Legal nature of ownership of euro

Question for written answer E-006243/2011
to the Commission
Rule 117
Mario Borghezio (EFD)
Subject: Legal nature of ownership of euro

There is currently an ongoing international scientific debate on the seigniorage of currency; the entire monetary system is based on seigniorage, which derives from the issuance of currency.
At present, it is impossible to identify who the creditors and who the debtors are as regards the circulation of the euro; however, European peoples have every right to know whether they are 'creditors' (i.e. owners) or 'debtors' (i.e. non-owners) of the value of all the euro currently in circulation.
Can the Commission therefore specify, clearly and definitively, who the legal owner of the euro is at the moment of issuance?

Natura giuridica della proprietà dell'euro

Interrogazione con richiesta di risposta scritta E-006243/2011
alla Commissione
Articolo 117 del regolamento
Mario Borghezio (EFD)
Oggetto: Natura giuridica della proprietà dell'euro

Alla luce della discussione scientifica in atto a livello internazionale sul signoraggio della moneta e premesso che detto signoraggio sta a monte di tutto il sistema monetario, poiché si colloca nel momento di emissione della moneta;

posto che, allo stato attuale, non è dato individuare chi sia creditore e chi debitore nella fase della circolazione dell'euro, mentre i popoli europei hanno pieno diritto di conoscere se siano "creditori" in quanto proprietari o "debitori" in quanto non proprietari per un valore pari a tutta la massa monetaria di euro posta in circolazione;

può la Commissione precisare, in maniera chiara e definitiva, a chi appartenga giuridicamente la proprietà dell'euro al momento della sua emissione?

• Eurons juridiska ägare
• Euron omistamisen oikeudellinen luonne
• Natureza jurídica da propriedade do euro
• Juridische aard van de eigendom van de euro
• Nature juridique de la propriété de l'euro
• Νομική φύση της κυριότητας του ευρώ
• Wem gehört der Euro aus juristischer Sicht?
• Den juridiske natur af ejendomsretten til euro
• Naturaleza jurídica de la propiedad del euro
• Legal nature of ownership of euro

Banking in the Public Interest: California Public Bank

Banking in the Public Interest | California Public Bank

The revival of local lending

The revival of local lending
By Ellen Brown, Asia Times, Jul 2, 2011

"Wall Street banks have cut back on small business lending ... [by] more than double the cutback in overall lending. ... [Small business] options just keep disappearing." -Elizabeth Warren, chair of the TARP Congressional Oversight Panel.

The Wall Street bailout of 2008 has radically altered the banking business. The bailout was supposed to keep credit flowing to Main Street, but it has wound up having the opposite effect. Small and medium-sized businesses have traditionally been the main engines for increasing employment, and they need bank credit for their working capital; but today credit to local businesses has collapsed nearly everywhere.

That's why so many states - the total is now 14 - are considering turning to state-owned banks to get local credit flowing again.

The bailout that missed Main Street
The credit collapse of September 2008 was triggered by the speculative activities of giant Wall Street banks. These profligate banks, which would have gone bankrupt without federal support, have emerged from the crisis bigger and more powerful than before. The federal government has supported and subsidized bank consolidation, resulting in the elimination of more than 1,000 community banks by takeover or failure.

The five largest banks now hold 40% of all deposits and 48% of all bank assets. These banks - Bank of America, Wells Fargo, JPMorgan Chase, Citigroup, and PNC - currently control more deposits than the next largest 45 banks combined.

They are big, they are powerful, and they have lost interest in local lending. In the past three years, the four largest banks have cut back on small business lending by a full 53%. The two banks that were the largest recipients of Troubled Asset Relief Program (TARP) funds, Bank of America and Citigroup, have cut back on local lending by 94% and 64%, respectively.

Why? In 2010, the six largest bank holding companies made a combined $75 billion; and of this, $56 billion was in trading revenues - income from speculating in derivatives, futures, commodities, and currencies. If the too-big-to-fail banks win on these bets, they win big and can pocket the proceeds. If they lose, the federal government can be relied on to bail them out. In those comfortable circumstances, why lend to risky local businesses that might go bankrupt, or to homeowners who might default?

Why banks aren't lending locally
Another perk of the bailout that has put a tourniquet on local lending involve interest rates. The Federal Reserve dropped the Fed funds rate (the rate at which banks lend to each other) to an extremely low 0 to 0.25%. It was a very good deal for the big banks - too good to be wasted on local lending.

As Dirk van Dijk, writing for the investor website Zacks.com, explained in April 2010:

Keeping short-term rates low should be good for the stock market, and is particularly helpful to the big banks like Bank of America (BAC) and JPMorgan (JPM). Their raw material is short-term money, which is effectively free right now. They can borrow at 0.25% or less, and then turn around and invest those funds in, say, a 5-year T-note at 2.50%, locking in an almost risk-free profit of 2.25%.

On big enough sums of money, this can be very profitable, and will help to recapitalize the banking system (provided they don't drain capital by paying it out in dividends or frittering it away in outrageous bonuses to their top executives).

It can be very profitable indeed for the big Wall Street banks, but the purpose of the near-zero interest rates was supposed to be to get banks to lend again. Instead, they are, indeed, paying "outrageous bonuses to their top executives"; using the money to engage in the same sort of unregulated speculation that nearly brought down the economy in 2008; buying up smaller banks; or investing this virtually interest-free money in risk-free government bonds, on which taxpayers are paying 2.5% interest (more for longer-term securities).

Investing in Treasury bills is an attractive alternative for banks, not just because it provides 2.25% of risk-free profit but because it requires no capital investment. The amount of capital a bank must hold against its assets (mainly loans) depends on how risky the assets are. Treasuries are considered "risk-free", so there is NO capital requirement for holding them.

Naturally, banks prefer investing in Treasuries under these circumstances over making risky loans, against which they must maintain capital reserves of 7%. The banks can borrow virtually for free and make a nice return at taxpayer expense without tying up their capital, which can be used instead to speculate in the market.

And speculation is particularly lucrative at these very low interest rates. As blogger Philip George explains:

The entities who really benefit from low interest rates are hedge funds and traders of financial instruments. Typically, they take advantage of mispricings of securities amounting to a few cents. And how do they parlay such tiny mispricings into incomes amounting to tens and hundreds of millions of dollars? By leveraging their equity ten, fifty, or a hundred times. And of course they can do that only if money is dirt-cheap.

Equally important, this hurts the producers of real goods and services who are looking for loans. At present the prime rate is around 3.25%. What self-respecting bank would lend at 5% or even 10% and wait a whole year when they can earn more in just a few weeks by trading in financial instruments?

Even when banks do deign to use their nearly interest-free funds to support loans, they typically do not pass these very low rates on to borrowers. For example, the Fed funds rate was lowered by 5 percentage points between August 2007 and December 2008, but during the same period the 30-year fixed mortgage rate dropped by less than 1%, from 6.75% to only about 6%; today it is still at 4.5%.

State-owned banks to the rescue?
With lending to Main Street still anemic, some states are taking matters into their own hands and considering legislation that would put local credit back into the local economy. Fourteen states have now initiated legislation for state-owned banks based on the model of the Bank of North Dakota (BND), which provides liquidity for local banks and credit lines for local government. North Dakota has not lost a single bank to insolvency over the last decade.

Other ways in which the BND supports local lending are detailed in a Demos report by Jason Judd and Heather McGhee titled "Banking on America: How Main Street Partnership Banks Can Improve Local Economies". They write:

Alone among states, North Dakota had the wherewithal to keep credit moving to small businesses when they needed it most. BND's business lending actually grew from 2007 to 2009 (the tightest months of the credit crisis) by 35%. BND accomplished this through participation loans, in which BND contributes to a community bank's loan, in order to free up the bank's capital for more lending. Other tools that boost bank lending power and lower interest rates include purchases of community bank stock and - together with the state's targeted economic development programs - interest rate buy-downs. As a result, loan amounts per capita for small banks in North Dakota are fully 175% higher than the U.S. average in the last five years, and its banks have stronger loan-to-asset ratios than comparable states like Wyoming, South Dakota and Montana.

While we wait for the Fed to reform its monetary policy and for congress to break up the banking monoliths, we can follow the lead of North Dakota and set up our own local credit engines. State-owned banks can not only nurture and protect local lending but can provide cash-strapped states with new revenues - without raising taxes, slashing services, or selling off public assets.

Ellen Brown is an attorney, author, and president of the Public Banking Institute. In Web of Debt, her latest of eleven books, she shows how the power to create money has been usurped from the people, and how we can get it back. Her websites arehttp://webofdebt.com and http://ellenbrown.com. For information on specific state bank legislation, see here.

(First posted by Yes! Magazine.)

Bankitalia, Napolitano: no a forzature

Bankitalia, Napolitano: no a forzature politiche

ANSA - ROMA - ''Mentre si dà corso alle procedure per la nomina del governatore della Banca d'Italia, si va sviluppando sulla questione un serrato dibattito pubblico. Il Presidente della Repubblica, Giorgio Napolitano, auspica che si giunga alla scelta, come sempre nel passato, in un clima di discrezione e rispetto attorno ai nomi dei possibili candidati, anche per la riconosciuta qualità dei loro titoli di competenza ed esperienza''. Lo si legge in un comunicato della Presidenza della Repubblica in cui viene sottolineato che ''forzature politiche e contrapposizioni personali non gioverebbero né alla serenità della decisione che spetta ai soggetti istituzionali indicati dalla legge, né a quel prestigio internazionale della Banca d'Italia che si è espresso nella nomina del prof. Mario Draghi a Presidente della BCE e che va oggi tenuto al riparo da laceranti dispute sulla nomina del nuovo governatore''.

BERLUSCONI: CANDIDATO ADEGUATO, NO FRETTA - ''Ne parliamo un'altra volta'', ma posso dire che ''siamo consapevoli che e' un posto importante che deve essere ricoperto da una persona adeguata, quindi stiamo valutando in tutta serenita' i candidati con un procedimento che non e' affrettato ma che e' proporzionale all'importanza della scelta e della carica che occupa''. Cosi' il premier Silvio Berlusconi a proposito della nota del Quirinale su Bankitalia.

Greece Should Tell Banks To Kiss My Baklava

FORBES, Jun. 30 2011

Greece Should Tell Banks To Kiss My Baklava

posted by BILL BONNER

Greece Riots Aftermath

All the financial sweepers in Europe are working around the clock, trying to get the Greek debt mess under the carpet or out the door. By the looks of the markets, they were succeeding. But it’s not over yet.

You’ll remember that we gave some advice to the financial officials who are in charge of bailing out Greece? We told them to take a page out of Gerald Ford’s book. Just tell the Greeks to “drop dead.”

Today, we give advice to the Greeks. Tell the bankers to ‘drop dead.’

From what we’ve been able to make out of the rescue plan, they’d be better off rejecting it. Not that we’re in favor of people who don’t play fair. But this deck was always stacked. And the dealer had a few aces up his sleeve at the get go. The way we figure it, the politicians, the banks – notably Goldman Sachs, as well as the big French banks – were in on the whole thing from the get-go.

It would be considered rude to mention it, for example at a champagne-swilling reception hosted by Christine Lagarde, but the whole deal was always corrupt. Goldman Sachs helped the Greeks disguise their debt so they could get in the EU system. Then, more or less the same bankers, advising pension funds, the IMF and the European Central Bank, urged them to buy Greek debt.

When the debt went bad, they organized a rescue – which spared the lenders any losses. And then, when the rescue went bad, they set to work figuring out the terms of a new rescue and warning the Greek people that if they don’t go along, they’ll have to face Armageddon.

The Greeks would be better off calling their bluff. Then, they could go broke with some dignity. They wouldn’t get any more credit. But more credit is the last thing they need. Besides, each time they are rescued, they end up in worse shape, with more debt to pay and higher interest rates to pay on it.

So tell the bankers to ‘drop dead.’

Of course, the Greeks themselves were as corrupt as the bankers. They took their opportunities, too, as they came along. If they could get paid for not working, they didn’t work. If they could get a subsidy and not have to compete in the real world economy, they took the subsidy. If they could retire early, or get something for nothing, or hoodwink investors with some nonsense figures…of course, they did it.

So, there’s a pot. And there’s a skillet. Both are as black as a tax collector’s heart. And now they are both colluding to make sure neither has to reckon with his greed and errors.

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Trouble is, that’s not the way it works. Debt doesn’t go away just because a knave and a fool decide they don’t want it. It’s still there. Like grinning death. It knows it will have its way.

Let’s see how things are going in the U.S. We’re here in South Florida where consumer confidence is falling, just as it in the rest of the nation.

Hey, if there were a recovery, how come consumer confidence is falling?

The answer is simple: there ain’t no recovery and consumers know it. The feds can babble about anything they want, but the typical consumer knows he is in a tough spot…and it’s getting tougher.

The good news: gasoline prices are falling. “But so are home prices in South Florida,” says the Palm Beach Post. House prices rose in 13 cities says the latest news. But not in Miami…which is in Palm Beach county.

Over on page 4 it says “Fla. Seniors insecure about income.” They ought to be. They’ve lost purchasing power for the last 10 years.

Of course, that’s just a part of the story. As we keep saying, the last 10 years has been a ‘lost decade’ – for Florida seniors as well as just about everyone else, except the rich. The middle classes have lost ground on every front.

Their houses are now back to 1990s prices.

Their real incomes have actually gone down.

Their stock portfolios too have lost value in real terms.

And the job market offers them fewer jobs than it did in 2000.

A gallon of gasoline costs only $3.64 in Palm Beach County, down from $3.85 a month ago. But it’s up from $1.30 in 2000.

“Consumers will keep their wallets closed until they feel a heightened level of confidence,” says a source interviewed by the Palm Beach paper.

When will that be? No one knows, but if present trends continue Florida seniors will have turned up their toes long before they turn up their confidence.

Why Greece Should Default and Go Broke With Dignity by Bill Bonner originally appeared in the Daily Reckoning.

GLOBAL FINANCE FOR DUMMIES

http://ewnbusiness.com

Posted by EWN Business on Jun 28, 2011 in Paul Polke -

In the 17th Century people left their gold with goldsmiths for safekeeping

ALTHOUGH many of the terms peculiar to global finance are alien to us the system is easily understood when explained in layman’s terms.

Money is not created by governments but by banks; they create and lend money to governments in much the same way as they give you a credit card. The credit available maxes; finance implodes, money supply runs short, governments stop spending and you’re out of a job. Very few governments run their own banks but those that do often have successful economies; living standards are better. On the other hand privatised banking cartels have been a disaster and because their system is deeply flawed the worst is yet to come.

Banks create credit that must be paid back with interest so repayments constantly outstrip loans so more loans have to be made to keep up; it is a pyramid system fated to collapse; to consume itself.

It started off simply enough. In the 17th Century people left their gold with goldsmiths for safekeeping. In return they were issued with receipts, which we know as banknotes. As people would only collect their gold 10 percent of the time this meant the goldsmiths could lend out 10 times as much in banknotes secure in the knowledge that there was sufficient gold to cover the notes in circulation.

In effect those 90 percent of notes were counterfeit and today this is called ‘fractional reserve banking’. It became institutionalised when the Bank of England was founded in 1694.

In this way the bank financed the government; it was the national money supply. Only the interest was ever paid; the original loan was always outstanding. This flawed system is almost universal.

Noted economic analyst Ellen Brown and author of ‘Web of Debt’ says there are alternatives; loans in future would have to be interest free but transition would be formidable. Another option is to place the banks in public ownership. In this way the people own the bank; it is a co-operative and the interest and profits are recycled for the people, not the bankers benefit. The immediate benefits include lower taxation, improved public services and less expensive public infrastructure; roads, hospitals, schools, transport, etc.

Bringing into public ownership private banks has been shown to reduce the cost of public projects by between 30 – 50 percent. It is the reason why Hitler’s Germany, in just three years, morphed from a bankrupt pariah to a super state second only to the U.S.A. Others like Libya have similarly benefited from public-owned banking.

Public owned banks go much further back. Benjamin Franklin’s Pennsylvania colony operated a ‘land bank.’

Money was printed, lent to the community, recycled and re-lent. It was a bank owned by the people for the people. The colonists paid no taxes except excise taxes. There was no inflation, no government debt. When the money supply is run by a private bank the profits are creamed off.

The privately owned Federal Reserve Bank was then set up; it basically ate itself, which resulted in the Great Depression

The first U.S. private bank was set up in 1791. It was called The First U.S. Bank and led to ruin. President Lincoln avoided ruinous Civil War debts by reverting to the public owned money control system. He was assassinated and his independent ‘greenback’ system was halted. The privately owned Federal Reserve Bank was then set up; it basically ate itself, which resulted in the Great Depression.

Robert H. Hemphill, credit manager of the Federal Reserve Bank of Atlanta, wrote in 1934: “We are completely dependent on the private banks. Someone has to borrow every dollar we have in circulation. If the banks create (print) ample synthetic money we are prosperous; if not, we starve.” The owners and shareholders of the banks were happy. The system meant they were in control and they were more powerful than governments.

Throughout modern history control of the money supply has been wrested from privately owned banking cartels but fiscal oligarchs don’t give up easily. Wars are declared when governments opt out of the cartel.

Next week we take a look at those who did succeed and those that are doing so right now.