensure the failure and collapse of socialist governments in Central and South America. US-friendly Saudi Arabia can see out a period of low oil prices. Most of their labour force are indentured workers from impoverished Asian nations – unlike Venezuela, whose government has been trying for years to improve the lot of its own poorest citizens.

Turkey’s currency has taken a hammering in recent months on international “money markets”, losing more than 25% of its value since September. My theory is foreign interests opposed to Turkey’s President Tayyip Erdoğan supported local factions in their coup attempt on 15 July. Frustrated by its failure, the attack has turned to a slower but possibly surer method – attacking the nation’s currency to create economic hardship and strengthen local opposition to the AK Party government. For his part, Mr Erdoğan has encouraged citizens to show faith the Turkish Lira and sell off any stockpiles they may have of Yankee dollars.

forex

F*** the government and the country – buy dollars!

Interestingly, soon after the presidential appeal, a large advertising hoarding appeared in a major thoroughfare near us, urging people to do the opposite, to buy foreign currency! I did my civic duty and complained to the metropolitan council – and the ten-metre billboard has now been removed.

But to return to the Swiss banking reform movement. The people behind the Vollgeld Initiative have set up a website providing answers to crucial questions. Here’s a brief summary:

What is sovereign money?

Most people believe that the money they have in their bank accounts is real money i.e. real Swiss Francs (or pounds Sterling etc). This is 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. 

What would change with the Swiss Sovereign Money Initiative?

The way the money system works today doesn’t comply with the intention of the Swiss Constitution (Article 99: “The Money and Currency System is a matter of the State”). 

What are the fundamental advantages of sovereign money?

Sovereign money in a bank account is completely safe because it is central bank money. It does not disappear when a bank goes bankrupt. Finance bubbles will be avoided because the banks won’t be able to create money any more. The state will be freed from being a hostage, because the banks won’t need to be rescued with taxpayers’ money to keep the whole money-transaction system afloat i.e. the “too big to fail” problem disappears. The financial industry will go back to serving the real economy and society. The money and banking systems will no longer be shrouded in complexity, but will be transparent and understandable.”

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I admit it – It was me!

A recent article in The Economist, while predictably coming out against the proposed monetary reform, nevertheless does provide a delightfully simple analogy to illustrate how the present system works:

“Children are sometimes reassured that new siblings arrive via friendly storks. The reality is messier. Money creation is much the same. The ‘stork’ in this case is the central bank; many think it transfers money to private banks, which act as intermediaries, pushing the money around the economy. In reality, most money is created by private banks. They generate deposits every time they make a loan, a process central banks can influence but not control. That alarms some, who worry that banks use this power heedlessly, thereby stoking disruptive booms and busts.

Campaigners in many rich countries want to strip private banks of the power to create money. In Switzerland members of the “Vollgeld Initiative” presented the government with enough signatures in December to trigger a national referendum on the subject. Bank deposits, they point out, make up some 87% of the readily available money in Switzerland, vastly exceeding notes and coins. Since money creation is the main fuel of both inflation and growth, they argue, it should not be in private hands, let alone entrusted to institutions that are prone to binge and purge.”

Simple enough, huh? If I were you, I’d cut and paste those two paragraphs into my next blog post so that all my readers could learn the truth.

93rd Anniversary of the Republic of Turkey

Cumhuriyet Bayramınız kutlu olsun!

To commemorate the 93rd anniversary of the official founding of the Republic of Turkey, I’m passing on this piece posted on the Turkish Coalition of America website:

unnamedOn October 29, 1923, the newly recognized Turkish parliament proclaimed the establishment of the Republic of Turkey, formally marking the end of the Ottoman Empire. On the same day, Mustafa Kemal, who led the Turkish National War of Liberation and was later named Atatürk (father of Turks), was unanimously elected as the first president of the Republic.

Turkey had effectively been a republic from April 23, 1920 when the Grand National Assembly was inaugurated in Ankara. When the Turkish parliament held its first session in 1920, virtually every corner of the crumbling Ottoman Empire was under the occupation of Allied powers. Exasperated by the Ottoman government’s inability to fight the occupation, the nationwide resistance movement gained momentum. With the Allied occupation of Istanbul and the dissolution of the Ottoman Parliament, Mustafa Kemal’s justification for opening the resistance movement’s new legislative body was created.

With the opening of the Assembly, Ankara became the center of the Turkish national struggle for liberation. The National War of Liberation culminated in the emancipation of Anatolia from foreign occupation, the international recognition of modern Turkey’s borders by the Treaty of Lausanne, and finally, the founding of the Republic of Turkey on October 29, 1923. October 29, or Republic Day, is an official Turkish holiday celebrated each year across Turkey and by peoples of Turkish heritage worldwide.

Following the founding of the Republic of Turkey, Mustafa Kemal Atatürk embarked on a wide-ranging set of reforms in the political, economic and cultural aspects of Turkish society. These reforms have left a lasting legacy of which the peoples of Turkish heritage are proud: the conversion of the newly founded Republic into today’s modern, democratic and secular Turkish state.

Turkey’s 15 July coup attempt had nothing to do with America – Where’s the proof?

It’s not so easy to catch them red-handed – but they are perfectly happy to admit they do it, at home and abroad. This one from the New York Times:

Hillary Clinton Liked Covert Action if It Stayed Covert, Transcript Shows

Hillary Clinton longs for the days when Americans knew how to execute a covert action abroad and not spill the details to reporters.

17clintonspeeches-superjumboAddressing a Goldman Sachs event in 2013, in one of the speeches that WikiLeaks published on Saturday, Mrs. Clinton gave a tough-minded, realpolitik answer to the question of how to handle a problem like Syria. If the best chance of success was to act secretly inside that country, she made clear, she had no problem doing that.

She went on to say — as her audience already knew because of revelations in the news media — that as secretary of state she had advocated secretly arming the Syrian opposition and moving forcefully to counter the Russians, who at that point were supporting President Bashar al-Assad but had not yet fully entered the conflict.

“My view was you intervene as covertly as is possible for Americans to intervene,” she said in answer to a question from Lloyd C. Blankfein, the chief executive of Goldman Sachs, which paid Mrs. Clinton about $225,000 a speech to give what felt like an insider’s view of the making of American foreign policy, months after she left office.

But she quickly acknowledged that “we used to be much better at this than we are now.” “Now, you know, everybody can’t help themselves,” she added, and officials go out to “tell their friendly reporters and somebody else: ‘Look what we’re doing, and I want credit for it.’

And another one:

Donald Trump rallies infiltrated by paid Hillary Clinton operatives, investigation reveals

Agents working for Hillary Clinton’s presidential campaign paid professional agitators to incite violence at Donald Trump rallies, an explosive investigation has revealed.

In a new hidden-camera sting by conservative activist group Project Veritas, undercover journalists infiltrated two political consulting companies with ties to the Democratic National Committee and the Clinton campaign.

In the 16-minute video, Democratic operatives are caught out describing how paid agents “infiltrate” to stage fake grassroots protests to create a sense of “anarchy” at Donald Trump events.

The agents notably lay claim to the violent Chicago protests in March, which forced Trump to cancel his rally and left two police officers seriously injured.

“It doesn’t matter what the friggin’ legal and ethics people say, we need to win this motherf*****,” Scott Foval, founder of consulting firm the Foval Group told an undercover journalist.

“I’m saying we have mentally ill people, that we pay to do s***, make no mistake. “Over the last 20 years, I’ve paid off a few homeless guys to do some crazy stuff, and I’ve also taken them for dinner, and I’ve also made sure they had a hotel, and a shower. And I put them in a program.

“Like I’ve done that. But the reality is, a lot of people, especially our union guys, a lot of our union guys … they’ll do whatever you want. They’re rock’n’roll.

“When I need to get something done in Arkansas, the first guy I call is the head of the AFL-CIO [American Federation of Labor and Congress of Industrial Organisations] down there, because he will say, ‘What do you need?’ And I will say, ‘I need a guy who will do this, this and this’. And they find that guy. And that guy will be like, ‘Hell yeah, let’s do it’.”

Analysis: What is Turkey trying to achieve in Iraq?

This article appeared in Al Jazeera today. I’m abridging it a little:

“Any attempt to change Mosul’s demographic composition would be a direct threat to Turkey’s security, analysts say.

“Only weeks before Iraqi troops and their local and international partners start their push to retake the city of Mosul from the Islamic State of Iraq and the Levant (ISIL, also known as ISIS), the leaders of Turkey and Iraq have been caught in a war of words that could derail the Mosul liberation efforts.

730768b961374fc195b9f53e9633b8c6_6Mosul, home to up to 1.5 million people, has been the headquarters of ISIL’s self-declared caliphate in northern Iraq since 2014. The battle for the city, expected later this month, is likely to shape the post-ISIL Iraq.

Turkey’s President Erdoğan also said that Turkey is determined to participate in the operation to retake Mosul from ISIL, with or without Baghdad’s approval. Turkish media later reported that Turkey is planning to participate in the Mosul operation with an invitation from the president of the Kurdistan Regional Government, Masoud Barzani.

Turkey’s parliament voted two weeks ago to extend the deployment of an estimated 2,000 troops across northern Iraq by a year to combat “terrorist organisations”. Around 500 of these troops are stationed in the Bashiqa camp in northern Iraq, training local fighters who will join the battle to recapture Mosul.

Abadi’s government requested an emergency United Nations Security Council meeting to discuss the issue, and both countries summoned each other’s ambassadors in a mounting diplomatic standoff. “It is hard to take Baghdad’s threats seriously,” Ali Faik Demir, an expert on Turkish foreign policy from Istanbul’s Galatasaray University, told Al Jazeera.

“A country that cannot protect its territorial integrity and eliminate terrorist elements within itself cannot threaten a neighbour for protecting its own interests. Especially when that neighbour was invited in to the country by Mosul’s former governor to train Sunni militias who are preparing to fight ISIL.”

According to analysts the legitimacy of the government in Baghdad is slowly eroding amid sectarian tensions, foreign interventions and the ISIL occupation. Abadi, say analysts, is trying to use Turkey’s presence in Northern Iraq to fuel a new brand of Iraqi nationalism to keep at least certain parts of the country intact in the post-ISIL era.

” Turkey is concerned that once ISIL fighters are pushed out of Mosul, the government in Baghdad will make it difficult for Sunni residents of the city to live there. Erdogan previously said that Mosul, which was seized by ISIL two years ago, belongs to “its Sunni residents”.

Analysts believe that Turkey’s concerns about the future of Mosul should not be interpreted as an attempt to reshape a sovereign country’s demographic make-up. “We have to remember Iraq’s current borders were drawn in the Sykes-Picot agreement,” Demir said.

“Those borders are nothing more than arbitrary lines drawn in the sand by the British. So the situation can only be analysed realistically from a city-centric perspective. Mosul is a historically Sunni city and any attempt to change its demographic composition would be a direct threat to Turkey’s security,” he said.

Analysts emphasised that Turkey’s uneasiness about the prospect of having sectarian militias help Iraqi army in the Mosul liberation operation should not be dismissed simply as a desire to protect fellow Sunnis in the region. “If [these forces] push into Mosul, where will the Sunni residents of the city go?” asked Demir. “Of course they cannot go to Syria, so they will move north, into Turkey. ”

Turkey is already hosting 2.7 million refugees, he said.  “Turkey simply cannot absorb another wave of refugees, so the Turkish government and military need to take necessary precautions to make sure residents of Mosul can stay in Mosul after ISIL is ousted from their city.”