STAFF NEWS & ANALYSIS
The Real Reason for Government Banking Solutions
By Daily Bell Staff - December 27, 2016

This is a bad season for banking around the world and especially in Italy where major banks are under water.

Central banks are supposed to protect banks but who really believes that? In the modern era especially central bank protection has often involved government refinancing.

From the point of view of central banking, the health of the whole system is more important than the health of an individual component. That’s one reason why Italy’s oldest bank was just bailed out.

The bank, Monte dei Paschi di Siena, is being bailed out by the italian parliament which has put aside up to 20 billion to ose as necessary. However the parliament dearly hopes it won’t cost so much.

The bank had found up to 2.5 billion in private and institutional funds. But thut that wasn’t enough according to the European central bank that had performed a stress test some 60 banks earlier in the year BMPS finished dead last.

Nonetheless, the bank requested additional time, until january 20th but the request was refused. The bank only had until the end of the years.

Now the bank is destined to be turned over to the state, and any additional losses will be undertaken by bondholders This process may take up to three additional months according to some reports.

The lender’s position had worsened in december after a failed referendum. The result of the referendum led to the resignation of the Prime Minister and the appointment of a caretaker.

The referendum included constitutional reforms by former Prime Minister Matteo Renzi on December 4. Shortly after the referendum, the ECB tossed its negative ruling, tippling the bank into bankruptcy.

Ellen Brown, an independent analyst, writes that the real reason for current solutions is that central banks are hoping to force banks into a government oriented role. This would make sense for BMPS which was pushed into government arms by the European Central Bank.

The idea is that central banks manufacture most of the money in the world and therefore banking ought to be run for the benefit of the public. Of course such a solution is in the eye of the beholder. Not everyone is satisfied with a world where central banks rather than the market itself are responsible for money creation.

The ECB and the European Commission could push banks toward government control simply by claiming that was the only feasible solution. Over time, European banks could be rescued by the central bank, outright.

The idea, according to Brown is that banks could eventually be fully nationalized for public purposes. Banks would essentially become public utilities. This runs counter to the history of banking. It a bad idea but one no doubt that is being seriously considered by the powers that be.

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  • Libertarian Jerry

    Central banks,fiat currency,income taxation and government bonds are all mechanisms for financing the big government welfare/warfare state. Basically Planks of Karl Marx’s Communist Manifesto.State control of currency and lending institutions is one more link in the chain of serfdom shackling free men everywhere.

    • lois

      I agree

    • ThomasJK

      There’s an old saying that goes something like, “It’s hard to keep in mind that the objective is to drain the swamp when you’re up to your rear end in snakes and alligators.” It’s even worse than that in that strange little foreign country that’s called The District of Columbia. While Trump is trying to drain the swamp and all the while has most of his attention is on all the snakes and alligators, he risks being sucked dry by the millions of indigenous swamp-dwelling leeches.

    • rahrog

      Yep.

      The question is: What are we prepared to do about it?

      • The question is: What are we prepared to do about it? …. rahrog

        Howdy doody, rahrog.

        Is ISIS/IS/ISIL radicalism a result of crooked central banker expansionism? And do the myriad and emerging deadly forces of disorder need to more accurately target the fat cat subjects of division?

        Two questions there which might hide practical simple answers to curtail and even reverse deepening problems ….. although that is not to say that such would not present other difficulties for future consideration and fundamental resolution.

        Or are such exceptional central banker expansionist operations, one of their rogue renegade programs for magicking into existence more paper fiat via out of intelligent command and remote control Military Industrial Complex spending channels/chunnels? The Mighty Rotten Mole Roaring from Deep Within Traditional and Conventional Systems of Perverse Administration?

        • rahrog

          What are we prepared to do about it?

          • All and anything that is required is something best left next to impossible to clearly specify and defend crooked forces and corrupt sources against, rahrog. You just never know who may be listening …. Loose Lips Sinks Ships …. and all that jazz.

            The enemy can be masquerading as friend.

            Hmmm ….. would that be treachery and deliver identification of traitors in hiding?

            Are you prepared also to do any and/or all of that, rahrog? And is anything less an abdication and surrender to apathy?

          • rahrog

            Each individual must choose their own path.

            Secession is the best way to bring down the “globalists”.

            Declare Independence & SECEDE from governments that are controlled by central banks.

            For those who like the current system, let them have it.

          • Ah yes, rahrog, ye olde Brexit route is the beginning of one such journey. ? 🙂 Mark Carney is not the man to captain the Bank of England ship though, through the choppy waters of revised global rehypothecation. He’s just as a country corner shop keeper in a world of global superstore franchises.

            It will be massively entertaining, and most probably also quite frightening rather than enlightening, to discover what sort of a crew be the present Conservative party ……. scurvy pirate dogs of war or supreme starship troopers being apposite and opposing end products of one particular, politically correct spectrum.

          • rahrog

            For some of us the goal is to do away with The Bank of England, and all such central banks (& the worthless currencies they peddle).

            Brexit is a wonderful step in the right direction of a long journey.

          • Hi, rahrog,

            Such a goal, methinks, is a step too far for reality to accept, given the easy means by which both the filthy rich and the chronically poor are controlled by paper.

            However, when command and control is as poor as it is today, the leaders of that remote system are in deadly danger of losing their heads to anonymous foe who know of their shenanigans. Such is a quite natural progression in the great scheme of things.

          • rahrog

            There is indeed a natural cycle coursing through current events. It is good vs evil – liberty vs tyranny.

  • esqualido

    “Central banks are supposed to protect banks but who really believes that? ” That is the wrong question. The question is “Since the too-big-to-fail banks of the U.S., England, France, Spain and Italy are the actual owners of their respective central banks, why have citizens not risen up to demand that central banking be ended?”
    For no nation determined to live within its means has any need for a central bank, just a functioning Treasury Department, as we had 1790-1913.

  • georgesilver

    Central banks ARE the problem. They are the parasites killing the host. They now want to become the host. The only way the host (people) can survive is to get rid of central banks.

  • Kevin

    And so … along the continuum…’before evolution, must come a revolution’
    We ask – why? and of course the answer is that it just doesn’t hurt enough – yet.

  • wraft

    Trump ought to issue negative interest (say -6%) demurrage currency equal to the interest due on all federal debt. The interest earned on the time stamps could pay down the debt principal. This ‘hot potato’ money would be loaned back into the real economy ASAP and would furnish the real economy high velocity circulating cash.

    • wraft

      Also, since no money would be borrowed, it would be constitutional. Could someone pass this idea along to the Donald? many thanks

  • apberusdisvet

    Central Banks are the biggest criminal scam going; all sovereign nations should take back their independent rights to print money and set monetary policy. Why are US citizens allowing the FED, a foreign owned entity, to charge us interest on our own money?

    • rahrog

      Ignorance.

    • LawrenceNeal

      Because the so-called ‘government’ is an illusory construct, a tool the .001% Elite use to mollify and manipulate the masses.

  • ICFubar

    If one considers that central banks dominate each and every nation that hosts one of the Bank of International Settlements system members then a conclusion can be drawn that central bank function and government finances are an interwoven business plan with law and jurisdiction determining which is to act under a certain set of circumstances. This is a bad idea as the financial sector dominates the political. In China it is the reverse but still a bad idea to have the omnipotent power of money and credit creation to be in anyone other than the public’s hands, free from interference of government or financial power houses.

    The form of money, whether precious metal or backed by the same, fiat or sticks with notches carved to denote value is actually unimportant and up to the people. What is important is that money is created in the correct QUANTITY, neither too much or too little. Who creates money, how and in whose interest can be debated. If a permanent and stable money supply is sought as a beneficial influence then money should be created as debt free as possible or in a ratio that negative number debt money does not come to dominate the economy.

    An interesting aside is anarchist Ken Cousen’s take on how world systems operate. skip to the one minute 30 second mark to avoid an echo like introduction
    https://www.youtube.com/watch?v=rEux0uOqtUg

    • Mstrjack

      Money can not be created. Money must be mined, grown, or sewn.

      Currency can be created, yet the purpose of currency creation is theft of money from production. The ‘who’ of currency creation is of the utmost importance. Whoever gets to create currency controls everything.

      • Currency can be created, yet the purpose of currency creation is theft of money from production. The ‘who’ of currency creation is of the utmost importance. Whoever gets to create currency controls everything. … Mstrjack

        And the failure of created currency to flow freely out of private banks and into the public sector is a systemic vulnerability vector for exploit in many forms. And it can very easily become extremely personal in certain circumstances …..

        amanfromMars 1 Wed 28 Dec 06:47 [1612280647] ….. clearing away the smoke and mirrors on http://forums.theregister.co.uk/forum/1/2016/12/25/2017_rise_of_the_intelligent_machines/

        A Simple Misinterpretation Corrected ……

        So, if you’re afraid of the future, other people will know? … Big John

        Oh no, Big John, it is much more the case of if you are personally and/or corporately responsible for cynically creating fear in the future and/or fear of the future, will other people know of your wanton work. Such then allows streaming of facilitation of swift and anonymous and autonomous corrective activity/reaction/proaction/HyperRadioProActive IT Countermeasures. The CyberIntelAIgent Messaging Machine virtually protecting itself from the possibility, and therefore very real probability of attempts at breaching security defences and attacking systems and administrations with dumb human abuse and misuse.

        And such actions may also include far-reaching and crippling SWIFT activity in accounts held close and dear to the cold heart, and most likely quite probably the root human abuse and misuse cause of the problem right at the heart of all that matters to them. Pathetic indeed, yes, but such be the nature of ignorant and arrogant beasts.

        My apologies for the former text ambiguity, Big John.

        It is a mistake to not imagine and realise that corrupted things will always collapse and destroy their hosts and patrons. And that is a result due to a lack of intelligence in such systems with a remote artificial command with fiat control ….. and just the slightly wider sharing of the problem with considerably smarter souls?

        🙂 Time will tell the tale, and these cyber spaces will deliver the result to all places in need of the feed.

      • ICFubar

        The only secret about money that enables a permanent and stable supply of money is that it must be created and maintained in the correct QUANTITY to allow the full operational capacity of the economy. If you think on this you will come to realize that what form money takes is largely immaterial within reason, but if too much is created the money will devalue (inflation) or too little it will increase its value (deflation). All the rest is the shouting of those with personal preferences as to the form money should take. The value of money is then based upon how productive the people using it are and this creation must be under the people’s control and not under any other party’s like government or banking.

        • Mstrjack

          You don’t seem to understand the difference between money and currency. Money can be currency while currency, if not money, can only represent money.

          If the amount of currency is carefully controlled (quantity) then I agree with you. But the problem you have is giving someone other than yourself the authority to create currency gives them the power to rule over you. If you give me the authority to create currency I will do exactly what the Federal Reserve cronies did. I will buy a political system, a military, an educational system, the media, and a police state while living a life of freedom in mansions, flying around the world in private jets to board my yachts loaded with gorgeous women while you shine my shoes for me. (A Good Job).

          If you would really like to know the difference between money and currency, which everyone should know, Mike Maloney’s Hidden Secrets of Money is excellent.
          https://goldsilver.com/hidden-secrets/episode-1/

          • ICFubar

            The value of anything is only what humans as a collective attribute to any certain COMMODITY.. Gold other than being a shiny rare-ish metal commodity has little use other than as jewelry as has many drawbacks when used as money. Silver if you like is a much better metal if the people should want to use it as a monetary representative.

            The quantity of issuance of a money form determines its value in the long run. That is whether it is sticks of wood with notches carved in them to denote value (the most successful form of money ever, lasting about 700 years) or a gold coin. What is money but other than what the people agree upon? Of course the bullion dealers will tell you money can only be constructed of what they are selling. Do you believe them in totality? And yes I do own some gold-silver coinage on speculation and as insurance just in case TPTB ever reset physical money to a precious metal standard. More likely is that physical money will disappear entirely.

            That the current system is well advanced in its collapse has little to do with the form of money than to other factors, which is that money currently is based on an extractive, consumptive and exploitive-speculative paradigm and at the entire purview of a very few apex elites. A debt based monetary system expands as civilization expands until the later can no longer expand enough to carry the debt load and monetary collapse becomes inevitable and which those apex elites who own money and credit creation profit from in both directions. This while leaving the contained population (matrix) without either a stable or permanent money supply to which they are the guarantees of all the debt under law. We have been consuming our own monetary destruction under the present system and will in the end destroy the planet if we continue in this monetary vein.

  • Chris Hulme

    Why do we allow commercial banks to take such reckless risks with our money?
    Why do we allow governments to spend money they do not have?
    Why do we allow central banks to create money out of thin air?
    And why do these things go unchallenged in the main stream press?

    • James Clander

      “And why do these things go unchallenged in the main stream press?”

      Because the MSP is “owned” by the above & the .01% . Simple !

      • LawrenceNeal

        It’s actually the .001% Elite, 400 families that own almost everything in the US, including the Wall Street Scam, the Too-Big-To-Fail Banks Scam, the Federal Reserve Counterfeiting Scam, and the so-called ‘Government’ Scam.

      • Werni Wolf

        Central banks and governments are playing “Monopoly” with Mickey Mouse money. But nobody wants to say it openly as long as some fools still accept this money for payment of their real work.

    • LawrenceNeal

      #4: Because the LameStream Press is owned by the Elite.

    • Red Baron

      Because “we” are not the ones in power, that’s why. Sure, they allow you to vote, but they can’t even actually validate your vote. The people have very little say what goes on inside the Beltway.

  • LawrenceNeal

    Proofreading

  • comrade

    Gangster ism in the guise of De mock racy
    feudalism never ended . the joos have the goy by the balls . THE END

  • 789

    Ellen the trojan Brown is “an independent analyst” ??!!? has someone sexed out your brain ?
    she is a charlatan who peddles book to ignorant groupies on subject she never studied and knows nothing about, or understands

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