BOOM as at 18th October 2020

CHINA ISSUES ELECTRONIC CASH — LEADING ON MONEY INNOVATION

Last week, almost 50,000 Chinese people were each given 200 Yuan by the Government — or more accurately, by the People’s Bank of China — the central bank. That is equal to about US$ 40. The recipients were decided by lottery because this was a trial of a new “Digital Wallet” — an App downloaded onto their smartphones. The App received and stored the electronic money — not their bank account.  In total, about $ 2 Million worth of Yuan was distributed.

The Chinese government and the Chinese central bank must be reading BOOM’s many articles on the need to increase Cash in all economies to buffer credit money (money created as a bank loan). They are now leading the charge in regard to money innovation, not the West.

In Western media stories about this trial, the words “digital currency”, “digital Yuan” and “digital wallet” are being used extensively. However, this is disingenuous. All currencies in every nation are already overwhelmingly digital. They exist principally as deposits on the computer ledgers of commercial banks. And all bank accounts are already, in effect, “digital wallets”. That term could also be used to describe commonly used Debit Cards. SO what is the fuss all about?

The funds of the so-called “digital Yuan” have been issued by the central bank of China and not by any commercial bank or from government Treasury accounts. The funds are not loans so there is no interest component. Thus, they are Electronic Cash issued directly to personal digital wallet Apps.

China, that bastion of communism, is leading the world in regard to the issuance of this new form of money. They have just boosted the fresh money supply by the equivalent of $ 2 Million. In future, they could easily boost it by $ 2 Billion worth of Yuan or even $ 2 Trillion. And they could ask the recipients to spend it in designated outlets by a specified time. This would immediately cause a huge boost to the total of economic transactions — the GDP — of China.

Interestingly, the money can only be spent at 3,800 designated outlets in the district of Luohu. This means  that they are a local (or regional) currency with closely restricted usage characteristics. Adolf Hitler built the economic miracle of pre World War 2 Germany using a very similar (but obviously not digital) methodology — called a Mefo Bill. And the Mefo Bill was fashioned on a little known successful experiment in local money issuance (outside of the banking system) in the small Austrian village of Worgl during the great depression of 1932.

BOOM wrote about this in a recent editorial on 3rd May titled
“CHINA LEADS WITH COUPONS — HISTORY REPEATS — SILVIO GESELL — COMPLEMENTARY CURRENCIES”.

If you are at all interested in the future of money creation, you should read it again.

https://boomfinanceandeconomics.wordpress.com/2020/05/02/boom-as-at-3rd-may-2020/

What the Chinese are doing is very similar to what BOOM has been proposing as a system of interest free Electronic Cash. However, the difference is that, in BOOM’s proposal, the “cash” would reside on the ledgers of the entire banking system plus the government’s Treasury ledger (rather than just on the central bank’s ledger in a closed loop with a smartphone App).

BOOM’s proposal is called Quantitative Boosting. In it, there is no separation of new money from old. And no restriction occurs on where or when the money can be spent because, under QB, the money is initially spent into the real economy by the Treasury in payment of government obligations. BOOM’s system is also dramatically superior to the Chinese system because of the natural checks and balances brought to bear by the proposed Tripartite Agreement that must exist between commercial banks, central banks and government to operate it. In other words, the People (yes, that’s us) get a seat at the table via their government representatives who control the Treasury.

This is much more acceptable in Democratic nations — because otherwise, if they adopted the Chinese system, the central bank would become solely responsible for such electronic cash issuance. And BOOM does not have sufficient confidence in the central bankers of the Western democracies to allow such huge power to go unchecked by normal democratic oversight.  Don’t you agree?

Electronic Cash is coming because it is essential.  Why? Because we have allowed physical Cash to dwindle to just 3 % of all money used in most advanced economies. Cash is very important in all economies because it is an interest free buffer to the huge amounts of credit created money issued when banks make loans de novo to borrowers. We MUST have cash in a digital world. It is an absolutely essential, non-interest bearing, stabilizing component to our money system.

BOOM is ready to assist in any way to move these innovations forward. The major central banks, the Bank for International Settlements, the OECD, the World Bank and the IMF are all constrained by the current monetary system because they see their role as the preservation of that system. They have already adopted ZIRP, NIRP and QE and are now considering “Helicopter Money” (reluctantly) — commonly called UBI (Universal Basic Income). Those policies have been proved to be not sufficiently innovative and have actually not worked to revive the advanced economies. Think Tanks could be established to examine the task. BOOM is ready for that role and feels that perhaps Switzerland or Australia may be the best Western nations to adopt advanced monetary innovations as an example to other larger nations.

In the absence of a massive increase in physical cash which BOOM would prefer (but acknowledges that it is unlikely to happen), we need the very best Electronic Cash system — BOOM’s Quantitative Boosting.

Quantitative Boosting for Dummies — Yes — You can safely Click on the Link: 

https://boomfinanceandeconomics.wordpress.com/2020/01/18/boom-as-at-19th-january-2020/

WHAT THE HELL IS A CASE?
WE STILL DON’T KNOW

Nothing seems to have changed since this article was published in the British Medical Journal on September 3rd. The author, Elisabeth Mahase, is Clinical News Reporter at The BMJ.

Covid-19: The Problems with Case Counting

“I’m still waiting to see the small print to clarify what we are counting as cases.”
“Both Heneghan and Raffle say that it’s hard to compare the figures on cases over time because the way we define a case seems to have changed, moving from people with symptoms who have then tested positive to a PCR positive result alone, regardless of symptoms.”

Link:  https://www.bmj.com/content/370/bmj.m3374

TWO MORE COVID TRIALS STOPPED

Two more Covid 19 Clinical Trials have been stopped. A vaccine trial was stopped last week by Johnson & Johnson because a trial participant had developed an “unexplained illness”. BOOM has not been able to find any details of the illness.

And a second trial based on Covid 19 Antibody therapy by Eli Lilly was also stopped last week due to a “potential safety concern”.

Trials of yet another vaccine from Astra Zeneca and Oxford University were halted previously in the US because another trial participant developed a serious neurological condition of the spinal cord called Transverse Myelitis.

LOCKDOWNS NOT RECOMMENDED BY WHO

Two leading Doctors in the WHO (World Health Organization) last week spoke out against harsh Lockdowns being used by some governments against Covid 19.

Dr David Nabarro, a Special Envoy of the WHO, told world leaders to stop “using lockdowns as your primary control method” of the coronavirus.
“We in the World Health Organisation do not advocate lockdowns as the primary means of control of this virus”.  “The only time we believe a lockdown is justified is to buy you time to reorganise, regroup, rebalance your resources, protect your health workers who are exhausted, but by and large, we’d rather not do it.”

Also, the World Health Organization’s Regional Director for Europe Hans Kluge said that governments should stop enforcing lockdowns, unless as a “last resort,” because the impact on other areas of health and mental well-being is more damaging.

Thousands of Doctors in clinical practice all over the world have issued similar warnings for months now but the politicians of the Western world have steadfastly refused to listen to anyone except their government appointed “principal health advisers”. WHY?

Meanwhile, there are currently no excess deaths occurring in Europe. The official total death numbers per week from all causes for 24 European nations including the UK are still below the baseline (normal) and falling.

LEGAL ACTIONS ARE COMING

Legal challenges are being organized against politicians and their advisers because of their alleged incompetence in adequately assessing the degree of accuracy of the PCR Test for Covid 19.

A German lawyer, Dr. Reiner Fuellmich, explains in this lecture why the so-called corona pandemic in his opinion is a scandal that qualifies to be called a crime against humanity.

The Short Version (8 minutes) — https://www.bitchute.com/video/IrtC2Ew0biYo/
The Full Analysis (49 minutes) —  https://www.bitchute.com/video/kZAHIhkF6GuQ/

Some other organizations are seeking Judicial Reviews of all Government decisions concerning Covid 19. Here are just two that BOOM is aware of —

Keep Britain Free — Court Action to begin late October — https://www.keepbritainfree.com/

GotFreedom  — USA — Judicial Review —  https://got-freedom.org/

TRUTH IS DEAD OR DYING

A discussion about the origins of Covid 19 cannot be allowed in the mainstream media because (perhaps) the real origins of the Coronavirus may then become obvious. Truth may well be dead in the official narrative.

A book was banned on Amazon last week titled “Covid 19 and the Agendas to Come: Red Pilled” by James Perloff. 3,500 copies of it had already been sold by Amazon since August 20th. The explanation given by Amazon was that the book “violated content guidelines”.

On the night of May 10, 1933, German students and Hitler’s Nazi Brown Shirts gathered in Berlin to burn books with “unGerman” ideas. The Nazi Propaganda Minister Joseph Goebbels was there to encourage the activity. The crowd tossed heaps of books into a bonfire while giving the Hitler arm-salute and singing Nazi anthems. A hundred years before Hitler, the German-Jewish poet, Heinrich Heine, said — “Wherever books are burned, human beings are destined to be burned too.”

In the communist dictatorship of the USSR, the people said “We pretend to work and they pretend to pay us”.

In our world today, we could say “We pretend to believe and they pretend to tell us the truth”

Link:  Are the Global Scientific Elite Trying to Bury the Truth About the Origin of COVID-19?

In economics, things work until they don’t. Until next week …………  Make your own conclusions, do your own research.  BOOM does not offer investment advice.
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EMAIL: gerry {at} boomfinanceandeconomics.com

Return to the BOOM Main Website –  BOOM Finance and Economics at  http://boomfinanceandeconomics.com/

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HOW MOST MONEY IS CREATED

BANKS CREATE FRESH NEW MONEY OUT OF THIN AIR (but they always need a Borrower to do so)

THERE IS NO SUCH THING AS A DEPOSIT
BANKS PURCHASE SECURITIES, THEY DON’T MAKE LOANS
BANKS DON’T TAKE DEPOSITS, THEY BORROW YOUR MONEY
Watch this short 15 minutes video and learn as Professor Richard Werner brilliantly explains how the banking system and financial sector really work.
https://www.youtube.com/watch?v=EC0G7pY4wREhttp://

How is Most New Money Created ?

LOANS CREATE DEPOSITS — that is how almost all new money is created in the economy (by commercial banks making loans).

From the Bank of England Quarterly Bulletin Q1 2014    —
“Whenever a bank makes a loan, it simultaneously creates a matching deposit in the borrower’s bank account, thereby creating new money.“Most money in the modern economy is in the form of bank deposits, which are created by commercial banks themselves”.

Youtube Video —  https://www.bankofengland.co.uk/quarterly-bulletin/2014/q1/money-in-the-modern-economy-an-introduction

and

https://www.bankofengland.co.uk/quarterly-bulletin/2014/q1/money-creation-in-the-modern-economy

Paper:  Money in the Modern Economy  PDF —  CLICK HERE

Quarterly Bulletins Indexhttp://www.bankofengland.co.uk/publications/Pages/quarterlybulletin/2014/qb14q1.aspx

Most economists are unaware of this and even ignore the banking & finance sectors in their econometric models.

On 25th April 2017, the central bank of Germany, the Bundesbank, released a statement on this matter —

“In terms of volume, the majority of the money supply is made up of book money, which is created through transactions between banks and domestic customers. Sight deposits are an example of book money: sight deposits are created when a bank settles transactions with a customer, ie it grants a credit, say, or purchases an asset and credits the corresponding amount to the customer’s bank account in return. This means that banks can create book money just by making an accounting entry: according to the Bundesbank’s economists, “this refutes a popular misconception that banks act simply as intermediaries at the time of lending – i.e. that banks can only grant credit using funds placed with them previously as deposits by other customers”. By the same token, excess central bank reserves are not a necessary precondition for a bank to grant credit (and thus create money).

”Reference: https://www.bundesbank.de/Redaktion/EN/Topics/2017/2017_04_25_how_money_is_created.html

The Reserve Bank of Australia (Australia’s central bank) has also contributed to the issue in a speech by Christopher Kent, the Assistant Governor on September 19th 2018.“…… the vast bulk of broad money consists of bank deposits”“Money can be created …….. when financial intermediaries make loans

“In the first instance, the process of money creation requires a willing borrower.” “It’s also worth emphasizing that the process of money creation is not the result of the actions of any single bank – rather, the banking system as a whole acts to create money.”
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MOLS Denmark

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