Category Archives: Banking

Mobile money transfers in Kenya help the poor and unbanked

M-Pesa, is a mobile-phone based money transfer service that was started up in Kenya 2007.  Since then it’s usage has grown by leaps and bounds. This recent article provides a thorough understanding of how it works and the benefits it provides: 10 Myths About M-PESA: 2014 Update.

Dollar decline accelerates as political alliances are being reshaped

Whether you’re a Democrat, Republican, Independent, Green, LaRouchite, or consider yourself apolitical, you need to pay attention to what is happening on the money and banking front, because that is the realm in which World War III is now being fought.

We can’t afford to tune out messengers that wear a different party label or with whom we might disagree on other issues. Listen carefully to what Ron Paul has to say in this Alex Jones interview and use your common sense to separate the “wheat from the chaff.”

How do central banks control interest rates?

Question: How do central banks control interest rates?

Answer: By creating counterfeit money.

Of course, they will never admit that. They see their “purchases” of debt instruments, mainly those of governments, as being legitimate. But such purchases violate sound monetary principles, and even their legality is questionable.

The obvious question that must be asked is “Where do central banks get the money with which to buy those debt instruments?” The answer is, they do not “get” the money, they create it–by fiat. This is  their celebrated “quantitative easing,” which is actually currency inflation. The new “high powered money” thus created puts new “reserves” into the banking system, which banks use to multiply their own purchases of government bonds and other assets.

Without this “monetization” of debts by the banking system, newly offered debt instruments, like government bonds, would have to offer higher rates of interest to attract buyers from the general public.

Interest rates on the ever-increasing amounts of sovereign debts can only be kept low by this sort of central bank intervention. As I put it, central banks are the “buyers of last resort” for bonds that cannot be sold at artificially low rates of interest. The chart below show just how desperate the situation has become since the financial crisis of 2008.

Interest Rate Elephant In The Room

 

Initially, however,  in the case of the Fed, the purchases were of “junk” that the banks had created during the real estate bubble. That was the bailout that saved the banks but put the squeeze on people through foreclosures, layoffs, and loss of income on their savings.

As shown in this chart and others I posted previously, all he major central banks are doing the same thing, so foreign exchange rates are not too adversely affected–yet. But keep your eye on Brazil, Russia, India, China, and other countries that show signs that they may not be willing to play along./ t.h.g.

An open letter to the Financial Times

Dear Martin Wolf,
Your article, Strip private banks of their power to create money, highlights some of the problems of the global money and banking system, but falls short in the proposed solution.

The problem is not private money creation, per se, but the monopolization of credit (money creation) in the hands of a private banking cartel and the collusive arrangement between bankers and politicians.

In today’s world, banks get to lend our collective credit back to us and charge interest for it while central governments get to spend more than they earn in overt tax revenues, relying on the banking system to monetize government debts. These two parasitic drains on the economy, interest and inflationary government debt monetization, create a growth imperative that is destroying the environment, shredding the social fabric, and creating ever greater disparities of income and wealth.

Turning over the money monopoly to politicians (what I call the “Greenback solution”) will not change things very much. It will be the same people wearing different hats. The political process has been so thoroughly corrupted and taken over by this small elite class that political approaches to solving the money problem have no chance of passage anyway. I articulated that argument a few years ago in my Alternet article, The End of Money: Take Power Back From the Money and Banking Monopoly.

True solutions must emerge, and are emerging, from society and from associations of small and medium-sized businesses. Money is first and foremost a medium for facilitating the exchange of goods and services and other forms of real value, but the exchange function can be effectively and efficiently provided outside the banking system and without the use of conventional political money. This is being done for associated businesses through credit clearing exchanges and through the issuance of private currencies or vouchers by businesses that produce real value. Both approaches have the capacity to provide exchange media that can be used by general public as well.

So, rather than ban private issuance of currencies, such private issuance needs to be proliferated and encouraged. There needs to be competition in currency so that there will be a sufficient amount of exchange media, and so that political currencies cannot be abused without losing patronage in the market. Rather than establishing the state as the money power, we need to have a separation of money and state. That argument is more fully developed in my latest book, The End of Money and the Future of Civilization.

Best wishes,

Thomas H. Greco, Jr.

FED: “your gold is safe with us, just don’t ask for it back.”

The global banking farce is becoming ever more hilarious (if you can ignore the tragic consequences of this monumental fraud). Germany is seeking to repatriate its gold that is supposedly held by the US Federal Reserve, but the Fed says, “Nein, you cannot even examine it.”

 Watch this RT report to get the story:

Welcome to Goldman Sachs

I’m a subscriber to Quora.com and receive a weekly digest by email listing things that I’ve expressed an interest in. One item this week consisted of answers to the question: “What are some of the most profound jokes ever?” I found this one below to be especially profound and timely.

Anonymous

5725 votes by Matthew Baldwin, Massimiliano Marangon, Vallabh Anwikar

A manager at Goldman Sachs has this to tell.

Once upon a time in a village, a man announced to the villagers that he would buy monkeys for Rs 10. The villagers, seeing that there were many monkeys around, went out to the forest and started catching them.

The man bought thousands at Rs 10 and as supply started to diminish, the villagers stopped their effort.

He further announced that he would now buy at Rs 20. This renewed the efforts of the villagers and they started catching monkeys again.

Soon the supply diminished even further and people started going back to their farms. The offer rate increased to Rs 25 and the supply of monkeys became so little that it was an effort to even see a monkey, let alone catch it!

The man now announced that he would buy monkeys at Rs 50!

However, since he had to go to the city on some business, his assistant would now buy on behalf of him.

In the absence of the man, the assistant told the villagers, “Look at all these monkeys in the big cage that the man has collected. I will sell them to you at Rs 35 and when the man returns from the city, you can sell it to him for Rs 50.”

The villagers squeezed up with all their savings and bought all the monkeys.

Then they never saw the man nor his assistant, only monkeys everywhere!

Welcome to ‘Goldman Sachs’!

Hmm, sound familiar?

More profound jokes here.

 

End poverty by ending the corrupt central banking system

Thirteen year old Victoria Grant speaks truth to power in calling for a massive change in the way we do money and banking. Brilliant!

Corrupción Extrema, la causa de la Extrema Pobreza. subtítulos en español