Germany’s main financial daily Frankfurter Allgemeine has published in the last few days two articles seriously discussing the money reform proposals.
On 17th August it was an article entitled “Do we need a new money system?”.
The article explains in detail how the money is created today by private commercial banks when they make loans. It even contains an illustration entitled “Money from nothing: How banks create money”, which explains how can the commercial bank create from 100 EUR an amount of 10,000 EUR of new electronic money and how is this new money destroyed when the loan is repaid.
(Note: unlike UK where the minimum reserve requirements have been abolished long time ago, in Eurozone there is still a minimum reserve ratio of 1%)
[sws_blockquote_endquote align=”” cite=”Prof Joseph Huber, Chair of economic and environmental sociology at Martin-Luther-University, Halle, Germany, Member of the board of the organization Monetative.” quotestyle=”style02″] “All the money should be created exclusively by an independent public body – the Central Bank. It is important to regain control over the money supply. Otherwise, the banks would produce money until the system collapses.” [/sws_blockquote_endquote]
If you speak German you can read the article here.
Another short article on this subject was published on 24th August: “Money that only central bank can create”:
“Sovereign money” is the name of an idea to reform the monetary system: Banks should no longer be permitted to create money. So far, banks can do this – by crediting customers’ checking account…”
“5.2 trillion euros are there in Europe – but only 879 billion euros cash.”
Let’s hope the financial media in UK will wake up soon too.