Banca Italia clarifies the nature of "electronic money": it is toilet paper!

The note of Banca Italia on 11 December 2017 issued an interesting press release which dealt with various topics. First of all that of the illegitimacy of alternative currencies, of which I have already said in another post (click here to read it) and secondly that of the nature of the cd. electronic money.

Read as a whole, the piece sounded almost threatening, recalling in fact that any attempt to emit money from the state is illicit and will therefore provoke a reaction by the ESCB (the European system of central banks), while on the contrary, private banks can do what they want. They do not specifically create money in a forced circle, but only conventionally accepted payment promises.

For the insiders there is nothing new, but in my memory it is the first time that Banca Italia makes such an admission. But we transcribe and comment on the statement that reads: "In completing a pecuniary transaction, households and businesses can also use private legal means in addition to legal tender, defined and regulated by agreements between the parties. For example, bank accounts at sight, although without legal tender, constitute a widespread means of payment because the depositor can ask for conversion into legal tender at full face value at any time. The debit card, check, credit card and bank transfer are instruments commonly used for the transfer of deposits in the pecuniary transactions which, when it occurs between customers of different commercial banks, is made possible by movements of reserves on the accounts held by the institutions of credit at the central bank ". Click here to read the full press release.

Have you read carefully and carefully? Otherwise, still take a few minutes to reread because admission has an incredible scope and once again clarifies how the political power held by commercial banks is incompatible, radically incompatible, with any form of democracy.

The legal tender currency is only that cash or metal. When we deposit the money in the bank, the institute becomes the owner of our money pursuant to and by effect of art. 1834 c.c., giving us in return a mere promise of payment. The bank becomes our debtor, but in reality it is a debt that is rarely demanded and that, on the contrary, increasingly restrictive national legislation makes it more and more virtual and irrecoverable, with the inevitable satisfaction of who should pay that debt.

As Banca Italia points out, the money from the deposits, or rather the promises of payment, then circulate through a system of private transactions, of which we support the costs. This circulation leads to transfers of minimum mandatory reserves that banks have at the Central Bank. The reserve has decreased over the years from 22.5% to 2%, which becomes even 0% for liabilities with maturities of more than two years and for repurchase agreements (Regulation 2531/98 of the European Council and Regulations 2818/98 by ECB - click here to read the rules).

In essence, the banks take possession of all the "real" currency that we carry, that is, the cash that creates from nothing BCE in the quantity decidedly sovereign, and this also on the impetus of the law that restricts the use of cash. In exchange for all this we receive payments that we then spontaneously accept as a currency for transactions, because we mistakenly believe this system is safe, despite radically lacking a real guarantee that we can get our money back. However, for every transaction made with these "I will pay bank", we pay a comfortable lace that is used to call commission.

The guarantee represented by the cash delivered and of which the bank became the owner at the time of filing could be real if the Banks simply limited themselves to converting cash into electronic money, as the TUB (Consolidated Banking Act - Article 114) would appear to provide bis and ss.). But they do much worse, banks actually expand credit, emit new money from nothing, or rather new promises of payment.

When the bank gives you a mortgage it certainly does not make it in cash. The sum is credited to the current account, but if one speaks of sum it is called false. In exchange for the obligations that you take on with your mortgage, the bank only makes a promise of payment, which fortunately is generally and conventionally accepted by the person from whom you want to buy your property.

To issue such a promise of payment, in the case of mortgage-backed mortgages, the bank is not obliged to add anything to its reserve with the Central Bank. The percentages of obligatory reserve then vary according to