Swiss Referendum to Curb Banks’ “Fake Money”

The Swiss government has announced that it will hold a referendum on whether to spruce up its laws forbidding private banks from issuing money after the widespread use of electronic banking has allowed the original proscription to be bypassed.


The referendum—sparked by a popular movement in Switzerland known as the “Vollgeld Initiative” (the “real money initiative”)—will be held after a petition demanding the move attracted over 100,000 signatures. In terms of the Swiss constitution, any public petition which attracts that number or more signatories must be put to the vote and, if passed, enacted into law.

If passed, the proposed legal amendment will specifically grant sole power to create money in the financial system to the state-owned central bank, and will ban commercial banks from creating money.

This will, the campaign group said, limit financial speculation by requiring private banks to hold 100 percent reserves to guarantee all their deposits. In effect, this will outlaw what is known as “fractional banking” through which banks “loan” out more money than they actually have by only holding a tiny portion of the money they claim to have in circulation.

“Banks won’t be able to create money for themselves anymore, they’ll only be able to lend money that they have from savers or other banks,” the campaign group says on its website.

Although an 1891 law grants the state bank the sole right to issue money, the advent of electronic banking in particular has allowed all banks to bypass this law. Most people with deposits never actually see the cash they have in the bank, and accept the electronic printout or online figures as an accurate representation of the cash they hold in the bank.

Very few banks however actually have that amount of cash as represented in these figures on hand, using the “fractional banking” scam to cover this shortfall—and always hoping that all the depositors will never simultaneously ask for their cash. When that has occasionally happened in the past, it has led to what is known as a “run on the banks” and the subsequent closure of the banks in question after they are unable to give every depositor their full cash deposit back.

The referendum proposed as the “Sovereign Money Act” would give the Swiss National Bank a monopoly on physical and electronic money creation, “while the decision concerning how new money is introduced into the economy would reside with the government.”

According to the campaign group, over 90 percent of the money in circulation in Switzerland now exists in the form “electronic” cash created by private banks, rather than the central bank.

“Due to the emergence of electronic payment transactions, banks have regained the opportunity to create their own money. The decision taken by the people in 1891 has fallen into oblivion.”

* The government of Iceland—the scene of a banking collapse caused by an extended fractional banking swindle—is currently also investigating the possibility of formally abolishing the creation of “electronic money” and a specific end to the fractional banking system.

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  1. Fractional banking is what caused every reccession that we ever had,the working class are forever bailing out the non producer’s.

  2. I am aware that the Algeciras Convention April 7 1906 says in Article XXXll “The Bank shall maintain.. cash on hand at least half its notes in circulation, and equal to at least one-third after the expiration of said period of two years. At least one -third of such cash on hand is to be (negotiable securities, Article 21g Statutes of the Bank for International Settlements).
    These negotiable securities now exclude gold and silver as they no longer circulate as a means of exchange. There is one security that is recognised by International law and it is Municipal services which include electricity, roads sanitary sevices etc. (Articles 23, 24 Hague Convention 1907) and each minority within their own territory within a State can use this as a means of buying and selling, and the Central bank must hold this negotiable security.

  3. Isn’t it strange that economists, and there are more supposedly scholarly economists than at any time in world history, should have no theories as to the effects of such schemes. They are not so far from primitive people repeating witchcraft stories.

  4. Book: Pawns in the Game, by William Guy Carr.
    How fractional lending was granted a charter by the establishment of the Bank of England, 1694, & how the banksters have financed every war & revolution since.
    Book: The Creature from Jekyll Island, by G. Edward Griffin.
    Brings the story up to date. The Creature is the US Fed, established 1913.
    If a bank loans out £1,000 while holding only £100, @ 5% interest, then after 1 year the bank has collected £50, which is a totally immoral usury rate of 50% on the £100 it was holding.
    All money is created as debt. This is not sustainable.

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