{"id":16400,"date":"2016-01-13T07:38:20","date_gmt":"2016-01-13T12:38:20","guid":{"rendered":"http:\/\/olduvai.ca\/?p=16400"},"modified":"2016-01-13T07:38:20","modified_gmt":"2016-01-13T12:38:20","slug":"switzerlands-referendum-on-fractional-reserve-banking","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=16400","title":{"rendered":"Switzerland\u2019s Referendum on Fractional Reserve Banking"},"content":{"rendered":"
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Switzerland\u2019s Referendum on Fractional Reserve Banking\u00a0<\/a><\/h3>\n<\/div>\n
A Warmed-Up \u201cChicago Plan\u201d<\/strong><\/div>\n
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Many of our readers may be aware by now that a Swiss initiative against fractional reserve banking has gathered the required 100,000 signatures to force a referendum on the matter. Is is called the \u201cVollgeld Initiative\u201d, whereby \u201cVollgeld\u201d could be loosely translated as \u201cfully covered money\u201d.<\/p>\n

\"logo_vollgeld-initiative_mit_Titel_hoch_2014_05\"Swiss initiative against fractional reserve banking<\/p>\n

Austrian School proponents will at first glance probably think that it sounds like a good idea: After all, it is the creation of uncovered money substitutes\u00a0ex nihilo\u00a0<\/em>that leads to the suppression of market interest rates below the natural rate and consequently to a distortion of relative prices, the falsification of economic calculation and the boom-bust cycle.<\/p>\n

However, a second glance reveals that the initiative has a substantial flaw. One may for instance wonder why the Swiss National Bank hasn\u2019t yet let loose with a propaganda blitz against it, as it has done on occasion of the gold referendum. The answer is simple: the \u201cVollgeld\u201d plan only wants to prohibit the creation of fiduciary media by\u00a0commercial<\/em>\u00a0banks.<\/p>\n

The power to create additional money from thin air is to be reserved solely to the central bank, which would vastly increase its power and leave credit and money creation in the hands of a few unelected central planning bureaucrats. In other words, it is a warmed-up version of the \u201cChicago Plan\u201d of the 1930\u2019s, which Chicago economists led by Irving Fisher and Frank H. Knight presented in the wake of the Great Depression (the debate over the plan led to the establishment of the FDIC and the Glass-Steagall Act, but its central demand obviously remained unfulfilled).<\/p>\n

\"IrvingIrving Fisher and Frank H. Knight, the lead authors of the original Chicago plan<\/p>\n

As Hans Hermann Hoppe has pointed out, the Chicago School (F. H. Knight is today regarded as one of its most important founders), was seen as \u201cleft fringe\u201d in the 1940s.<\/p>\n

…click on the above link to read the rest of the article…<\/p>\n

 <\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

Switzerland\u2019s Referendum on Fractional Reserve Banking\u00a0 A Warmed-Up \u201cChicago Plan\u201d Many of our readers may be aware by now that a Swiss initiative against fractional reserve banking has gathered the required 100,000 signatures to force a referendum on the matter. Is is called the \u201cVollgeld Initiative\u201d, whereby \u201cVollgeld\u201d could be loosely translated as \u201cfully covered […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[2],"tags":[5728,11661,1708,6170,672,775],"class_list":["post-16400","post","type-post","status-publish","format-standard","hentry","category-economics","tag-acting-man","tag-chicago-plan","tag-fractional-reserve-banking","tag-pater-tenebrarum","tag-referendum","tag-switzerland"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/16400","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=16400"}],"version-history":[{"count":1,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/16400\/revisions"}],"predecessor-version":[{"id":16401,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/16400\/revisions\/16401"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=16400"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=16400"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=16400"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}