Monday, 30 April 2018
The Sunday Times: Exposed: Russian Twitter bots tried to swing general election for Jeremy Corbyn
Monday April 30 2018
Search The Times and The Sunday Times
Get access now
INSIGHT INVESTIGATION
Exposed: Russian Twitter bots tried to swing general election for Jeremy Corbyn
Robot accounts rooted for Labour and attacked Tories
Insight
April 29 2018, 12:01am, The Sunday Times
Jeremy Corbyn saw support for the Labour Party rise from 25% of the electorate to 40% over the course of last year’s election campaign
Jeremy Corbyn saw support for the Labour Party rise from 25% of the electorate to 40% over the course of last year’s election campaign
Original photo: Gareth Fuller
Share
The first evidence of Russian attempts to influence the result of the general election by promoting the Labour leader, Jeremy Corbyn, has emerged in a ground-breaking investigation into social media by this newspaper.
Our research, in conjunction with Swansea University, discovered that 6,500 Russian Twitter accounts rallied behind Labour in the weeks before last year’s election, helping supportive messages to reach millions of voters and denigrating its Conservative rivals.
Many of the Russian accounts can clearly be identified as internet robots — known as bots — that masqueraded under female English names but were in fact mass-produced to bombard the public with orchestrated political messages.
Academics say the fake accounts identified by this newspaper are just the tip of the iceberg and called on Twitter…
Politics
Jeremy Corbyn
Labour Party
You've reached your article limit
Wait until next week to read more, or subscribe for just £1 a month for 3 months.
Get access now
Politics
Jeremy Corbyn
Labour Party
Everything you need to know about the Northern Territory
Sponsored
Which island is the culinary capital of the Caribbean?
Sponsored
Start your digital subscription from less than £1 a week
We hope you enjoyed the articles you’ve read
You can wait until next week to enjoy two more articles, or subscribe for just £1 a month for 3 months.
Find out more
Back to top
times Masthead
Get in touch
Contact us
Help
The Times Editorial Complaints
The Sunday Times Editorial Complaints
Place an announcement
Classified advertising
Display advertising
The Times corrections
The Sunday Times corrections
More from The Times and The Sunday Times
The Times e-paper
The Sunday Times e-paper
Times Currency Services
The Sunday Times Wine Club
The Times Dating
Times Print Gallery
Times Crossword Club
Sunday Times Driving
Times+
The Sunday Times Rich List
Insider City Guides
Good University Guide
Schools Guide
The Brief
Best Places to Live
Best Places to Stay
Announcements
Times Appointments
© Times Newspapers Limited 2018.
Registered in England No. 894646.
Registered office: 1 London Bridge Street, SE1 9GF.
Privacy & cookie policy
Licensing
Commissioning Terms
Terms and conditions
Maybe later
You have now read your two articles this week
To continue reading on the web or our smartphone and tablet apps, subscribe today for just £1 a month for 3 months.
Subscribe now
The Sunday Times: Escape from Isis: Christina Lamb meets the Yazidi women fighting for justice
Monday April 30 2018
Search The Times and The Sunday Times
Escape from Isis: Christina Lamb meets the Yazidi women fighting for justice
Four years after the Yazidi genocide, we speak to the women who escaped sexual slavery and the brave souls who secured their freedom
Former Isis captives in Khanke camp in northern Iraq
Former Isis captives in Khanke camp in northern Iraq
ALEX KAY POTTER
The Sunday Times, April 29 2018, 12:01am
Share
The Monday-morning yoga class is full of young women. As the instructor tells them to breathe slow and deep, they squirm and fidget, struggling to settle. Tacked on the walls are drawings, including one of four girls in hijabs chained together. Every member of the class, including the instructor, has survived being kept as a sex slave by Isis fighters, raped and repeatedly sold on. A few weeks ago, one of the group, Khalida, 20, committed suicide by hanging herself.
Outside stretches a muddy field of white canvas tents. Khanke camp, near Dohuk, northern Iraq, shelters some of the 420,000 Yazidis who were forced from their homes when Isis swept into their areas in northern Iraq in August 2014. Men were slaughtered, women and girls enslaved for sex, and boys taken for indoctrination and military training. The attempted extermination of the hitherto little-known minority of gentle people who pray to the sun and worship a peacock angel — but whom Isis call devil-worshippers — prompted an international outcry and was declared a genocide by the UN.
Isis may have been driven out of Iraq, but almost four years after the attack the Yazidi population remains in limbo. Their beloved homeland of Sinjar, under the mountain where they believe Noah’s Ark came to rest, is in ruins, their fruit trees burnt and goats stolen, landmines lie hidden all around and the area is disputed between Iraqi and Kurdish militias. Many of the perpetrators of rape and murder remain at large.
Outside the yoga class, one woman, Sevvi Hassan, 45, in the long, puritanical white dress typical of older Yazidi women, recounts what she and her family found when they tried to return home in the autumn. “Everything was rubble,” she says. “Our house had no door or roof or windows, there was no water or electricity and no people, just ghosts. We’d been well off, with orchards of pomegranates, figs, olives and grapes, 90 sheep and 30 goats, but everything was gone.”
Healing time: a yoga class at Kanke Camp
ALEX KAY POTTER
Worst of all were the memories of the Kalashnikov-toting men in black from whom they had fled to the mountain. So traumatised was Sevvi’s eldest daughter, Zeena, that she set fire to herself. “When we got back to Sinjar she was scared, all the time feeling Isis was coming. She was so desperate to save herself from them, she poured petrol over herself and lit a match.”
The 28-year-old mother of four was so badly burnt that only one side of her face remains unscathed.
About two-thirds of the 7,000 girls who were abducted have been recovered, but their problems have not ended with escape from Isis. Inside almost every tent is a broken family, torn apart by what they have endured. Many have been physically damaged by repeated rape. Some can’t face going out, others have committed suicide in violent ways. Some daughters have been brainwashed into regarding fellow Yazidis as infidels.
Most of the families are in debt because they borrowed thousands of dollars to rescue their children. All are angry and disappointed that international outrage has not translated into rebuilding their homeland, or into justice for what they suffered. Some 3,154 Yazidis are still missing, many of them women and girls.
When the West declared victory against Isis after driving them out of Mosul and Raqqa last year, it did nothing to rescue the girls. It even allowed a convoy of about 3,500 people to escape Raqqa, which included fighters and, perhaps, their enslaved girls.
Yazidis are taking matters into their own hands. Some are working with the human-rights lawyer Amal Clooney to seek justice (see panel). A beekeeper, the first female Yazidi MP and a lawyer are among the people risking their lives to rescue their women and children, and trying to catch the perpetrators.
Life after Isis: Turko with her twins, born after she was rescued from Isis
ALEX KAY POTTER
One of those they rescued is Turko, 28, who cradles two gorgeous five-month-old twins in her arms, her soft face framed by a cascade of long glossy hair. Her tent is cosy, with a bed, TV, gas heater and piles of pink quilts and cushions, but it is still a tent far from home. Turko escaped from Raqqa with her three daughters in November 2016 after almost 2½ years in captivity, and seems full of spark. But as she recounts what happened, tears spill from her eyes.
Her husband and brother were away working in Kurdistan when Isis swept into their village of Herdan, and captured Turko and her three daughters, aged 3, 6 and 8. Moved to various places, they ended up captives of a Saudi Isis commander called Haider, who raped her and forced the three girls to study the Koran. “He was forcing me to have sex with him, hurting me, and I feared he would do the same to my girls,” Turko tells me. She tried to escape, but the house was guarded. “He told me if you don’t stop trying to run away I will take your daughters. Anyone who tried to run away he would electrocute. Isis was cutting off heads and they made us watch, even the children. They would hang the headless corpses for days and we would pass them on the way to the mosque and back.”
One night, as he was forcing himself on her, she told him: “One day you will all be finished.” Enraged, he threw her and her daughters in an underground jail for three months where they could not wash and had little food. “I didn’t care about myself. If it was just me I would have committed suicide,” she says, crying. “But I was with my daughters. When we got out we were in such a bad state they took us to hospital. We had typhoid.”
Back with her Saudi captor, Turko concluded there was no hope. “All that torture and rape — death was better for us,” she says. “I tried to kill us all, put fuel over us and was about to set us on fire, but one of my daughters stopped me.”
One day in November 2016, the Saudi commander was away in Mosul fighting the Iraqi forces that had launched a campaign to recapture the city. He had left Turko money for food, so she paid to borrow a Syrian woman’s ID, put on a niqab like an Isis wife, then went to an office that had wi-fi and sent a WhatsApp message to her brother. “It was very dangerous,” she says. “If they’d caught me they would have burnt me alive in a big cage, but I was desperate because of my daughters.”
Her brother gave her the number of a Yazidi beekeeper called Abdullah Shrim, who used to sell honey in Aleppo before the war, and had rescued scores of girls after many of his own family had been taken captive. Shrim told Turko to tell her mother to collect money — $32,000 — for her and her daughters from a kidnap office set up by the Kurdish government.
Turko gave him the location of the house, near a downed plane, and the times of day when the Saudi usually went out, and Shrim put her in contact with an Arab smuggler. When an airstrike began, the smuggler told her that now was the time to run. But her girls didn’t want to leave.
“They had brainwashed my daughters, particularly the eldest, Rehan,” she says. “On our way to escape she was screaming, ‘Don’t take us back to the infidels!’ They were angry and complaining, ‘We’re not praying or fasting so we won’t go to paradise.’ ”
Once outside Raqqa, Turko and the girls had to walk for four days with nothing to eat or drink, except once when they came across a water tank. At one point Turko tripped and hurt her ankle, so the smuggler carried her. “It was very scary, always thinking we would be captured,” says Turko.
Finally they came to a village in Kobane, which was controlled by Syrian Kurds, and they were safe. “I shouted whoo!” she laughs. “I was super happy.”
The next day they woke at dawn and prayed. One of the other Yazidis asked: “What are you doing? You’re not in the Islamic State any more.”
“Look at us!” says Turko, showing a video on her phone of her and her three daughters all clad in black hijabs.
Isis forced Turko’s other three children to wear black hijabs and to witness beheadings
Coming back has not been easy. “I was so happy to see my husband, but also not happy because of what had happened and not knowing if he would accept me,” she says. “It’s been over one year now and still I can’t look at him normally.”
Nevertheless, the couple were soon expecting twins, whom she lovingly cradles now. Her older daughters were so indoctrinated that they still regard their fellow Yazidis as infidels. “The girls are always talking about religion and think of themselves as Muslims. I told them Muslims are cutting off hands and heads of people and they reply, ‘They deserve it.’ They won’t talk to their uncle or cousins.”
Like most women I speak to, Turko says she is terrified of going back to Sinjar. Instead she wants to leave the country. “Just take us out of Iraq, because Iraqi people did this to us,” she pleads.
The Yazidis’ situation has been complicated by the Kurdish referendum last September, which demanded independence. Baghdad retaliated and sent Iraqi forces to places previously controlled by the Kurds, including Sinjar. Then, last month, Turkey threatened an incursion into Sinjar, with the aim of driving out PKK fighters — Kurdish rebels.
“The whole thing is a mess,” says Ameena Saeed Hasan, who was one of two Yazidi MPs in the Iraqi parliament until she stepped down in 2014 in protest at the failure to protect her people. “Different forces are protecting and contesting areas, so people are afraid to go back. There are no services. My town, Khanesor, is controlled by the PKK; the next place is 20km away and controlled by the Iraqi army; Sinjar city by Hashed al-Shaabi [an Iranian-backed Shia militia] …”
Hasan and her husband, Khaleel al-Dakhi, a lawyer, have dedicated the past few years to rescuing Yazidi girls. “To start with, our plan was just to document who was missing and what we knew about them, because this thing seemed bigger than us and we thought there would be some government somewhere who would help these girls be rescued,” says Aldakhi. “But no one did.” So far, they have retrieved 265 girls.
Shrim, the beekeeper, a slight, grey-haired 43-year-old father of four with metal-rimmed glasses and a sheepish air, looks an unlikely hero. “I came through bees to support women’s rights,” he says, and then explains: “Here in the Middle East we’re in a society where, when someone gives birth to a boy, there are parties and songs and people bring sweets, but when it’s a girl they don’t do anything. So I always see girls and women who are oppressed and have their rights restricted. But, raising the bees, I could see they were ruled by the queen bee at the centre and their society was very organised and worked very well. So why does our world have to be different? I started researching women leaders. And after Isis came and stole these women, I decided to do something about it.”
Fifty-six members of Shrim’s own family were captured by Isis and he was shocked that nobody was doing anything to recover them. When his 16-year-old niece called him from captivity in Raqqa on October 27, 2014, he resolved to act.
“I’d never done anything like this, never worked with smugglers or crossed borders secretly,” he tells me. But from his time selling honey, he knew trading networks, so he asked their advice. They told him to use cigarette smugglers. “Under Isis, cigarettes were forbidden — haram, like us Yazidis — but they still wanted them,” he explains. “So they told me if you want to get the girls out, you have to go with cigarettes. But girls will be more expensive.”
The first time he was terrified, but he found a Kurdish driver and all went smoothly. Over the past 3½ years he has rescued 367 people from Isis. For each rescue, he develops a plan with his son, an engineer. In one case, where eight Yazidi women and children were in a heavily guarded house, Shrim sent in coffins and a funeral car, pretending two of the children had died and needed to be buried. That almost led to disaster when Isis guards insisted they would dig the graves. “I thought the children were going be buried alive,” he says. “We managed to get them all out when the men went for their tools.”
Often, Shrim rents safe houses where contacts can watch comings and goings, or to move the girls to, so they are not passing through checkpoints when the alarm is raised. He even rented a bakery to deliver bread as a way to check if the girls were still in houses where Isis was holding them captive. “We tried so many ways,” he says. “We got women to distribute clothes to other women, as then they could enter the house and see faces uncovered.”
It is dangerous work. Five men and a young woman working with the network in Syria were executed by Isis after being caught. Shrim receives frequent threats.
“They sent me my photo in Dohuk to say, ‘We can kill you wherever we want.’ One girl I rescued told me, ‘Isis have your picture, they are going to kill you.’ ” He shrugs. “My life is not more important than the tears of my niece or the other 366 I have liberated.”
Over time it has become harder and more expensive to get them out, particularly as many have been moved to Turkey, where authorities refuse to co-operate. Some are believed to have been sold into prostitution rings in Europe. He believes that perhaps 1,000 are still alive, but many are dead.
The last girl he freed was another niece, Khitab, who had been abducted when she was just nine. He shows a photo of her, taken after she was liberated last month from the northern Syrian city of Idlib, where she had been held by Jabhat al-Nusra, al-Qaeda’s Syrian branch. “She was sold to so many men and raped,” he says, shaking his head. He had tried to rescue her before using an ambulance, but on the way out they caught her again. “They tortured her so many times after that,” he says.
This time, she was staying near Idlib’s general hospital, so he told her to go there when her captor went out for Friday prayers and stand outside holding a white bag. “I told her to wait for a man to come and say, ‘I am Abdullah.’ ” He and his wife were waiting in a minibus across the border. He shows me a photograph of them all reunited.
Shrim longs for the days when they can go back to Sinjar and his quiet life of keeping bees. In the meantime his phone doesn’t stop ringing. Every time he rescues someone, the families of those still missing contact him to see if the new arrival has brought any fresh information.
The beekeeper: Abdullah Shrim went from selling honey to rescuing scores of girls from Isis
Among those anxiously awaiting news is Nasima, who sits cross-legged on the floor of her tent, her little boy Hussain clinging to her anxiously. Her face is swollen with sadness and she looks much older than her 35 years. On her phone is a picture of a teenage girl in a blue party dress — her eldest daughter, Inas, 19, whom she hasn’t seen since they were both taken captive in 2014. Also missing is her son Sabah, 15.
“I know what they did to me in captivity, so I keep thinking of my son and daughter and what they’re going through,” she says. “No one cries like a mother. Every night I’m crying and thinking of it. To the last day of my life I will relive it.”
Nasima and her four children were captured on the afternoon of August 4, 2014, the day after Isis moved into the Yazidi area. They were fleeing from their village of Tilbanat, which means Hill of Girls, after being separated from her husband and their eldest son, who had gone to borrow a vehicle and whom she has not seen since. Many of the men were shot dead. “A big group of Isis came with weapons, all in black and very scary,” she says. Sabah, who was 12 at the time, was taken off while she and her two daughters, Inas and Renas, then 15 and 14, were taken to a large farm in Tal Afar.
“There were about 25 women and girls,” she says. “Everything was very dirty — they were spitting in our food and peeing in the water and they put drugs in it to make us sleepy. They forced us to pray and read the Koran and beat us if we didn’t.”
Every so often men came and selected girls, starting with young virgins. Inas was one of the first chosen. “When they took her, I was crying and crying,” says Nasima. After that Renas held her baby brother, pretending he was her child.
After a couple of weeks, the remaining women and girls were moved to a village where other Yazidis, including Nasima’s son Sabah, had been taken. “They were brainwashing the boys,” she says. “Beating them if they didn’t pray, making them do military training and showing them how to behead people. I fell down dizzy when I saw.”
They spent two months there, then Nasima, Renas and baby Hussein were loaded onto a bus with other women and girls and taken to Raqqa, to what she describes as an underground prison. On the sixth day a Tunisian fighter came and bought Nasima and her baby, leaving Renas behind.
Nasima found herself kept as a slave. “From morning till midnight I was working for his family, cooking, washing clothes and cleaning, not just his house but the place where Isis fighters all gathered. He even made me clean the house of his friend who was getting married.”
Asked if he did anything else, she looks at me witheringly. “Nobody came back without raping,” she replies.
She was sold a couple of times, ending up with an Isis leader, Jezrawi, who took her to al-Shadadiya, another Syrian town, where Abu Bakr al-Baghdadi, the head of Isis, sometimes visited. “Jezrawi was some kind of emir and had about 250 Yazidi women and girls with him,” she says. “He raped every single one then, every two or three days, was selling and buying new ones.”
Nasima was kept on, however. “He had a young wife of 16 and she told him not to sell me because I was doing all her work, cooking, washing dishes, even cleaning the ceiling. The house was very dirty, full of all the hair of the girls.”
Nasima and Hussein slept in the room used to store weapons. “It was full of guns, gunpowder and ammo, grenades, everything for fighting. Once, I was washing the dishes and came back to the room and saw my son playing with a bomb.”
One day, Jezrawi told her and his wife to get in the car. “He drove us to a place in al-Shadadiya and stopped and asked me to roll down the window. Then he beheaded a person in front of us. I’d never seen anything so horrible. I was crying and didn’t know what to do.”
When they got home he told her “you Yazidis are pagans”. She retorted: “Are we the pagans or you who are beheading?”
Jezrawi was furious and threatened to register her son as his and send him for training. “Later, his wife told me he had taken Hussein. I ran after his car, but he came out and pushed me to the ground with his rifle butt and whacked my head three times so it cracked — still now it hurts. After all this beating he was raping me and I refused, so he put his hands round my throat and said Rassoul, their Islamic messenger, told them it’s OK to rape those of us nine and older.”
Shortly after that Jezrawi took an even younger second wife, of 15. The first wife was so angry, one day she told Nasima it was their chance to escape. She put her in a hijab and bundled her into a waiting car that took her, Nasima and Hussein to Turkey. From there, Nasima contacted her family, who paid $13,000 to smugglers to get them out.
Her two daughters were still missing, though. Toying with a gold R on a necklace, Renas recounts how she was taken the day after her mother by two men. “They took me to another house in Raqqa, where there were four other Yazidi girls, and kept me there four days, then took me to another house of a big Arab family.”
“I was made to work as their servant, cleaning, sweeping and serving them. I got very tired, but if I stopped, they would beat me. They also showed me the Koran and told me I must pray like them.”
Although that family kept her for two years, they “sublet” her after a couple of months to an Isis fighter for sex whenever he came back from battle. “He’d go off fighting then came back raping,” she says. “He was forcing me, they raped every girl. I tried to resist, but he tied me down.”
Free but tormented: Renas (left) and her mother, Nasima, bear the scars of their ordeal
ALEX KAY POTTER
Twice she tried to escape, but each time the family caught her and beat her. After that she was sold to different men, who also tied her down to force her to have sex and beat her if she resisted.
When the battle to recapture Raqqa from Isis began last June, their area was pounded by American airstrikes. Eventually, she took advantage of the bombing to flee and managed to persuade an Arab family to contact her family and arrange for her to be sent back in return for money.
She finally got out last October after more than three years in captivity. Though she was overjoyed to be reunited with her mum, she worries about her sister Inas, who has also ended up in Raqqa. Renas hasn’t heard from her since the bombing of the city last year. “When I first got back, I was having very bad dreams every night, dreaming of the night they took us and thinking those things will happen again,” she says.
Eventually, a Yazidi from the same village persuaded her to go to classes organised by the Free Yezidi Foundation (FYF), which runs the yoga as well as music, art, English and counselling sessions. Renas now works for them as a health assistant, which, she says, takes her mind off thinking about what happened and earns her a little money.
Mother and daughter are now deeply in debt, with no prospect of paying back the $14,000 they borrowed for their rescue. Nasima says that some in the community still shun them, even though the baba sheikh, the Yazidi spiritual leader, issued a proclamation to say girls abducted by Isis were innocent. “They raped us by force in captivity, but not every Yazidi thinks like that,” says Nasima.
The Yazidi sect is strictly closed, perhaps because the Isis onslaught was only the most recent of many attempts over the centuries to wipe them out. Many wear red and white twisted-thread bracelets to remind them of the blood of what they say are 73 previous ferman, or genocides. A child must be born a Yazidi to worship as one, and adults must marry within the religion. In the past any sexual contact with a non-believer has meant banishment.
Many of the girls who had babies by Isis fighters fear their children won’t be accepted by the community. “Yes, that’s a step too far,” said Murad Ismael, executive director of Yazda, the main activist group for Yazidis. He believes some of the abducted girls are still inside Mosul or in camps with Isis supporters because they fear having to give up their children if they come home.
“Escaping Isis is only the beginning,” says Pari Ibrahim, a young US-based Yazidi lawyer who lost 19 girls and 21 men from her own family. She was so shocked, she founded the FYF to provide a safe space for women of Khanke camp to attend classes and meet with a British psychologist. “The trauma is immense,” she says. “So great was the need that, on the first couple of days, our psychologist had 90 individual sessions.”
That first psychologist was Ginny Dobson, a grandmother from Dorset who spent last year in Khanke funded by the Department for International Development (DfID). “I saw the most profound grief and unbelievable loss,” she says. “A huge amount of medication was being taken, some were drinking or self-harming.”
She read up on Yazidi culture and tried to harness their rituals to help the women, aged from 14 to 55. “We used the music, dancing, singing and prayer as well as art,” she says. “They may never recover, but we can help them heal and rekindle hope by building friendships.”
The results have been impressive. Most women who attend say their nightmares have ended. Ibrahim cites Zainab, abducted with all her sisters and now alone, as “going from someone sitting in an unfinished building not going out to someone glowing”. Zainab is now the yoga teacher.
But it is a massive task. A recent survey of the camp found 69% of inhabitants to be suffering from PTSD, compared with 30.6% in a normal community in conflict. Khanke alone has seen four suicides and 13 attempts, while 300 exhibit suicidal tendencies.
And FYF’s work is a tiny drop in the ocean. Khanke is just 16,200 people, with a further 12,000 outside. But 85% of the entire Yazidi community are in camps — some 350,000 people — and no other camps have trauma psychologists.
“I’ve heard from the community that around 10 or more Yazidis commit suicide in Duhok every week,” says Ibrahim.
Many feel angry that, having gone through the painful process of telling their stories to the media, they have not been given help. Yazda’s Murad Ismael cites a woman with TB who could not raise the $700 she needed for hospital treatment.
Graphic tale: the drawing by a survivor at Khanke camp of four girls chained together
“We have been asking for international protection until we have dry mouths, but it’s not happening,” he adds. “In Sinjar there is no water, no electricity, no teachers and our mayors and council fled when Iraq took over. This genocide destroyed both the physical and emotional existence of our people. My fear is we have something like Palestinian refugee camps that will be here for ever and our people will have a sub-life of hopelessness.”
In September, the UN Security Council approved a British proposal to establish an international investigation team. The UK has donated £1m, but it has yet to be formed.
Although at least 94 mass graves of Isis victims have been found in northern Iraq, Ismael says none has been exhumed and not a single perpetrator has been brought to justice. “We have recorded 1,400 women’s testimonies and have lists of names of Isis militants if someone would take it,” he says.
Amal Clooney warns that time is running out. “Justice will for ever be out of reach if we allow the evidence to disappear: if mass graves are not protected, if medical evidence is lost, if witnesses can no longer be traced,” she has said. “That’s why it’s important that we get the UN investigation off the ground as soon as possible.”
Thousands of alleged members of Isis were captured by Iraqi and Kurdish authorities after the fall of Mosul last year. They are being tried in courts in Nineveh and Baghdad dressed in Guantanamo-style orange jumpsuits, but on blanket charges of terrorism, not war rape. Some of those convicted have been executed.
Jamal Daoud, the chief judge in Nineveh, admits that some of the 490 he has tried so far kept sex slaves, but argues that “if a civilian raped a Yazidi girl, that’s one thing, but if someone joined Isis they have also done killing, beheading and raping, so it all counts as terrorism”.
Daoud comes from Sinjar and complains Yazidis have taken over his house. “Why is the West obsessed with the Yazidis?” he asks. “Many more things happened to all the people, the Arabs and Christians of Sinjar, but no one talks of that.”
He concedes that thousands more Isis fighters are still at large. Some of the Yazidi rescuers, such as Khalil and Ameena, are trying to track them down themselves. One of the girls they rescued in January was Bushra. She had been sold numerous times and her last captor was a 70-year-old man in Deir ez-Zour, in eastern Syria.
Once she was safely back, Khalil created a fake Facebook identity to contact the old man, offering to help get her back. Bushra recorded a voice message to send him, saying if he came to get her, she would go back with him. He took the bait. Khalil shows me a video of him crying into an olive tree, begging, “Please come back, I miss you!”
“We have managed to catch a lot of Isis people like this,” he said.
Clooney insists that proper trials are key to helping women such as Bushra heal. “Many Yazidi survivors have told me they don’t want their abusers executed, they want them tried in a court of law,” she said. “And they deserve nothing less. A lack of accountability prevents healing for survivors and reconciliation between communities.
“Killing Isis on the battlefield is not enough,” she adds. “We must also kill the idea behind Isis by exposing its brutality and in doing so deter future recruits. Every conflict reminds us that there can be no lasting peace without justice. A lack of accountability simply leads to continuing cycles of vengeful violence.”
I meet many Yazidi women who say they see no hope. Those who can, leave. Germany has taken in 1,100 of the sexually abused women and girls; Canada and Australia have taken several hundred. Clooney and her husband, the Hollywood star George Clooney, support a 23-year-old Yazidi called Hazim, who is studying computer science at the University of Chicago.
The UK has taken none and recently refused asylum to five young Yazidi men who managed to make their way there.
“The UK government has been very vocal about genocide and sexual violence, so we can’t understand why they can’t at least take some for treatment,” says Pari Ibrahim.
Alistair Burt, minister for the Middle East, argues it is better to support Yazidi women where they are until they can go home and to fund reconstruction, pointing out that the UK gives £246m in humanitarian aid to Iraq.“What Germany has done is really interesting, but I don’t think [the women] will go back, so you have created a push factor,” he says. “I’m not convinced that the long-term future of Iraq is best provided by removing minority communities who have been persecuted in the past. If the narrative becomes you can leave if you want to, how can you make a case for others to stay?”
Burt refuses to see the Yazidi women as a special case. He says that the Foreign Office gets “pressed very hard” by Christian groups, adding: “Although Yazidis suffered particularly, others have suffered the same way and it’s not always easy to separate one group from another and say they should have preferential treatment, because the circumstances for all have been horrific.”
Over tea in a comfortable room in Whitehall, perhaps that sounds reasonable. But when I think of Turko, Nasima, Renas and all the others in their tents in Khanke, and the absolute terror in their eyes at the idea of moving back to the places where terrorists in black slaughtered their men and robbed them of dignity and virginity, I don’t see how we can refuse.
@christinalamb
For more information and to donate, visit freeyezidi.org
Share
Comments are subject to our community guidelines, which can be viewed here.
Livefyre logo
Sunday, 29 April 2018
Care2 Causes/Judy M.: 10 Fascinating Facts About Butterflies
Care2 Causes
10 Fascinating Facts About Butterflies
72
10 Fascinating Facts About Butterflies
72
tweet
1
0
email
246
By: Judy M.
April 28, 2018
About Judy
Follow Judy at @judymolland
Editor’s note: This Care2 favorite was originally posted on June 20, 2016.
From those small cabbage whites to the largest swallowtails, there are thousands of unique and beloved butterfly species on the planet. Many of us see them outside every day in the spring and summer, but how much do you know about these colorful insects?
10 Fascinating Facts to Know About Butterflies
1. There are more than 17,500 recorded butterfly species around the world, 750 of which can be found in the United States.
2. Butterflies and moths are part of the class of insects in the order Lepidoptera. Butterflies are flying insects with large scaly wings. Like all insects, they have six jointed legs and three body parts: the head, the thorax and the abdomen. The wings are attached to the thorax, and they also have a pair of antennae, compound eyes and an exoskeleton.
cabbage white
Photo Credit: Smabs Sputzer/Flickr
3. The cabbage white, pictured above, is the most common butterfly in the U.S. Although it appears mostly white with black markings on the top of its wings, those wings are yellowish-green on the underside. Cabbage whites have a wing spread of just about two inches. Males have only one spot on each wing, while females have two. As you probably know, you can find cabbage whites in most open spaces — including gardens, roadsides, parks and cities.
Love This? Never Miss Another Story.
monarch-butterfly
Photo Credit: Thinkstock
4.Monarch butterflies migrate to get away from the cold. However, they are the only insect that migrates an average of 2,500 miles to find a warmer climate. The iconic North American monarch has been greatly affected by extreme weather events, undergoing drastic dips and spikes in population over the past several decades. The overall pattern continues to point downward, with a 95-percent population decline over the last 20 years, but conservation efforts are helping: There were more monarch butterflies migrating in 2015 than there were in 2014.
5. Monarchs are not the only butterfly to migrate. The painted lady, American lady, red admiral, cloudless sulphur, skipper, Sachem, question mark, clouded skipper, fiery skipper and mourning cloak are among the other butterflies that also migrate — but not as far as the monarchs.
common-buckeye-butterfly
Photo Credit: Thinkstock
6. The common buckeye butterfly is one of the most striking butterflies, with its bold multicolored eyespots and thick upper-wing bars — all designed to frighten away any birds that might be tempted to chomp on them. If you look under its wings, you’ll find a more abstract profusion of brown, orange and beige. These insects are pretty common all over North and Central America, although you won’t find them in the Pacific Northwest or in the far north of Canada.
7. The orange barred sulphur butterfly is one that you can find all over the Americas and the Caribbean. It’s very distinctive, with bright yellow coloration and patches of orange marking both forewings and hindwings. Females tend to be bigger and darker than their male counterparts. And, just like the adult butterflies, the caterpillars have bright yellow bodies segmented by dark stripes.
8. Speaking of caterpillars, how much do you know about the life cycle of a butterfly? The butterfly starts its life as an egg, laid on a leaf. The caterpillar, or larva, hatches from the egg and eats leaves or flowers. It loses its skin many times as it grows, increasing greatly in size. Eventually it turns into a pupa, or chrysalis, and finally a beautiful adult butterfly emerges, and the cycle continues.
9. An adult butterfly has a very short life: just three to four weeks. However, the entire life cycle of a butterfly can range between two and eight months, depending on the species. Some migratory butterflies, such as the North American onarch, can live as long as seven to eight months in one generation.
giant-swallowtail-butterfly
Photo Credit: Brian Gratwicke/Flickr
10. The giant swallowtail butterfly, as its name implies, is one of the biggest butterflies, with a wing spread of four to seven inches. The female is once again larger than the male. Swallowtails are found throughout North America, and sometimes as far south as South America. These butterflies are called “swallow” because they have long tails on their hind wings that resemble the long, pointed tails of the birds known as swallows.
Be sure to get outside this spring and look around for butterflies and other wildlife in your backyard. If you see a butterfly but aren’t sure about the species, you can consult this handy identification guide.
Related stories:
How to Attract Butterflies to Your Garden
Butterfly Bushes Aren’t Good for Butterflies
Photo Credit: Dominik QN/Unsplash
GREAT STORY, RIGHT?
Share it with your friends
72
tweet
1
0
email
CONNECT WITH US
Facebook 1.1 million followers
Twitter 560,000 followers
Pinterest 30,000 followers
Email Newsletter
EMAIL THE EDITORS
You Might Also Like
Why Big Tech Is Plotting An Invasion Of The Healthcare Market Why Big Tech Is Plotting An Invasion Of The Healthcare Market TalkMarkets
Woman Drowns Puppy in Airport Toilet So She Can Board Plane Woman Drowns Puppy in Airport Toilet So She Can Board Plane
4 Tantric Sex Exercises for Couples or Singles 4 Tantric Sex Exercises for Couples or Singles
14 Things Compromising the Health of Your Vagina 14 Things Compromising the Health of Your Vagina
Can You Harm Your Pet by Neutering/Spaying Too Young? Can You Harm Your Pet by Neutering/Spaying Too Young?
Recommended by
246 comments
Janet B
Janet B10 minutes ago
Thanks
SEND
Angela J
Angela J18 minutes ago
Thanks
SEND
Sheila D
Sheila D24 minutes ago
Love butterflies. Have a dog-faced butterfly tattoo on my ankle. Thanks for sharing.
SEND
Lisa M
Lisa Mabout an hour ago
Thanks for sharing!
SEND
Lisa M
Lisa Mabout an hour ago
Thanks for sharing!
SEND
Jaime J
Jaime Jabout an hour ago
Thank you!!
SEND
Jaime J
Jaime Jabout an hour ago
Thank you!!
SEND
Jetana A
Jetana Aabout an hour ago
Plant butterfly attracting flowers, people!
SEND
Christeen A
Christeen Aabout an hour ago
Quite interesting. Thank you.
SEND
Roro l
Roro l1 hours ago
Thank you.
SEND
view all 246 comments
TOP STORIES
1
4 Significant Court Wins for Abortion Rights
2
17-Year-Old Deaf Dog Saves Little Girl Lost in Australian Bush
3
10 Fascinating Facts About Butterflies
4
It May Finally Become Illegal to Kill Dogs and Cats for Food in the US
5
Oklahoma Passes Law to Prevent LGBTQ Parents From Adopting
ads keep care2 free
learn more ▸
ads keep care2 free
learn more ▸
COMMUNITY SUCCESS!
Success! Bill Cosby Found Guilty of Sexual Assault
In a major victory for this Sexual Assault Awareness Month, Bill Cosby has finally been...
more
Disclaimer: The views expressed above are solely those of the author and may not reflect those of Care2, Inc., its employees or advertisers.
72
tweet
1
0
"The best way to predict the future is to create it!"
- Dennis Gabor
Start A Petition
Home
Start a Petition
Sign Petitions
Petition Successes
Care2 Causes
Healthy Living
Petition Help
Trending Petition Topics
Animal Rights
Children's Rights
Civil Rights
Corporate Accountability
Education
Environment
Health
Human Rights
International Development
LGBTQ Rights
Media, Arts, Culture
Politics
Reproductive Rights
Wildlife
Women's Rights
Our Promise: Welcome to Care2, the world's largest community for good. Here, you'll find over 45 million like-minded people working towards progress, kindness, and lasting impact.
Care2 Stands Against: bigots, bullies, science deniers, misogynists, gun lobbyists, xenophobes, the willfully ignorant, animal abusers, frackers, and other mean people. If you find yourself aligning with any of those folks, you can move along, nothing to see here.
Care2 Stands With: humanitarians, animal lovers, feminists, rabble-rousers, nature-buffs, creatives, the naturally curious, and people who really love to do the right thing.
You are our people. You Care. We Care2.
HomeAbout UsPartnershipsMedia InquiryPrivacy PolicyTerms of ServiceContact UsHelp
Copyright © 2018 Care2.com, inc. and its licensors.All rights reserved
site feedback
site feedback
log in / Join
Start A Petition
Sign Petition
CARE2 Home
healthy living
causes & news
Animals
Women
Politics
Food
LGBT
Human Rights
Civil Rights
Children
Education
Environment
Health Policy
Global Warming
Trailblazers
Canada
UK
Success Stories
butterfly rewards
New to Care2? Start Here.
About Us
Care2 Team Blog
10 Fascinating Facts About Butterflies
72
10 Fascinating Facts About Butterflies
72
tweet
1
0
246
By: Judy M.
April 28, 2018
About Judy
Follow Judy at @judymolland
Editor’s note: This Care2 favorite was originally posted on June 20, 2016.
From those small cabbage whites to the largest swallowtails, there are thousands of unique and beloved butterfly species on the planet. Many of us see them outside every day in the spring and summer, but how much do you know about these colorful insects?
10 Fascinating Facts to Know About Butterflies
1. There are more than 17,500 recorded butterfly species around the world, 750 of which can be found in the United States.
2. Butterflies and moths are part of the class of insects in the order Lepidoptera. Butterflies are flying insects with large scaly wings. Like all insects, they have six jointed legs and three body parts: the head, the thorax and the abdomen. The wings are attached to the thorax, and they also have a pair of antennae, compound eyes and an exoskeleton.
cabbage white
Photo Credit: Smabs Sputzer/Flickr
3. The cabbage white, pictured above, is the most common butterfly in the U.S. Although it appears mostly white with black markings on the top of its wings, those wings are yellowish-green on the underside. Cabbage whites have a wing spread of just about two inches. Males have only one spot on each wing, while females have two. As you probably know, you can find cabbage whites in most open spaces — including gardens, roadsides, parks and cities.
Love This? Never Miss Another Story.
monarch-butterfly
Photo Credit: Thinkstock
4.Monarch butterflies migrate to get away from the cold. However, they are the only insect that migrates an average of 2,500 miles to find a warmer climate. The iconic North American monarch has been greatly affected by extreme weather events, undergoing drastic dips and spikes in population over the past several decades. The overall pattern continues to point downward, with a 95-percent population decline over the last 20 years, but conservation efforts are helping: There were more monarch butterflies migrating in 2015 than there were in 2014.
5. Monarchs are not the only butterfly to migrate. The painted lady, American lady, red admiral, cloudless sulphur, skipper, Sachem, question mark, clouded skipper, fiery skipper and mourning cloak are among the other butterflies that also migrate — but not as far as the monarchs.
common-buckeye-butterfly
Photo Credit: Thinkstock
6. The common buckeye butterfly is one of the most striking butterflies, with its bold multicolored eyespots and thick upper-wing bars — all designed to frighten away any birds that might be tempted to chomp on them. If you look under its wings, you’ll find a more abstract profusion of brown, orange and beige. These insects are pretty common all over North and Central America, although you won’t find them in the Pacific Northwest or in the far north of Canada.
7. The orange barred sulphur butterfly is one that you can find all over the Americas and the Caribbean. It’s very distinctive, with bright yellow coloration and patches of orange marking both forewings and hindwings. Females tend to be bigger and darker than their male counterparts. And, just like the adult butterflies, the caterpillars have bright yellow bodies segmented by dark stripes.
8. Speaking of caterpillars, how much do you know about the life cycle of a butterfly? The butterfly starts its life as an egg, laid on a leaf. The caterpillar, or larva, hatches from the egg and eats leaves or flowers. It loses its skin many times as it grows, increasing greatly in size. Eventually it turns into a pupa, or chrysalis, and finally a beautiful adult butterfly emerges, and the cycle continues.
9. An adult butterfly has a very short life: just three to four weeks. However, the entire life cycle of a butterfly can range between two and eight months, depending on the species. Some migratory butterflies, such as the North American onarch, can live as long as seven to eight months in one generation.
giant-swallowtail-butterfly
Photo Credit: Brian Gratwicke/Flickr
10. The giant swallowtail butterfly, as its name implies, is one of the biggest butterflies, with a wing spread of four to seven inches. The female is once again larger than the male. Swallowtails are found throughout North America, and sometimes as far south as South America. These butterflies are called “swallow” because they have long tails on their hind wings that resemble the long, pointed tails of the birds known as swallows.
Be sure to get outside this spring and look around for butterflies and other wildlife in your backyard. If you see a butterfly but aren’t sure about the species, you can consult this handy identification guide.
Related stories:
How to Attract Butterflies to Your Garden
Butterfly Bushes Aren’t Good for Butterflies
Photo Credit: Dominik QN/Unsplash
GREAT STORY, RIGHT?
Share it with your friends
72
tweet
1
0
CONNECT WITH US
Facebook 1.1 million followers
Twitter 560,000 followers
Pinterest 30,000 followers
Email Newsletter
EMAIL THE EDITORS
You Might Also Like
Why Big Tech Is Plotting An Invasion Of The Healthcare Market Why Big Tech Is Plotting An Invasion Of The Healthcare Market TalkMarkets
Woman Drowns Puppy in Airport Toilet So She Can Board Plane Woman Drowns Puppy in Airport Toilet So She Can Board Plane
4 Tantric Sex Exercises for Couples or Singles 4 Tantric Sex Exercises for Couples or Singles
14 Things Compromising the Health of Your Vagina 14 Things Compromising the Health of Your Vagina
Can You Harm Your Pet by Neutering/Spaying Too Young? Can You Harm Your Pet by Neutering/Spaying Too Young?
Recommended by
246 comments
Janet B
Janet B10 minutes ago
Thanks
SEND
Angela J
Angela J18 minutes ago
Thanks
SEND
Sheila D
Sheila D24 minutes ago
Love butterflies. Have a dog-faced butterfly tattoo on my ankle. Thanks for sharing.
SEND
Lisa M
Lisa Mabout an hour ago
Thanks for sharing!
SEND
Lisa M
Lisa Mabout an hour ago
Thanks for sharing!
SEND
Jaime J
Jaime Jabout an hour ago
Thank you!!
SEND
Jaime J
Jaime Jabout an hour ago
Thank you!!
SEND
Jetana A
Jetana Aabout an hour ago
Plant butterfly attracting flowers, people!
SEND
Christeen A
Christeen Aabout an hour ago
Quite interesting. Thank you.
SEND
Roro l
Roro l1 hours ago
Thank you.
SEND
view all 246 comments
TOP STORIES
1
4 Significant Court Wins for Abortion Rights
2
17-Year-Old Deaf Dog Saves Little Girl Lost in Australian Bush
3
10 Fascinating Facts About Butterflies
4
It May Finally Become Illegal to Kill Dogs and Cats for Food in the US
5
Oklahoma Passes Law to Prevent LGBTQ Parents From Adopting
ads keep care2 free
learn more ▸
ads keep care2 free
learn more ▸
COMMUNITY SUCCESS!
Success! Bill Cosby Found Guilty of Sexual Assault
In a major victory for this Sexual Assault Awareness Month, Bill Cosby has finally been...
more
Disclaimer: The views expressed above are solely those of the author and may not reflect those of Care2, Inc., its employees or advertisers.
72
tweet
1
0
"The best way to predict the future is to create it!"
- Dennis Gabor
Start A Petition
Home
Start a Petition
Sign Petitions
Petition Successes
Care2 Causes
Healthy Living
Petition Help
Trending Petition Topics
Animal Rights
Children's Rights
Civil Rights
Corporate Accountability
Education
Environment
Health
Human Rights
International Development
LGBTQ Rights
Media, Arts, Culture
Politics
Reproductive Rights
Wildlife
Women's Rights
Our Promise: Welcome to Care2, the world's largest community for good. Here, you'll find over 45 million like-minded people working towards progress, kindness, and lasting impact.
Care2 Stands Against: bigots, bullies, science deniers, misogynists, gun lobbyists, xenophobes, the willfully ignorant, animal abusers, frackers, and other mean people. If you find yourself aligning with any of those folks, you can move along, nothing to see here.
Care2 Stands With: humanitarians, animal lovers, feminists, rabble-rousers, nature-buffs, creatives, the naturally curious, and people who really love to do the right thing.
You are our people. You Care. We Care2.
HomeAbout UsPartnershipsMedia InquiryPrivacy PolicyTerms of ServiceContact UsHelp
Copyright © 2018 Care2.com, inc. and its licensors.All rights reserved
site feedback
site feedback
log in / Join
Start A Petition
Sign Petition
CARE2 Home
healthy living
causes & news
Animals
Women
Politics
Food
LGBT
Human Rights
Civil Rights
Children
Education
Environment
Health Policy
Global Warming
Trailblazers
Canada
UK
Success Stories
butterfly rewards
New to Care2? Start Here.
About Us
Care2 Team Blog
Care2 Healthy Living/Jordyn Cormier: Trouble Sleeping in a New Place? This Might Be Why
Care2 Healthy Living
Trouble Sleeping in a New Place? This Might Be Why
Trouble Sleeping in a New Place? This Might Be Why
tweet
By: Jordyn Cormier
April 28, 2018
About Jordyn
We’ve all been there—exhausted after a day of traveling, you crash in a friend’s guest room only to wake up 8 hours later still feeling wiped. Maybe you had trouble falling asleep and continued to toss and turn all night, waking at every tiny noise or shift in light. Perhaps you blamed it on that green tea you had at 3pm. Either way, the next night you sleep like a baby, no problems.
This is a fairly common phenomenon, and there is a scientific explanation. It’s called first-night effect, and it is a well-documented form of sleep disturbance. But why do so many of us struggle to fall asleep on our first night in a new environment?
Recent research suggests that we have evolved a sort of “night watch.” When we sleep in a new place, oftentimes one hemisphere of our brain will stay more active throughout the night, instead of recharging. In an effort at protection, any external stimulation detected by the waking hemisphere will quickly wake the sleeper. Sure, it keeps humans safe from nocturnal dangers. But this also means that your entire brain is not recharging with plenty of deep sleep, which means you’ll feel a bit groggy the next day.
woman in bed late night trying to sleep suffering insomnia
Nowadays, it’s unlikely that your friend’s guest room is dangerous, so this can be a rather cumbersome evolutionary trait. The same first-night effect can be felt, perhaps more strongly, when camping. Foreign noises, unfamiliar temperatures, changing conditions—all of these things are watched by half of our brain, which explains why you may not feel well rested after your first night in your sleeping bag. The same phenomenon happens in all sorts of animals. It makes sense; the outdoors can feel like a scary place at night.
So what can you do to increase your chances of a good rest, no matter where you’re sleeping? It is important to make yourself as comfortable as possible. Yes, maybe that means bringing your own pillow. But it could also mean using a sound machine to drown out urban noise, wearing a sleeping mask to mimic the darkness of your home bedroom, or listening to Stephen Frye reading Harry Potter to lull you into dreamland as you sometimes do at home.
Use sounds, light, objects and familiar smells to instill a sense of safety and calm before bedtime. The more comfortable and safe you can make yourself feel on a subconscious level, the better your odds are for getting a deep, restorative sleep.
Related on Care2:
Your Nightlight May Increase Your Depression Risk (& What to do About It)
Would You Rather Pop a Pill or Exercise?
Here’s What Happens to a Plastic Bag After You Throw It Away
GREAT STORY, RIGHT?
Share it with your friends
tweet
You Might Also Like
Is India's Economic Potential Over-Hyped? Is India's Economic Potential Over-Hyped? TalkMarkets
For Sexual Health, Does Pubic Hair Matter? For Sexual Health, Does Pubic Hair Matter?
National Geographic Cancels “The Dog Whisperer” National Geographic Cancels “The Dog Whisperer”
8 Obvious Signs Your Blood Sugar is High 8 Obvious Signs Your Blood Sugar is High
Magical Peach Arugula Salad Magical Peach Arugula Salad
Recommended by
18 comments
Jessica K
Jessica Kjust now
I've run into this situation and it makes sense that there is something neurological about the phenomena. Thanks.
SEND
Angela J
Angela J14 minutes ago
Thanks
SEND
Sheila D
Sheila D20 minutes ago
It doesn't help if you're already a light sleeper. Thanks for the information.
SEND
Roro l
Roro labout an hour ago
Thank you.
SEND
Elizabeth H
Elizabeth Habout an hour ago
I never had problems with sleep when I went away. Slept like a log.
SEND
Janet B
Janet Babout an hour ago
Thanks
SEND
Chrissie R
Chrissie R2 hours ago
No problems here!
SEND
RK R
RK R2 hours ago
Makes sense. I only get six hours of sleep every day, but a night I get eight hours of sleep - Cat.
SEND
Ann B
Ann B3 hours ago
there are so many sleep factors why we dont sleep--noisy neighbors barking dogs trains on and on....i would love to have an entire 8 hours interrupted!!!!
SEND
Jeramie D
Jeramie D4 hours ago
Makes sense
SEND
TOP STORIES
1
The Surprising Habit that Raises Your Blood Pressure and Causes Cancer
2
Trouble Sleeping in a New Place? This Might Be Why
3
How Quantum Physics Bridges Science and Spirituality
4
9 Magnesium-Rich Foods to Ease Anxiety
5
What Are the Health Effects of the Hops Phytoestrogen in Beer?
ads keep care2 free
learn more ▸
Care2 Healthy Living/Maggie McCracken: How to Set Realistic Daily Goals, And Stick to Them
Care2 Healthy Living
How to Set Realistic Daily Goals, And Stick to Them
How to Set Realistic Daily Goals, And Stick to Them
tweet
email
12
By: Maggie McCracken
April 28, 2018
About Maggie
Follow Maggie at @MaggieBlogs
The word “habit” may have developed a negative connotation, but habits aren’t necessarily a bad thing. You may have heard that it takes about 21 days to make a habit. Those habits may be good things (like drinking plenty of water all day long) or they may be less desirable for our health and happiness (like biting our nails, or spending our evenings glued to the TV).
If you want to make improvements in your life, one of the best ways to do that is to change your habits. By the time an activity becomes a habit, it has become second nature. And what better way to get healthy activities into your life than by not having to think about doing them?
So, if you want to start accomplishing your goals, you need to turn them into daily habits. Here’s how to set realistic goals for yourself and turn them into habits you barely even need to think about doing.
Love This? Never Miss Another Story.
Step 1: Define What You Really Want to Do
The first step is to spell out your goals. Some of these goals may look like habits (like trying to eat a healthy breakfast each morning) while others will look like long-term achievements (like writing a book). That’s totally okay.
The important part here is to weed out what’s not really important to you. If something on your list of goals is something society says you should do, but you’re not really passionate about (losing weight, for example), then it’s time to scratch it off the list. Whittle down your list of goals so that you’re only working on five things at a time.
Step 2: Break Down Long-Term Goals Into Daily Habits
This is arguably the most important part of your process. If you have lofty goals, it’s time to break them down into small actions you can take every single day. Without the minutiae of daily attention, goals are unlikely to be accomplished. Let’s take that example of writing a book: Break it down into manageable pieces. For example, you may decide that you want to spend one hour each day writing.
By now, your goals should have formed into a list of daily actions. Here’s an example of what those habits might be:
Eat a healthy breakfast each morning.
Drink eight glasses of water per day.
Call or text one loved one each evening to see how they’re doing.
Spend one hour writing before bed.
Be in bed by 10 p.m. every night.
Step 3: Create an Accountability System
Now it’s time to decide how you’re going to help yourself stick with your goals. Every habit will have slightly different parameters for measuring success. For example, drinking eight glasses of water per day is something you’ll probably want to physically log. Download an app like Lifesum or add a little water tally section into your daily planner.
Meanwhile, checking in with loved ones could be logged a little bit differently. Maybe you take the time on Sunday to write notes into your planner reminding you of who you should call each day. Or perhaps you set a reminder on your cell phone for each night at 6pm to tell you who you should call or text.
Whatever your goal is, find a way to track your progress and hold yourself accountable.
Step 4: Do It
Finally, habits are made by actually following through with them. Only you can do that. If you’ve set realistic goals for yourself and given yourself the tools to stay accountable, you should be able to follow through on what’s really important to you.
Try to stick to your new behavior for at least a month. After that time, if it feels like it’s unenjoyable or a burden, you can intentionally decide to let that habit go. But if you fall off the wagon sooner than a month in, get back into it — give yourself the time to make your goals into daily habits.
Related Articles:
5 Easy Ways to Manage Your Time
5 Tips for Staying Productive While Working from Home
3 Fresh Organization Ideas to Kickstart Your Day
GREAT STORY, RIGHT?
Share it with your friends
tweet
email
CONNECT WITH US
Facebook 1.1 million followers
Twitter 560,000 followers
Pinterest 30,000 followers
Email Newsletter
EMAIL THE EDITORS
You Might Also Like
White House says Trump will undergo physical exam after slurred speech White House says Trump will undergo physical exam after slurred speech theGrio
Home Buyer's Dilemma Explained In One Picture Home Buyer's Dilemma Explained In One Picture TalkMarkets
Tantric Sex for Beginners: 4 Easy Tips! Tantric Sex for Beginners: 4 Easy Tips!
20 Ways to Conserve Water at Home 20 Ways to Conserve Water at Home
What Are the Health Effects of the Hops Phytoestrogen in Beer? What Are the Health Effects of the Hops Phytoestrogen in Beer?
10 Natural Remedies for Swollen Feet and Ankles 10 Natural Remedies for Swollen Feet and Ankles
Recommended by
12 comments
Angela J
Angela J6 minutes ago
Thanks
SEND
Roro l
Roro labout an hour ago
Thank you.
SEND
Elizabeth H
Elizabeth Habout an hour ago
Why would you want to regiment your day.
SEND
Sandra Vito
Sandra V4 hours ago
Thanks
SEND
Sandra Vito
Sandra V4 hours ago
Thanks
SEND
Danii P
Danii P5 hours ago
Thanks for sharing.
SEND
Camilla V
Camilla V10 hours ago
thanks
SEND
Chad A
Chad Anderson12 hours ago
Thank you!
SEND
Lenore K
Lenore K16 hours ago
ty
SEND
RK R
RK R17 hours ago
Are your complaints, your drama, your victim mentality, your whining, your blaming, excuses blocking you from your goals or dreams?
SEND
view all 12 comments
TOP STORIES
1
The Surprising Habit that Raises Your Blood Pressure and Causes Cancer
2
Trouble Sleeping in a New Place? This Might Be Why
3
How Quantum Physics Bridges Science and Spirituality
4
9 Magnesium-Rich Foods to Ease Anxiety
5
What Are the Health Effects of the Hops Phytoestrogen in Beer?
ads keep care2 free
learn more ▸
ads keep care2 free
learn more ▸
COMMUNITY SUCCESS!
Success! Bill Cosby Found Guilty of Sexual Assault
In a major victory for this Sexual Assault Awareness Month, Bill Cosby has finally been...
more
tweet
"The best way to predict the future is to create it!"
- Dennis Gabor
Start A Petition
Home
Start a Petition
Sign Petitions
Petition Successes
Care2 Causes
Healthy Living
Petition Help
Trending Petition Topics
Animal Rights
Children's Rights
Civil Rights
Corporate Accountability
Education
Environment
Health
Human Rights
International Development
LGBTQ Rights
Media, Arts, Culture
Politics
Reproductive Rights
Wildlife
Women's Rights
Our Promise: Welcome to Care2, the world's largest community for good. Here, you'll find over 45 million like-minded people working towards progress, kindness, and lasting impact.
Care2 Stands Against: bigots, bullies, science deniers, misogynists, gun lobbyists, xenophobes, the willfully ignorant, animal abusers, frackers, and other mean people. If you find yourself aligning with any of those folks, you can move along, nothing to see here.
Care2 Stands With: humanitarians, animal lovers, feminists, rabble-rousers, nature-buffs, creatives, the naturally curious, and people who really love to do the right thing.
You are our people. You Care. We Care2.
HomeAbout UsPartnershipsMedia InquiryPrivacy PolicyTerms of ServiceContact UsHelp
Copyright © 2018 Care2.com, inc. and its licensors.All rights reserved
site feedback
site feedback
log in / Join
Start A Petition
Sign Petition
CARE2 Home
healthy living
Food +Recipes
Health
Love + Sex
Green
News
Crafts
Ecards
Brands forGood
Nature
Pets
Spirit
Home
Life
Family
Beauty
causes & news
Success Stories
butterfly rewards
New to Care2? Start Here.
About Us
Care2 Team Blog
How to Set Realistic Daily Goals, And Stick to Them
How to Set Realistic Daily Goals, And Stick to Them
tweet
12
By: Maggie McCracken
April 28, 2018
About Maggie
Follow Maggie at @MaggieBlogs
The word “habit” may have developed a negative connotation, but habits aren’t necessarily a bad thing. You may have heard that it takes about 21 days to make a habit. Those habits may be good things (like drinking plenty of water all day long) or they may be less desirable for our health and happiness (like biting our nails, or spending our evenings glued to the TV).
If you want to make improvements in your life, one of the best ways to do that is to change your habits. By the time an activity becomes a habit, it has become second nature. And what better way to get healthy activities into your life than by not having to think about doing them?
So, if you want to start accomplishing your goals, you need to turn them into daily habits. Here’s how to set realistic goals for yourself and turn them into habits you barely even need to think about doing.
Love This? Never Miss Another Story.
Step 1: Define What You Really Want to Do
The first step is to spell out your goals. Some of these goals may look like habits (like trying to eat a healthy breakfast each morning) while others will look like long-term achievements (like writing a book). That’s totally okay.
The important part here is to weed out what’s not really important to you. If something on your list of goals is something society says you should do, but you’re not really passionate about (losing weight, for example), then it’s time to scratch it off the list. Whittle down your list of goals so that you’re only working on five things at a time.
Step 2: Break Down Long-Term Goals Into Daily Habits
This is arguably the most important part of your process. If you have lofty goals, it’s time to break them down into small actions you can take every single day. Without the minutiae of daily attention, goals are unlikely to be accomplished. Let’s take that example of writing a book: Break it down into manageable pieces. For example, you may decide that you want to spend one hour each day writing.
By now, your goals should have formed into a list of daily actions. Here’s an example of what those habits might be:
Eat a healthy breakfast each morning.
Drink eight glasses of water per day.
Call or text one loved one each evening to see how they’re doing.
Spend one hour writing before bed.
Be in bed by 10 p.m. every night.
Step 3: Create an Accountability System
Now it’s time to decide how you’re going to help yourself stick with your goals. Every habit will have slightly different parameters for measuring success. For example, drinking eight glasses of water per day is something you’ll probably want to physically log. Download an app like Lifesum or add a little water tally section into your daily planner.
Meanwhile, checking in with loved ones could be logged a little bit differently. Maybe you take the time on Sunday to write notes into your planner reminding you of who you should call each day. Or perhaps you set a reminder on your cell phone for each night at 6pm to tell you who you should call or text.
Whatever your goal is, find a way to track your progress and hold yourself accountable.
Step 4: Do It
Finally, habits are made by actually following through with them. Only you can do that. If you’ve set realistic goals for yourself and given yourself the tools to stay accountable, you should be able to follow through on what’s really important to you.
Try to stick to your new behavior for at least a month. After that time, if it feels like it’s unenjoyable or a burden, you can intentionally decide to let that habit go. But if you fall off the wagon sooner than a month in, get back into it — give yourself the time to make your goals into daily habits.
Related Articles:
5 Easy Ways to Manage Your Time
5 Tips for Staying Productive While Working from Home
3 Fresh Organization Ideas to Kickstart Your Day
GREAT STORY, RIGHT?
Share it with your friends
tweet
CONNECT WITH US
Facebook 1.1 million followers
Twitter 560,000 followers
Pinterest 30,000 followers
Email Newsletter
EMAIL THE EDITORS
You Might Also Like
White House says Trump will undergo physical exam after slurred speech White House says Trump will undergo physical exam after slurred speech theGrio
Home Buyer's Dilemma Explained In One Picture Home Buyer's Dilemma Explained In One Picture TalkMarkets
Tantric Sex for Beginners: 4 Easy Tips! Tantric Sex for Beginners: 4 Easy Tips!
20 Ways to Conserve Water at Home 20 Ways to Conserve Water at Home
What Are the Health Effects of the Hops Phytoestrogen in Beer? What Are the Health Effects of the Hops Phytoestrogen in Beer?
10 Natural Remedies for Swollen Feet and Ankles 10 Natural Remedies for Swollen Feet and Ankles
Recommended by
12 comments
Angela J
Angela J6 minutes ago
Thanks
SEND
Roro l
Roro labout an hour ago
Thank you.
SEND
Elizabeth H
Elizabeth Habout an hour ago
Why would you want to regiment your day.
SEND
Sandra Vito
Sandra V4 hours ago
Thanks
SEND
Sandra Vito
Sandra V4 hours ago
Thanks
SEND
Danii P
Danii P5 hours ago
Thanks for sharing.
SEND
Camilla V
Camilla V10 hours ago
thanks
SEND
Chad A
Chad Anderson12 hours ago
Thank you!
SEND
Lenore K
Lenore K16 hours ago
ty
SEND
RK R
RK R17 hours ago
Are your complaints, your drama, your victim mentality, your whining, your blaming, excuses blocking you from your goals or dreams?
SEND
view all 12 comments
TOP STORIES
1
The Surprising Habit that Raises Your Blood Pressure and Causes Cancer
2
Trouble Sleeping in a New Place? This Might Be Why
3
How Quantum Physics Bridges Science and Spirituality
4
9 Magnesium-Rich Foods to Ease Anxiety
5
What Are the Health Effects of the Hops Phytoestrogen in Beer?
ads keep care2 free
learn more ▸
ads keep care2 free
learn more ▸
COMMUNITY SUCCESS!
Success! Bill Cosby Found Guilty of Sexual Assault
In a major victory for this Sexual Assault Awareness Month, Bill Cosby has finally been...
more
tweet
"The best way to predict the future is to create it!"
- Dennis Gabor
Start A Petition
Home
Start a Petition
Sign Petitions
Petition Successes
Care2 Causes
Healthy Living
Petition Help
Trending Petition Topics
Animal Rights
Children's Rights
Civil Rights
Corporate Accountability
Education
Environment
Health
Human Rights
International Development
LGBTQ Rights
Media, Arts, Culture
Politics
Reproductive Rights
Wildlife
Women's Rights
Our Promise: Welcome to Care2, the world's largest community for good. Here, you'll find over 45 million like-minded people working towards progress, kindness, and lasting impact.
Care2 Stands Against: bigots, bullies, science deniers, misogynists, gun lobbyists, xenophobes, the willfully ignorant, animal abusers, frackers, and other mean people. If you find yourself aligning with any of those folks, you can move along, nothing to see here.
Care2 Stands With: humanitarians, animal lovers, feminists, rabble-rousers, nature-buffs, creatives, the naturally curious, and people who really love to do the right thing.
You are our people. You Care. We Care2.
HomeAbout UsPartnershipsMedia InquiryPrivacy PolicyTerms of ServiceContact UsHelp
Copyright © 2018 Care2.com, inc. and its licensors.All rights reserved
site feedback
site feedback
log in / Join
Start A Petition
Sign Petition
CARE2 Home
healthy living
Food +Recipes
Health
Love + Sex
Green
News
Crafts
Ecards
Brands forGood
Nature
Pets
Spirit
Home
Life
Family
Beauty
causes & news
Success Stories
butterfly rewards
New to Care2? Start Here.
About Us
Care2 Team Blog
Care2 Healthy Living/Andrea Donsky: 9 Cheap (And Super Healthy) Superfoods
Care2 Healthy Living
9 Cheap (And Super Healthy) Superfoods
9 Cheap (And Super Healthy) Superfoods
tweet
email
25
By: Naturally Savvy
April 28, 2018
About Naturally Savvy
Follow Naturally Savvy at @naturallysavvy
by Andrea Donsky
There is a tendency to believe that superfoods must be costly because they are, well, super and trendy! These labels practically scream “expensive,” but the good news is, you can easily populate your plate with plenty of these nutrient dense foods without breaking into your piggy bank or opening your wallet wide.
These cheap superfoods can be found readily on supermarket shelves and farmer’s market stands.
1. Apples
Crisp apples always seem to be in season, and that’s a good thing since the adage “an apple a day” still seems to hold true.
Apples are an economical and nutritious snack, dessert, and even main course loaded with vitamins, minerals, and fiber. Since apples are heavily sprayed with pesticides, choose organic whenever possible.
If not, thoroughly wash and peel conventional apples. They are all a nutritional bargain. Check out some great apple recipes for dessert and other occasions.
2. Bananas
Both the organic and conventionally grown versions of this yellow fruit are highly affordable. Bananas are a great source of potassium, calcium, manganese, magnesium, iron, folate, niacin, riboflavin, and B6. They are very filling because they contain pectin, a soluble fiber that also helps reduce cholesterol levels.
Bananas are highly portable snacks but also are common ingredients in smoothies, cereal bowls, and who can forget banana muffins, banana bread, and banana pancakes! They can also help you fall asleep if you’re having trouble.
3. Berries
All berries are rich in potent antioxidants known as anthocyanins, but some berries are more costly than others.
Love This? Never Miss Another Story.
One way to keep costs low is to buy frozen berries when fresh are not in season. I suggest stocking up when they are in season and plentiful. You can freeze them and enjoy them year round in smoothies, muffins, fruit salads, as a cereal and yogurt topping, and all by themselves!
Hint: Frozen berries pop in your mouth and are a real tasty treat (my girls love to snack on them)!
4. Cabbage.
This cruciferous veggie was named the second most economical cooked vegetable per price of edible cup by the US Department of Agriculture (potatoes made number one).
Beyond economics, cabbage has shown promise in preventing some types of cancer (because of its sinigrin content) and type 2 diabetes, and it also is a good source of vitamins C and K as well as fiber.
Red cabbage offers unique antioxidant and anti-inflammatory properties. Saute cabbage or add it to soups, salads, stews, stir-fry, or make sauerkraut or kimchi (probiotic power foods).
5. Lentils
The high protein content of these pulses makes them a low-cost animal protein alternative.
Lentils save you time as well as money, because you don’t need to soak them first and they cook quickly. Along with protein, lentils provide fiber, iron, magnesium, zinc, and antioxidants.
Enjoy them alone with some herbs such as curry powder or cumin, mix with rice or other grains, or put into soups, chili, or stews.
6. Oats
You can hardly beat oats when it comes to being inexpensive, nutritious, easy to prepare, and versatile. The super ingredients in oats include beta-glucan fibers, which have been shown to help lower cholesterol.
Oats also provide calcium, protein, iron, and potassium. Select steel-cut or rolled oats when possible, and avoid instant products that have added sugars.
You can find oats recipes that take you from breakfast to desserts, breads and lunch ideas.
7. Red Beans
Of all the beans you can buy, red beans and red kidney beans are tops when it comes to antioxidant content.
Beans are not only inexpensive; they also are incredibly versatile. Enjoy these red wonders in chili, salads, soups, salsa, burritos, spreads, stews, and with rice or other grains.
They also can be the special ingredient in some surprise recipes, such as brownies.
8. Sunflower Seeds
How do you get the stellar nutrition and crunch of almonds and other nuts without the high cost? Sunflower seeds! Your heart and your wallet will be thankful for the healthy fats, vitamin E, copper, B vitamins, and fiber of sunflower seeds.
Another plus: essential fatty acids in the form of linoleic acid, which helps balance hormones, slow food absorption, and carry fat-soluble vitamins. Sunflower seeds are great for snacking, especially when you are on the go.
Keep some in your backpack, car, desk at the office, and in your kids’ lunches.
9. Sweet Potatoes
These highly affordable tubers are packed with fiber, beta-carotene and other carotenoids, vitamin C, iron, magnesium, vitamin B6, and potassium.
Sweet potatoes can help lower your blood pressure, support nervous system function, and benefit your vision. A diet high in carotenoids has been shown to help reduce the risk of cancer, including breast cancer.
Sweet potatoes are delicious baked, roasted, combined with apples and cinnamon, stir fry, toasted, and made into fries. And don’t forget sweet potato pie!
Republished with permission from Naturally Savvy.
Related at Care2
Prunes: The Low-Cost Superfood that Builds Strong Bones
6 Superfoods to Boost Your Health
8 Superfoods You Probably Aren’t Eating
Images via Thinkstock.
GREAT STORY, RIGHT?
Share it with your friends
tweet
email
CONNECT WITH US
Facebook 1.1 million followers
Twitter 560,000 followers
Pinterest 30,000 followers
Email Newsletter
EMAIL THE EDITORS
You Might Also Like
Georgia parents furious that teacher gave their 7-year-old a racist role in school play Georgia parents furious that teacher gave their 7-year-old a racist role in school play theGrio
This Stock is A Dividend Champ This Stock is A Dividend Champ TalkMarkets
After Reading This, You May Never Eat Avocados Again After Reading This, You May Never Eat Avocados Again
6 Simple Ways to Lose Belly Fat, Based on Science 6 Simple Ways to Lose Belly Fat, Based on Science
14 Things Compromising the Health of Your Vagina 14 Things Compromising the Health of Your Vagina
16 Prebiotic Foods to Eat Now 16 Prebiotic Foods to Eat Now
Recommended by
25 comments
Lisa M
Lisa M26 minutes ago
Thanks.
SEND
Lisa M
Lisa M26 minutes ago
Thanks.
SEND
Chrissie R
Chrissie R42 minutes ago
Let me know where you buy berries....where I live they sure aren't cheap!! :-(((((
SEND
Elizabeth H
Elizabeth Habout an hour ago
We eat all of the above.
SEND
Roro l
Roro labout an hour ago
Thank you.
SEND
Sherry Kohn
Sherry Kohn3 hours ago
Many thanks to you !
SEND
Past Member
Past Member 3 hours ago
Henderson Elizabeth
Dr joy is a trust worthy spell caster and he will be of great help to you. I never believed in spell casting but After 4 years of marriage my husband left me because I lost my womb, and i was unable to give birth to children. I felt like my life has come to an end, and i almost committed suicide, i was emotionally down for a very long time, but thanks to this spell caster called Dr joy whom i met online after my friend Becky Ross told me how he also helped her to bring back her husband in less than 2 days. I believed her and decided to give Dr joy a try and i contacted him on his email joylovespell@gmail.com. and explained my problems to him. He laughed and told me that In less than 2 days, my Husband will come back to me again, and that he will restore my womb and i will give birth to children. At first i thought it was a joke but i took courage and believed as Dr joy has said and it did happen just as this Great spell caster said, My husband called me and was crying, begging for forgiveness. I forgive him and today i am so glad that all worries and problems has gone away, and we are even happier than before, another good news is that i am pregnant now, and very soon we will have our baby. Dr joy is really a gifted and a powerful spiritual man and i will not stop publishing him because he is a wonderful man. I advice you all If you have a problem and you are looking for a real and genuine spell caster to solve all your problem
SEND
Danii P
Danii P4 hours ago
Thanks for sharing.
SEND
Chad A
Chad Anderson13 hours ago
Thank you!
SEND
Lenore K
Lenore K16 hours ago
ty
SEND
view all 25 comments
TOP STORIES
1
The Surprising Habit that Raises Your Blood Pressure and Causes Cancer
2
Trouble Sleeping in a New Place? This Might Be Why
3
How Quantum Physics Bridges Science and Spirituality
4
9 Magnesium-Rich Foods to Ease Anxiety
5
What Are the Health Effects of the Hops Phytoestrogen in Beer?
ads keep care2 free
learn more ▸
ads keep care2 free
learn more ▸
COMMUNITY SUCCESS!
Success! Bill Cosby Found Guilty of Sexual Assault
In a major victory for this Sexual Assault Awareness Month, Bill Cosby has finally been...
more
tweet
"The best way to predict the future is to create it!"
- Dennis Gabor
Start A Petition
Home
Start a Petition
Sign Petitions
Petition Successes
Care2 Causes
Healthy Living
Petition Help
Trending Petition Topics
Animal Rights
Children's Rights
Civil Rights
Corporate Accountability
Education
Environment
Health
Human Rights
International Development
LGBTQ Rights
Media, Arts, Culture
Politics
Reproductive Rights
Wildlife
Women's Rights
Our Promise: Welcome to Care2, the world's largest community for good. Here, you'll find over 45 million like-minded people working towards progress, kindness, and lasting impact.
Care2 Stands Against: bigots, bullies, science deniers, misogynists, gun lobbyists, xenophobes, the willfully ignorant, animal abusers, frackers, and other mean people. If you find yourself aligning with any of those folks, you can move along, nothing to see here.
Care2 Stands With: humanitarians, animal lovers, feminists, rabble-rousers, nature-buffs, creatives, the naturally curious, and people who really love to do the right thing.
You are our people. You Care. We Care2.
HomeAbout UsPartnershipsMedia InquiryPrivacy PolicyTerms of ServiceContact UsHelp
Copyright © 2018 Care2.com, inc. and its licensors.All rights reserved
site feedback
site feedback
log in / Join
Start A Petition
Sign Petition
CARE2 Home
healthy living
Food +Recipes
Health
Love + Sex
Green
News
Crafts
Ecards
Brands forGood
Nature
Pets
Spirit
Home
Life
Family
Beauty
causes & news
Success Stories
butterfly rewards
New to Care2? Start Here.
About Us
Care2 Team Blog
9 Cheap (And Super Healthy) Superfoods
9 Cheap (And Super Healthy) Superfoods
tweet
25
By: Naturally Savvy
April 28, 2018
About Naturally Savvy
Follow Naturally Savvy at @naturallysavvy
by Andrea Donsky
There is a tendency to believe that superfoods must be costly because they are, well, super and trendy! These labels practically scream “expensive,” but the good news is, you can easily populate your plate with plenty of these nutrient dense foods without breaking into your piggy bank or opening your wallet wide.
These cheap superfoods can be found readily on supermarket shelves and farmer’s market stands.
1. Apples
Crisp apples always seem to be in season, and that’s a good thing since the adage “an apple a day” still seems to hold true.
Apples are an economical and nutritious snack, dessert, and even main course loaded with vitamins, minerals, and fiber. Since apples are heavily sprayed with pesticides, choose organic whenever possible.
If not, thoroughly wash and peel conventional apples. They are all a nutritional bargain. Check out some great apple recipes for dessert and other occasions.
2. Bananas
Both the organic and conventionally grown versions of this yellow fruit are highly affordable. Bananas are a great source of potassium, calcium, manganese, magnesium, iron, folate, niacin, riboflavin, and B6. They are very filling because they contain pectin, a soluble fiber that also helps reduce cholesterol levels.
Bananas are highly portable snacks but also are common ingredients in smoothies, cereal bowls, and who can forget banana muffins, banana bread, and banana pancakes! They can also help you fall asleep if you’re having trouble.
3. Berries
All berries are rich in potent antioxidants known as anthocyanins, but some berries are more costly than others.
Love This? Never Miss Another Story.
One way to keep costs low is to buy frozen berries when fresh are not in season. I suggest stocking up when they are in season and plentiful. You can freeze them and enjoy them year round in smoothies, muffins, fruit salads, as a cereal and yogurt topping, and all by themselves!
Hint: Frozen berries pop in your mouth and are a real tasty treat (my girls love to snack on them)!
4. Cabbage.
This cruciferous veggie was named the second most economical cooked vegetable per price of edible cup by the US Department of Agriculture (potatoes made number one).
Beyond economics, cabbage has shown promise in preventing some types of cancer (because of its sinigrin content) and type 2 diabetes, and it also is a good source of vitamins C and K as well as fiber.
Red cabbage offers unique antioxidant and anti-inflammatory properties. Saute cabbage or add it to soups, salads, stews, stir-fry, or make sauerkraut or kimchi (probiotic power foods).
5. Lentils
The high protein content of these pulses makes them a low-cost animal protein alternative.
Lentils save you time as well as money, because you don’t need to soak them first and they cook quickly. Along with protein, lentils provide fiber, iron, magnesium, zinc, and antioxidants.
Enjoy them alone with some herbs such as curry powder or cumin, mix with rice or other grains, or put into soups, chili, or stews.
6. Oats
You can hardly beat oats when it comes to being inexpensive, nutritious, easy to prepare, and versatile. The super ingredients in oats include beta-glucan fibers, which have been shown to help lower cholesterol.
Oats also provide calcium, protein, iron, and potassium. Select steel-cut or rolled oats when possible, and avoid instant products that have added sugars.
You can find oats recipes that take you from breakfast to desserts, breads and lunch ideas.
7. Red Beans
Of all the beans you can buy, red beans and red kidney beans are tops when it comes to antioxidant content.
Beans are not only inexpensive; they also are incredibly versatile. Enjoy these red wonders in chili, salads, soups, salsa, burritos, spreads, stews, and with rice or other grains.
They also can be the special ingredient in some surprise recipes, such as brownies.
8. Sunflower Seeds
How do you get the stellar nutrition and crunch of almonds and other nuts without the high cost? Sunflower seeds! Your heart and your wallet will be thankful for the healthy fats, vitamin E, copper, B vitamins, and fiber of sunflower seeds.
Another plus: essential fatty acids in the form of linoleic acid, which helps balance hormones, slow food absorption, and carry fat-soluble vitamins. Sunflower seeds are great for snacking, especially when you are on the go.
Keep some in your backpack, car, desk at the office, and in your kids’ lunches.
9. Sweet Potatoes
These highly affordable tubers are packed with fiber, beta-carotene and other carotenoids, vitamin C, iron, magnesium, vitamin B6, and potassium.
Sweet potatoes can help lower your blood pressure, support nervous system function, and benefit your vision. A diet high in carotenoids has been shown to help reduce the risk of cancer, including breast cancer.
Sweet potatoes are delicious baked, roasted, combined with apples and cinnamon, stir fry, toasted, and made into fries. And don’t forget sweet potato pie!
Republished with permission from Naturally Savvy.
Related at Care2
Prunes: The Low-Cost Superfood that Builds Strong Bones
6 Superfoods to Boost Your Health
8 Superfoods You Probably Aren’t Eating
Images via Thinkstock.
GREAT STORY, RIGHT?
Share it with your friends
tweet
CONNECT WITH US
Facebook 1.1 million followers
Twitter 560,000 followers
Pinterest 30,000 followers
Email Newsletter
EMAIL THE EDITORS
You Might Also Like
Georgia parents furious that teacher gave their 7-year-old a racist role in school play Georgia parents furious that teacher gave their 7-year-old a racist role in school play theGrio
This Stock is A Dividend Champ This Stock is A Dividend Champ TalkMarkets
After Reading This, You May Never Eat Avocados Again After Reading This, You May Never Eat Avocados Again
6 Simple Ways to Lose Belly Fat, Based on Science 6 Simple Ways to Lose Belly Fat, Based on Science
14 Things Compromising the Health of Your Vagina 14 Things Compromising the Health of Your Vagina
16 Prebiotic Foods to Eat Now 16 Prebiotic Foods to Eat Now
Recommended by
25 comments
Lisa M
Lisa M26 minutes ago
Thanks.
SEND
Lisa M
Lisa M26 minutes ago
Thanks.
SEND
Chrissie R
Chrissie R42 minutes ago
Let me know where you buy berries....where I live they sure aren't cheap!! :-(((((
SEND
Elizabeth H
Elizabeth Habout an hour ago
We eat all of the above.
SEND
Roro l
Roro labout an hour ago
Thank you.
SEND
Sherry Kohn
Sherry Kohn3 hours ago
Many thanks to you !
SEND
Past Member
Past Member 3 hours ago
Henderson Elizabeth
Dr joy is a trust worthy spell caster and he will be of great help to you. I never believed in spell casting but After 4 years of marriage my husband left me because I lost my womb, and i was unable to give birth to children. I felt like my life has come to an end, and i almost committed suicide, i was emotionally down for a very long time, but thanks to this spell caster called Dr joy whom i met online after my friend Becky Ross told me how he also helped her to bring back her husband in less than 2 days. I believed her and decided to give Dr joy a try and i contacted him on his email joylovespell@gmail.com. and explained my problems to him. He laughed and told me that In less than 2 days, my Husband will come back to me again, and that he will restore my womb and i will give birth to children. At first i thought it was a joke but i took courage and believed as Dr joy has said and it did happen just as this Great spell caster said, My husband called me and was crying, begging for forgiveness. I forgive him and today i am so glad that all worries and problems has gone away, and we are even happier than before, another good news is that i am pregnant now, and very soon we will have our baby. Dr joy is really a gifted and a powerful spiritual man and i will not stop publishing him because he is a wonderful man. I advice you all If you have a problem and you are looking for a real and genuine spell caster to solve all your problem
SEND
Danii P
Danii P4 hours ago
Thanks for sharing.
SEND
Chad A
Chad Anderson13 hours ago
Thank you!
SEND
Lenore K
Lenore K16 hours ago
ty
SEND
view all 25 comments
TOP STORIES
1
The Surprising Habit that Raises Your Blood Pressure and Causes Cancer
2
Trouble Sleeping in a New Place? This Might Be Why
3
How Quantum Physics Bridges Science and Spirituality
4
9 Magnesium-Rich Foods to Ease Anxiety
5
What Are the Health Effects of the Hops Phytoestrogen in Beer?
ads keep care2 free
learn more ▸
ads keep care2 free
learn more ▸
COMMUNITY SUCCESS!
Success! Bill Cosby Found Guilty of Sexual Assault
In a major victory for this Sexual Assault Awareness Month, Bill Cosby has finally been...
more
tweet
"The best way to predict the future is to create it!"
- Dennis Gabor
Start A Petition
Home
Start a Petition
Sign Petitions
Petition Successes
Care2 Causes
Healthy Living
Petition Help
Trending Petition Topics
Animal Rights
Children's Rights
Civil Rights
Corporate Accountability
Education
Environment
Health
Human Rights
International Development
LGBTQ Rights
Media, Arts, Culture
Politics
Reproductive Rights
Wildlife
Women's Rights
Our Promise: Welcome to Care2, the world's largest community for good. Here, you'll find over 45 million like-minded people working towards progress, kindness, and lasting impact.
Care2 Stands Against: bigots, bullies, science deniers, misogynists, gun lobbyists, xenophobes, the willfully ignorant, animal abusers, frackers, and other mean people. If you find yourself aligning with any of those folks, you can move along, nothing to see here.
Care2 Stands With: humanitarians, animal lovers, feminists, rabble-rousers, nature-buffs, creatives, the naturally curious, and people who really love to do the right thing.
You are our people. You Care. We Care2.
HomeAbout UsPartnershipsMedia InquiryPrivacy PolicyTerms of ServiceContact UsHelp
Copyright © 2018 Care2.com, inc. and its licensors.All rights reserved
site feedback
site feedback
log in / Join
Start A Petition
Sign Petition
CARE2 Home
healthy living
Food +Recipes
Health
Love + Sex
Green
News
Crafts
Ecards
Brands forGood
Nature
Pets
Spirit
Home
Life
Family
Beauty
causes & news
Success Stories
butterfly rewards
New to Care2? Start Here.
About Us
Care2 Team Blog
Leverage Apostle Kojo Safo Kantanka's Many Gifts To Make The 'Ghana Beyond Aid' A Reality In The Shortest Possible Timeframe
Such is the quality of leadership it is blessed with, there is no question that had Apostle Kojo Safo Kantanka been born in the United Arab Emirates (UAE) - with the same inventive and disciplined mind he has - today, he would be running class-leading natural pesticide and natural growth-enhancing soil-additive producing manufacturing giants, supplying organic farming inputs to organic farmers in all five continents of humankind's one biosphere.
It never ceases to amaze me that our nation's leaders still fail to see the potential to turn Ghana into the world's leading producer of organic fruits and vegetables, as well as the world's leading producer of organic cocoa beans, by leveraging some of the polymath Apostle Kojo Safo Kantanka's many gifts.
Nothing can justify continuing to ignore a brilliant and truly unique mind responsible for making it possible for Ghana to produce self-charging electric vehicles - the global automobile industry's holy grail. Not when purchasing his self-charging electric saloon cars, pick-up trucks and 4x4 vehicles will dramatically reduce public expenditure: by eliminating the cash component used to fuel state-owned vehicle fleets across the nation from our country's annual budget allocations to public-sector entities.
And would public health in our country not improve dramatically, if henceforth Ghanaians could purchase organically produced fruits, vegetables and other locally grown foodstuffs across the nation - because Apostle Kojo Safo Kantanka's natural pesticides and natural growth-enhancing soil-additives were the only such imputs allowed for use in farming in Ghana: because the state had partnered him to set up factories for that purpose across Ghana, in sundry public private partnership (PPP) 1-district-1-factory agreements?
Food for thought for Ghana's minister for food and agriculture: Japan recently rejected a batch of cocoa beans imported from Ghana because they had unacceptable levels of chemical residue - including heavy metals. Again. Those who have been tasked by President Akufo-Addo to grow the cocoa sector must look to collaborating with Apostle Kojo Safo Kantanka to protect Ghana's cocoa industry's future. In that regard, they must be as bold, innovative, dynamic and far-sighted as the UAE's brilliant leaders. Simply put, our nation can no longer afford to ignore the many gifts of Apostle Kojo Safo Kantanka - which ought to be leveraged to make the goal of a 'Ghana beyond aid' a reality in the shortest possible timeframe.
It never ceases to amaze me that our nation's leaders still fail to see the potential to turn Ghana into the world's leading producer of organic fruits and vegetables, as well as the world's leading producer of organic cocoa beans, by leveraging some of the polymath Apostle Kojo Safo Kantanka's many gifts.
Nothing can justify continuing to ignore a brilliant and truly unique mind responsible for making it possible for Ghana to produce self-charging electric vehicles - the global automobile industry's holy grail. Not when purchasing his self-charging electric saloon cars, pick-up trucks and 4x4 vehicles will dramatically reduce public expenditure: by eliminating the cash component used to fuel state-owned vehicle fleets across the nation from our country's annual budget allocations to public-sector entities.
And would public health in our country not improve dramatically, if henceforth Ghanaians could purchase organically produced fruits, vegetables and other locally grown foodstuffs across the nation - because Apostle Kojo Safo Kantanka's natural pesticides and natural growth-enhancing soil-additives were the only such imputs allowed for use in farming in Ghana: because the state had partnered him to set up factories for that purpose across Ghana, in sundry public private partnership (PPP) 1-district-1-factory agreements?
Food for thought for Ghana's minister for food and agriculture: Japan recently rejected a batch of cocoa beans imported from Ghana because they had unacceptable levels of chemical residue - including heavy metals. Again. Those who have been tasked by President Akufo-Addo to grow the cocoa sector must look to collaborating with Apostle Kojo Safo Kantanka to protect Ghana's cocoa industry's future. In that regard, they must be as bold, innovative, dynamic and far-sighted as the UAE's brilliant leaders. Simply put, our nation can no longer afford to ignore the many gifts of Apostle Kojo Safo Kantanka - which ought to be leveraged to make the goal of a 'Ghana beyond aid' a reality in the shortest possible timeframe.
Bank of England's Fintech Hub: Why we are interested in how technology is changing financial services
Bank of England
Fintech Hub
Our work on fintech is wide ranging and looks at how technology is changing financial services.
Related links
Fintech proofs-of-concept
Digital Currencies
Why we are interested in how technology is changing financial services
Developments in financial technologies, such as artificial intelligence (AI) and distributed ledger technology (DLT), have the potential to fundamentally change the way businesses can provide – and consumers can use – financial services.
In his speech on The Promise of Fintech our Governor, Mark Carney, said “there are clear prospects for new financial technologies to make the financial system more efficient, effective and resilient.”
We take a keen interest in exploring how innovation and developments in fintech might support our mission to promote the good of the people of the UK by maintaining monetary and financial stability.
In particular, we seek to understand what fintech means for the stability of the financial system, the safety and soundness of financial firms, and our ability to perform our operational and regulatory roles.
Scales
Understanding how fintech developments may affect systemic stability.
Padlock
Understanding how fintech developments may affect the safety and soundness of firms.
bank
Applying fintech, where appropriate, to enhance our capabilities.
Our Fintech Hub brings together all of our work in this area. Sir Dave Ramsden, our Deputy Governor for Markets and Banking, spoke about the importance of being open to fintech when he launched the hub.
If you would like to get in touch, you can reach us at fintech@bankofengland.co.uk
You can also find out more about our related work on digital currencies.
Working with fintech firms
We started our proofs-of-concept programme in 2016 under our Fintech Accelerator project. We will continue to work with businesses on fintech proofs-of-concept on occasions when it might help us to meet our mission.
Find out about the proofs-of-concept we have worked on.
Fintech firms offering financial services in the UK
If you are a fintech firm thinking of providing financial services in the UK, you may need to be regulated.
The Bank of England is responsible for supervising financial firms such as banks, building societies, credit unions, major investment firms and insurers. And we provide information and support for businesses that are thinking of setting up a new bank in the UK.
We also supervise financial market infrastructure and we act as settlement agent for payment systems.
Financial services in the UK are also regulated by the Financial Conduct Authority and UK payment systems are also regulated by the Payment Systems Regulator.
Fintech publications and speeches
// Speech // Dave Ramsden
Dave Ramsden
22 March 2018
The Bank of England - Open to Fintech - speech...
// Speech // Mark Carney
Mark Carney
02 March 2018
The Future of Money - speech by Mark Carney
// Speech // Jon Cunliffe
Jon Cunliffe
26 February 2018
Looking after our money - speech by Jon Cunliffe
// Prudential Regulation // Consultation paper
CP5/18 - Algorithmic trading
12 February 2018
Algorithmic trading
View more
Back to top
This page was last updated 11 April 2018
Was this page useful?
Yes
No
What did you think of this page?
Add your details...
logo-boe
Follow us
Follow us on Twitter
Connect with us on LinkedIn
Watch us on Youtube
Add us on Facebook
Find us on Flickr
Museum
Follow us on Twitter
Follow us on Instagram
Add us on Facebook
Browse topics
Banknotes
Financial stability
Gold
Markets
Monetary policy
Payments
Prudential regulation
Research
Statistics
Useful links
Subscribe to emails
FAQs
Careers
Freedom of Information
CCBS
The Archive
Legal
Privacy
Sitemap
Cymraeg
Visiting the bank
Threadneedle Street, London, EC2R 8AH
Switchboard: +44(0)20 3461 4444
Enquiries: +44(0)20 3461 4878
Visiting the museum
Bartholomew Lane, London, EC2R 8AH
Visit Museum Website
©2018 Bank of England
Fintech Hub
Our work on fintech is wide ranging and looks at how technology is changing financial services.
Related links
Fintech proofs-of-concept
Digital Currencies
Why we are interested in how technology is changing financial services
Developments in financial technologies, such as artificial intelligence (AI) and distributed ledger technology (DLT), have the potential to fundamentally change the way businesses can provide – and consumers can use – financial services.
In his speech on The Promise of Fintech our Governor, Mark Carney, said “there are clear prospects for new financial technologies to make the financial system more efficient, effective and resilient.”
We take a keen interest in exploring how innovation and developments in fintech might support our mission to promote the good of the people of the UK by maintaining monetary and financial stability.
In particular, we seek to understand what fintech means for the stability of the financial system, the safety and soundness of financial firms, and our ability to perform our operational and regulatory roles.
Scales
Understanding how fintech developments may affect systemic stability.
Padlock
Understanding how fintech developments may affect the safety and soundness of firms.
bank
Applying fintech, where appropriate, to enhance our capabilities.
Our Fintech Hub brings together all of our work in this area. Sir Dave Ramsden, our Deputy Governor for Markets and Banking, spoke about the importance of being open to fintech when he launched the hub.
If you would like to get in touch, you can reach us at fintech@bankofengland.co.uk
You can also find out more about our related work on digital currencies.
Working with fintech firms
We started our proofs-of-concept programme in 2016 under our Fintech Accelerator project. We will continue to work with businesses on fintech proofs-of-concept on occasions when it might help us to meet our mission.
Find out about the proofs-of-concept we have worked on.
Fintech firms offering financial services in the UK
If you are a fintech firm thinking of providing financial services in the UK, you may need to be regulated.
The Bank of England is responsible for supervising financial firms such as banks, building societies, credit unions, major investment firms and insurers. And we provide information and support for businesses that are thinking of setting up a new bank in the UK.
We also supervise financial market infrastructure and we act as settlement agent for payment systems.
Financial services in the UK are also regulated by the Financial Conduct Authority and UK payment systems are also regulated by the Payment Systems Regulator.
Fintech publications and speeches
// Speech // Dave Ramsden
Dave Ramsden
22 March 2018
The Bank of England - Open to Fintech - speech...
// Speech // Mark Carney
Mark Carney
02 March 2018
The Future of Money - speech by Mark Carney
// Speech // Jon Cunliffe
Jon Cunliffe
26 February 2018
Looking after our money - speech by Jon Cunliffe
// Prudential Regulation // Consultation paper
CP5/18 - Algorithmic trading
12 February 2018
Algorithmic trading
View more
Back to top
This page was last updated 11 April 2018
Was this page useful?
Yes
No
What did you think of this page?
Add your details...
logo-boe
Follow us
Follow us on Twitter
Connect with us on LinkedIn
Watch us on Youtube
Add us on Facebook
Find us on Flickr
Museum
Follow us on Twitter
Follow us on Instagram
Add us on Facebook
Browse topics
Banknotes
Financial stability
Gold
Markets
Monetary policy
Payments
Prudential regulation
Research
Statistics
Useful links
Subscribe to emails
FAQs
Careers
Freedom of Information
CCBS
The Archive
Legal
Privacy
Sitemap
Cymraeg
Visiting the bank
Threadneedle Street, London, EC2R 8AH
Switchboard: +44(0)20 3461 4444
Enquiries: +44(0)20 3461 4878
Visiting the museum
Bartholomew Lane, London, EC2R 8AH
Visit Museum Website
©2018 Bank of England
FT Alphaville Guest Post/Tony Yates: The consequences of allowing a cryptocurrency takeover, or trying to head one off
FT Alphaville
myFT
Guest post
The consequences of allowing a cryptocurrency takeover, or trying to head one off
Twitter
Facebook
LinkedIn
Print this page
33
June 7, 2017
By: Guest writer
In this guest post, economics professor and former Bank of England economist Tony Yates talks about the potential for “cryptocurrencies” to compete with government-backed money, and what central banks can do about it.
The total value of all cryptocurrency in circulation is now almost $100bn. This is roughly double what it was just a few months ago, but it’s still tiny compared to the face value of paper dollars issued by the Federal Reserve, which alone amount to about $1.4trn. We are therefore nowhere near the point yet where cryptocurrencies pose a credible threat of supplanting central-bank-issued money.
Nevertheless, it’s worth thinking through some of the implications if something like Bitcoin (which has about a 45 per cent market share) were to wholly or even partially supplant central bank fiat currency. Not least because central banks themselves are thinking about it out loud, and wondering what they might do to avoid being usurped in this way.
The agreed protocols that govern Bitcoin are effectively its monetary policy. In exchange for expending computing power to verify the legitimacy of transactions and record them, Bitcoin “miners” get paid in Bitcoin. (This is roughly analogous to seigniorage income.) These rewards increase the supply of Bitcoin, but the growth of the Bitcoin money supply is constrained by the increasing difficulty of verifying transactions. More and more computing power is needed to verify each transaction and create new Bitcoin, which means that the total supply gradually approaches its limit of about 21 million. (There are currently just under 16.5 million in circulation.)
Our fiat money has its own protocols that give rise to a different monetary policy: appoint a bunch of clever people and tell them to stabilise inflation using interest rates and bond-buying. The money supply that results from all this is generally ignored.
A strand of monetary nostalgia likes the fixed money supply rule of Bitcoin, which sort of resembles the classical gold standard. But most economists and central bankers long since left this view behind. As David Andolfatto crisply points out, a money supply rule that does not respond to shifts in money demand generates large fluctuations in prices. And since society tends not to tolerate outright declines in wages, these fluctuations often carry over into unemployment.
Some argue this is precisely what will prevent Bitcoin and other cryptocurrencies from taking over. Fluctuations in demand for Bitcoin and its competitors, in the face of relatively fixed supply, cause wild swings in the price. We seem to be living through one right now. This makes Bitcoin impractical as a money. Cryptocurrencies provide a belt and braces alternative to traditional reserve currencies such as the dollar in places with poor monetary policy and weak banks, but their role may develop no further than that.
The adoption of Bitcoin and similar as money would have other disadvantages.
Cryptocurrencies are borderless. That is, their usefulness derives from a set of agreements struck by participants who aren’t confined to any one state. This might be good insofar as it could facilitate greater trade and capital flows, but from a monetary policy perspective, the Bitcoin ‘area’ is not likely to be an ‘optimal’ currency area. Without a state directing fiscal transfers to make up for the inability to adjust exchange rates within the area, the result is going to be a monetary policy consistently too tight and too loose for different groups at different times, as the euro area has spent the last 16 years figuring out.
Further, a partial adjustment by one set of users in the world will have spillovers to everyone else. The more amplified boom and bust that a gold-standard like cryptomonetary policy would imply for its users would disturb the business cycles of its neighbours. Central banks and fiscal authorities controlling the non-Bitcoin areas would have to work their levers harder to stabilize their economies.
In principle, you could imagine Bitcoin or other currencies changing the protocols so that monetary policy improved, but it seems vanishingly unlikely.
You’d need an agreement somehow that the verification rewards for miners depended on the state of the economy in the same way that central bank interest rates are flexible according to conditions. And this could not be hard-coded, any more than central banks could hard-code interest rate policy. (There is a reason so many central bankers object to the #AudittheFed idea of binding interest rates to the Taylor Rule.) You’d need some kind of standing committee appointed by the diffuse network of Bitcoiners. That centralised model is the opposite of what cryptocurrencies are supposed to be about.
Central banks could simply step in and offer their own digital currency, to pre-empt a Bitcoin takeover. There is such a thing already, of course. It’s what happens whenever central banks buy assets by creating bank reserves. It’s all just digital entries on a spreadsheet. Creating central bank “digital currency” simply means offering existing digital account services to a wider group of entities. Central bank speeches thinking through this idea have been given by Ben Broadbent and Andy Haldane at the Bank of England and Jon Nicolaisen at the Norges Bank.
There are other reasons for central banks to offer these services to the broader public, especially if digital central bank money came to replace physical money. It would help combat tax evasion and illegal economic activity, which Ken Rogoff dubbed the ‘Curse of Cash’ in his book by that title. Digital money replacing cash would also make it easier for central banks to lower interest rates far below zero per cent, as Buiter, Haldane, Kimball and others have explained. Investors would have no cash to run to.
As Broadbent explains, offering these accounts might well disintermediate retail banks, as depositors pull their money out of banks and opt for central bank accounts instead. This would be an implementation of something similar to the ‘Chicago plan’ for narrow banks by accident. The central bank would become the ‘narrow bank’, backing deposits with government securities. Private-sector lenders would have to fund themselves with non-deposit debt and equity.
There might be intermediate outcomes too, where banks are not entirely eliminated, but instead grow and shrink as credit risk waxes and wanes and people move between the central and private banks. All this might increase the amplitude of the business cycle — exactly what central banks would be trying to avoid by stopping the spread of bad Bitcoin monetary policy.
If any one country went down this route — to avoid the unpleasant consequences for monetary policy of a Bitcoin takeover — it would likely have spillovers for others. For starters, a larger credit cycle in one country means larger booms and busts for its trading partners.
Beyond that, foreigners outside the digital central banking country might desert their own banks and deposit directly with the foreign central bank, or indirectly via some local intermediary. The increased ease of shifting deposits into a safe foreign asset might exacerbate the flows of capital in and out according to changing perceptions of the health of the domestic banking system, amplifying the credit cycle in their home country.
In the financial crisis, capital flight from the most afflicted countries was limited by the difficulty and inconvenience of getting hold of and managing cash and by the state of banks in alternative countries. Direct or indirect access to foreign digital money would have none of these drawbacks and potentially facilitate periodic flights to safety.
These problems would be avoided if all monetary authorities acted in concert. But global central banks presenting a common front on anything is historically very unusual.
The latest difficulties with Bitcoin make the prospect of a crypto currency takeover seem fanciful at the moment. But if solutions to these problems were found, or a new currency were devised with better protocols, central banks will have to resolve these dilemmas one way or another.
Tony Yates is Professor of Economics at the University of Birmingham. He was Reader in Economcis at Bristol for 2 years and before that worked at the Bank of England for 20 years in the directorate devoted to monetary policy.
Copyright The Financial Times Limited 2018. All rights reserved. You may share using our article tools. Please don't cut articles from FT.com and redistribute by email or post to the web.
Twitter
Facebook
LinkedIn
Print this page
33
Read next:
Part of the Thought for the weekend series
Thoughts for the weekend
Thoughts for the weekend
Featuring Tesla, Reinhart and Mountbatten.
1
April 27, 2018
By: FT Alphaville
Financial Times
Search Alphaville
Back to FT.com
Top sections
FTAV Home
Markets Live
Long Room
Alphachat
Meet the Team
About FTAV
About Markets Live
RSS service
Get in touch
Filter by ...
Most popular
Most commented
Filter by topic
Filter by author
Izabella Kaminska
Alexandra Scaggs
Bryce Elder
Dan McCrum
Jamie Powell
Jemima Kelly
Paul Murphy
Thomas Hale
Sign out
My Account
Support
Help Centre
About Us
Legal & Privacy
Terms & Conditions
Privacy
Cookies
Copyright
Slavery Statement
Services
Conferences & Events
Individual Subscriptions
Group Subscriptions
Republishing
Contracts & Tenders
Analysts Research
Executive Job Search
Advertise with the FT
Follow the FT on Twitter
Ebooks
Tools
Portfolio
ePaper
Alerts Hub
Lexicon
MBA Rankings
Economic Calendar
News feed
Newsletters
Currency Converter
More from the FT Group
Markets data delayed by at least 15 minutes. © THE FINANCIAL TIMES LTD . FT and ‘Financial Times’ are trademarks of The Financial Times Ltd.
The Financial Times and its journalism are subject to a self-regulation regime under the FT Editorial Code of Practice.
myFT
Guest post
The consequences of allowing a cryptocurrency takeover, or trying to head one off
Print this page
33
June 7, 2017
By: Guest writer
In this guest post, economics professor and former Bank of England economist Tony Yates talks about the potential for “cryptocurrencies” to compete with government-backed money, and what central banks can do about it.
The total value of all cryptocurrency in circulation is now almost $100bn. This is roughly double what it was just a few months ago, but it’s still tiny compared to the face value of paper dollars issued by the Federal Reserve, which alone amount to about $1.4trn. We are therefore nowhere near the point yet where cryptocurrencies pose a credible threat of supplanting central-bank-issued money.
Nevertheless, it’s worth thinking through some of the implications if something like Bitcoin (which has about a 45 per cent market share) were to wholly or even partially supplant central bank fiat currency. Not least because central banks themselves are thinking about it out loud, and wondering what they might do to avoid being usurped in this way.
The agreed protocols that govern Bitcoin are effectively its monetary policy. In exchange for expending computing power to verify the legitimacy of transactions and record them, Bitcoin “miners” get paid in Bitcoin. (This is roughly analogous to seigniorage income.) These rewards increase the supply of Bitcoin, but the growth of the Bitcoin money supply is constrained by the increasing difficulty of verifying transactions. More and more computing power is needed to verify each transaction and create new Bitcoin, which means that the total supply gradually approaches its limit of about 21 million. (There are currently just under 16.5 million in circulation.)
Our fiat money has its own protocols that give rise to a different monetary policy: appoint a bunch of clever people and tell them to stabilise inflation using interest rates and bond-buying. The money supply that results from all this is generally ignored.
A strand of monetary nostalgia likes the fixed money supply rule of Bitcoin, which sort of resembles the classical gold standard. But most economists and central bankers long since left this view behind. As David Andolfatto crisply points out, a money supply rule that does not respond to shifts in money demand generates large fluctuations in prices. And since society tends not to tolerate outright declines in wages, these fluctuations often carry over into unemployment.
Some argue this is precisely what will prevent Bitcoin and other cryptocurrencies from taking over. Fluctuations in demand for Bitcoin and its competitors, in the face of relatively fixed supply, cause wild swings in the price. We seem to be living through one right now. This makes Bitcoin impractical as a money. Cryptocurrencies provide a belt and braces alternative to traditional reserve currencies such as the dollar in places with poor monetary policy and weak banks, but their role may develop no further than that.
The adoption of Bitcoin and similar as money would have other disadvantages.
Cryptocurrencies are borderless. That is, their usefulness derives from a set of agreements struck by participants who aren’t confined to any one state. This might be good insofar as it could facilitate greater trade and capital flows, but from a monetary policy perspective, the Bitcoin ‘area’ is not likely to be an ‘optimal’ currency area. Without a state directing fiscal transfers to make up for the inability to adjust exchange rates within the area, the result is going to be a monetary policy consistently too tight and too loose for different groups at different times, as the euro area has spent the last 16 years figuring out.
Further, a partial adjustment by one set of users in the world will have spillovers to everyone else. The more amplified boom and bust that a gold-standard like cryptomonetary policy would imply for its users would disturb the business cycles of its neighbours. Central banks and fiscal authorities controlling the non-Bitcoin areas would have to work their levers harder to stabilize their economies.
In principle, you could imagine Bitcoin or other currencies changing the protocols so that monetary policy improved, but it seems vanishingly unlikely.
You’d need an agreement somehow that the verification rewards for miners depended on the state of the economy in the same way that central bank interest rates are flexible according to conditions. And this could not be hard-coded, any more than central banks could hard-code interest rate policy. (There is a reason so many central bankers object to the #AudittheFed idea of binding interest rates to the Taylor Rule.) You’d need some kind of standing committee appointed by the diffuse network of Bitcoiners. That centralised model is the opposite of what cryptocurrencies are supposed to be about.
Central banks could simply step in and offer their own digital currency, to pre-empt a Bitcoin takeover. There is such a thing already, of course. It’s what happens whenever central banks buy assets by creating bank reserves. It’s all just digital entries on a spreadsheet. Creating central bank “digital currency” simply means offering existing digital account services to a wider group of entities. Central bank speeches thinking through this idea have been given by Ben Broadbent and Andy Haldane at the Bank of England and Jon Nicolaisen at the Norges Bank.
There are other reasons for central banks to offer these services to the broader public, especially if digital central bank money came to replace physical money. It would help combat tax evasion and illegal economic activity, which Ken Rogoff dubbed the ‘Curse of Cash’ in his book by that title. Digital money replacing cash would also make it easier for central banks to lower interest rates far below zero per cent, as Buiter, Haldane, Kimball and others have explained. Investors would have no cash to run to.
As Broadbent explains, offering these accounts might well disintermediate retail banks, as depositors pull their money out of banks and opt for central bank accounts instead. This would be an implementation of something similar to the ‘Chicago plan’ for narrow banks by accident. The central bank would become the ‘narrow bank’, backing deposits with government securities. Private-sector lenders would have to fund themselves with non-deposit debt and equity.
There might be intermediate outcomes too, where banks are not entirely eliminated, but instead grow and shrink as credit risk waxes and wanes and people move between the central and private banks. All this might increase the amplitude of the business cycle — exactly what central banks would be trying to avoid by stopping the spread of bad Bitcoin monetary policy.
If any one country went down this route — to avoid the unpleasant consequences for monetary policy of a Bitcoin takeover — it would likely have spillovers for others. For starters, a larger credit cycle in one country means larger booms and busts for its trading partners.
Beyond that, foreigners outside the digital central banking country might desert their own banks and deposit directly with the foreign central bank, or indirectly via some local intermediary. The increased ease of shifting deposits into a safe foreign asset might exacerbate the flows of capital in and out according to changing perceptions of the health of the domestic banking system, amplifying the credit cycle in their home country.
In the financial crisis, capital flight from the most afflicted countries was limited by the difficulty and inconvenience of getting hold of and managing cash and by the state of banks in alternative countries. Direct or indirect access to foreign digital money would have none of these drawbacks and potentially facilitate periodic flights to safety.
These problems would be avoided if all monetary authorities acted in concert. But global central banks presenting a common front on anything is historically very unusual.
The latest difficulties with Bitcoin make the prospect of a crypto currency takeover seem fanciful at the moment. But if solutions to these problems were found, or a new currency were devised with better protocols, central banks will have to resolve these dilemmas one way or another.
Tony Yates is Professor of Economics at the University of Birmingham. He was Reader in Economcis at Bristol for 2 years and before that worked at the Bank of England for 20 years in the directorate devoted to monetary policy.
Copyright The Financial Times Limited 2018. All rights reserved. You may share using our article tools. Please don't cut articles from FT.com and redistribute by email or post to the web.
Print this page
33
Read next:
Part of the Thought for the weekend series
Thoughts for the weekend
Thoughts for the weekend
Featuring Tesla, Reinhart and Mountbatten.
1
April 27, 2018
By: FT Alphaville
Financial Times
Search Alphaville
Back to FT.com
Top sections
FTAV Home
Markets Live
Long Room
Alphachat
Meet the Team
About FTAV
About Markets Live
RSS service
Get in touch
Filter by ...
Most popular
Most commented
Filter by topic
Filter by author
Izabella Kaminska
Alexandra Scaggs
Bryce Elder
Dan McCrum
Jamie Powell
Jemima Kelly
Paul Murphy
Thomas Hale
Sign out
My Account
Support
Help Centre
About Us
Legal & Privacy
Terms & Conditions
Privacy
Cookies
Copyright
Slavery Statement
Services
Conferences & Events
Individual Subscriptions
Group Subscriptions
Republishing
Contracts & Tenders
Analysts Research
Executive Job Search
Advertise with the FT
Follow the FT on Twitter
Ebooks
Tools
Portfolio
ePaper
Alerts Hub
Lexicon
MBA Rankings
Economic Calendar
News feed
Newsletters
Currency Converter
More from the FT Group
Markets data delayed by at least 15 minutes. © THE FINANCIAL TIMES LTD . FT and ‘Financial Times’ are trademarks of The Financial Times Ltd.
The Financial Times and its journalism are subject to a self-regulation regime under the FT Editorial Code of Practice.
Norges Bank/Jon Nicolaisen: What should the future form of our money be?
Norges Bank
Speech
What should the future form of our money be?
Speech by Deputy Governor Jon Nicolaisen at the Norwegian Academy of Science and Letters, 25 April 2017.
Please note that the text below may differ slightly from the actual presentation.
Origins of the central bank
The Dutch financier Johan Palmstruch arrived in Stockholm in 1647. Some ten years later, he was granted permission to open a private bank, Stockholms Banco, where he combined two important innovations. The first of these, pioneered by Palmstruch, was to use customer deposits to fund lending. The second utilised Johannes Gutenberg’s invention, the printing press, to print the first European banknotes.
Stockholms Banco was authorised to issue banknotes backed by the copper and silver coins in use at the time. Coins could be deposited at the bank in return for banknotes, and banknotes could be exchanged for copper and silver at the bank. The banknotes proved to be popular and were soon in circulation.
Stockholm Banco also offered loans in the form of banknotes. For the Swedish king, Karl Gustav, this occurred at a convenient time. Wars were in progress that had to be financed, and a bank that would offer loans was like manna from heaven. King Karl Gustav made good use of the money. Sweden’s victory over Denmark-Norway in the 1658 Dano-Swedish War, leading to the permanent cession to Sweden of the strategically and historically important territory of Båhuslen in southeastern Norway, was thus at least partly the result of a financial innovation.
Things did not end well for Johan Palmstruch. There were no rules to limit the loans that could be issued by the bank, and Stockholms Banco’s loans far outstripped the value of the copper and silver held by the bank. Confidence in the banknotes began to evaporate, and their value fell. Demand to redeem the banknotes for copper and silver was high, but Stockholms Banco did not have enough metal to meet the demand, and Sweden experienced its first banking crisis. The bank was declared bankrupt and was liquidated. Johan Palmstruch was sentenced to death for irresponsible accounting. The death sentence was subsequently commuted, but Palmstruch had to spend the rest of his life in prison.
Nonetheless, the Stockholms Banco crisis left a permanent legacy: in 1668, the authority to conduct banking operations was transferred to a bank that was later to become the Riksbank, under the direct control of the Swedish parliament, Riksdagen.[1] The world’s first central bank was born.[2]
What is money?
So what is money exactly? The simple answer is that money is a means of payment. It is also a universally recognised common unit of account. Money has therefore a key role in all financial transactions – it is a practical means of assigning value to goods and services and of settling trades.
To perform these functions, money must have a fairly stable value. People will only accept money as payment if they believe it can be used again as a method of payment in the future. Money must therefore also function as a store of value.
The first coins to be struck, imprinted with the king’s mark as a guarantee of their weight, were produced in Lydia almost 2500 years ago – with the reverse bearing the mark of King Croesus. Since then, coins in a variety of metals have been widely used. The currency of Norway was directly linked to a metal for centuries, until the gold standard was abandoned in 1931.
Wealth in the form of silver and gold coins can – literally – be a heavy burden. The emergence of banknotes that could be exchanged for a specific monetary value in metal made it easier to manage large sums of money. A banknote is in reality a promissory note – an interest-free claim on the issuer. Its value depends on trust that the issuer will keep his word and that the banknote proves to have the promised value.
The issue of banknotes by private entities was a fundamentally unstable system. The solution was to establish central banks in order to build abiding trust in the currency. The Swedish central bank, the Riksbank, the first central bank in history, was founded because the issue of banknotes by a private bank – Stockholms Banco – led to a banking crisis. The origins of the US Federal Reserve are similar: during the so-called “free banking” era, private banks could issue their own banknotes in various denominations. However, the banks experienced repeated crises, and in 1913, the Federal Reserve was established to stabilise the private banking system.
In the post-war years, the value of western currencies was pegged to gold under the Bretton Woods system: an ounce of gold was worth USD 35. All the other member countries – including Norway – agreed to peg their currencies at a fixed rate to the US dollar. The gold standard was abandoned by President Nixon during the Vietnam War, and the traditional fixed exchange rate system was terminated in 1971.
The value of money is no longer linked to precious metals. Today, money is so-called fiat money. The term derives from the Latin “fiat”, meaning “let it become”.
In his book Sapiens – A Brief History of Humankind, Yuval Noah Harari writes: “Trust is the raw material from which all types of money are minted”.
And he goes on:
“..., the fact that another person believes in cowry shells, or dollars, or electronic data, is enough to strengthen our own belief in them, […]. Christians and Muslims who could not agree on religious beliefs could nevertheless agree on a monetary belief, because whereas religion asks us to believe in something, money asks us to believe that other people believe in something.”[3]
Money has value because – and only because – everyone believes in its value. Money is minted from trust.
But how is this possible? How can money retain stable value in a system exclusively based on belief and trust?
First, money must be usable. This is the domain of the authorities. All taxes in Norway must be paid in Norwegian kroner. The governments of most countries have defined the country’s banknotes and coins as legal tender. This means that a buyer is entitled to make a payment in the country’s currency, and a seller can require payment in this currency. Legal tender cannot be refused as payment by either party.[4] Buyer and seller can of course agree on a different method of payment if they so wish.
Second, trust is related to the role of the central bank. In most countries, it is taken as a matter of course that the central bank guarantees the value of the currency. The central bank is subject to democratic control. In Norway, Article 75 of the Constitution states that “It devolves upon the Storting [Norwegian parliament]… to supervise the monetary system of the realm”. At the same time, the people’s elected representatives have conferred independence on the central bank in the use of its instruments by means of the Norges Bank Act. This underpins trust in the central bank and ensures the democratic legitimacy of the system.
For Norway’s founding fathers, another important objective was to ensure that the king and his government did not have direct access to the banknote printing press. Past experience had shown that kings were not immune to temptation.
The stability of the value of the currency in Norway is guaranteed by Norges Bank, and ultimately by the Norwegian government. The authorities have delegated this task to Norges Bank and decided that the Bank’s monetary policy objective is to keep inflation low and stable. The inflation target is quantified in the regulation on monetary policy as annual consumer price inflation over time of close to 2.5 percent. The Bank’s policy instrument is the key policy rate. Confidence that inflation will be kept low and stable is underpinned by the central bank’s independence. Norges Bank has a clear mandate and an independent position. This fosters trust in the Bank’s ability to do its job.
But a regulation defining the inflation target and central bank independence are not enough. Confidence in the inflation target can only be upheld if the central bank actually ensures that inflation is low and stable over time, thereby maintaining monetary stability. Credibility and trust are built up over time. In Norway, inflation has been low and stable for a quarter of a century. As the expression goes, the proof of the pudding is in the eating.
How is money created?
Today, there are two forms of central bank money. One of the forms is common knowledge – banknotes and coins. The other, bank reserves at Norges Bank, is less well known. The sum total of banknotes and coins and bank reserves at Norges Bank is about NOK 85 billion.[5] But the total money supply is much larger than this. Customer deposits in banks are also money. These deposits, referred to as deposit money, total more than NOK 2 trillion in Norway. This money is created by banks, not by Norges Bank.
Chart 1
Chart 1: Money supply and cash
Chart 1 shows the money supply and the supply of banknotes and coins in Norway since 1960. In Norway, the money supply mainly comprises deposit money in banks.[6] In the early 1960s, banknotes and coins accounted for a fifth of the money supply. Current accounts and cheques were already becoming commonplace. Since then, banks’ deposit money has increased dramatically, and today, banknotes and coins make up less than 2.5 percent of the money supply. In other words, virtually all the money we use has been created by banks.
So how do banks create money? The answer to that question comes as quite a surprise to most people.
When you borrow from a bank, the bank credits your bank account. The deposit – the money – is created by the bank the moment it issues the loan. The bank does not transfer the money from someone else’s bank account or from a vault full of money. The money lent to you by the bank has been created by the bank itself – out of nothing: fiat – let it become.
The money created by the bank does not disappear when it leaves your account. If you use it to make a payment, it is just transferred to the recipient’s account. The money is only removed from circulation when someone uses their deposits to repay a bank, as when we make a loan repayment.[7] The money supply is therefore only reduced when banks’ claims on the rest of the economy decrease.
Banks also fund lending by raising loans themselves instead of creating money in the form of deposits. In order to reduce risk, banks also use other forms of investment in addition to lending.[8] Nevertheless, the money supply is growing at almost at the same pace as total bank credit.
To sum up: banks create money out of nothing and withdraw it when loans are repaid. Growth in total bank credit is normally matched by growth in the money supply.[9]
This does not sound encouraging. Is money an illusion? Why is today’s privately issued deposit money often perceived to be as safe as money issued by the central bank?
First and foremost, maintaining confidence that the deposits are safe is the responsibility of the banks. If a bank takes on too much risk, trust in that bank will be impaired. For trust to be maintained, it is essential that a bank operates responsibly.
Customer deposits in Norway are also covered by a deposit guarantee. For customers with accounts in Norwegian banks, the guarantee covers deposits of up to NOK 2 million per depositor per bank. This guarantee is provided by the Norwegian Banks’ Guarantee Fund, a joint deposit insurance scheme funded by Norwegian banks.
Nonetheless, probably the most important factor is that the banking sector is one of the most highly regulated sectors in society and is subject to strict supervision. A bank cannot operate without a licence, and banks are required to satisfy a number of requirements relating to capital adequacy and liquidity management, all of which limit bank lending and money creation. Norwegian banks cannot behave as Stockholms Banco did in the 1600s. By ensuring that banks are solid and sufficiently liquid, regulation and supervision also underpin trust in the money we use.
The financial crisis in autumn 2008 was triggered by the collapse of an under-regulated financial institution – the Lehman Brothers investment bank.[10] In the years preceding the crisis, Lehman’s equity was less than two percent of its assets. With so little capital supporting loans, it does not take more than a puff of wind to bring down a house of cards.
New forms of payment and new forms of money
Trust is necessary, though not sufficient, for money to function as a universal means of payment. It must also be efficient and safe to use.
When you make a payment in a shop using a bank card, one of the largest systems we have is set in motion. Payments move back and forth between banks. Banks settle the payments by transferring money between their accounts at Norges Bank. Your payment then becomes available in the recipient’s account, normally a few hours after the payment process was initiated.
The hub of the payment system in Norway is Norges Bank’s settlement system, and it is our responsibility to make sure the system is efficient and reliable. Turnover is substantial, and transactions totalling close to NOK 240 billion were settled by Norges Bank in 2016 – every day.
As a society, we are completely dependent on the smooth functioning of the payment system. Without a stable settlement system, it would not be possible to use customer deposits in bank accounts as a means of payment, and substantial resources are allocated, both by banks and by Norges Bank, to make the system as robust and efficient as possible.
Technological innovation continues to bring us new methods of payment. Using smartphone apps such as Vipps and MobilePay, we can now make payments using our mobile phones. Technology giants such as Apple, Samsung and Google are also entering the payment market. Suppliers of goods and services are making their own apps and linking them to bonus and loyalty programmes. Although this may be a positive trend for many people, it comes at a price. It is difficult for us as consumers to keep track of the information we disclose and how it is used. This poses a challenge to data privacy and the security of the payment system.
The apps are only a customer interface. Behind them lie international card schemes such as Visa and Mastercard. Even though users do not cover costs directly, the costs involved in using these schemes are high, making these solutions an expensive alternative for banks. Eventually, banks’ customers foot the bill one way or another.
Cheaper alternatives are on their way. The new solutions could also result in faster payments. National payment card schemes, such as BankAxept in Norway, might provide an alternative to the international card schemes, including access to the new services. New regulations have been introduced to lower the costs related to international cards. A new EU regulation also provides for direct bank-to-bank payments, bypassing the card schemes entirely.
Technological innovation has given us not only new methods of payment, but also new forms of money – so-called e-money. E-money is electronic money issued by non-bank entities, but in existing currencies. Paypal customers can make payments through their Paypal account. Facebook has recently applied for a Europe-wide e-money licence. If large providers offer an attractive, user-friendly solution, this method of payment could become widespread. A key issue related to e-money is the question of consumer trust. E-money is a claim on the issuing company. E-money is not backed by a deposit insurance scheme or any authority.
Other companies are offering new forms of money – often in the form of a new currency – on closed platforms such as social networks and online games. Examples of such platform currencies are Amazon Coins, the virtual currency used in the online game World of Warcraft and Chinese Q Coins. These currencies might seem insignificant, but they have already been used as means of payment outside their own platforms.
A number of private digital currencies have also appeared. Some have gained ground in terms of turnover and use, while others were introduced for purely fraudulent purposes and have rapidly disappeared. The largest and best-known digital currency is Bitcoin, which was launched in 2009. Bitcoin has been the subject of widespread debate, but still has only a minor role in the payment system. Payment by Bitcoin is costly, and the system’s capacity is limited. Bitcoin prices have been highly volatile. A characteristic of private currencies such as bitcoin is the absence of any central institution backing the currency. But this is also a problem, making it difficult to establish the trust necessary for a widespread adoption of these currencies.
Cybercrime
New technology and new forms of payment are raising fundamental questions related to the security of the payment system. Cybercrime is evolving rapidly, with cyberattacks becoming increasingly advanced and well-organised.
Central banks are also targeted. In February last year, an attempt was made to steal USD 950 million from the central bank of Bangladesh. Most of the payments were stopped, but in the course of 48 hours, USD 81 million had found its way to a bank in the Philippines. A few days later, more than USD 60 million had disappeared through Philippine casinos. As far as I know, the money trail stopped there.
All the institutions involved in our payment system are devoting increasing resources to prevent cyberattacks, from banks and Norges Bank to our security authorities. However, we can never be completely certain that the system will be able to resist all possible attacks. We can lose money too. Ultimately, there may come a time when our systems have to be shut down for a period.
We need to be prepared for a situation where the payment system – or parts of it – has to be shut down for a period. Contingency arrangements must provide protection against a wide range of incidents, not just cyberattacks. These arrangements primarily comprise a number of reserve solutions in our electronic systems. Our ultimate contingency and reserve solution is our banknotes and coins. This part of our contingency arrangements must be strengthened. On the advice of Norges Bank and Finanstilsynet (Financial Supervisory Authority of Norway), the Ministry of Finance recently circulated a consultation paper proposing a regulation to ensure the availability of cash in a contingency.
What should the future form of money be?
The role of banknotes and coins, which have been our central bank money since Norges Bank was founded a little more than 200 years ago, continues to diminish. Everyday payments are increasingly made using deposit money in bank accounts. New forms of payment are a new stage of this trend. This prompts the following question: what should the future form of money be?
There are perhaps some who believe that deposit money will ultimately become the sole means of payment. Because Norwegian banks are well-run and well-capitalised, and because customer deposits are covered by the deposit guarantee scheme, we trust deposit money. As long as this is the case, using deposit money will be cheap and efficient for the consumer. But is it entirely unproblematic?
Imagine an ordinary consumer, let’s call him Ola, in a future when cash is no longer in frequent use. Ola hasn’t been to a bank for many years. He hasn’t used cash for a long time. He pays for everything digitally. But now he’s worried. Over the past few weeks, there have been several major cyberattacks against the bank he uses. The bank’s systems have been down for hours at a time, and staff are working overtime to fix the problem.
Ola decides he wants his money.
He logs on to his online bank, which for the time being is still open. He considers his options: he could transfer his money to an account in another bank. Or he could transfer money to a pre-paid card. But Ola does not trust either option. Who is really behind these solutions? How safe are they now?
Ola decides he wants cash and contacts his bank. But the bank cannot meet his request as it is currently unable to provide Norwegian banknotes. Ola faces the same options as before: use an account in another bank? or a payment card? The only option that does not involve using another bank account is to buy bitcoins. Ola does not want to do this. Perhaps he is a little stubborn. He wants cash.
The bank clerk is patient. He tells Ola that the bank can offer dollar or euro banknotes. Ola sees no alternative and withdraws euro banknotes. But he soon encounters another problem. In order to use this currency to make purchases in Norway, the shop has to accept payment in euros. If not, Ola will have to deposit the euro banknotes in his bank account in order to make the payment – bringing him back to square one.
What has been lost here?
First, Ola has become completely dependent on a third party – the bank: payments can no longer be made directly between two parties, but must be channelled through a bank, a card company or an app. Today, you can settle a payment at a shop or with a neighbour in cash, without involving anyone else.
Second, Ola has become dependent on the technology functioning as it should. Technology is not needed to settle payments in cash – as long as cash is available.
Third, Ola is no longer anonymous when he makes a payment. All payment transactions using deposit money can be recorded. Anonymous payments are often associated with something negative, such as tax evasion or other criminal activity. But there is another side to anonymity – privacy. We may not be entirely comfortable with the thought that every purchase we make is recorded. It may be too reminiscent of the society described in George Orwell’s 70-year-old novel 1984.
Fourth, Ola no longer has access to money directly backed by Norwegian authorities. We no longer have functional legal tender. The monetary system has been turned over to private entities. Alternatively, Ola has to use another country’s currency – in our hypothetical case, the euro.
We have to ask ourselves: should we allow private solutions to compete freely in developing means of payment, or must the authorities play a role?
The crucial factor is whether solutions based on private money deliver the characteristics the payment system should have. The system must be able to channel payments swiftly, safely, at low cost and in a user-friendly manner. The means of payment itself – our money – must be universal, because money is only useful if it is widely used. This requires trust.
Deposit guarantee schemes and banking regulation promote trust. The objective of monetary policy is to maintain stability in the value of the currency. Norges Bank assists private operators in implementing faster and safer payments. We cooperate with other authorities to oversee and supervise the payment infrastructure to ensure robustness and efficiency. Privacy rules prevent unauthorised access to payment information.
But there are some characteristics deposit money lacks. It cannot offer anonymous payments. The system is vulnerable to advanced attacks. Having more money on deposit than is covered by the deposit guarantee scheme involves risk. Nor is direct and immediate settlement between two parties, without the involvement of a third party, possible without cash.
In the future, new payment solutions may be able to offer these possibilities. Private digital currencies providing anonymity are already on the market. These currencies can also be used even if banks’ systems fail – as long as the Internet is still functioning. The same applies to platform currencies and e-money. However, there are other crucial characteristics missing from these solutions – they are not backed by any authority and the level of foreign exchange and credit risk can be high.
One alternative currently being discussed is the introduction of electronic central bank money. There are several ways of achieving this: consumers can have an account either at the central bank itself or in a system controlled by the central bank. Another possible solution is for Norges Bank to issue a payment card or develop an app for consumers to use for anonymous payments.
Which brings us to another question: which means of payment should be the statutory form of legal tender in Norway if we introduce electronic central bank money? Should it be banknotes and coins, or Norges Bank’s electronic money, or both?
We must also ask ourselves what the consequences will be for the banking system. For many consumers, electronic central bank money could provide an alternative to deposit money in a bank, as cash does today. Banks can attract deposits through the interest rates they offer. But their ability to create money and extend credit could nonetheless be affected, especially if this new form of electronic money enters into widespread use.
Norges Bank has begun the work of assessing what the future form of money should be. This is a long-term process. Whatever the conclusion, we can be fairly certain that banknotes and coins will be with us for many years yet. Deposit money in banks will most likely continue to be the dominant means of payment, even if electronic central bank money is introduced. Nevertheless, the very fact that these questions are being raised heralds a new era for our monetary system.
Choosing the direction our future monetary system and payment system will take requires not only economists, but also technologists, lawyers and other social scientists. And political decisions will ultimately need to be made by our elected representatives. It devolves upon the Storting to supervise the monetary system of the realm.
The questions are numerous, but we already have one of the answers. Central banks were established to build confidence in the monetary system. That is still our primary task. We cannot leave the monetary system entirely in the hands of private entities. There will be a role for central bank money. We must have a legislative framework and a means of payment backed by the authorities to ensure trust in our money – as history has shown.
Thank you for your attention.
Footnotes:
Riksbank website
For more details about the story of Stockholms Banco and the origins of the Riksbank, see the Riksbank website
Harari, Y.N. (2011) Sapiens: a brief history of humankind. Vintage Books, London, pp. 201 and 207.
Definitions of legal tender vary across countries. Danish banknotes and coins, for example, are legal tender in Denmark, but this is a right for the payer and an obligation for the recipient of the payment, and not vice versa. See "Report on the Role of Cash in Society", The Danish Payment Council, August 2016: and Danmarks Nationalbank's Monetary Review, 3rd Quarter 2006, "Legal Tender".
Bank reserves at Norges Bank are not included in the total money supply (M1, M2 and M3) as these reserves are financial institutions’ claims on other financial institutions. Claims between financial institutions or from the public sector are not included in the money supply.
We refer here to the money supply measure M3, which includes time deposits, repurchase agreements, and bonds and short-term paper with a maturity of less than two years. We do not show M1, which only includes cash and customer deposits in banks, because there are substantial breaks in our historical series and M3 is comprised almost exclusively of deposits. In February 2017, repurchase agreements and bonds were 0.4 percent of M3. Time deposits represented a somewhat larger share at 9 percent of the money supply. For more details on money supply statistics, see https://ssb.no/en/bank-og-finansmarked/statistikker/pengemengde
For a review of Norway’s monetary history, see Eitrheim, Ø., J.T. Klovland and L.F. Øksendal (2017). A monetary history of Norway, 1816-2016, Cambridge University Press.
Deposit money is also reduced when customers withdraw cash. However, since cash is part of the money supply, the total money supply in the economy does not change.
In isolation, diversification reduces banks’ funding risk. Increased use of wholesale funding may lead to slower growth in the money supply than in credit. Banks also hold liquidity portfolios containing highly liquid securities that can be sold to compensate for deposit withdrawals. This also reduces banks’ risk.
For a more detailed explanation of how money is created by banks, see “Money creation in a modern economy”, Bank of England Quarterly Bulletin2014/Q1, and Bernhardsen, T., A. Kloster and O. Syrstad (2016) “Alternative virkemidler i pengepolitikken – Den nødvendige monetære økosirk” [Alternative monetary policy instruments – the necessary monetary circulation]. Staff Memo12/2016. Norges Bank (Norwegian only).
Lehman Brothers was an investment bank and did not accept customer deposits. However, as the bank issued short-term paper and took part in repurchase agreements, which are included in M3, Lehman Brothers created money. The closure of Lehman Brothers led to investor flight from money market funds, very high money market volatility and higher demand for cash from US bank customers.
Published 25 April 2017 17:30
Print
Norges Bank is the central bank of Norway and shall promote economic stability in Norway. Norges Bank also manages the Government Pension Fund Global. The central bank does not offer any banking services to the general public.
Bankplassen blog - a blog for Norges Bank staff
Contact
Norges Bank
P.O. Box 1179 Sentrum
0107 Oslo
Norway
Tel: + 47 22 31 60 00
Map
Central bank e-mail
Press room
Careers
News and updates
Stay tuned to our website for news and updates.
Subscription
RSS
FAQ
Copyright and liability
Cookies and privacy...
Speech
What should the future form of our money be?
Speech by Deputy Governor Jon Nicolaisen at the Norwegian Academy of Science and Letters, 25 April 2017.
Please note that the text below may differ slightly from the actual presentation.
Origins of the central bank
The Dutch financier Johan Palmstruch arrived in Stockholm in 1647. Some ten years later, he was granted permission to open a private bank, Stockholms Banco, where he combined two important innovations. The first of these, pioneered by Palmstruch, was to use customer deposits to fund lending. The second utilised Johannes Gutenberg’s invention, the printing press, to print the first European banknotes.
Stockholms Banco was authorised to issue banknotes backed by the copper and silver coins in use at the time. Coins could be deposited at the bank in return for banknotes, and banknotes could be exchanged for copper and silver at the bank. The banknotes proved to be popular and were soon in circulation.
Stockholm Banco also offered loans in the form of banknotes. For the Swedish king, Karl Gustav, this occurred at a convenient time. Wars were in progress that had to be financed, and a bank that would offer loans was like manna from heaven. King Karl Gustav made good use of the money. Sweden’s victory over Denmark-Norway in the 1658 Dano-Swedish War, leading to the permanent cession to Sweden of the strategically and historically important territory of Båhuslen in southeastern Norway, was thus at least partly the result of a financial innovation.
Things did not end well for Johan Palmstruch. There were no rules to limit the loans that could be issued by the bank, and Stockholms Banco’s loans far outstripped the value of the copper and silver held by the bank. Confidence in the banknotes began to evaporate, and their value fell. Demand to redeem the banknotes for copper and silver was high, but Stockholms Banco did not have enough metal to meet the demand, and Sweden experienced its first banking crisis. The bank was declared bankrupt and was liquidated. Johan Palmstruch was sentenced to death for irresponsible accounting. The death sentence was subsequently commuted, but Palmstruch had to spend the rest of his life in prison.
Nonetheless, the Stockholms Banco crisis left a permanent legacy: in 1668, the authority to conduct banking operations was transferred to a bank that was later to become the Riksbank, under the direct control of the Swedish parliament, Riksdagen.[1] The world’s first central bank was born.[2]
What is money?
So what is money exactly? The simple answer is that money is a means of payment. It is also a universally recognised common unit of account. Money has therefore a key role in all financial transactions – it is a practical means of assigning value to goods and services and of settling trades.
To perform these functions, money must have a fairly stable value. People will only accept money as payment if they believe it can be used again as a method of payment in the future. Money must therefore also function as a store of value.
The first coins to be struck, imprinted with the king’s mark as a guarantee of their weight, were produced in Lydia almost 2500 years ago – with the reverse bearing the mark of King Croesus. Since then, coins in a variety of metals have been widely used. The currency of Norway was directly linked to a metal for centuries, until the gold standard was abandoned in 1931.
Wealth in the form of silver and gold coins can – literally – be a heavy burden. The emergence of banknotes that could be exchanged for a specific monetary value in metal made it easier to manage large sums of money. A banknote is in reality a promissory note – an interest-free claim on the issuer. Its value depends on trust that the issuer will keep his word and that the banknote proves to have the promised value.
The issue of banknotes by private entities was a fundamentally unstable system. The solution was to establish central banks in order to build abiding trust in the currency. The Swedish central bank, the Riksbank, the first central bank in history, was founded because the issue of banknotes by a private bank – Stockholms Banco – led to a banking crisis. The origins of the US Federal Reserve are similar: during the so-called “free banking” era, private banks could issue their own banknotes in various denominations. However, the banks experienced repeated crises, and in 1913, the Federal Reserve was established to stabilise the private banking system.
In the post-war years, the value of western currencies was pegged to gold under the Bretton Woods system: an ounce of gold was worth USD 35. All the other member countries – including Norway – agreed to peg their currencies at a fixed rate to the US dollar. The gold standard was abandoned by President Nixon during the Vietnam War, and the traditional fixed exchange rate system was terminated in 1971.
The value of money is no longer linked to precious metals. Today, money is so-called fiat money. The term derives from the Latin “fiat”, meaning “let it become”.
In his book Sapiens – A Brief History of Humankind, Yuval Noah Harari writes: “Trust is the raw material from which all types of money are minted”.
And he goes on:
“..., the fact that another person believes in cowry shells, or dollars, or electronic data, is enough to strengthen our own belief in them, […]. Christians and Muslims who could not agree on religious beliefs could nevertheless agree on a monetary belief, because whereas religion asks us to believe in something, money asks us to believe that other people believe in something.”[3]
Money has value because – and only because – everyone believes in its value. Money is minted from trust.
But how is this possible? How can money retain stable value in a system exclusively based on belief and trust?
First, money must be usable. This is the domain of the authorities. All taxes in Norway must be paid in Norwegian kroner. The governments of most countries have defined the country’s banknotes and coins as legal tender. This means that a buyer is entitled to make a payment in the country’s currency, and a seller can require payment in this currency. Legal tender cannot be refused as payment by either party.[4] Buyer and seller can of course agree on a different method of payment if they so wish.
Second, trust is related to the role of the central bank. In most countries, it is taken as a matter of course that the central bank guarantees the value of the currency. The central bank is subject to democratic control. In Norway, Article 75 of the Constitution states that “It devolves upon the Storting [Norwegian parliament]… to supervise the monetary system of the realm”. At the same time, the people’s elected representatives have conferred independence on the central bank in the use of its instruments by means of the Norges Bank Act. This underpins trust in the central bank and ensures the democratic legitimacy of the system.
For Norway’s founding fathers, another important objective was to ensure that the king and his government did not have direct access to the banknote printing press. Past experience had shown that kings were not immune to temptation.
The stability of the value of the currency in Norway is guaranteed by Norges Bank, and ultimately by the Norwegian government. The authorities have delegated this task to Norges Bank and decided that the Bank’s monetary policy objective is to keep inflation low and stable. The inflation target is quantified in the regulation on monetary policy as annual consumer price inflation over time of close to 2.5 percent. The Bank’s policy instrument is the key policy rate. Confidence that inflation will be kept low and stable is underpinned by the central bank’s independence. Norges Bank has a clear mandate and an independent position. This fosters trust in the Bank’s ability to do its job.
But a regulation defining the inflation target and central bank independence are not enough. Confidence in the inflation target can only be upheld if the central bank actually ensures that inflation is low and stable over time, thereby maintaining monetary stability. Credibility and trust are built up over time. In Norway, inflation has been low and stable for a quarter of a century. As the expression goes, the proof of the pudding is in the eating.
How is money created?
Today, there are two forms of central bank money. One of the forms is common knowledge – banknotes and coins. The other, bank reserves at Norges Bank, is less well known. The sum total of banknotes and coins and bank reserves at Norges Bank is about NOK 85 billion.[5] But the total money supply is much larger than this. Customer deposits in banks are also money. These deposits, referred to as deposit money, total more than NOK 2 trillion in Norway. This money is created by banks, not by Norges Bank.
Chart 1
Chart 1: Money supply and cash
Chart 1 shows the money supply and the supply of banknotes and coins in Norway since 1960. In Norway, the money supply mainly comprises deposit money in banks.[6] In the early 1960s, banknotes and coins accounted for a fifth of the money supply. Current accounts and cheques were already becoming commonplace. Since then, banks’ deposit money has increased dramatically, and today, banknotes and coins make up less than 2.5 percent of the money supply. In other words, virtually all the money we use has been created by banks.
So how do banks create money? The answer to that question comes as quite a surprise to most people.
When you borrow from a bank, the bank credits your bank account. The deposit – the money – is created by the bank the moment it issues the loan. The bank does not transfer the money from someone else’s bank account or from a vault full of money. The money lent to you by the bank has been created by the bank itself – out of nothing: fiat – let it become.
The money created by the bank does not disappear when it leaves your account. If you use it to make a payment, it is just transferred to the recipient’s account. The money is only removed from circulation when someone uses their deposits to repay a bank, as when we make a loan repayment.[7] The money supply is therefore only reduced when banks’ claims on the rest of the economy decrease.
Banks also fund lending by raising loans themselves instead of creating money in the form of deposits. In order to reduce risk, banks also use other forms of investment in addition to lending.[8] Nevertheless, the money supply is growing at almost at the same pace as total bank credit.
To sum up: banks create money out of nothing and withdraw it when loans are repaid. Growth in total bank credit is normally matched by growth in the money supply.[9]
This does not sound encouraging. Is money an illusion? Why is today’s privately issued deposit money often perceived to be as safe as money issued by the central bank?
First and foremost, maintaining confidence that the deposits are safe is the responsibility of the banks. If a bank takes on too much risk, trust in that bank will be impaired. For trust to be maintained, it is essential that a bank operates responsibly.
Customer deposits in Norway are also covered by a deposit guarantee. For customers with accounts in Norwegian banks, the guarantee covers deposits of up to NOK 2 million per depositor per bank. This guarantee is provided by the Norwegian Banks’ Guarantee Fund, a joint deposit insurance scheme funded by Norwegian banks.
Nonetheless, probably the most important factor is that the banking sector is one of the most highly regulated sectors in society and is subject to strict supervision. A bank cannot operate without a licence, and banks are required to satisfy a number of requirements relating to capital adequacy and liquidity management, all of which limit bank lending and money creation. Norwegian banks cannot behave as Stockholms Banco did in the 1600s. By ensuring that banks are solid and sufficiently liquid, regulation and supervision also underpin trust in the money we use.
The financial crisis in autumn 2008 was triggered by the collapse of an under-regulated financial institution – the Lehman Brothers investment bank.[10] In the years preceding the crisis, Lehman’s equity was less than two percent of its assets. With so little capital supporting loans, it does not take more than a puff of wind to bring down a house of cards.
New forms of payment and new forms of money
Trust is necessary, though not sufficient, for money to function as a universal means of payment. It must also be efficient and safe to use.
When you make a payment in a shop using a bank card, one of the largest systems we have is set in motion. Payments move back and forth between banks. Banks settle the payments by transferring money between their accounts at Norges Bank. Your payment then becomes available in the recipient’s account, normally a few hours after the payment process was initiated.
The hub of the payment system in Norway is Norges Bank’s settlement system, and it is our responsibility to make sure the system is efficient and reliable. Turnover is substantial, and transactions totalling close to NOK 240 billion were settled by Norges Bank in 2016 – every day.
As a society, we are completely dependent on the smooth functioning of the payment system. Without a stable settlement system, it would not be possible to use customer deposits in bank accounts as a means of payment, and substantial resources are allocated, both by banks and by Norges Bank, to make the system as robust and efficient as possible.
Technological innovation continues to bring us new methods of payment. Using smartphone apps such as Vipps and MobilePay, we can now make payments using our mobile phones. Technology giants such as Apple, Samsung and Google are also entering the payment market. Suppliers of goods and services are making their own apps and linking them to bonus and loyalty programmes. Although this may be a positive trend for many people, it comes at a price. It is difficult for us as consumers to keep track of the information we disclose and how it is used. This poses a challenge to data privacy and the security of the payment system.
The apps are only a customer interface. Behind them lie international card schemes such as Visa and Mastercard. Even though users do not cover costs directly, the costs involved in using these schemes are high, making these solutions an expensive alternative for banks. Eventually, banks’ customers foot the bill one way or another.
Cheaper alternatives are on their way. The new solutions could also result in faster payments. National payment card schemes, such as BankAxept in Norway, might provide an alternative to the international card schemes, including access to the new services. New regulations have been introduced to lower the costs related to international cards. A new EU regulation also provides for direct bank-to-bank payments, bypassing the card schemes entirely.
Technological innovation has given us not only new methods of payment, but also new forms of money – so-called e-money. E-money is electronic money issued by non-bank entities, but in existing currencies. Paypal customers can make payments through their Paypal account. Facebook has recently applied for a Europe-wide e-money licence. If large providers offer an attractive, user-friendly solution, this method of payment could become widespread. A key issue related to e-money is the question of consumer trust. E-money is a claim on the issuing company. E-money is not backed by a deposit insurance scheme or any authority.
Other companies are offering new forms of money – often in the form of a new currency – on closed platforms such as social networks and online games. Examples of such platform currencies are Amazon Coins, the virtual currency used in the online game World of Warcraft and Chinese Q Coins. These currencies might seem insignificant, but they have already been used as means of payment outside their own platforms.
A number of private digital currencies have also appeared. Some have gained ground in terms of turnover and use, while others were introduced for purely fraudulent purposes and have rapidly disappeared. The largest and best-known digital currency is Bitcoin, which was launched in 2009. Bitcoin has been the subject of widespread debate, but still has only a minor role in the payment system. Payment by Bitcoin is costly, and the system’s capacity is limited. Bitcoin prices have been highly volatile. A characteristic of private currencies such as bitcoin is the absence of any central institution backing the currency. But this is also a problem, making it difficult to establish the trust necessary for a widespread adoption of these currencies.
Cybercrime
New technology and new forms of payment are raising fundamental questions related to the security of the payment system. Cybercrime is evolving rapidly, with cyberattacks becoming increasingly advanced and well-organised.
Central banks are also targeted. In February last year, an attempt was made to steal USD 950 million from the central bank of Bangladesh. Most of the payments were stopped, but in the course of 48 hours, USD 81 million had found its way to a bank in the Philippines. A few days later, more than USD 60 million had disappeared through Philippine casinos. As far as I know, the money trail stopped there.
All the institutions involved in our payment system are devoting increasing resources to prevent cyberattacks, from banks and Norges Bank to our security authorities. However, we can never be completely certain that the system will be able to resist all possible attacks. We can lose money too. Ultimately, there may come a time when our systems have to be shut down for a period.
We need to be prepared for a situation where the payment system – or parts of it – has to be shut down for a period. Contingency arrangements must provide protection against a wide range of incidents, not just cyberattacks. These arrangements primarily comprise a number of reserve solutions in our electronic systems. Our ultimate contingency and reserve solution is our banknotes and coins. This part of our contingency arrangements must be strengthened. On the advice of Norges Bank and Finanstilsynet (Financial Supervisory Authority of Norway), the Ministry of Finance recently circulated a consultation paper proposing a regulation to ensure the availability of cash in a contingency.
What should the future form of money be?
The role of banknotes and coins, which have been our central bank money since Norges Bank was founded a little more than 200 years ago, continues to diminish. Everyday payments are increasingly made using deposit money in bank accounts. New forms of payment are a new stage of this trend. This prompts the following question: what should the future form of money be?
There are perhaps some who believe that deposit money will ultimately become the sole means of payment. Because Norwegian banks are well-run and well-capitalised, and because customer deposits are covered by the deposit guarantee scheme, we trust deposit money. As long as this is the case, using deposit money will be cheap and efficient for the consumer. But is it entirely unproblematic?
Imagine an ordinary consumer, let’s call him Ola, in a future when cash is no longer in frequent use. Ola hasn’t been to a bank for many years. He hasn’t used cash for a long time. He pays for everything digitally. But now he’s worried. Over the past few weeks, there have been several major cyberattacks against the bank he uses. The bank’s systems have been down for hours at a time, and staff are working overtime to fix the problem.
Ola decides he wants his money.
He logs on to his online bank, which for the time being is still open. He considers his options: he could transfer his money to an account in another bank. Or he could transfer money to a pre-paid card. But Ola does not trust either option. Who is really behind these solutions? How safe are they now?
Ola decides he wants cash and contacts his bank. But the bank cannot meet his request as it is currently unable to provide Norwegian banknotes. Ola faces the same options as before: use an account in another bank? or a payment card? The only option that does not involve using another bank account is to buy bitcoins. Ola does not want to do this. Perhaps he is a little stubborn. He wants cash.
The bank clerk is patient. He tells Ola that the bank can offer dollar or euro banknotes. Ola sees no alternative and withdraws euro banknotes. But he soon encounters another problem. In order to use this currency to make purchases in Norway, the shop has to accept payment in euros. If not, Ola will have to deposit the euro banknotes in his bank account in order to make the payment – bringing him back to square one.
What has been lost here?
First, Ola has become completely dependent on a third party – the bank: payments can no longer be made directly between two parties, but must be channelled through a bank, a card company or an app. Today, you can settle a payment at a shop or with a neighbour in cash, without involving anyone else.
Second, Ola has become dependent on the technology functioning as it should. Technology is not needed to settle payments in cash – as long as cash is available.
Third, Ola is no longer anonymous when he makes a payment. All payment transactions using deposit money can be recorded. Anonymous payments are often associated with something negative, such as tax evasion or other criminal activity. But there is another side to anonymity – privacy. We may not be entirely comfortable with the thought that every purchase we make is recorded. It may be too reminiscent of the society described in George Orwell’s 70-year-old novel 1984.
Fourth, Ola no longer has access to money directly backed by Norwegian authorities. We no longer have functional legal tender. The monetary system has been turned over to private entities. Alternatively, Ola has to use another country’s currency – in our hypothetical case, the euro.
We have to ask ourselves: should we allow private solutions to compete freely in developing means of payment, or must the authorities play a role?
The crucial factor is whether solutions based on private money deliver the characteristics the payment system should have. The system must be able to channel payments swiftly, safely, at low cost and in a user-friendly manner. The means of payment itself – our money – must be universal, because money is only useful if it is widely used. This requires trust.
Deposit guarantee schemes and banking regulation promote trust. The objective of monetary policy is to maintain stability in the value of the currency. Norges Bank assists private operators in implementing faster and safer payments. We cooperate with other authorities to oversee and supervise the payment infrastructure to ensure robustness and efficiency. Privacy rules prevent unauthorised access to payment information.
But there are some characteristics deposit money lacks. It cannot offer anonymous payments. The system is vulnerable to advanced attacks. Having more money on deposit than is covered by the deposit guarantee scheme involves risk. Nor is direct and immediate settlement between two parties, without the involvement of a third party, possible without cash.
In the future, new payment solutions may be able to offer these possibilities. Private digital currencies providing anonymity are already on the market. These currencies can also be used even if banks’ systems fail – as long as the Internet is still functioning. The same applies to platform currencies and e-money. However, there are other crucial characteristics missing from these solutions – they are not backed by any authority and the level of foreign exchange and credit risk can be high.
One alternative currently being discussed is the introduction of electronic central bank money. There are several ways of achieving this: consumers can have an account either at the central bank itself or in a system controlled by the central bank. Another possible solution is for Norges Bank to issue a payment card or develop an app for consumers to use for anonymous payments.
Which brings us to another question: which means of payment should be the statutory form of legal tender in Norway if we introduce electronic central bank money? Should it be banknotes and coins, or Norges Bank’s electronic money, or both?
We must also ask ourselves what the consequences will be for the banking system. For many consumers, electronic central bank money could provide an alternative to deposit money in a bank, as cash does today. Banks can attract deposits through the interest rates they offer. But their ability to create money and extend credit could nonetheless be affected, especially if this new form of electronic money enters into widespread use.
Norges Bank has begun the work of assessing what the future form of money should be. This is a long-term process. Whatever the conclusion, we can be fairly certain that banknotes and coins will be with us for many years yet. Deposit money in banks will most likely continue to be the dominant means of payment, even if electronic central bank money is introduced. Nevertheless, the very fact that these questions are being raised heralds a new era for our monetary system.
Choosing the direction our future monetary system and payment system will take requires not only economists, but also technologists, lawyers and other social scientists. And political decisions will ultimately need to be made by our elected representatives. It devolves upon the Storting to supervise the monetary system of the realm.
The questions are numerous, but we already have one of the answers. Central banks were established to build confidence in the monetary system. That is still our primary task. We cannot leave the monetary system entirely in the hands of private entities. There will be a role for central bank money. We must have a legislative framework and a means of payment backed by the authorities to ensure trust in our money – as history has shown.
Thank you for your attention.
Footnotes:
Riksbank website
For more details about the story of Stockholms Banco and the origins of the Riksbank, see the Riksbank website
Harari, Y.N. (2011) Sapiens: a brief history of humankind. Vintage Books, London, pp. 201 and 207.
Definitions of legal tender vary across countries. Danish banknotes and coins, for example, are legal tender in Denmark, but this is a right for the payer and an obligation for the recipient of the payment, and not vice versa. See "Report on the Role of Cash in Society", The Danish Payment Council, August 2016: and Danmarks Nationalbank's Monetary Review, 3rd Quarter 2006, "Legal Tender".
Bank reserves at Norges Bank are not included in the total money supply (M1, M2 and M3) as these reserves are financial institutions’ claims on other financial institutions. Claims between financial institutions or from the public sector are not included in the money supply.
We refer here to the money supply measure M3, which includes time deposits, repurchase agreements, and bonds and short-term paper with a maturity of less than two years. We do not show M1, which only includes cash and customer deposits in banks, because there are substantial breaks in our historical series and M3 is comprised almost exclusively of deposits. In February 2017, repurchase agreements and bonds were 0.4 percent of M3. Time deposits represented a somewhat larger share at 9 percent of the money supply. For more details on money supply statistics, see https://ssb.no/en/bank-og-finansmarked/statistikker/pengemengde
For a review of Norway’s monetary history, see Eitrheim, Ø., J.T. Klovland and L.F. Øksendal (2017). A monetary history of Norway, 1816-2016, Cambridge University Press.
Deposit money is also reduced when customers withdraw cash. However, since cash is part of the money supply, the total money supply in the economy does not change.
In isolation, diversification reduces banks’ funding risk. Increased use of wholesale funding may lead to slower growth in the money supply than in credit. Banks also hold liquidity portfolios containing highly liquid securities that can be sold to compensate for deposit withdrawals. This also reduces banks’ risk.
For a more detailed explanation of how money is created by banks, see “Money creation in a modern economy”, Bank of England Quarterly Bulletin2014/Q1, and Bernhardsen, T., A. Kloster and O. Syrstad (2016) “Alternative virkemidler i pengepolitikken – Den nødvendige monetære økosirk” [Alternative monetary policy instruments – the necessary monetary circulation]. Staff Memo12/2016. Norges Bank (Norwegian only).
Lehman Brothers was an investment bank and did not accept customer deposits. However, as the bank issued short-term paper and took part in repurchase agreements, which are included in M3, Lehman Brothers created money. The closure of Lehman Brothers led to investor flight from money market funds, very high money market volatility and higher demand for cash from US bank customers.
Published 25 April 2017 17:30
Norges Bank is the central bank of Norway and shall promote economic stability in Norway. Norges Bank also manages the Government Pension Fund Global. The central bank does not offer any banking services to the general public.
Bankplassen blog - a blog for Norges Bank staff
Contact
Norges Bank
P.O. Box 1179 Sentrum
0107 Oslo
Norway
Tel: + 47 22 31 60 00
Map
Central bank e-mail
Press room
Careers
News and updates
Stay tuned to our website for news and updates.
Subscription
RSS
FAQ
Copyright and liability
Cookies and privacy...
Subscribe to:
Posts (Atom)
