Before this reminder post, lets talk about the next failed states.The failed States are all those, which in the long run will pay dearly traveling backwards in time and not ahead, because of their strictly ideologically chosen inability, stupidity incapacity, ignorance,of the bad managing of the Covid 19. Definitely the winners are all those countries which succeeded stopping or are keeping the infection at minimum levels, such as Taiwan , South Korea, New Zealand, Singapore, China, etc. All others are idiots, which, choosing to be half pregnant, half opening and half closing are only making the infection worse and even more durable in time and by this choice of being half open, little pregnant, are delaying the economy recovery and de facto ruining their future.
As up Today, there is only Quarantine, aggressive track and trace and isolate asap with the use of GPS ( not some worthless completely inaccurate bluetooth) and the help of thousands of people employed in tracing which can prevent the spread. On top, having we the people being divided in half,One half for the Negationist in denial of facts of life, the other half wearing masks of worthless fabric with their noses out, they have really beautiful noses to show, all this places are bound to loose the recovery.
Being forced to work or being stupid enough to work in unsafe conditions succumbing to their Masters and producers.
There are places, like Slovenia, which, due to stupidity and ignorance of the people, its govt, have the one of the highest death rates from covid in Europe, being even definitely sparsely populated and not having a concentration of the population all in one place. The steady 25%-30% infection rate leads to the really high number of deaths which shows the disfunctional health system. It also shows, since it is a constant number, the deeply infected population, if we add on this 25% the 40% of asymptomatic ( it is not 65% but, if 25% is a constant of infected then 40% is 10% more adding to the constant and we have 35% , if the constant is 25% ,if it is 30% we have 42%). The asymptomatic logically do not go to test themselves since they have none or very bland symptoms, we can conclude that the infection is widely spread.They are completely Disfunctional, not in number of hospital beds, but in managing the covid by all involved, we the people, hospital staff, govt etc. Adding that the retirement homes for the elderly are already the killing fields, decimating the elders.
Shitty people, shitty staff, shitty protocols,shitty procedures, shitty financing,shitty investing, shitty planning, shitty govt wanting to be half pregnant as their Oligarchy wants, too…
That is why Slovenia will recover late or never to be back on the track with the others again.
They do not have even enough oxymeters, WHICH COST around 20 EUROS a piece on any marketplace! And we are talking around 1.300 patients in the whole Slovenia being hospitalized, which means 26. 000 euros of Oxymeters bought expensively! They do not have even enough monitors, what, 100 euros a piece? But the locals there think, as all ignorant sods, that they are simply the best. Almost in the whole world. And they think WD is an idiot which is in fact the best news for them.
Have you read Witchdoctor post , weeks ago?How taking half measures in order to save the economy they will All End in Lockdown and save nothing? Weeeks ago, weeeeeekks.
Dear new readers. Let refresh how money works and how it is made out of nothing. Fortunately in this time era , the money is made from nothing and is not linked to some metal. That is why we do not see in most parts of the globe consequences we should have seen if we were in deep middle ages when the plague was running free..
Today, a famous fact checker Expert on Italian public radio claimed that banks lend money which is “given” to them from the central bank.
???????
No wonder Italy is going down the drain. To be kept so deep in the dark is a special art.
When, and find it in this Blog, The Bank of England, The German Bundesbank finally recognized that the private banks lend money out of nothing and they do not lend their reserves or the people deposits, we have to listen to this bullshit , all over again, in this times of covid reckoning?
Private banks make money out of Nothing. Central banks make Money out of nothing.
Governments by making debt/deficit make money out of nothing, and the money is issued by the Private banks or by the Central bank to cover the debt which has the form of govt bonds.They exchange a “primary” paper money- Euros Dollars,or Shitnotes, for the “secondary” paper money which is in the form of debt bonds…
Business makes money out of nothing by producing things , which they exchange for “primary” money in form of euros or shitnotes from the Private Bank as credit, a loan to cover the production …ETC.
Money is Debt. Loan is Debt. Debt is Credit for the lender.
There are two more things. The Society can issue money debt free. It means that money is issued and there is no debtor, no one must pay it back.. PICK your choice, debt or debt free.
The Other thing is that Private banks when issue money in form of a loan do not declare the “making it out of nothing “ on the positive – bank account-side, but instead they just put it asap in the borrower bank account side and when the people pay back a loan, the bank fraudulently says that the account goes to zero and does not declare where the money is. The reason for this is that the banking laws which are still in use were made before the banks made money out of nothing, but instead of money paper or digital out of nothing, they loaned gold or any real thing.
there are loads of posts here in this blog explaining it
Here is the transcript of Richard Werner experiment and the conclusion. He proved how banks do it, by borrowing 200.0000 euros from a bank and tracing the loan in the bank books.. Only ONE Bank allowed him to do it And to trace the debt/credit in the bank double entry keeping books..
Thanks to The famous ALBANKAEDA site, which has loads of interesting stuff, without comments. The Conversation with Richard Werner AL-BANKAEDANEWS.ALBANKAEDA published Richard Werner transcript of his Rhodes talk, which WD had many month ago linked in his blog regarding the subject of money creation.WD thanks Marco…
BEFORE READING IT, ReMEMBER: Your State can give away as much money as it wants in this Covid times.TO YOU, TOO.
The only limit is inflation. The STATE can give as much money until the inflation starts, Inflation means that too much money is chasing not enough goods on sale and then the prices get building up.The scarcity of goods compared to the quantity of money is the only limit.
THE SLOVENIA AND THE EU have lost, and they are all, on the life support o provided by Christine Lagarde,: The Ashen Lady is the only functioning place. But in the Distance,there are the famous evangelical protestant priests rising their voices in the name of their God knows who, wanting the Ashen Lady to stop.
CMMON; yes, stop it and throw the key of the EU in the dustbin.
WD can hardly wait to see it.
The part of the transcript, the whole is on the ALBANKAEDA site:
“”This is far too sensitive’ and… all sorts of reasons, you cannot see this, but I managed to find a bank in Germany that collaborated. We actually had the BBC, there, filming this empirical test. I took out a live loan 200 thousand euros and it was gonna transfer it away from the bank, and we looked at the bookings and what they did, and it turned out where did the money come from. It was not transferred away from any other account inside the bank or outside the bank. It did not come from deposits. It did not come from reserves at the central bank.
In fact, they didn’t care about their reserves. They didn’t even look how much they had. Reserves were not affected. It was newly created. How does that work ? Well, the best way to understand this if you look at the law, and this is, of course, one of the reasons why economists don’t understand banking, and why they leave out banks in all their economic models. Because they never look at the law. Law is reality. If you’ve got an issue, well, you can use the law to claim your rights, and the court will decide, and that is the result, and you can challenge it to a higher court, but ultimately, you know, the highest court will make a decision and that is it. That’s reality. So, what is the law say about banking. Economists consider banks as deposit-taking institutions that lend out money. That’s a standard definition by economists. But when you study the law in the country that invented modern banking, which is England in the 17th century, and that’s also when this legal system was created and it’s still the same, the law tells us: it’s a different story. Banks are not deposit-taking institutions and they don’t lend money, that’s what the law says. How does that work ? At law, and we have Supreme Court judgments on this, there is no such thing as a bank deposit. It doesn’t exist. So what is it when you deposit your money with a bank ? We have the feeling, and we are given the impression that when you put your money with a bank, ‘it’s my money’. In fact it did a survey and people respond no, the money at the bank belongs to me, that’s my money and I’m holding it in deposit. The bank, they’re taking care of it, but it’s my money. I can ask it as my money back anytime.But at law that’s not true. At law there is no such thing as a bank deposit. It’s not held in custody, it’s not held for you. You are not the owner of the money at the bank. The money held in deposit at a bank is owned exclusively by the bank. It was your money before you deposited it. When it’s deposited at the bank, the bank owns it and what rights do you have ?
You’re a creditor. So, what that means: the money at the bank is a loan that you’ve given to the bank, and you’re just a general creditor. So, that’s why banks don’t take deposits: they borrow money we lend it to them. We are general creditors. They own the money, and they can do as they please. They’re the owners of this money at law. Very clear-cut, okay, but it’s surely they lend money. What else would they do with this money ? No, there is no bank that has ever lend money. At law, again, very clear-cut, how does that work ? Very intriguing. I thought…
Werner: You go to a bank, and you say: I want to borrow money. Now, an important thing is the loan contract, and they will make you sign it. Now what happens at law is: the moment you’ve signed the loan contract that you will borrow X amount of money and you will repay this money at this date with his interest, whatever, that moment, once you’ve signed it, you have issued a security, a debt instrument. That’s what this long contract is at law. So, what the bank does, when it gives you a “loan” as we call it, and “lends” you money as we call it, at law they do no such thing. They’re in the business of purchasing securities. They will purchase the IOU, the debt instrument that you’ve issued. The bank will purchase this from you. Okay, fine, I don’t care. I just want the money when I get my loan. Ah, you’re right. The bank now owes you money. So the bank owes you money, well, that’s what we call a deposit. Right ? A deposit is when the bank owes you money, and the record of how much money the bank owes you we call a deposit, and that’s what you get. You get a record of how much money the bank owes you, and that’s all you get because that’s what the banks do. So, they purchase your debt instrument and then they record their debt to you, and here’s an accounting trick, and actually in another paper published, find it online, I could demonstrate that there is actually a slight, well, aspect of incorrectness, (FRAUDULENT -remark by WITCHDOCTOR) let’s put it politely, in banking, because technically, from an accountants perspective, they now have an accounts payable liability to you, right ? You’ve signed the long contract, they should give you money – accounts payable liability for the banks – but the banks will book this now, this liability called accounts payable liability, as another type of liability which sounds much more convenient for bankers. Namely, “customer deposit”, and that’s how they’ll show it to you ,and that’s in your account. In other words, the bank will invent a fictitious deposit for the borrower, and that is how the money supply is created. I did a survey in Frankfurt of 1000 people, students helped me to do this, and we asked in the streets around the University, so probably slightly above average educational standard, but doesn’t matter. Bias may be in the right direction. We asked them: who do you think creates the money supply in the economy ? The majority of the money supply, and of course the majority, over 90 percent response: well it’s the central bank, isn’t it ? Central bank or the government. But that’s not true, the central bank only creates 3% of the money supply, and the correct answer is: the majority, the vast majority, 97% of the money supply, is created by the banks when they lend money.
(INCORRECT – Central Bank also creates money when it buys the State bonds from the banks which in turn have bought and hold the State bonds . It is a swap- money for the bonds, which are in possession by the private bank. That was the QE , but, Richad Werner explains it in the same way as WD,further on – WD)
So, this was the result of the empirical test as well. Turns out the money supply is created by banks, and where does the money come from for a bank loan ? It’s created out of nothing by the banks, and because of that, so, it’s the credit creation theory, the oldest theory, which is correct. It’s now been empirically proven, you can look up the paper if you Google “can banks individually create money out of nothing” you will get it. It’s the most downloaded research paper of any Elsevier academic publication…
Stefan: Yeah, Elsevier being a major scientific publishing house right.
Werner: Thank you, and that means it’s it’s the oldest theory is correct, and therefore for bank regulation, to come back to your question on Basel, we need a bank regulatory approach that recognizes this reality that banks create money. The Basel approach uses the financial intermediation theory and thinks: by having capital requirements we can contain the banks and avoid crises. But it’s not true because it’s the credit creation approach which is correct. Banks create money out of nothing. Have you heard of Credit Suisse, or Barclays, in 2008 ? Well, how they got out of the crisis ? They were actually as bust as all the big banks, remember ? In 2008. But did they go bust ? Did they need public money ? Neither, they didn’t. What did they do ? They were clever. They were aware of this, and the decision makers in the crisis, you know, in the crisis you’re under pressure, they remembered that banks create money out of nothing. Why should we go bust ? They created their own capital out of nothing. How do you do that ? Well, you need a borrower. There was a borrower: the sovereign of Qatar. They had relations with them, business relations, and so they needed suddenly ten billion roughly, that’s saying, ten billion dollars worth of capital.
Well, let’s create it out of nothing. Let’s lend it to somebody like Qatar, obviously needs to be a big player to borrow ten billion, and be credible. They will buy our newly issued shares of ten billion and we can create the money out of nothing for our capital. That’s exactly what they did. In a way, we shouldn’t do what is now being done in the UK: the Serious Fraud Office is going after them for fraud. Well, they’re just doing banking, and they save the taxpayer billions and billions in money. In fact, this tells us that we can get out of any crisis without using taxpayers money and without reducing public welfare spending as a result in austerity, because we can just use the reality of bank accounting to get cleanly out of any banking crisis, and this is also what central banks have done and put in the past when they didn’t want a banking crisis to turn into a major recession. They just solved the problem like this. You can do it in one morning and you will not have a real banking crisis, and you will not have a recession. This is what Ben Bernanke did,
in 2008, and he was actually… I proposed all these things in the 90s in Japan in these big debates we had, where I also proposed quantitative easing, and Bernanke was joining these debates and he was in 2008 the only central banker to implement my advice, the true quantitative easing, because the others slightly changed the definition. Step one: you have a bust banking system. The capital and the Basel approach is not enough, you know, is a tiny amount anyway, and when the banks had create money, use it for financial transactions, push up assets price by three four hundred percent, which is due to banks creating this money for financial transactions. At the peak if then assets prices drop by ten percent, you’ve used up all the equity for the non-performing loans already, you are bust. So, that’s why we have the banking crises. So, how do you get out of this quickly at no cost to the taxpayer ? It’s very simple. The central bank steps in, goes to the banks, and says: oh, you’ve got non-performing assets larger than your equity. You are bust, all of you. Most of the banking system, always the same story. No problem. Because we don’t want a banking crisis now turning into big recession. We will let you off this time. We will put in in place measures to prevent this in the future, we’ll talk about what those are, but we’ll get you out of this one now. You don’t use tax money, that’s expensive, that increases national debt. Ireland was a fiscal poster boy but because the ECB forced it to fiscalize all the banking non-performing assets, Ireland became bankrupt and had to call in the IMF. No, we don’t do that. The central bank steps in, goes to the banks and purchases the non-performing assets at face value, and the problem is solved. There’s no cost, and this is exactly what Bernanke did. That’s why in September October 2008 the balance sheet of the Federal Reserve quadrupled in one month. This doesn’t create inflation. Some people thought at the time wow ! We’re gonna get hyperinflation now. They’re inflating their way out ! No, no. If you want to create inflation, some countries try to do this, allegedly, like Japan for 20 years, it’s not going to work with this method, because it doesn’t create money. Because you’re just shifting assets between central bank in the banks, in the right way, away from the bank balance sheets where they are harmful, to the central bank, where they can’t do any harm but you don’t eject money into the non banking sector. So, you can’t create inflation. Oh, but hang on, the dollar is gonna collapse ! Well, no, as I said at the time, and it strengthened. Why ? Because you’re not creating money. You’re solving the problem in the banking system, the banks are healthy again, have strong balance sheets, and can lend again, and they did in America who is the first country to get out of the crisis since then very strong bank credit growth, unfortunately too much. That’s why we’re back in the same spot. They continue to create credit for financial transactions. That’s how you prevent getting into this situation the first place of banks being unstable. Because banks create money, you have to split the stream of credit creation from banks into two: for the real economy and for financial transactions, because they are not part of the real economy. If banks create credit for financial transactions, you are creating an asset bubble which is always unsustainable and will always lead to a banking crisis ultimately, if it’s large enough. So in the early 2000s I was warning that, in Europe, the ECB, which is newly created, was gonna create bank credit driven asset bubbles, banking crises, unemployment, large recessions in the eurozone. That’s exactly what they did in Ireland, Portugal, Spain and Greece, based on 30 percent credit growth for – how many years ? – three four years. Way ahead of GDP growth, this is all credit creation by banks for asset transactions, property, real estate, that’s how you blow up these countries, and that’s what the ECB did””
PS. This are facts, mostly , which does not means that Witchdoctor agrees on many Richard Werner conclusions, but, at least you have something to read before you….