by Peter Koenig for The Saker Blog
It’s called “Vollgeld Initiative” – in German, meaning more or less “Referendum for Sovereign Money”. What is “Sovereign Money”? – Its money produced only by the Central Bank, by the “Sovereign”, the government, represented by its central bank. Money created in accordance with the needs of the economy, as contrasted to the profit and greed motives of the banking oligarchy – wat it is today; money creation at will, by private banking.
The people of Switzerland are called to vote on 10 June 2018 whether they want to stop the unlimited, unrestrained money-making by the Swiss private banking system, and to return to the “olden days”, when money was made and controlled only by the Central Bank; and this not just in Switzerland, but in most countries around the globe. Switzerland is one of the few sovereign countries within the OECD, and possibly worldwide, that has the Right of Referendum written into her Constitution. With 100,000 valid signatures anybody can raise a referendum to amend or abolish a law, or to create a new one. – This is a huge privilege to Right a Wrong.
Most Swiss and probably most westerners in general don’t even know that the loan or mortgage they get from their bank is no longer backed by the bank’s capital and deposits. How could they? Instead of being told the truth, they are being lied to, even by their own party and politicians. And that in the case of Switzerland, by nobody less than the CEO of the UBS, the largest Swiss bank. Just watch this short video (in German and Italian – 2 min) https://www.youtube.com/watch?v=5m5ifQV4aIg .
Lying is a felony, hence Mr. Sergio Ermotti, CEO of UBS, should be prosecuted. Unlikely to happen, though. What Mr. Ermotti in essence says in this interview is that loans are backed by deposits. This is directly contradicted by the Swiss National Bank and the German Bundesbank (Central Bank). They say that “today about 90% of all the money is accounting money, created by loans the banks make to enterprises and private citizens. Pretending that banks use deposits to make loans, is not true.” The latter part was specifically expressed by the German Bundesbank. – So, how come Mr. Ermotti, CEO of UBS, wouldn’t know that?
Switzerland, fully embedded in the globalized western banking system, absorbed by it, has a chance to tell the world that the only way to control and get on top of the cycle of financial and economic crises is to reign-in the bottom-less money production – the debt-interest-profit driven banking system, a Ponzi scheme that cannot survive (financing debt with more debt); the abhorrent uncontrollable debt-profit cycle that has brought misery to humanity – just look at Greece. With money production controlled by the respective central banks, for example, in France and in Germany, the senseless indebting of Greece by German and French banks would not have been possible, in which case the troika’s (ECB, European Commission and IMF) so-called bail-outs, or ‘rescue packages’, would not have been possible either. Hence no doubling of Greece’s debt – and Greece would be well on her way to recovery.
The point is that these too-big-to-fail banks have become also too big to control, and of course they do not want to be controlled. They have the (political) power to shed off any control. They want to continue creating debt, lending money not for economic development, but for profit of their shareholders. Banking for development has stopped a long time ago. The only banking for development is public banking, and that is almost non-existent – so far – in the west; except for North Dakota and soon New Jersey – and a number of other US States are considering public banking as a means of bringing back the true sense of banking – i.e. for economic development. But with the current FED-Wall Street bulldozer’s onslaught on the world, they are fighting against windmills – but even windmills are fallible.
By and large, in the west it’s corporate banking for profit. And thanks to the public’s ignorance and disinterest, deregulation took place behind our backs.
Did you know for example, that to become a member of the World Trade Organization (WTO), a nation has to deregulate its banks – to put them on a platter at disposal of the globalized banking sharks? – Probably you didn’t. Such decisions are never publicized.
Again, the Swiss with a Yes vote on 10 June could change this for themselves and send a signal to the rest of the world – suggesting to take back their financial, economic and monetary sovereignty – cutting the link to globalized usury banking that enslaves the poor in favor of the rich. Literally.
Will Switzerland seize this unique opportunity to broadcast this powerful message to the (western) world? Saying in the clearest voice possible – enough is enough, we are going back to regulating our banking system, through ‘new-old’ legislation and through the only institution that really has the Constitutional power to create money – the Swiss National Bank?
The Swiss, an enormous influence in international banking – good or bad – could become a trail blazer for a new economic model, to demonstrate how ell well an economy can run without following the global trend of unlimited money supply – which serves only the banks by indebting the nations and the people. They could put a halt to the seemingly out-of-control economic rollercoaster that brings only misery to people, unemployment, broken homes and businesses, decimated social safety nets, pensions health plans — they, the Swiss could put an end to it and become an economically and financially independent nation with a healthy economy for the wellbeing of the people – not of the banks.
Will they? Will they grasp this once in a lifetime opportunity to break loose from the banking stranglehold?
The Swiss people are the most indebted of the G20, with 127.5% of private debt as compared to GDP in September 2017. The trend is on the rise. The United States, where deregulation started in the 1990s under President Clinton before it became ‘globalized’, was number seven with 78.5% in September 2017. – According to an OECD 2015 report, mortgages account for 120% of GDP, by far the largest proportion of all OECD countries. – Do the Swiss know that? – Some probably do, but the majority most likely does not. Ever-so-often the Swiss National Bank (Central Bank) issues a routine warning about private and particular mortgage debt – as it is an ever-raising risk for highly indebted families. An economic crisis, loss of a job – and a family fails to meet mortgage payments – bingo, foreclosure. The same as in 2008, 2009 and going on.
Well, do you know that in Switzerland first mortgages do not have to be amortized? In fact, banks encourage you not to repay your mortgage, but just keep paying interest. Many mortgages are passed on with the related real estate from generation to generation. So, you never really own your house. The bank does. And the bank earns the money on your house, as well as calls the final shots on what is to happen with your real property, in case it is being sold.
“Free money” – as it could also be called, is money made indiscriminately without backing. It has many negative effects – the risk factor, as mentioned before – and the bubble effect on the housing market which in turn increases the risk for houseowners, because sooner or later bubbles burst. The only winners are the banks.
Why can the banks just make mortgage loans without requesting amortization? – Because they are afloat with money. Because, of course, they just make money with loans – the 90% which are not central bank made money. And the more loans they have outstanding, the more interest they earn. They earn money for doing absolutely nothing. For a mouse-click. Interest accumulates on its own. And debt is today’s foremost tool to enslave people, nations, entire continents.
This is what the Swiss could change by accepting this referendum, by Voting YES to Vollgeld. It would refrain banks from creating money and return the responsibility to the central bank, where it is to be located according to the Swiss Constitution. It would force banks to be more prudent in issuing mortgages and personal debt – it would provide for a more stable economy and for a financially less vulnerable personal life. It would gradually take some air out of the real estate bubble – a healthy feature for any society.
Again, are the Swiss going to vote for what is best for them? – Probably not. – But why not? – Because they are subjected to an enormous anti “Sovereign Money” campaign by the banking and finance sector, by the ‘built-in’ lobby. Yes, built-in, because in Switzerland Parliamentarians have the right to represent as many corporations, banking and otherwise, in their Boards of Directors, as they please. Yes – this is another special feature of Switzerland, also unique among OECD countries. – How many Swiss are aware of this?
Is it therefore a surprise that the Swiss are being utterly brainwashed to vote against their own interest? – As they have done so often in the past – and frequently to the utter surprise of neighboring countries.
In addition – and this is where another feature of the Swiss Un-Democracy enters: The Swiss Federal Council, the Swiss Executive, takes for itself the privilege and right – I have no clue from where, it is nowhere written in the Constitution – to issue sort of an edict before every national vote or referendum – “advising” the people how they should vote. With a public that oozes of comfort, where consistently less than 50% go to the polls, largely because of disinterest, such a proclamation has a huge impact.
In this case, the Swiss Government, its Executive, has already and already for a while repeatedly “advised” its populace to vote ‘no’ to the Vollgeld Initiative. And surprisingly every major party goes along with it, including the socialists and other left-leaning parties. Either they are brainwashed to the core by propaganda repeated at nauseam, indoctrinating the people how bad accepting the “Vollgeld Initiative” would be. How bad can be owning your “Sovereign Money”? – Can you imagine? – How much lie must go into such fake marketing?
Or could it be that the Swiss are no longer ruled by Bern, nor has the Swiss Central Bank much to say about Swiss monetary policy, but they may be ruled by an international and globalized banking cartel that puts so much pressure on the Swiss government, that it could almost be interpreted as blackmail? – Why otherwise, would intelligent people advise and vote against their own and proper interests?
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My dear Swiss compatriots, this is the chance of your lifetime. Do yourself a favor by voting YES to the “Vollgeld Initiative”. Not only will you do yourself and the Swiss economy a favor, by bringing the latter back to sovereign control, you would most certainly make world-headlines and, who knows, inspire the peoples of other countries, who are sick and tired of their enslavement by banks, to request that their Central Banks alone can make money – in the amount that corresponds to the needs of their economies – no longer according to the profit-and-greed requirements of the globalized banking oligarchy.
Peter Koenig is an economist and geopolitical analyst. He is also a water resources and environmental specialist. He worked for over 30 years with the World Bank and the World Health Organization around the world in the fields of environment and water. He lectures at universities in the US, Europe and South America. He writes regularly for Global Research; ICH; RT; Sputnik; PressTV; The 21st Century; TeleSUR; The Vineyard of The Saker Blog; and other internet sites. He is the author of Implosion – An Economic Thriller about War, Environmental Destruction and Corporate Greed – fiction based on facts and on 30 years of World Bank experience around the globe. He is also a co-author of The World Order and Revolution! – Essays from the Resistance.
That money must be worth a fortune -seriously.
Interesting article. Let us hope that the Swiss citizens will respond too this initiative by voting yes to Vollgeld! Maybe the rest of the world will take notice, and the revolution will grow. We can only hope…
Of course, regardless of banking interests rates, even if we think we own our home “debt free”, it is in reality the state that owns it, with taxation rates (in the US) of up to 5% per annum based on the value of the property! Ergo, many people cannot afford to hang on to their homes even if they never borrowed a penny to purchase it. Such is the condition of modern man-eternally in debt to the state.
Exactly, Real Estate tax is killing the people who think they own their house. Paying say anywhere between $5-10,000/year is a lot of “after tax money”. People tend to forget that it’s the after tax (employment) money is used in their daily life. Add to that Sales tax (Vat in Europe?) Utilities and ever climbing cost of food leaves little if any to savings. Even that is taxed by inflation and the government usually takes about half of whatever little interest the bank pays you.
citizenry=zombies in our times.
Not much expectations
It’s reasonable for maybe second or definitely third homes +, stops rentier capitalism being profitable with respect to private property. But there should be 0% tax on first homes, or maybe one city and one countryside home.
Forget it, the Swiss will never vote the right way anymore.
The last time they did a “surprise” vote (ie. something unexpected by the power that be) was in 2014 with this: https://en.wikipedia.org/wiki/Swiss_immigration_referendum,_February_2014
and the politicians blatantly ignored the will of the people by not implementing the result.
Dave, you are right that, on some issues, Swiss politicians have ignored the will of their people. However, I still admire a system that can force a nationwide referendum with signatures of only 100,000 citizens.
SInce you mention 2014, there was another vote that took place that year in Switzerland: it was the one that would have forced the central bank to hold 20% of its reserves in gold. Now THAT referendum, had it passed, would have been a game changer.
The vollgeld initiative, confers absolute authority to the central bank. For this reason I am not too excited about it. Also, as Peter Koenig writes, the initiative is not supported by any party so it is highly probable it won’t pass.
I agree but would like to add that the central banks and banks as a whole already hold absolute authority in finance. Acceptance of the initiative would clarify this point in the Swiss constitution in favor of its central bank.
Unfortunately I was right.
“The sovereign money initiative would have ended the centuries-old system of fractional reserve banking by allowing only the SNB to create money and requiring checking accounts to be fully backed by assets that are a direct claim on the monetary authority. Three quarters of voters rejected it.”
https://www.swissinfo.ch/eng/swiss-reject-plan-that-would-have-revolutionized-banking/44181800
”The Swiss Federal Council, the Swiss Executive, takes for itself the privilege and right – I have no clue from where, it is nowhere written in the Constitution – to issue sort of an edict before every national vote or referendum – ’advising’ the people how they should vote.”
Well, to the best of my knowledge, waging perpetual wars endangering the Planet’s very survival is not written into the # % $ € ”Constitution of all Constitutions” either. This Constitution fetishism is just proof positive of all-out Western cretinism. One really has to ask why not every single country on Earth is a Western style Democracy when, evidently, the fabulous Constitution is all that’s needed to legitimize all-out, unending lawlessness.
What’s genuinely interesting about the Swiss Executive’s edicts is that they make you wonder if the Ziomedia don’t reach out to the Swiss.
Nussiminen,
Good point. However, there must be an explanation…
Switzerland is the paradise of the bankers. I guess the idea probably originated from the bankers themselves to conceal disturbing anxieties around the global financial mess… Will it catch and delay the break up of the financial system?
The present capitalist State = debt industry (paper money, banks) and death industry (weapons, wars).
yeah – this sentence “…witzerland, fully embedded in the globalized western banking system, absorbed by it, has a chance to tell the world that the only way to control and get on top of the cycle of financial and economic crises is to reign-in the bottom-less money production –”…
its insane that money is producted easily and has no termination – its eternal basically – whereas what it represents – goods and commodities – are perishable – its insane –
Money should have an expiry date
Money does expire actually. When a debt is repaid the money disappears.
The interest paid for the duration of the loan was not created with the loan but was paid for with real money which of course goes to the bank.
Easy credit causes inflationary bubbles with risk takers bidding up prices ever higher disguising the fact that the banks are earning interest on 10, 20, 30 plus times the deposits it manages. Milking the real economy.
If interest paid went to a public lender where nothing else changes, the government would have a source of wealth which at the moment enriches only the finance industry and You Know Who.
Well, a fraction of that wealth created by the bankers is then paid back to the politicians in the form of bribes, uh, sorry, “contrbutions”, as the fee for creating the system that so benefits the bankers.
If there was to be a try at trying to “fix” democracies, and certainly America’s fake-democracy, eliminating this sort of payment would be high on the list. Publicly financed campaigns make more sense, in that the elected politicians are then only owned by the public once elected. America after the Watergate crisis/scandals tried to control the money flow to politicians, but these reforms only lasted until the Clinton administration which removed both the post-Watergate election reforms as well as the post-Depression banking reforms.
fabulous article – thanks Peter – you’re a hero –
T’was fun until you stated “lying is a felony”.
Really? ;-)
Lying is perfectly legal(unless under oath). If the Swiss voted “yes” on this expect a “color revolution” there within a month. “All money is Rothschild money” – official motto of the Rothschild family
” Its money produced only by the Central Bank, by the “Sovereign”, the government, represented by its central bank.”
That is incorrect, central banks are not sovereign, not even the Swiss national bank; they are all controlled by a private entity.(the same one everywhere)
It doesn’t matter how the Swiss vote, ‘They’ will never allow the ‘Sovereign ‘ control of currency. In the end they will say the vote was no, no one knows in the end how the poeple voted, they have to take the answer of the counted votes as ‘True’. It’s not how you vote it is how the votes are counted…
’…Switzerland Parliamentarians have the right to represent as many corporations, banking and otherwise, in their Boards of Directors, as they please. Yes – this is another special feature of Switzerland…’
The capitalist State is controlled by capital: if not directly (with their representatives), then indirectly (with corrupt politicians bought by capital).
I will be again ashamed to be Swiss. One clarification on the mortgage: we didn’t pay it back in in full cause the property tax would be higher as the interest itself.
False hopes. There was a similar referendum in 2014 > the gold reserves proposal would have required the Swiss National Bank to have gold reserves of at least 20% of the value of the assets of the Swiss National Bank, and see all Swiss gold currently held in the Federal Reserve Bank of New York returned to Switzerland. The Swiss Parliament and the SNB were against the initiative since it would stop their ability to freely print money. That initiative was rejected (turnout 49,8 %, only 22,7 voted for). See > https://en.wikipedia.org/wiki/Swiss_referendums,_2014#November_referendums
I ‘m a 60 years old swiss man. No hope.The Swiss citizens will vote no. It’s very technical matter and most of the voters don’t understand that banks are ”Swiss francs printing machine”. The Swiss National bank policy are right now destroying the pension fund with negatives interest rates. Nearly nobody understand this. A huge majority of citizens think that they have good salary only why they work well and hard. A vast majority simply don’t understand that their well being in something fragile. The vast majority is not ready to fight for anything. The direct democracy only slowed down the policy of swiss elite and mass media aligned with USA.
Some of us knew what the WTO was all about …..
https://ia800609.us.archive.org/30/items/SeattleTimesWtoInSeattle1999PhotoGallery/images/photo18.jpg
https://ia800609.us.archive.org/30/items/SeattleTimesWtoInSeattle1999PhotoGallery/images/photo30.jpg
Images from https://archive.org/details/SeattleTimesWtoInSeattle1999PhotoGallery
and what’s missing from this are any images of the large 80,000 person protest march at the same time.
It’s sickening to see that few speak about the topic in Switzerland as if it was something minor. Media is almost silent and when the topic is addressed, it is on behalf of bankers. The “No” vote is being engineered, again. Those who think that Switzerland is such a great democracy make me laugh. We pretend. That’s what the Swiss do best, pretend. So no point of getting all excited, there won’t be any Vollgeld anytime soon. Unfortunately.
Dirk Müller about our monetary system
https://www.youtube.com/watch?v=ihT6uOSl5s0
I forgot – you can change the subtitles of the video to English
“Most Swiss and probably most westerners in general don’t even know that the loan or mortgage they get from their bank is no longer backed by the bank’s capital and deposits. How could they? Instead of being told the truth, they are being lied to, even by their own party and politicians. ”
Most loans are backed, however, by pledged assets. It is almost impossible to get a loan with pledging some valuable security, or asset (small personal lines of credit excepted).
And so contrary to popular belief, the vast majority of the money supply is backed by real assets. Typically real estate.
The public option is necessary for a healthy economy, I hope the Swiss go for this central bank option.
Lets assume I want to build a home and take out a mortgage from my bank. The bank thus creates the amount of money I need by adding a couple numbers to my bank account. In their balance sheet, the same number is added to the outstanding loans. I get the construction done, pay the workers and companies with this amount and start amortizing my mortgage. If I go broke, the bank will get “their money back” by selling my home. In any case, the bank will get the amount plus interests on my mortgage back. Amortizing the debt means that I work like a slave for free during 10 to 20 years. Guess what: big win for my bank. Little so for myself.
Lets assume my bank goes broke before I do. What will happen then?
In the best case for me, my mortgage gets forgotten. The outstanding debt is canceled without removing the so-created money from circulation. This surplus of money will drive inflation and thereby impoverish every holder of assets in this currency.
In the usual case, the mortgage is sold to another bank who then will collect it.
In the worst case, I have to pay it back immediately >> for instance by selling my home. Thus, back to start.
Essentially, the right of my bank to create more credit than it has deposits available literally means that my bank gets my work for free. Because banks collect interest on the entire outstanding debt, they effectively make money from selling thin air. Due to their right to create money, banks are legalized free-riders/well-fare parasites.
If only the national bank would be allowed to create money, it could effectively control the money supply and it could take a fraction of the banks’ profits back. Therefore, it could inject the wealth created by the entire populace into the well-fare of that same populace instead of filling the deep pockets of the bank owners.
The Swiss central banks is practically a giant hedge fund. They are NOT injecting giving this money back for the “welfare of the populace”. The Swiss central bank is one of the biggest holders of Apple stock in the world.They have USD 80 bn in US stocks.. Look at these charts:
https://www.zerohedge.com/news/2017-11-03/swiss-national-bank-now-owns-record-88-billion-us-stocks
https://www.forbes.com/sites/johnmauldin/2017/06/22/the-swiss-national-bank-owns-80-billion-in-us-stocks-heres-the-catch/#5e479c653623
Peter Koenig also uses the word “Sovereign “control as if it was something good… it’s simply handing control from corrupt private bankers to a corrupt central banker. The only way to restore the control of money is to have a gold/precious metal standard where there is a physical constraint to the money printing.
It is of key importance to hold the national bank accountable to its tasks as set forth in the constitution. If I am not misinformed the Swiss national bank is subjected to the Swiss constitution, where it is stated that its net gains are to be distributed to the confederation (state and cantons; about 1bn CHF a year).
The Swiss national bank still holds way too much USD and EUR assets because it introduced a 1.20 CHF/EUR peg in December 2008 when the rate fell to parity. In my opinion, the bank had to intervene particularly strongly because it is only a minority player in the money supply. I would have waited a few more weeks until reaching 0.60 CHF/EUR before issuing large orders of photovoltaic panels and other urgently needed goods. Switzerland could have changed to fully renewable electricity production at half the cost. Instead, the national bank bought EUR and USD to suppress the value of the CHF. Thus, it still holds large amounts of foreign currency and tries to invest it in more-or-less trustworthy businesses.
Hello, Marcel; public banking/central bank operations are a very good idea, to stop the rent extraction you describe above, the parasitism that private banks are operating with.
Public banking doesn’t have to charge much interest, as a public bank does not have to make a profit. And so construction loans can be made very low cost to the economy, or essentially no cost to the economy. No transfer of wealth is required for public banking.
A central task is to stop the fraud of the private bankers, and the rent extraction.
Public banking would be able to stop the rent extraction and fraud instantly.
<>
Wrong ! The Swiss National Bank, distribute some billions a year (base on his benefits) to his shareholder. And the shareholder are the canton. Those public entities count on this amount to have no (or to shorten) their deficit.
Mr Keonig, please correct my thinking, i’m an amateur.
money is credit, credit is debt > money is debt.
payable debt collateralizes the debt multiple, (last i looked, 20:1 in US banks)
so in effect, the velocity of money collateralizes the debt load, to the extent
that GDP is productive.
MMT depends on an honest broker maintaining a ratio of money to productivity. (???)
the inverted pyramid of derivatives are bets on value via the machinery of money.
these are money-like instruments but not money.
much obliged.
But Peter I think you have left out the ” (Removed language,MOD) in the woodpile ” in your backgrounding explanation of the power of non=state banks being allowed to dreate money at will?
I think it is important to publicise the 1937 terms of the private Banks which are headquartered in Bern and their protection from Suisse and all other State’s laws and legal processes, and their ability today to remain totally anonymous.
Actually, this extra-territorial privilege was granted to only 47 private banks and their ability to control the majority of the global monetary supply, never-the-less makes it easy to guess their names without visiting Basle.
This is not getting coverage on the usual places I hang out, places which are big promoters of MMT. I wonder why.
Instead, it was Zerohedge that ultimately led me to this article. Go figure.
There are variants on this that can be somewhat useful-
Before the Dumbinion of Canaduh was used as a stalking horse to set up the Petro Dollar Ponzi,
under H.Kissinger’s orders-
The Cartered Criminal Banks (see; Royal ,Montreal ,Commerce ect.)had a restraint placed on them they greatly resented-
They set the interest rates But the finance minister could without warning change(Up) the reserve ratio required for the banks to be allowed to operate.And they Had to meet the reset reserve requirement .
Not the full solution of course but surprisingly useful.
Bonus- there was nothing the lawyers could do about it.
Baby steps are reassuring at the start.
What self-respecting ‘left’ party would not support this referendum? Opportunity of a lifetime however not very many so-called left politicians are economically literate to the point they even recognize the fact that the class war they never even realized was being waged against them, the one they lost badly to the 1%, was won by neoliberalizing the economy and all that entails – Michael Hudson explains this better than anyone.
I should mention, Canada recently had a really interesting legal case in this vein, the federal government was sued by a group who was trying to get the Federal Court to try to force a restoration of the Bank of Canada to its mandated purposes i.e. create its own money to ‘lend’ to governments at all levels — interest free loans to the citizens/tax payers in effect. They lost, hate to say.
Vollgeld is not a very bright idea, it copies the Venezuela/Zimbabwe model.