If the banks called back all the loans, there would not be enough money in the whole world to pay them. This is not academic exercise, this is a neutron bomb that they possess because they were able to bribe the politicians for centuries, and kill the ones that did not yield.

If QE is debt-based, it does not add a cent to the monetary base.

If it is "equity-based" (printing new money without corresponding obligation to pay back) then monetary base expands.

Central bank do 2 evils, which happen to be diametrically opposite to each other, yet both are evil.

Remove cash, negative interest rates and other economic crimes
Saturday, November 28, 2015, 00:04

It may sound like a conspiracy theory, but, judging by the growing desperation of governments to control and "push" of the global economy, you see that not far from reality.

I refer to the idea of ​​abolition of cash (dollars, euros, pounds, etc.) in their natural form. And a basic excuse of those who support this extreme measure is to enhance the ability of central banks to impose negative interest rates.

Negative interest rates mean that lenders are literally paying businesses and consumers to borrow money! Also, they punish savers saving for future consumption, investment, or just pension or health security. The Danes and the Swiss have already fallen into negative territory, with interest rates at -0.75%.

This means that 100,000 to an account in Switzerland will be worth 99 250 after one year. Currently these rates apply only to "high reserves" that banks hold with the central bank, but nothing prevents banks to soon require all depositors share the burden.

But these "trivial" rates are not enough, according to some economists. A chief economist at Citicorp, the technocrat Willem Buiter [1], for example, believes that the US needs much lower interest rates to "boost" the economy away from recession. Proposes negative interest rates around 6% "to get the job done." But for this to happen, there is one condition: To operate this project, says Mr. Buiter, the government should abolish the cash.

It's easy to see why Mr. Buiter and proportionate bureaucrats consider "annoying" cash. If your bank grabs 6% of your savings of 100 € in your account would be worth 94 € at the end of the year, 88.36 € after two years, and 83.06 € after three years. Instead, a bank note of 100 € in circulation would still be worth ... 100 €.

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I'm skeptical of cash being removed everywhere that fast. Won't people head to dollars or other stable currencies? I mean I can't imagine people standing for negative interest rates, they'd put there money in tinned/dry food anything else that can't be stolen. I think this was mentioned up thread.
In that way wouldn't it artificially stimulate demand to a crack up boom?

Which country was this.

Country was Finland and year 1992-1993

Looking at http://www.europarl.europa.eu/document/activities/cont/200912/20091216ATT66587/20091216ATT66587EN.pdf I see Greece was just a replay of that situation
only diff greece can not use currency depreciation, therefore the crisis burns on.

However I do not see banks calling back loans, all I see is Gov stepping in to clear the mess, Unless you can present us with specifics. I stand on my opinion that banks never never call back loans.

The empirical evidence is strongly on the side of the view that deviations from full employment are often the result of spending shocks. Monetary policy, in particular, appears to have played a crucial role in causing business cycles in the United States since World War II. For example, the severe recessions of both the early 1970s and the early 1980s were directly attributable to decisions by the Federal Reserve to raise interest rates. On the expansionary side, the inflationary booms of the mid-1960s and the late 1970s were both at least partly due to monetary ease and low interest rates. The role of money in causing business cycles is even stronger if one considers the era before World War II. Many of the worst prewar depressions, including the recessions of 1908, 1921, and the Great Depression 1930s, were to a large extent the result of monetary contraction and high real interest rates.

Figure 1: Unemployment Rate and Recessions

Responding to public demand government steps in and tries to halt finance induced crashes. However, government does not simply print money to mitigate the cyclical monetary crunch. True money printing would harm vested financial interests and is taboo. Instead government enters the arena meekly as the sucker borrower of last resort. Once government is ensnared the triumph of finance is complete.  Government debt is paid via taxation and taxation primarily targets the upper class. Thus with the capture of government finance gains the ability to siphon wealth from the upper class.

A time honored strategy in war is divide and conquer. It is easier to subjugate a people who are fighting amongst themselves. Finance and fractional reserve divides the public into two competing blocks of victims. The poor as we have seen become ever poorer with each "business cycle". They  look at the relatively well off and cry Thief! The entrepreneurs and productive increasingly suffer under ever higher tax burdens. They point to government and the welfare recipients and cry Thief!

Government does not handle this conflict well. Unable to decide between competing citizen demands it waffles. It spends to support the poor but does not raise taxes. The result is ever larger government debt. Each attempt by government to buffer the finance induced downturn simply delays the liquidation of middle classes assets by transferring that liability to the government and eventually to the upper classes via increased taxation.  Bailouts are thus a transfer wealth from the productive upper classes to well-connected financial interests. Finance uses the business cycle to harvest the  poor, and bailouts to harvest the rich.

The long-term costs of all this are borne out by the majority of the ill-informed public who are too busy fighting over a myriad useless conservative versus liberal disputes to address the root cause of their suffering. Meanwhile government in its misguided attempt to "help" becomes so indebted that eventually it can no longer service its loans.

Ok we have gone to deep in the rabbid hole,
Banks will not call back loans en mass as a means of a "neutron bomb" trying to control us. Banks calling back loans as they learned in the 20's is the fastest way to close down shop, it signals that bank has essentially lost control and is on the brink of bankrupcy.

So it's not a choice that they will make hence my "banks never never ever call back loans"
The banks creates loans as a battery creates potential to drive a circuit, when it stops to do that it means you need to change the battery.