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Mats Kaarbø

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Central Banking or Nationalized Banks?

In the aftermath of the bubble burst in '08, Iceland took a radically different path than the United States after their financial crisis and nationalized the banks, threw some people responsible for the crash in jail and bailed out the homeowners instead of worrying about only bailing out the banks. And now they're coming back and their economy is growing again... http://goo.gl/QuKGA

When the banks in Norway declined in 1992, the government simply nationalized them (instead of bailing them out leaving the tax payer to pay the bill) which gave the banking business a breather and was ultimately beneficial for its citizens, because the banking business returned to more traditional banking values, though it only was for a short period of time.

So, in terms of public prosperity is there any merit left to keep the current central banking system, with many private banks and one central bank, instead of nationalized banks?

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    Oct 29 2012: The more centralized the money is the further away it gets from the small business person that needs it. The small community bank is much more transparent and less likely to do irresponsible things with your deposits and savings. I you truely want to balance and evenly distribute currency you need to spread it out among a large number of competitive players. Centralize defeats competition and drives up curruption in the form of unwarrented points and fees.
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      Oct 30 2012: John Smith helped me articulate it, so please take a second look at my description. Sorry for the inconvenience.
    • Nov 1 2012: Wade: you're right. So , logically, that should result in drastic limits placed on the size of Banks. They should be constrained , by their GOVERNMENT ISSUED CHARTERS, to be "Too small to Fail spectacularly".

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