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Offenbarungeid der Deutschen Bundesbank.
Kritik am Aufsatz über die Rolle von Banken, Nichtbanken und Zentralbank im Geldschöpfungsprozess.


von Michael Schemmann (2017)

Der Autor ist gelernter Bankkaufmann, amerikanischer Wirtschaftsprüuuml; und Steuerberater (CPA), und Professor für Finanz- und Rechnungswesen emeritus.

Mit dem im Titel angesprochenen "Offenbarungseid" werden die Bankrotterklärung der historischen Banklehre, die uns die Deutsche Bundesbank offenbart, die ewig-gestrigen Gesichtspunkte der Bundesbank, einschliesslich Fehlinterpretationen und Falschmeldungen im Monatsbericht April 2017 besprochen.

So behauptet die Bundesbank, "Fisher selbst hatte seinerzeit nicht die Möglichkeit, die von ihm erhofften Vorteile seines Vorschlags empirisch zu überprüfen, und bis heute liegt keine Evidenz [Beweis] dafür vor, wie ein solches System in der geldpolitischen Praxis abschneidet".

Die Meldung im Handelsblatt (2012) widerspricht:

"In einem gängigen makro-ökonomischen Modell, das sie mit Daten für die US-Wirtschaft gefüttert haben, simulieren IWF-Forscher [Benes und Kumhof] die Folgen einer solchen Reform. Das Ergebnis ist bemerkenswert: Die Argumente, die die US-Ökonomen in den 30er Jahren anführten, bestätigen sich dabei auf ganzer Linie." — Die Einleitung der Studie, "The Chicago Plan Revisited", ist in der Anlage im englischen Originaltext nachgedruckt.

John Kenneth Galbraith (1975) schreibt in seinem Buch "Geld: Woher es kam, wohin es ging":

    "Viel Gerede über Geld beinhaltet eine schwere Überlagerung priesterlicher Beschwörung. Einiges davon ist bewusst. Diejenigen, die von Geld reden und darüber unterrichten und ihren Lebensunterhalt verdienen, gewinnen Prestige, Wertschätzung und Gewinn, ebenso wie ein Doktor oder ein Hexendoktor von der Kultivierung des Glaubens, dass sie in privilegierter Verbindung mit dem Okkulten stehen, dass sie Einsichten haben, die der gewöhnlichen Person nicht zur Verfügung stehen. Dabei gibt es nichts über Geld, das von Menschen mit angemessener Neugier, Sorgfalt und Intelligenz nicht verstanden werden kann."

Siehe auch "BuBa zur Buchgeld-Schöpfung der Banken" von Querschuss 1. Mai 2017.

Paperback 86 Seiten erschienen Mai 2017 - ISBN 978-1546864899

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Putting a Stop to Fictitious Bank Accounting.
With a Plan to Redeem the US and Euro Area National Debts.


By Michael Schemmann (2015).

The author is a former international banker, a licensed CPA in the State of Washington, and a university professor of accounting and finance emeritus.

This short 70-page book explains the commercial banks' abuse of International Financial Reporting Standards (IFRS) in their creation of tens of trillions of fictitious deposits out of nothing, relying on government bailouts while the same governments keep on borrowing the banks' fictitious credits that are comprising $18 trillion of the US's and €10 trillion of the Euro Area's national debts instead of making use of their constitutional money power to create the money themselves and spend it into circulation.

Irving Fisher (1935) writes in his famous "100% Money" book:

    Bankers Often Oppose Their Own Interests

    Some readers may be skeptical of the claim that the 100% plan would help the bankers, inasmuch as the rank and file of bankers will probably oppose it. To meet this skepticism, the following is quoted from Neil Carothers, writing in the New York Herald Tribune, Sunday, November 25, 1934:

    "For more than 100 years the banks of this country have stubbornly and unwisely failed to keep abreast of the times — to the injury of their own well being and to the damage of the nation. They fought the banking reforms of the Second United States Bank and reaped their own destruction in the depression of 1837. They blindly fought every attempt to obtain common decency in bank note issue form 1830 to the Civil War, only to have every cent of profit from note issue taken from them by the national banking act of 1863.

    "They balked like a sulky mule at every proposal for a more rational system from 1890 to the [First] World War, only to have a Federal Reserve system forced upon them in 1913. Even then they obstructed every proposal for a unified system, and eventually got a hybrid two-system scheme, whose weakness was one of the causes of the collapse in 1929.

Eighty years later nothing has changed. The author's plan redeems the national debts in a non-inflationary sterile way and balances the governments' budgets.


See also publication by Michael Schemmann (2013), "Accounting Perversion in Bank Financial Statements—Root Cause of the Ongoing Global Financial Crisis" below

See also Open Letter to FASB/IASBA 1 May 2013 click here

See also Accounting Standards Committee Foundation (IASCF), "CONCEPTUAL FRAMEWORKS" presentation by James J. Leisenring with a foreword by Sir David Tweedie, London, September 2004 moneyandbanking.co.uk


Date of publication: 4 April 2015 - ISBN 978-1511593595

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Schluss mit dem Bilanzbetrug der Banken.
Mit einem Plan der Staatsverschuldung für die USA und den Euroraum


Von Michael Schemmann (2015). Übersetzung aus dem Englischen durch den Verfasser.

Der Autor ist ehemaliger internationaler Banker (Deutschland, Schweiz, USA und Kanada), amerikanischer Wirtschaftsprüfer im Bundesstaat Washington und Universitätsprofessor für Finanz- und Rechnungswesen emeritus.

Dieses kurze 80-seitige Buch erklärt den Missbrauch der Internationalen Finanz- und Rechnungslegungsgrundsätze IFRSdurch die Geschäftsbanken bei der Schaffung von zig-Billionen fiktiver Einlagen aus dem Nichts, die anschliessenden Rettungsaktionen der Regierungen, während sich die gleichen Regierungen 18 billion U.S. Dollar und 10 billionen Euros dieses fiktiven Geldes mittels Staatsverschuldung ausleihen, anstatt Kraft ihres verfassungsgemässen Rechts dieses Geld selbst zu krieren und in Umlauf zu bringen.

Irving Fisher (1935) schreibt in seinem berühmten "100%-Geld" Buch:

Die Banker wehren sich oft gegen ihre eigenen Interessen

Einige Leser mögen dem Anspruch mit Skepsis gegenüber stehen, dass der 100%-Plan den Bankern hilft, genauso wie ihn die Führungspitzen der Banker bekämpfen werden. In Erwartung dieser Skepsis wird Neil Carothers zitiert, der in der New York Herald Tribune vom Sonntag, dem 25. November 1934 schrieb:

    Seit über 100 Jahren haben es die Banken in diesem Land hartnäckig und unklug versäumt, mit der Zeit Schritt zu halten — zum Nachteil ihrerselbst und zum Schaden der Nation. Sie bekämpften die Bankenreformen der Zweiten Bank der Vereinigten Staaten und erlitten ihre eigene Vernichtung in der Depression von 1837.

    Sie kämpften blind gegen jeden Versuch, die notwendige Banknotenausgabeform von 1830 bis zum Bürgerkrieg umzusetzen, nur damit ihnen jeder Cent des Gewinns aus der eigenen Banknotenausgaben durch das nationale Bankengesetz von 1863 wegenommen wurde.

    Sie stockten wie schmollende Maultiere bei jedem Vorschlag für ein rationelles System von 1890 bis zum [Ersten] Weltkrieg, bis ihnen das Bundesbanksystem — das Federal Reserve System — im Jahr 1913 aufgezwungen wurde. Selbst dann behinderten sie jeden Vorschlag für ein einheitliches System und bekamen schlussendlich ein hybrides Zweisystem aufgezwungen, dessen Schwäche eine der Ursachen für den Zusammenbruch im Jahr 1929 war.

Siehe auch offenen Brief an FASB, IASB und die internationalen wirtschaftsprüfungs Institute vom 1. Mai 2013 in der deutschen Übersetzung — (original Englisch)

Tag der Veröffentlichung: 12. Mai 2015 — ISBN 978-1512169201

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On Money Banking and National Debt Redemption.
80th Anniversary Edition of Fisher's 100% Money and the Chicago Plan.


By Irving Fisher, Primary Author. Michael Schemmann, Compilation editor.

Irving Fisher's (1936) classic "100% Money" and the Chicago Plan are revisited, discussed and critiqued. At the time of publication (March 2015), the Greek national debt and the currency of the Euro Area are in issue. National Debts are incurred by misconceived, if not corrupt, ministers of finance and bureaucrats at their central banks, yielding to private commercial bankers who are creating the money out of nothing. The national debts can be repaid at a stroke of a pen, instead are resulting in needless austerity programs, currency failures, leftist governments and noisy demonstrations on the streets, instead of taking back the banks’ illicit money creation in violation of generally accepted accounting principles and concepts of IFRS, and giving it back to the people.

Jaromir Benes and Michael Kumhof (2012), both economic researchers at the IMF, have run Irving Fisher's 100% monetary system through carefully calibrated models — IMF Working Paper WP/12/202 online — and found support for each of Fisher's beneficial claims: (1) Smooth business cycles; (2) Stable banks; (3) No national debt(s); (4) Stable debt-free money supply created by a public authority instead of private banks. The tests revealed an additional benefit: (5) A 10% national output gain with zero inflation.

Date of publication: 3 March 2015 - ISBN 978-1508727026
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Money and Trade Consider'd.
With a Proposal of Supplying the Nation with Money.

By John Law (1705) — A professionally type-set and readable reprint including a detailed biography, available mid-March 2015.

John Law writes:

The use of Banks has been the best Method yet practis'd for the increase of Money. Banks have been long us'd in Italy, but as I'm inform'd the Invention of them was owing to Swedeland. Their Money was Copper, which was inconvient, by reason of its Weight and Bulk; to remedy this Inconveniency, a Bank was set up where the Money might be pledg'd, and Credit given to the Value, which past in Payments, and facilitate Trade.
    Banks where the Money is pledg'd equal to the Credit given, are sure; For, tho' Demands are made of the whole, the Bank does not fail in payment.
    By the Constitution of this Bank, the whole sum for which Credit is given, ought to remain there, to be ready at demand; Yet a sum is lent by the Managers for a Stock to the Lumbar, and 'tis thought they lend great Sums on other occasions. So far as they lend they add to the Money, which brings a Profit to the Country, by imploying more People, and extending Trade; They add to the Money to be lent, whereby it is easier borrowed, and at less use; and the Bank has a benefit: But the Bank is less sure, and tho' none suffer by it, or are apprehensive of Danger, its Credit being good; Yet if the whole Demands were made, or Demands greater than the remaining Money, there could not all be satisfied, till the Bank had called in what Sums were lent.

National Power and Wealth consists in numbers of People, and Magazines of Home and Foreign Goods. These depend on Trade, and Trade depends on Money. So to be Powerful and Wealthy in proportion to other Nations, we should have Money in proportion with them; for the best Laws without Money cannot employ the People, Improve the Product, or advance Manufacture and Trade.

Money is not the value for which Goods are exchanged, but the Value by which they are Exchanged: The use of Money is to buy Goods, and Silver while Money is of no other use. Tho' Silver were our product, yet it is not so proper to be made Money as Land. Land is what produces every thing, Silver is only the product.

Reprinted 2015-03-10 ISBN 978-1508816249
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Norway's Trillion Dollar Government Slush Fund.
Rethinking Norway's Sovereign Wealth Fund and the Norges Bank's Maverick Speculation in Stocks and Bonds.


By Michael Schemmann 2014

"Norway's Trillion Dollar Government Slush Fund, is a provocative title representing fairly the reality, "for words ought to be a little wild, for they are the assaults of thoughts on the unthinking." (John Maynard Keynes)

The book may help to wake up the Norwegian people, the Storting, and last not least the Government of Norway and its Minister(s) of Finance to rethink the purpose and market risks of the currently (October 2014) NOK 5.7 trillion Sovereign Wealth Fund, and who if anyone has the right to speak for the unborn children and grandchildren of future generations who are the proposed beneficiaries of the fund, if that fund's wealth is still intact when they are here.

The author's predictions - based on the fund manager's maverick style and misconceptions, the world's financial history, and his personal experience as a commercial & investment banker and public accountant - are that the fund will be flat, if not lost and worthless, in the rather near future. Arguments in support of the findings are made in the book, along with many charts and citations.

The final analysis suggests a liquidation and distribution of the Government Pension Fund Global, as Norway's sovereign wealth fund is known, and to bring the money home where it came from, tax-free of course, at least for those people of Norway who feel micro-mismanaged by their government and wish to take the management of their wealth into their own hands, according to their own plans and priorities that may consider the future of their children and grandchildren.

See also Saleha Mohsin's and Mikael Holter's story — Man Running World’s Biggest Wealth Fund Takes On Riddle of China — posted on Bloomberg 03 Nov 2014.

Date of publication: 31 October 2014 - ISBN 978-1503051393

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Memoir, Correspondence, and Miscellanies from the Papers of Thomas Jefferson - in 4 Volumes: Volume I, II, III, and IV.

By Thomas Jefferson
Edited by Thomas Jefferson Randolph. Second edition. Boston: Gray and Bowen, 1830. Republished January 2015.

The Memoir, contained in the first volume, commences with circumstantial notices of his earliest life; and is continued to his arrival in New York, in March, 1790, when he entered on the duties of the Department of State, of which he had been just appointed Secretary.

Volume II of IV includes Thomas Jefferson's letters from April 1786 to July 1789, addressed to a very great variety of individuals; and comprising a range of information.
Jefferson served as First United States Secretary of State from March 22, 1790 - December 31, 1793, as Second Vice President of the United States from March 4, 1797 - March 4, 1801, and as Third President of the United States from March 4, 1801 - March 4, 1809. Volume III of IV contains Thomas Jefferson's letters from July 1789 to August 1803.

Volume IV contains Jefferson's letters from August 1803 to March 1826, addressed to a variety of individuals; and comprising a range of information, and, in many instances, regular essays, on subjects of Money, the proposed National Bank, History, Politics, Science, Lotteries, Morals, and Religion.

Available for order from publisher ThaiSunset Publications online — Discount for libraries and educational Institutions, colleges & universities: Percentage off 15% (from list price by using "Apply Discount" code 9CWQD83R when ordering directly from publisher via link below.)

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Deutschlands Geld-Illusion.
Monetative Reform oder Bankpleiten.


Michael Schemmann 2013

Dieses Buch ist ein Denkanstoss zur Umsetzung der Idee eines Trennbankengesetzes vom März 2013, analysiert die Erstellung von Rechnungseinheiten nominiert in Euro durch die sog. "Kreditgewährung" der privaten Geschäftsbanken, die nicht Geld sind, und weist nach, dass die Bilanzierungspraxis der Banken gegen eine Anzahl von Rechnungslegungsgrundsätzen der International Financial Reporting Standards (IFRS) verstösst.

Das Buch enthält zwei Vorschläge zur deutschen Bankenreform. Einen Vorschlag auf gesetzlichem Wege, einen zweiten Vorschlag im Wege der Selbsthilfe. Der Autor ist gelernter Bankkaufmann, arbeitete für Paul Erdman in Basel, war Corporate Credit Officer einer kanadischen Grossbank, ist amerikanischer Wirtschaftsprüfer (Certified Public Accountant) im Bundesstaat Washington und Universitätsprofessor für Finanz- und Rechnungswesen in Asien. Schemmann ist Mitglied des Advisory Board des Vereins MONETATIVE e.V. in Berlin, einer internationalen Bewegung zur Verhinderung von Finanzkrisen und Bankpleiten mit der Forderung der Einführung von Vollgeld nach Irving Fisher's 100%-Geld-Theorie.

Tag der ersten Veröffentlichung 8. Mai 2013.

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Money. Breakdown and Breatkthrough.
The History and Remedy of Financial Crises and Bank Failures.


By Michael Schemmann

The book reviews a long litany of financial crises and bank failures since the 3rd century right up to the ongoing Global Financial Crisis. The author analyzes the financial statement of a large international bank in Frankfurt, Germany and concludes that IFRS accounting principles and standards are not followed but violated, rendering the statement false and misleading - "Perversion in Bank Financial Statements."

The book contains a remedy to end the ongoing Global Financial Crisis and prevent future crises, calling on the European Central Bank(ECB) not only to 'bailout,' but to step in and take over the role of overall legal-tender money supply creator, which is currently performed almost entirely by the private commercial banks with inferior quasi "money of account." The current practice, permitting commercial banks to monetize sovereign debt, but prevent the ECB from doing so in the public interest, makes no sense at all. To reverse the process, the ECB can finance euro area governments to buy-back their general government debts held by private commercial banks, thereby reducing the total outstanding sovereign debt of the euro area by 40%, while improving the banks' liquidity tenfold in a way that is complete inflation-neutral (sterile).
The misconceived austerity programs imposed on Ireland, Greece, Cyprus, Portugal and Spain "to save the euro" can then be rolled back and abandoned.

Date of publication: 9 October 2013 - ISBN 978-1492920595

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Reflections on American Money, Private Wealth, the National Debt and Alternatives for Redemption

by Michael Schemmann

The book analyses the wealth structure of America and finds the top 10% of the population owning 70% of the nation's wealth and receiving 56% if its income. The United States is a tax haven country with an average tax rate of 27% vs. the OECD's median of 36%. The the top 10% -- the five million millionaires and billionaires -- would therefore be the prime candidates for a capital levy to redeem the national debt which created their fortunes without any fear of recession!. This booklet reflects on the composition of the US national debt, who owns it. Surprise! Not the top 10% of America's wealthy, but by two thirds the lower 90% and their soon exhausted Social Security Trust Fund and private and government pension funds, and one third foreign governments and their central banks as foreign exchange reserves. National debt redemption alternatives are discussed, including an in depth review of Germany's successful monetary reform of 1948 based on the American Colm-Dodge-Goldsmith Plan imposed by the Allied military governments. The book reflects on the involvement of the Federal Reserve, the Bank of England, the European Central Bank and other central banks concerning their countries' burgeoning public debts, in particular that of Japan. The preferred alternative debt redemption would involve the Fed in a form of permanent quantitative easing.

Date of publication 17 December 2012 (3rd).
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Liquid Money — The Final Thing.
Federal Reserve and Central Bank Accounts for Everyone

by Michael Schemmann

According to the author's practical experience as a corporate credit and investment banker, the solution to the present financial crises is "so simple that the mind is repelled," using John Kenneth Galbraith's (1975) words in "Money, Whence It Came, Where it Went," characterizing the process by which bankers create money . "Anyone shall be allowed to open and maintain a bank deposit account with internet banking at the nation's note-issuing central bank. No frills, no overdrafts, no credit cards, only a simple debit card that works at any ATM around the world to make payments and to withdraw that legal tender, at a reasonable fee, of course." There are no technical challenges in this electronic age to open 800 million bank accounts in the United States, Canada, and throughout the European Union, rather enormous benefits of laissez-faire in that all of the rest of the banking problems that plague us today will look after themselves. The plan details the necessary steps, avoiding a liquidity crisis, sterile and price inflation neutral. The reform can be complete within days. The 7,000 American FDIC-insured banks would largely convert into finance companies that are more profitable, putting an end to the bank-proliferation in the United States. An estimated that 100 major national and regional banks would remaain.

See Open Letters of 28 July 2012 to Governors of the central banks: Euro Area, UK, USA, Canada, and to their Ministers of Finance.

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Accounting Perversion in Bank Financial Statements — Root Cause of the Ongoing Global Financial Crisis
by Michael Schemmann.

The Global Financial Crisis of 2007 to perhaps 2012 — or whenever the system is finally fixed — is blamed on the credit rating agencies Standard & Poor's, Moody's and Fitch who certified pools of sub-prime mortgages as investment grade, on corporate psychopaths who took over Wall Street (the BBC's latest of 3 January 2012), the absence of banking supervision and capital inadequacy, all of which I believe is very much beside the point that turns the issue that our Global Financial System is kaput because of a misconception of what is money of the quality of legal tender, not bank-created points called dollars, euros, yen etc. classified as demand deposits that masquerade as liquid money, and are everything else but money. Thomas Jefferson, Irving Fisher, John Maynard Keynes, John Kenneth Galbraith are cited and would agree - and I believe Mervyn Allister King, the present long-serving Governor of the Bank of England.

"The recognition of an asset is dependent on the item having a cost or value that can be measured with reliability. For example, internally generated intangible assets such as brands and goodwill do not meet the recognition criteria."

    — James J. Leisenring (2004), "Conceptual Frameworks", "Accompanying Materials: Discussion Topics and Questions." Jim Leising, a member of the International Accounting Standards Board (IASB), in September 2004 at a meeting in London of standard-setters from around the world. The presentation is introduced by the chairman of the IASB, Sir David Tweedie. See Conceptual Framework.

ACCOUNTING STANDARDS — REQUEST FOR RECONSIDERATION: Accounting Perversion in Bank Financial Statements — Demand Deposits Do NOT comply with IFRS (GAAP) — Open letter to FASB, IASB and International Accounting Bodies dated 1st May 2013

See also article by Michael Schemmann (2009), "The Global Financial Crisis—Result of an Accounting Perversion?" October 2009 - IICPA Articles

Date of publication 4th January 2012.

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The Euro Is Still the Strongest Currency Around — Analyses and Solutions for the Money and Sovereign Debt Crises of the 2010s
by Michael Schemmann

The ongoing hype and alarm against the sustainability of the common European currency is without a factual foundation.

In his short 96-page booklet, the author who is a professional banker, public accountant and university professor, analyses the four major world currencies and their sovereigns' ability to redeem their respective national debts by substituting their federal money for the private banks' created quasi book money without inflation in analogy to Irving Fisher's (1935) 100% Money plan. The author provides a plan for the Eurozone's sovereing debt redemption, proving that the Euro is still the strongest currency around, compared with the US dollar and the Japanese Yen, whose countries sovereign debts can only be reduced through double-digit inflation. China's Yuan is the other strong currency, though smaller in volume, and its money is not yet in any meaningful use internationally.

Date of publication 10th November 2011.

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The ABC of Sovereign Debt Redemption — A Layman's Guide To Completely Avoid Governmental Austerity Programmes.
by Michael Schemmann

The nations' constitutional money power lies idle and unused, while debt-ridden governments impose misconceived austerity programmes on their people that are needless, do more harm than good, and are outright stupid.
— The ABC of Sovereign Debt Redemption is a practical guide to pay off sovereign debt TOMORROW with fresh central bank money, inflation-neutral WITHOUT increasing the euro area's money supply; reforming the out-of-control and abusive private commercial banking system in one wash.
— National debt redemption is primarily a mental exercise, resulting in prescribed accounting transactions in accordance with generally accepted accounting principles, and finally a fundamental correction of the banking system as demanded 185 years after by Thomas Jefferson, 3rd President of the United States, for the United States, and Irving Fisher 65 years ago.
— National debt redemption will correct the usurpation of the nation's money power, and restore the money to the people, to be exercised by the government elected by the people, for the benefit of the people and not private interest groups.
— The author is a professional banker, Certified Public Accountant and University professor. This is a book that the clever bankers don't want you to have... But their ways and days are numbered.

Second edition published 25 September 2010. Available for order worldwide at IICPA Publications pbk.
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European Banking Authority's Stress Teasing. The fallacy of capital adequacy requirements for commercial banks
by Michael Schemmann

EBA is stress-testing European commercial banks using questionable capital adequacy criteria, therefore the title 'teasing'. EBA is another behemoth like the BIS in Basel, run by bureaucrats who are at best economists in the ivory tower but don't have the faintest about what is real money, let alone banking. Alas! The Global Financial Crisis is here to stay because it has always been here, and always will be here for the simple reason of basic misconceptions, not to say conspiracies.

The misconception is well known. Thomas Jefferson, and after him Irving Fisher wrote about it, I repeated and expanded on it. But the theory and practice is not taught at schools of business, let alone departments of economics, because the knowledge would eliminate the abuse of so many thousand private mints run by the commercial bankers, many of whom don't have the faintest idea about real money either. How do I know? I was one of them until I studied and learned.


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Current to publication date: July 16, 2011

Misconceived Men of Très Haute Banque: Our Central Bankers. The Basel III Capital Accord - Another Misapplication of GAAP (2010)
by Michael Schemmann.

Financial crises have been the way of the world of money and banking for centuries. Thousands of bank failures (3,500 alone during the 'Savings and Loan Crisis' of the 1980s and 1900s in the U.S.) have been the norm rather than the exception. Our central bankers are all too often 'misconceived' economists straight from a chair at a university, 'dreaming the academic dream of a hundred years' (John Maynard Keynes, 1924, A Tract on Monetary Reform) and not seasoned bankers and professional accountants. The Basel Capital Accords of 1988 and 2004 are misconceived because they confuse bank equity capital (which is merely the difference between assets and liabilities, an accounting construct and abstract) with cash and liquidity required in the form of transferable balances at Monetary Financial Institutions or at a Central Bank, which alone redeems customer deposits and prevents bankruptcy. The booklet shows "The Way Out", citing Irving Fisher's (1935) 100% Money book, John Maynard Keynes' writings, and adapting the principles and lessons learned to the present with practical steps to end the Global Financial Crisis.


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Mervyn King Correspondence with the Governor of the Bank of England - October/November 2010 | Mervyn King at the Buttonwood Gathering, New York 25 October 2010

European Monetary Reform. A Plan for the Liquidation of Central Government Debt and the Financial Rehabilitation of the Euro Area (2010)
by Michael Schemmann.

The booklet is an adaption to the author's book "Money in Crisis. A Practial Solution for 'Resolving' America's Financial System & Redeeming the National Debt" to the current discussion surrounding the Euro and the Eurozone (or Euro Area). The book provides a historical review of currency crises and their resolutions, and provides a plan for the redemption of the EUR 7 trillion central government debt by the central bank(s) for conversion into equity capital of the Euro Area's Monetary Financial Institutions, while reaising reserve requirement in order prevent MFIs' from creating new bank book money to keep the money supply unchanged. The monetary reform is a technical systems adjustments that is long onver-due and puts and end to unbridled money creation by private commercial banks for nothing in return, and puts it into the domain of the central bank(s) in favor of the state under the state's constitutional money power.

Key elements of the plan

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Indian Currency and Finance. (1913)
by John Maynard Keynes.

When Keynes graduated from King's College, Cambridge, in 1905, he took up a career in the civil service. In October 1906 at age 23, he started work as a clerk in the India Office. He enjoyed his work at first, but by 1908 had become bored and resigned his position to return to Cambridge and work on probability, at first privately funded only by two Dons at the university - his father and the economist Arthur Pigou. In 1909 Keynes published his first professional economics article in the Economics Journal, about the effect of a recent global economic downturn on India.

Also in 1909, Keynes accepted a lectureship in economics funded personally by Alfred Marshall. Keynes's earnings rose further as he began to take on pupils for private tuition, and on being elected a fellow. In 1911 Keynes was made editor of the Economic Journal. By 1913 he had published his first book, Indian Currency and Finance. He was then appointed to the Royal Commission on Indian Currency and Finance - the same topic as his book - where Keynes showed considerable talent at applying economic theory to practical problems.

The book is a 170-page "memorandum of complete grasp and mastery" narrating the early days of modern British and European banking with maxims that apply to the Global Financial Crisis: "Everyone is reckoning in a crisis on everyone else." "It is not the business of Government to hold any of the reserves the bankers ought to hold." "The project [of a State Bank finally established on July 1, 1955] was smothered in the empty maxims of political wisdom." "Intelligent amateurs..." running "one comic opera bank." "The situation in its fundamentals has arisen before, so long as the relations of the House of Commons to India combine in a high degree responsibility and ignorance."

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The Rules of Double-Entry Bookkeeping. Particularis de computis et scripturis (1494)
by Luca Pacioli.

The Author: Luca Pacioli (1445-1517) was Chair of Mathematics at the University of Perugia in Italy. He was appointed by Pope Leo X in 1514 as Professor of Mathematics at Spienza University in Rome, a position of the highest ranking. Pacioli was a friend and an instructor of Leonardo da Vinci. The Book: Luca Pacioli's 1494 Treatise on Double-Entry Bookkeeping entitled Particularis de computis et scripturis (Details of Calculation and Recording) is the first published book on present-day double-entry bookkeeping, a bestseller printed on the Gutenberg press at the time, which is still the foundation of 'the universal standard of accounting in the Western world' today. "It is not surprising to find a treatise on mercantile proceedings in a book on mathematics. At the time, mercantile arithmatic was an established part of mathematics, and its teachers were mathematicians."


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A Plan for the Liquidation of War Finance and the Financial Rehabilitation of Germany (1946)
by Gerhard Colm, Joseph M. Dodge and Raymond W. Goldsmith.

The plan was prepared at the request of the U.S. Military Government for the American zone of occupation and was adopted by the Western Allieds to eliminate the enormous monetary overhang of the Reichsmark, and introduce the (1948), which subsequently became part of the Euro's main backing. The plan is a thorough lesson in money and banking, and basic principles that need to be considered for a monetary reform. The plan makes excellent reading even today, sixty-two years later.

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Writings on Money, Banking and Public Debt
by Thomas Jefferson

Jefferson's experience with excessive paper money issues encompassed three periods: the colonial period, the Revolutionary War, and the state-bank emissions 1811-1816, resulting in widely fluctuating prices, and disruptions of debtor-creditor relationships demanding a banking systems to promote economic stability to which he answered in his letters and proposals. Jefferson's money and banking proposals were similar to those of David Hume more than a century earlier. Jefferson's plan for monetary reform made the following demands. That: All emissions of paper money by private banks be prohibited. States would voluntarily transfer the exclusive right of issuing paper money to Congress, suggesting that such emissions for general circulation should be limited to wartime financing and gradually redeemed through taxes when the emergency was over. Bank lending be limited to the quantity of funds deposited with them. Large notes could be left in circulation for major commercial transactions (in lieu of specie) without damaging the system, but should usually be made by bills of exchange. The more recent writers, like Jefferson, have little confidence in a monetary system based on demand for bank credit as the determinant of the money supply. As Irving Fisher put it, "our national circulating medium is now at the mercy of loan transactions of banks; and our thousands of checking banks are, in effect, so many irresponsible private mints." Fisher was also doubtful whether the Federal Reserve System would stabilize money; "for this function the Federal Reserve System is ill fitted in organization, personnel, inclination, and tradition."

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Further recommended reading:


Monetäre Modernisierung | Monetary Modernisation — Zur Zukunft der Geldordning: Vollgeld und Monetative | About the Future of the Money System: Total Money and Monetative Authority
3rd revised and updated edition in German.
By Joseph Huber (2013)

Money in Crisis. 2nd edition 2009
A practical solution for 'resolving' America's financial system & redeeming the national debt.
By Michael Schemmann.
Order from publisher IICPA Publications | Amazon US | Amazon CA | Amazon UK | Amazon DE and other national Amazon sites.

Money in Crisis. 1st ed. 1992
Download as PDF — read only
Order from the publisher IICPA Publications | Amazon US | Amazon CA | Amazon UK | Amazon DE and other national Amazon sites.


100% Money and the Public Debt
By Irving Fisher (1936).
In this article Fisher urges Congress to take back its Constitutional money power, redeem the national debt, require banks' demand deposit to be 100% liquid, avoiding an inelastic loan structure that bursts leaving frozen loans behind, and thereby avoid today's systemic 'Global Financial Crises'.

The Debt-Deflation Theory of Great Depressions.
By Irving Fisher (1933)
A summary of his larger book (1932) entitled "Booms and Depressions. Some First Principles" - see below. "The credit crunch today is not destroying capital but recognising that capital was destroyed by misallocation in the years of irrational exuberance. If that is so, then we are entering a spiral of debt deflation that will play out slowly for years to come. To understand how that works, we turn to Professor Irving Fisher of Yale," writes a former British banking supervisor under the pen name London Banker in the 'Foreword.'

Booms & Depressions.
Some First Principles.
By Irving Fisher (1932)
A DEPRESSION is a condition in which business becomes unprofitable. It might well be called The Private Profits disease. Its worst consequences are business failures and wide-spread unemployment. But almost no one escapes a degree of impoverishment. The whole tragedy of the Great Depression is summed up in what happened to the Real Dollar.

100% Money:
Designed to keep checking banks 100% liquid; to prevent inflation and deflation; largely to cure or prevent depression; and to wipe out much of the National Debt.
By Irving Fisher (1935).
We have an unfortunate system under which our circulating medium, our money, is a by-product of private debt. The essence of the 100% plan is to make money independent of loans; that is, to divorce the process of creating and destroying money from the business of banking, ending the chronic inflations and deflations which have ever been the great economic curse sprung largely from banking.

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Updated 2013-05-07