Comments on: Credit Trouble for Spain and Greece Spreads Fears of Sovereign Defaults http://moneymorning.com/2009/12/09/spain-greece-default/ Global Investment News Mon, 13 Feb 2012 18:41:47 +0000 hourly 1 http://wordpress.org/?v=3.3.1 By: Potomac Oracle http://moneymorning.com/2009/12/09/spain-greece-default/comment-page-1/#comment-11336 Potomac Oracle Thu, 14 Jan 2010 18:12:08 +0000 http://moneymorning.com/?p=12654#comment-11336 Why can’t these governments simply do what private banks do and create credit with its publicly owned assets? These governments could take $1 in publicly owned assets, deposit that dollar in a state-owned owned bank and create $8.00 in credit to refinance its deficit. Moreover, they could even liquidate their sovereign debt by monitizing it. They would need to also liquidate any debt instruments so redeemed rather than rolling them over to eliminate a threat of inflation. This process of fractional reserve lending ought not be the sole purview of commercial/private banks. A state owned bank allows the government to retain its assets. It also provides a free source of credit that can be used to assist local governments finance needed infrastructure and safety net programs. Look at what the Federal Reserve has been doing in America’s mortgage market where it purchased 100% of all new mortgages last year without increasing the public deficit. These ledger entry mechanics are available to all publicly owned banks. There are no real opportunity costs. For an indepth discussion of this solution please visit: www.webofdebt.com Why can’t these governments simply do what private banks do and create credit with its publicly owned assets? These governments could take $1 in publicly owned assets, deposit that dollar in a state-owned owned bank and create $8.00 in credit to refinance its deficit. Moreover, they could even liquidate their sovereign debt by monitizing it. They would need to also liquidate any debt instruments so redeemed rather than rolling them over to eliminate a threat of inflation.

This process of fractional reserve lending ought not be the sole purview of commercial/private banks. A state owned bank allows the government to retain its assets. It also provides a free source of credit that can be used to assist local governments finance needed infrastructure and safety net programs.

Look at what the Federal Reserve has been doing in America’s mortgage market where it purchased 100% of all new mortgages last year without increasing the public deficit. These ledger entry mechanics are available to all publicly owned banks. There are no real opportunity costs.

For an indepth discussion of this solution please visit: http://www.webofdebt.com

]]> By: dick http://moneymorning.com/2009/12/09/spain-greece-default/comment-page-1/#comment-8567 dick Thu, 10 Dec 2009 00:52:06 +0000 http://moneymorning.com/?p=12654#comment-8567 I would say britain is the real pig and the french are not too far behind I would say britain is the real pig and the french are not too far behind

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