Cyprus-Forum.com

[Pyrpolizer]

I just wanted to mention that according to professor Werner (his videos are all very short ~5 minutes each-worth watching them-link provided earlier by RH) there are a few things that can be applied even today with the EXISTING system.
According to him the Central Bank should follow a policy of the "carrot and stick" with the Banks giving them incentives to promote loans that would lead to a healthy economy and discourage loans for consumption or speculative purposes. Buying land (which is what most people do in Cyprus when they want to Invest) is actually a speculative act, it delivers nothing to the economy.
I was really curious to learn what kind of incentives he would propose, but when asked he said this:
One incentive would be the threat to remove them the PRIVILEGE they think they have for granted in making loans by exploiting the deposits to loans circle -as a like to call it or by issuing new money out of nothing as RH likes to call it.

NB. In Cyprus the Central Bank has absolutely no say on interest rates today. The Government literally begs the Banks to lower the interest rates however they refuse! Let aside the fact that we don't really have a Central Bank anymore-it's just an outlet of the ECB. See we are soooo clever that we assigned to others our right to regulate our own economy....

[Robin Hood]

I just wanted to mention that according to professor Werner (his videos are all very short ~5 minutes each-worth watching them-link provided earlier by RH) there are a few things that can be applied even today with the EXISTING system.
According to him the Central Bank should follow a policy of the "carrot and stick" with the Banks giving them incentives to promote loans that would lead to a healthy economy and discourage loans for consumption or speculative purposes. Buying land (which is what most people do in Cyprus when they want to Invest) is actually a speculative act, it delivers nothing to the economy.
I was really curious to learn what kind of incentives he would propose, but when asked he said this:
One incentive would be the threat to remove them the PRIVILEGE they think they have for granted in making loans by exploiting the deposits to loans circle -as a like to call it or by issuing new money out of nothing as RH likes to call it.

NB. In Cyprus the Central Bank has absolutely no say on interest rates today. The Government literally begs the Banks to lower the interest rates however they refuse! Let aside the fact that we don't really have a Central Bank anymore-it's just an outlet of the ECB. See we are soooo clever that we assigned to others our right to regulate our own economy....

I agree with you ..... there could be interim steps but I suspect that Banks would find a way around them! IMO: the withdrawal of this privilege of currency creation should be taken away from them completely .....ASAP .... full stop!

[Pyrpolizer]

I 'd suggest we stop at this point and go one step further.

I suggest we all buy the book 'where does money come from' and then we discuss it here chapter by chapter. One chapter a week or every 2 weeks or month.

Anyone interested download it from here.You may need to ignore the invitation to register, and press download button 2 times.
*.epub files open with Firefox just download the relevant ad-on from mozilla. Also open with Adobe digital editions a free program from adobe.
And shhhh... don't tell anyone it's free

http://www.filedropper.com/book

HELP ...... how do you do it with Windows 7 Ultimate? Step-by-step

BTW; Searched with Google ...... and got1,260,000,000 matches in less than half a second .... obviously a popular subject!

Paphitis will speed read it in about two minutes, and when asked what it is all about will reply ....... 'MONEY!' :

Click on the link-press the button saying "download this file"
The file is compressed with Winzip right click on it press something like extract or unzip I don't remember exactly.
Double click on the extracted fil, maybe you already have a program that opens it. If you dont then:
Start Firefox Press Tools/add ons it will direct to to Firefox's available add ons, in the right top corner there's a box saying "search all Add ons" write EPUBReader inside it, press the search button, follow the instructions and install it. It's all clicks of the mouse, nothing to do with Windows versions... Although I hate Windows 8

[Paphitis]

I just wanted to mention that according to professor Werner (his videos are all very short ~5 minutes each-worth watching them-link provided earlier by RH) there are a few things that can be applied even today with the EXISTING system.
According to him the Central Bank should follow a policy of the "carrot and stick" with the Banks giving them incentives to promote loans that would lead to a healthy economy and discourage loans for consumption or speculative purposes. Buying land (which is what most people do in Cyprus when they want to Invest) is actually a speculative act, it delivers nothing to the economy.
I was really curious to learn what kind of incentives he would propose, but when asked he said this:
One incentive would be the threat to remove them the PRIVILEGE they think they have for granted in making loans by exploiting the deposits to loans circle -as a like to call it or by issuing new money out of nothing as RH likes to call it.

NB. In Cyprus the Central Bank has absolutely no say on interest rates today. The Government literally begs the Banks to lower the interest rates however they refuse! Let aside the fact that we don't really have a Central Bank anymore-it's just an outlet of the ECB. See we are soooo clever that we assigned to others our right to regulate our own economy....

I agree with you ..... there could be interim steps but I suspect that Banks would find a way around them! IMO: the withdrawal of this privilege of currency creation should be taken away from them completely .....ASAP .... full stop!

Nothing will change thank heavens. Not the changes you will want.

We are headed for globalization and money has no borders.

Things will get easier and easier with time and hooray for that!

One of the biggest growth areas is international borrowing. So unless all countries adopt such ridiculous controls you mention, which will never happen, then it won't works.

You just keep the experiments to the ECB because the rest of the world is jet gonna press on.

[Paphitis]

I just wanted to mention that according to professor Werner (his videos are all very short ~5 minutes each-worth watching them-link provided earlier by RH) there are a few things that can be applied even today with the EXISTING system.
According to him the Central Bank should follow a policy of the "carrot and stick" with the Banks giving them incentives to promote loans that would lead to a healthy economy and discourage loans for consumption or speculative purposes. Buying land (which is what most people do in Cyprus when they want to Invest) is actually a speculative act, it delivers nothing to the economy.
I was really curious to learn what kind of incentives he would propose, but when asked he said this:
One incentive would be the threat to remove them the PRIVILEGE they think they have for granted in making loans by exploiting the deposits to loans circle -as a like to call it or by issuing new money out of nothing as RH likes to call it.

NB. In Cyprus the Central Bank has absolutely no say on interest rates today. The Government literally begs the Banks to lower the interest rates however they refuse! Let aside the fact that we don't really have a Central Bank anymore-it's just an outlet of the ECB. See we are soooo clever that we assigned to others our right to regulate our own economy....

I would imagine that business is probably the biggest sector for lending in Cyprus and as we move forward it will become even bigger after things settle down a bit.

Young people are very business orientated. It's either than or earn 600 per month. I know what I would do. See the Bank immediately!

I will do the employing at 600 per month not get paid 600 per month.

All investment actually adds money to the economy. Even credit card expenditure. Also banks don't like giving out loans to non appreciating asset classes unless they get very high interest for it such as Credit Card facilities.

[Pyrpolizer]

I just wanted to mention that according to professor Werner (his videos are all very short ~5 minutes each-worth watching them-link provided earlier by RH) there are a few things that can be applied even today with the EXISTING system.
According to him the Central Bank should follow a policy of the "carrot and stick" with the Banks giving them incentives to promote loans that would lead to a healthy economy and discourage loans for consumption or speculative purposes. Buying land (which is what most people do in Cyprus when they want to Invest) is actually a speculative act, it delivers nothing to the economy.
I was really curious to learn what kind of incentives he would propose, but when asked he said this:
One incentive would be the threat to remove them the PRIVILEGE they think they have for granted in making loans by exploiting the deposits to loans circle -as a like to call it or by issuing new money out of nothing as RH likes to call it.

NB. In Cyprus the Central Bank has absolutely no say on interest rates today. The Government literally begs the Banks to lower the interest rates however they refuse! Let aside the fact that we don't really have a Central Bank anymore-it's just an outlet of the ECB. See we are soooo clever that we assigned to others our right to regulate our own economy....

I would imagine that business is probably the biggest sector for lending in Cyprus and as we move forward it will become even bigger after things settle down a bit.

Young people are very business orientated. It's either than or earn 600 per month. I know what I would do. See the Bank immediately!

I will do the employing at 600 per month not get paid 600 per month.

All investment actually adds money to the economy. Even credit card expenditure. Also banks don't like giving out loans to non appreciating asset classes unless they get very high interest for it such as Credit Card facilities.

I already asked someone who is working at the central offices of one of the big Banks here, specifically at the LOANS department.I wanted to know of what types their loans are. He said the vast majority are "στεγαστικα"-Housing Loans. More than 70% are non performing...Second in a row are loans for new cars and other personal loans!
I insisted to learn how many loans they provide for say factories,machinery, equipment etc for use in productive areas. He said very few ever apply for such loans. About the same number as all those offshore companies that deal mainly with Finance, Holdings and Intl Trading
I am really wondering how healthy our economy is...
Of course they are willing to offer all sorts of loans as you can see from here
http://www.bankofcyprus.com.cy/
It looks there are no incentives though for those who want to invest in productive areas.

[Robin Hood]

Government loans ....are a whole new ball game!!!!

This would need to be preceded by revisions to the Bank Charter Act 1844 to include the cancellation of the inferred right of commercial banks to create electronic currency; the implementation of a Glass Steegal Type Act, to separate the commercial bank (Which is what I think we are talking about here?) from the Investment Banks. The latter should be cast off on their own to sink or swim, with absolutely no backing from tax payers, if they screw up. There would also need to be revisions to the Bank of England’s Charter that would enshrine the privilege to create ALL currency as their exclusive right.

The Central Bank should now be declared a department of Government that supplies currency to both the Government and private commercial banks. It would be a service to the treasury and would be responsible to Parliament and thus the people. It would not be run just by bankers, as it mainly is at the moment, but by eminent economists, academics, representative of Commerce and Industry, Government and banks.

As I see it ......... the CB would create currency, on demand for both the Government and the private banks, just as the commercial banks do now! But there the similarity ends .... I have already described how I believe the CB would cooperate with the private banks to provide personal and business loans but how the CB deals with the Government has one significant difference ............. they gift the currency to the Treasury as an investment ......... not lend it. How can they do that? .... simple!

They do just what the banks do now! They type in a number on their computer and ‘SEND’ it to the Treasury account! When the treasury spends it into circulation it becomes currency and is now part of the economy. But it is free of debt and interest. It never has to be repaid .... it is now a perpetual currency and will circulate ad infinitum. This is just what Paphitis was describing (although he didn’t know it!) when he described his $100 note being used over and over again and formed the basis of $1m in transactions.

When the Treasury spends it, the currency will go to everyone, from major contractors and suppliers, to their employees, to their grocer and even to the unemployed on benefits! They all spend and as a result generate direct taxes such as VAT and duty. It all goes back to the treasury eventually, to be re-spent over and over again ............ just like Paphitis $100 note and just like Paphitis $100 note .......... it is not inflationary!

But they are only able to do this because the money was not borrowed and thus the tax money collected is not required to repay loans, and the banks compound interest, by taking this new currency out of the economy, simply so that banks can write the sum off on their accounts, to keep the books straight.

Now all the Government agencies have to do is to balance their imports and exports, because buying imports will take currency out of the economy and convert it to a foreign currency and exporting goods and services will do the reverse. Aim is for at least a zero sum balance. The foreign currency is held by the Treasury and converted back to local currency.

This re-assignment of currency creation also has very significant impact on the National debt. Not the obvious that we would no longer be creating debt but we could actually pay off the existing national debt. The CB transfers to the treasury and from there to each commercial bank a sum equal to the National Debt owed to the bank. The bank follows the same protocol as it does now ........and writes the debt off on their books. The currency enters the economy for micro-seconds and is then destroyed by the bank. Debt to banks eliminated and not a cent permanently enters the economy.

What happens to the banks? ..... they take a drop in assets and thus their income ...... their problem not ours!

Let me apply this to a current situation as seen through the eyes of a ‘leftie’ - Port Talbot steel work’s and I will take a few liberties with the law .........

The new PM (By this time we have taken Cameron out of No. 10 and put in a clone with real balls!!) calls TATA’s boss .... by telephone and says “You, my office now!”

They meet and the PM gives him a cheque for the estimated scrap value of the plant and his air ticket home (economy).

The Government now owns the plant .... lock-stock-and-barrel. They sit down with the unions , the management and the PM tells them what he plans to do. The clone does a Putin on them ......... he makes a decision, tells them what he proposes and gives them the opportunity to add their ideas. No meetings of Cobra or jet-setting to get the approval of every Tom , Dick and Harry to get them on side and to get their approval ......... he just puts the plan agreed into action.

If I were that clone .......... I keep the plant operating for the time being. I would use the engineering expertise we have in country, to redesign the plant to the highest standards currently available as two or more production streams. Then, shut down say one stream of the plant and demolish it, using the current operators and hired contractors. Again using the available staff, issue a contract to private UK based industrial companies with the expertise to manage and to build the new plant. When the whole plant is complete as one of the most advanced and efficient plants on the planet ......... I put it up for sale to UK companies and make sure it remains in UK hands.

Costs a lot of currency to do this ...... but what the hell we create it ourselves anyway!

We can either use it to prop up a community that has maybe now a hundred thousand unproductive people in need ,or we use it to provide for the future. All the money spent goes back to the treasury ..... so the same Paphitis '$100' note goes around and around .......... at the speed of light! Nobody looses their home because they have no job and cannot afford the mortgage; no children have to pull out of a University because Mum and Dad have hit unforeseen hard times; no small businesses need to close because their primary customer has closed down ..... their business could even see an upturn, with the help of a (0%) bank loan, as they adapt to provide for the new plant; the schools all stay open; the hospitals are not jammed with people suffering from the stress related conditions caused by a monumental change to their lives and a community survives to look forward to a future.

And, all that just because we changed the way currency is provided for the state. Amazing what a bit of imagination can dream up............. init?

[Robin Hood]

Pyrpolizer:

I already asked someone who is working at the central offices of one of the big Banks here, specifically at the LOANS department. I wanted to know of what types their loans are. He said the vast majority are "στεγαστικα"-Housing Loans. More than 70% are non performing...Second in a row are loans for new cars and other personal loans!

I insisted to learn how many loans they provide for say factories,machinery, equipment etc for use in productive areas. He said very few ever apply for such loans. About the same number as all those offshore companies that deal mainly with Finance, Holdings and Intl Trading

I am really wondering how healthy our economy is...

Of course they are willing to offer all sorts of loans as you can see from here
http://www.bankofcyprus.com.cy/

But there are very few takers ..... so, that's Paphitis economic theory for Cyprus down the pan ........ none of his other claims survive investigation either.

Paphitis; Have you got the answer to my question yet? Or do you find it beyond your economic capability to work it out?

[Robin Hood]

Paphitis:

I would imagine that business is probably the biggest sector for lending in Cyprus and as we move forward it will become even bigger after things settle down a bit.

Pyrpolizer has demonstated that prediction to be a load of rubbish!

Young people are very business orientated. It's either that or earn 600 per month. I know what I would do. See the Bank immediately!

Fine, if the jobs they dream for are available ..... but they ain’t! See the bank .... are you serious? And do what ..... ask them for job?

I will do the employing at 600 per month not get paid 600 per month.

Why not put them in chains and give them the dregs from your table in return for 18 hrs a day of their labour. I know the Aussies don’t have much time for the Aboriginals ...... but you still support slavery I see?

All investment actually adds money to the economy. Even credit card expenditure. Also banks don't like giving out loans to non appreciating asset classes unless they get very high interest for it such as Credit Card facilities.

Brilliant! Paphitis’ slant on modern economics .......... in three vey short sentences.

What you should say is that even unemployment benefits and sick/maternity benefits, adds currency to the economy or didn’t you realise that? What you missed is that loans for property purchases adds NOTHING to the economy and, as Pyrpolizer points out, that is a very large part of the Cypriot banking systems assets and 70% of them are non-performing!

Strange or what? 70% of the banks assets are non-performing loans .......... which equates to liabilities. They are just pulling the wool over the eyes of the ignorant ..... until the next ‘bail-in’ ! I don’t think they will have that long to wait? Maybe just after the next election would seem the opportune moment ..... then the incumbent can blame the last Government/President.

[Pyrpolizer]

Let's not take personal sides, I am as ignorant as Paphitis is. Perhaps more ignorant. I am just trying to learn from this discussion.