venerdì 9 luglio 2010

ECB backs treaty change for EU's 'economic government'

ECB backs treaty change for EU's 'economic government' [fr] [de]

EurActiv, 06 July 2010

The European Central Bank is asking EU finance ministers to consider changing the Lisbon Treaty in order to strengthen the European Commission's hand in punishing countries for falling out of line with the bloc's debt targets.


At their 17 June summit, EU leaders agreed to greater surveillance and coordination of national budgets following the Greek sovereign debt crisis. However, a deal on sanctions for countries in a weak financial position will not be finalised until a high-level task force, led by European Council President Herman Van Rompuy, reports in October (EurActiv 18/06/10).

The Van Rompuy task force will look at whether withholding EU funds might be an option for punishing errant governments, while an earlier Franco-German proposal to suspend countries' voting rights met with a cold response from other member states.

There have been ongoing concerns among diplomats about the practicalities of imposing sanctions, with some fearing that financial penalties would exacerbate economic problems (EurActiv 17/06/10).

Under plans tabled by the European Commission, EU countries can review each others' draft annual budgets before they are adopted at national level, during a so-called 'European semester' (EurActiv 01/07/10).

More on this topic

A high-level task force of EU finance ministers chaired by European Council President Herman Van Rompuy has received a proposal from the European Central Bank. Under the plan, an EU country would have to prove to its neighbours that it does not deserve to be punished for exceeding the EU's debt targets.

In other words, punitive measures, like cutting off deviant countries' access to EU funding, would be thrown to the wind if a country were able to get a majority of member states to agree that the punishment is too harsh, EU sources said.

"If there is no Qualified Majority Vote (QMV) against it, then the proposal for sanctions would stand," the source explained.

If agreed, the measure would be a veritable power grab for the European Commission as the burden of proof would fall on the country in question.

Treaty change

The only catch with the proposal is that it would require a change to the EU's Lisbon Treaty.

"We welcome the proposal but we all know it would require treaty change, an issue member states will have to discuss among themselves," the EU source added.

There has been much talk of treaty change since the EU began work on rehashing economic policy co-ordination, but the idea has received little backing from member states that had a tough time getting the treaty through first time around, most notably in Ireland.

The source said the EU could avoid the political upheaval attached to treaty change if the EU were to tack on amendments vis-a-vis economic sanctions to Croatia's upcoming accession agreement.

Role reversal

The Van Rompuy task force is currently rewriting how the EU stops member states from exceeding the bloc's agreed debt targets, which are formalised under the so-called Stability and Growth Pact.

The pact limits public deficits to 3% of GDP and national debt to a maximum of 60% of GDP, boundaries which were summarily overlooked after the onset of the financial crisis.

Member states which overstep the 3% target should in theory lose some of their EU benefits, a procedure that is rarely enforced because it requires the approval of a majority of member states in order to go through.

The ECB's proposal seeks to reverse that procedure by putting the onus on the country in question to prove to a majority of member states that the punishment is too harsh.

Last week the European Commission presented its own plans on economic governance, which include a detailed system of sanctions for member states which do not respect budgetary discipline requirements set out in the Stability and Growth Pact.

In the new plan, sanctions would go beyond regional funding to funds targeted at agriculture and fisheries to ensure that countries like France, Spain, Germany and the UK, the greatest beneficiaries of these, are treated in the same way as Eastern and Central European countries, which have predominantly benefited from regional funding (EurActiv 01/07/10).

Why the Idiocy About Unemployment?

Why the Idiocy About Unemployment?

Les Leopold

Les Leopold

My wife, a labor economist, is upset with NPR's "The Take Away" (and many other news programs) for reinforcing the myth that somehow the unemployed are to blame for not having a job. We all should be angry as well because the jobs just aren't there. In fact, the latest unemployment statistics show that there are five unemployed workers available for every vacant job. Why blame workers when it's so clear that Wall Street's reckless gambling caused the jobs crisis?

By now, you'd think we'd have buried this issue. But like Dracula it refuses to die. And so, I return to the subject with the hope of driving a stake through its heart and giving it a proper burial. Among the claims we need to put to rest:

1. Extended unemployment benefits are causing unemployment. Extending benefits for the long-term unemployed will only encourage them to sit at home on their extended derrieres and let vacant jobs go begging.

What jobs? We're down 8 million since the start of the Great Recession. We aren't even creating enough new jobs to keep up with population growth. So what jobs are the unemployed not taking?

Every child knows how to play musical chairs. When you take away 8 million chairs, a lot of people are forced to scrounge around looking for seats that aren't there. Providing nourishment for the chairless is not the cause of the disappearing chairs. It's just the decent thing to do.

Why is this so difficult to grasp? And why are so many people angry at the long-term unemployed and not at the bankers who actually created this mess?

Economist Dean Baker suggests that the Republicans are trying to keep unemployment as high as possible right now because they think that high jobless numbers will spell disaster for the Democrats in November. And if we give the unemployed extended benefits, that money will act as a stimulus, generating more jobs. Well, we can't have that! It's better for the Republicans if the economy stays in the ditch.

But what about Obama and the Democrats? Why aren't they at the barricades, fighting for the unemployed? They could be flooding the talk shows with a raucous defense of the jobless. They could be putting ads up all over the country, explaining why the long-term unemployed deserve our support. They ought to be ridiculing any politician or pundit who argues against jobless benefits. Where the hell is their outrage?

Instead, even as the unemployment crisis continues, the Democrats are pushing austerity and deficit reduction--the financial industry's pet issue. If the Democrats are so worried about unemployment benefits deepening the deficit they should start plugging that money hole by raising taxes on billionaire hedge funds executives. Just ask the billionaires to pay the same income tax rates as the rest of us, instead of dodging behind the lower capital gains rate. Is that really such a hard sell, Democrats? If the public knew that the top ten hedge fund managers were averaging $900,000 an hour (not a typo) during the worst economic year since the Depression--and paying lower income tax rates than the rest of us--the American public would be outraged. Of course, to push this plan the politicians would need to have the guts to upset billionaires.

(Meanwhile, Timothy Geithner is signaling that the Administration will hold down capital gains taxes on the super-rich.)

But even the gutless ought to know that blaming the unemployed for unemployment is insane --not to mention incredibly mean-spirited.

2. Unemployment is caused by "structural" problems in the labor markets. Labor markets have to be freed from constraints like decent pensions, a reasonable retirement age, and adequate health care benefits. These public benefits -sometimes known as the social wage -- are keeping employers from hiring. So, sorry, Americans, we'll just have to work longer and harder for less.
This chilling proposal, now on the lips of Republicans and Democrats alike, will clearly make the markets happy. But what about the rest of us?

Is this grim belt-tightening really going to bring back the 8 million jobs we lost?

If we cut the social wage, corporations certainly will save on labor costs and accumulate more cash. But will they productively invest it? Not according to Yves Smith and Rob Parenteau, They argue that corporate America greatly prefers to pocket the cash and use it for gambling on Wall Street:

To develop new products, buy new equipment or expand geographically, an enterprise has to spend money -- on marketing research, product design, prototype development, legal expenses associated with patents, lining up contractors and so on. Rather than incur such expenses, companies increasingly prefer to pay their executives exorbitant bonuses, or issue special dividends to shareholders, or engage in purely financial speculation. But this means they also short-circuit a major driver of economic growth.

3. The only real jobs are private sector jobs. You see, only the private sector can rescue our economy because the jobs they create spring from consumer supply and demand, not the dictates of corrupt or know-it-all politicians. When you work for the public sector, you're practically on the dole because your wages come from tax dollars. That's quasi-socialism.

Has anyone noticed that private industry has been on the public dole for decades? We have millions of alleged private sector jobs funded by the Defense Department and through subsidies for industries from sugar to oil, and of course banking. We've given so many tax dodges to corporate America that most companies pay almost no taxes at all. The idea of a purely private sector is pure fiction, a soothing fairy tale for Tea Partiers and faith-based, free-market ideologues.

Despite all the perks we've been giving to corporate America, it's not at all clear that the private sector will ever again create enough decent jobs to support a middle class society in this country. Right now the economy is supposedly growing, but employment isn't. So what is growing? Well, the obscene bonuses and pay packages of corporate America and Wall Street --- the only growth that counts for our financial elites.

We're at a critical point in the jobs crisis. Nearly 30 million of us don't have jobs or have been forced into part-time jobs. It's not like there's no work to do. We have millions and millions of kids to educate. We desperately need to slash our energy use--and with an army of workers, we could weatherize every home and business in the country. Our bridges and roads will take decades to repair. We need to build an entire national system of efficient public transit.

When Wall Street is in trouble, we come to the rescue with trillions in bailouts. We've poured hundreds of billions more into two wars. But when it comes to investing in our people to get needed work done, we can't seem to summon the will or find the cash.

There's a one-sided war going on between financial elites and the rest of us. They've engineered the economy to enrich themselves at our expense, with Wall Street taking the lead.

The numbers don't lie: In 1970 the top 100 CEOs earned approximately $45 for every dollar earned by the average worker. By last year, it was $1,081 to one. (See The Looting of America.)

There is no economic theory that can explain this obscene gap. It has nothing to do with talent or productivity or even luck. It's just raw power. And the only thing that financial power understands is countervailing power in the form of a popular mass movement - a movement that only can start once we stop blaming ourselves for the jobs crisis.

We have our work cut out for us.

Les Leopold is the author of The Looting of America: How Wall Street's Game of Fantasy Finance destroyed our Jobs, Pensions and Prosperity, and What We Can Do About It Chelsea Green Publishing, June 2009.

4 more banks failed in the USA

4 more banks failed in the USA

Home National Bank Blackwell OK 11636 July 9, 2010
USA Bank Port Chester NY 58072 July 9, 2010
Ideal Federal Savings Bank Baltimore MD 32456 July 9, 2010
Bay National Bank Baltimore MD 35462 July 9, 2010

L’arnaque de la dette publique

L’arnaque de la dette publique

(article court... à diffuser)

Le 30/09/2009 l'AFP annonçait: « La dette publique de la France (État, sécurité sociale et collectivités locales) a augmenté de 61,1 milliards d'euros au deuxième trimestre 2009 par rapport au trimestre précédent pour atteindre 1.428 milliards, soit "approximativement" 73,9% du PIB, a annoncé mercredi l'Insee. La dette brute des administrations publiques, calculée selon les critères de Maastricht, a ainsi augmenté de 3,5 points de PIB par rapport à la fin mars 2009, précise l'Institut national de la Statistique. Selon les prévisions du gouvernement, la dette publique devrait dépasser 83% du PIB à la fin de 2010 après 68% fin 2008, sous l'effet de l'envolée du déficit public gonflé par la crise économique qui frappe la France. »

On ne parle plus que de cela: la dette, la dette, la dette... en essayant par la même occasion de culpabiliser chacun de nous, en nous expliquant qu’il n’y a que deux solutions pour la réduire ou seulement éviter qu’elle ne s’amplifie, à savoir
- augmenter les prélèvements (taxes et impôts)
- diminuer les redistributions

Outre que c’est oublier que l’État restitue en prestations collectives l’ensemble de ses prélèvements (pas toujours d’une manière équitable, il faut le reconnaître), que les dépenses des uns font les recettes des autres (au sujet par exemple du « déficit » de la Sécurité Sociale qui est évidemment transféré dans une augmentation des revenus des professions de santé), et c’est également oublier ce qui suit, sujet de ce petit rappel que nous avons largement développé par ailleurs.
Nous avons payé l'an dernier, en 2008, près de 55 milliards aux prêteurs, pour les seuls intérêts et pour une seule année, ce qu'on appelle "la charge de la dette" des Administrations publiques. Pour vous donner une idée, c'est l'équivalent de 1000 airbus A320 (soit un cadeau de presque 2 Airbus A320 par jour aux « non-résidents »), ou de 3 portes-avions, ou de 55 000 belles villas sur la Côte d'Azur, ou de l'isolation (en comptant 10 000 euros par foyer) de 5 500 000 logements, ou un salaire net de 18000 euros annuel (salaire médian en France) pour plus de 3 000 000 personnes ... mais vous pouvez trouver d'autres exemples, il n'en manque pas!

C'est transférer de notre travail et notre production 150 millions d'euros par jour - oui, par jour: 1 milliard par semaine! - à ceux qui sont déjà les plus riches (qui d'ailleurs peuvent ainsi nous reprêter cet argent à nouveau contre intérêts). Mais cette monnaie qu'ils nous prêtent, est, comme 93% de la monnaie en circulation, issue de la création monétaire par les banques privées, monnaie évidemment payante bien que créée à partir d'une simple ligne d'écriture lors de "monétisation" de créances (voir le site pour les détails concernant l'émission de monnaie par les banques de second rang).

Le recours à l'emprunt par l'État, qui pouvait se concevoir lorsque la monnaie était représentative d'une certaine quantité de métal (or ou argent) qui à un moment pouvait manquer dans les caisses, n'a maintenant plus aucune justification depuis que la monnaie est totalement dématérialisée. Il reste seulement important qu'elle ait, comme toute monnaie, une contrepartie en "biens réels" ou en créances recouvrables, c'est-à-dire des actifs sains.

Depuis 1973 (l'article 25 de la loi du 3 janvier précise que "Le trésor public ne peut être présentateur de ses propres effets à l'escompte de la Banque de France". Ce qui signifie que notre pays s'est interdit de permettre à la Banque de France de financer le Trésor Public, c'est-à-dire de créer la monnaie dont il a besoin pour son développement (écoles, routes, ponts, aéroports, ports, hôpitaux, bibliothèques, etc.).

Et le traité de Maastricht a entériné pour l'Europe cet état de fait par l'article 104 (repris par l’art. 123 du traité de Lisbonne) qui précise " Il est interdit à la BCE et aux banques centrales des États membres, ci-après dénommées "banques centrales nationales", d'accorder des découverts ou tout autre type de crédits aux institutions ou organes de la Communauté, aux administrations centrales, aux autorités régionales ou locales, aux autres autorités publiques, aux autres organismes ou entreprises publics des États membres; l'acquisition directe, auprès d'eux, par la BCE ou les banques centrales nationales, des instruments de leur dette est également interdite."

En clair, les États sont obligés de financer nos besoins collectifs sur les marchés financiers, en augmentant perpétuellement notre dette à cause d’intérêts iniques et non nécessaires car ils ne sont que la conséquence d’une décision politique dont les effets furent désastreux.

De ce fait, alors qu'avant elle avait le choix, la France s'est obligée d'emprunter sur les marchés monétaires en émettant des "obligations" auprès des plus riches, des rentiers, et des investisseurs institutionnels (assurances, banques, etc). L'État, c'est-à-dire nous tous, doit payer un intérêt à ceux qui achètent les instruments de cette dette (40% du montant par des résidents, 60% par des non-résidents). Au fil des années, cet argent distribué aux plus riches plombe les finances publiques et il faut couvrir par l'emprunt le déficit toujours justement proche du montant des intérêts.

Et au total, c'est plus de 1300 milliards d'euros d'intérêts que nous avons payé entre 1980 et 2008!

Si nous avions pu créer notre monnaie — faire exactement ce qu'ont le droit de faire les banques privées — la dette publique serait quasiment inexistante aujourd'hui.

Si nous n'avions pas eu d'intérêts à payer, en partant d’une dette initiale de 239 milliards d'euros à fin 1979 (déjà litigieuse) la dette aurait totalement disparue entre 2005 et 2007 (l'année 2008 correspondant à un endettement anachronique comme le seront également 2009 et 2010 et sans doute 2011). Tout au long de ces années, les soldes auraient été positifs (les détails des calculs ayant aboutis à ces chiffres peuvent être trouvés dans un article plus développé sur le site « dette et monnaie » à )

En conclusion, il semble indispensable que l’article 123 du Traité de Lisbonne soit renégocié, dès son entrée en application, afin de permettre, au niveau de la zone euro, un droit d’émission monétaire par la Banque Centrale Européenne (donc sans intérêts) au bénéfice des États et l’autorisation pour les Banques Centrales Nationales (la Banque de France en ce qui nous concerne) de racheter les « titres de dette » au fur et à mesure qu’ils arrivent à échéance (il s’agit de montants de l’ordre de 200 à 250 milliards par an), par une émission monétaire qui transfèrera progressivement la dette à notre Banque Centrale nous laissant avec la même dette mais sur laquelle nous n’aurons plus d’intérêts à payer.

André-Jacques Holbecq
Auteur avec Philippe Derudder de : “La dette publique, une affaire rentable” (2008 - Ed. Yves Michel) – préface d’Etienne Chouard

Central Bankers Losing Control

Central Bankers Losing Control

The Daily Bell, July 09, 2010 – by Staff Report

D. Strauss-Kahn

IMF tells Europe to inject more stimulus ... The International Monetary Fund has called on the European Central Bank to prepare fresh emergency action to stabilise debt markets, throwing its weight behind calls for renewed monetary stimulus to offset budget cuts. "Markets are not yet convinced of the central bank's commitment to scaling up purchases if necessary to prevent a further deterioration in market functioning," said the IMF's Global Financial Stability Report. The IMF called on Europe's authorities to make their €500bn (£420bn) rescue fund is "fully operational" and to explain how they intend to shore up banks that fail stress tests. "Test results will need to be complemented by a plan that specifies how capital-deficient institutions would be handled. Bank reporting and disclosure standards, in general, need to be improved," it said. – UK Telegraph

Dominant Social Theme: The wise men must step forth and salvage the markets.

Free-Market Analysis: Obviously the austerity meme has served its purpose. The world's central banking wise men seem far more worried now that, left unattended, the West will continue to struggle with deleveraging and price deflation. We have predicted this all along, running a series of articles discussing inflation and deflation and suggesting the likely outcome is an inflationary problem rather than a deflationary one. Here's some more from the article:

The IMF called on Europe's authorities to make their €500bn (£420bn) rescue fund "fully operational" and to explain how they intend to shore up banks that fail stress tests. "Test results will need to be complemented by a plan that specifies how capital-deficient institutions would be handled. Bank reporting and disclosure standards, in general, need to be improved," it said. ...

While the IMF stopped short of calling for the ECB to launch full quantitative easing (QE), it is clearly worried that the bank's passive policies have allowed credit to wilt and led to fresh strains in interbank lending markets and sovereign debt. "Downside risks to the recovery have risen sharply. Bank funding pressures may accelerate the ongoing deleveraging process. It is too early to tell if actual bank lending growth will worsen in the euro area, after recently stabilising at barely positive year-on-year rates," it said.

This is what central banks do, of course. They inflate. In good times, central banks print too much money and in bad times they print as much or more. What central bankers and the power elite that stands behind do not want – and cannot tolerate in our view – is a great deal of social unrest as the result of what could turn into a deflationary depression if fresh supplies of money are not delivered daily. Of course in the long-term it is still unclear as to how much price deflation is to be delivered by the powers-that-be, but they are clearly worried.

We mentioned the other day that the unrest in Europe is being underreported. There are continued massive strikes in both Greece and Portugal, and Spain is not having an easy time of it either. It is likely most important from the standpoint of the elite and the larger socioeconomic structure as well that the unrest be tamed and the system itself reignited. Inflation, in this regard, may be preferable to deflation, at least for the moment. And this is not only a concern in Europe but in America as well.

The same problems that are afflicting Europe have come home to roost in the United States. There is in fact a sovereign wealth crisis that has affected most of America's states and has of course helped destabilize the dollar. The IMF in fact has now urged the US Federal government to work on closing the country's tremendous, ever-increasing debt, and the Washington Post just recently commented on the matter using a vocabulary similar to that of the IMF's:

Federal Reserve weighs steps to offset slowdown in economic recovery ... Federal Reserve officials, increasingly concerned over signs the economic recovery is faltering, are considering new steps to bolster growth ... With Congress tied in political knots over whether to take further action to boost the economy, Fed leaders are weighing modest steps that could offer more support for economic activity at a time when their target for short-term interest rates is already near zero. They are still resistant to calls to pull out their big guns -- massive infusions of cash, such as those undertaken during the depths of the financial crisis -- but would reconsider if conditions worsen.

Top Fed officials still say that the economic recovery is likely to continue into next year and that the policy moves being discussed are not imminent. But weak economic reports, the debt crisis in Europe and faltering financial markets have led them to conclude that the risks of the recovery losing steam have increased. After months of focusing on how to exit from extreme efforts to support the economy, they are looking at tools that might strengthen growth. (- Washington Post)

We can see a sub-dominant social theme at work here. The larger theme of course is the wisdom of central banks generally. But the lack of liquidity affecting markets and "sovereign" economies today has its roots in a fairly low velocity of money. And this is obviously just as worrisome in America as it is in Europe. A fiat system, in fact, is only as good as the confidence that people have about it. A fiat system, therefore, is nothing like an asset-based system, presumably one supported by both gold and silver.

Instead, the West struggles a string and makes endless attempts to push it. The situation is bound to be worrisome now only to the powers-that-be that have designed the system and are struggling to hold it together but to investors as well. The struggles of the elite, and their success or failure, will have an impact on every aspect of the West's financial structure.

In fact, there is a whole range of possibilities now that include not only inflation or deflation but the possibility of an economic rebound as well. Central banks can re-inflate in Europe and America but this does not mean that the economies themselves will pick up. There was "stagflation" in the 1970s and if there is additional inflation in the West, stagflation is the most likely outcome once again. If Western economies do pick up a bit, eventually, there is also the possibility of some sort of hyperinflation. It almost happened late in the 1970s, and those were conditions in our view that were actually BETTER than today's.

In such times of crisis, central bankers, having developed the problems to begin with, want to be perceived as having the answers. The answer is always the same of course – and has to do with printing boatloads of money. The investor is left contemplating a range of options having to do with the underperformance or over-performance of a variety of assets depending on the moves made by monetary authorities. Bonds, stocks, gold and silver, commodities in general are all going to be influenced by these decisions.

Politics comes into play as well, given that China, Russia and other countries are increasingly uncomfortable with the dollar. The IMF (controlled in fact by the Anglo-American elite) is offering another, more globalized solution (SDRs) to take the dollar's place. But such a solution has manifold challenges in front of it, including a lack of credibility.

Conclusion: The effect that the Internet has had on people's belief in the system must be factored in, and a general rising tide of disbelief and frustration. The business cycle has not yet played itself out, either. Any moves that central bankers make in either Europe or the US must be seen in the context of an additional 5-10 years of economic restructuring before this current money-metals bull market likely winds to a close. The powers-that-be won't mention it of course, but they've lost control and it is not easy to see how they can regain it in the near future, anyway. They will continue to sound confident; they are not.

Complicating Economics

Complicating Economics


07/08/10 Tampa, Florida – A column by Ambrose Evans-Pritchard of The Telegraph, and appearing through, recently sported the headline “Time to shut down the US Federal Reserve?

Good question! If I were writing about this subject, of course, I would have opened my scathing condemnation of the Federal Reserve with, “Unfortunately, the time to shut down the Federal Reserve was long, long ago. As a result, we’re freaking doomed, and the only thing left to do is round these lowlife Fed morons up and punish them severely for their arrogance and incompetence! And Congress, too! And the Supreme Court! A pox on all their houses!”

Most people can tell at a glance the difference in our styles when he opens with the line “Like a mad aunt, the Fed is slowly losing its marbles”, which I think is a terrific line and shows a lot of subtle-yet-classy wit and wisdom, whereas I would follow this up with something more earthy as regards such monetary insanity, like, “The Federal Reserve is an intellectual cesspool of self-deluded neo-Keynesian econometric halfwits who have created so much excess money and credit, for so long, that they created boom-time inflations in stocks, bonds, houses, simmering-yet-ruinous inflation in consumer prices, a huge inflation in the cost of and reach of government, not to mention a terrifyingly gargantuan derivatives industry that swamps everything else, all of which shows some kind of insanity to not say, ‘Whoa! This can’t be right!’ a long, long time ago, especially since, because of them, We’re Freaking Doomed (WFD)!”

Mr. Evans-Pritchard, continuing with the civility for which he is now famous, completely ignores me and my spittle-spewing, hate-filled rant, and instead merely makes note of Kartik Athreya, senior economist for the Richmond Fed, who “has written a paper condemning economic bloggers as chronically stupid and a threat to public order.”

Well, I certainly appreciate him mentioning me, and am very flattered! And, boy, has he got me pegged! Wow!

I always knew that I was kind of stupid, but also a “threat to public order”? That would certainly explain a lot of other things about my life!

Then, to my surprise and pleasure, Mr. Evans-Pritchard, out of nowhere, sticks up for me! He says, “Dr Athreya’s assertions cannot be allowed to pass. The current generation of economists have led the world into a catastrophic cul de sac.”

By this time, I am beside myself, thrilled that he is agreeing with me when I say that the morons in the Federal Reserve, academia, the media, Congress and the Supreme Court are all responsible for the economic collapse now descending upon us, and the sheer horror of what they have done with their staggering incompetence cries out that they should be rounded up and put into some stinking cesspool of a prison so that they can’t breed and pass on their damaged chromosomes.

Naturally, I am applauding and shouting, “Bravo! Well said indeed, Mr. Ambrose Evans-Pritchard!” sure that he can read my mind and will echo my thoughts about this important subject.

Apparently encouraged by my appreciative outburst, he went on to further condemn the guilty by saying, “And if they think we are safely on the road to recovery, they still fail to understand what they did.”

Naturally, being the vindictive, hateful kind of guy that I am, a man who thinks that giving immunity to the Federal Reserve for their egregious sins of creating too much money, and Congress for allowing them to create the money so that the already-guilty Congress can increase their calumny by deficit-spending the new money, I think that his use of the term “fail to understand” is much, much too mild.

I think I would have used the immortal line from the Tom Hanks movie Forrest Gump, “Stupid is as stupid does,” even though “Treacherous and malignant is as treacherous and malignant does” is more (I am very, very sorry to say) apt.

Regardless of my helpful suggestions, he has a lot more insightful and clever criticisms of his own concerning Mr. Athreya, the Federal Reserve and mainstream/university “economists,” all of which is better than anything I can write. So I can only point you to The Telegraph and tell you to go read Mr. Evans-Pritchard yourself if “intelligent and educated with a British accent and refined, thoughtful discourse” is what you want, ya little wimp, but if you want an angry guy screaming his head off about how the foul Federal Reserve creating so much money will lead to inflations in prices that will destroy us, where your only hope is to buy gold, silver and enough firepower to protect them, and delivered with an American accent laced with implied gutter obscenities, gratuitous violence and strangely recurring references to yummy foods and alcoholic beverages, then you know where to find me.

Feeling sorry for myself, I was sulking about how I am always standing in the shade of Mr. Evans-Pritchard’s mighty pen, when I noticed that Mr. Athreya reveals that he has not read Henry Hazlitt’s classic book Economics in One Lesson! Hahaha!

He gave himself away when he said, “Economics is hard. Really hard. You just won’t believe how vastly hugely mind-boggingly hard it is. I mean you may think doing The Sunday Times crossword is difficult, but that’s just peanuts to economics. And because it is so hard, people shouldn’t blithely go shooting their mouths off about it, and pretending like it’s so easy. In fact, we would all be better off if we just ignored these clowns.” Hahaha!

I laughed! I laughed the Mogambo Laugh Of Scorn (MLOS) because economics is actually easy!

It only gets hard when you try to do something as Stupid (S) as trying to define the relevant variables of an economy and their relationships in order to build a mathematical model of the economy, and then trying something Really Stupid (RS) like trying to measure these variables and insisting on three-decimal place precision in an environment of constant “adjustments” to the data, and then to trying to do something Really, Really Stupid (RRS) like trying to forecast the path of the economy using these numbers, and then to do something Really, Really, Really Stupid (RRRS) like trying to adjust monetary policy to affect that forecasted future, and which always involves creating more and more money and credit to distort the future! Hahaha!

And if you or Mr. Athreya want something really easy, then just buy gold, silver and oil to capitalize on the mess that the Fed and Congress have made of the economy by creating too much money and then borrowing and spending too much money, respectively! It’s too easy! Whee!

The Mogambo Guru
for The Daily Reckoning

Tutti gli errori di chi vuol smentire il signoraggio

FINANZA/ Tutti gli errori di chi vuol smentire il signoraggio

venerdì 9 luglio 2010

Secondo il premio Nobel Krugman, il signoraggio corrisponde “alle risorse reali che il governo guadagna stampando la moneta che spende in beni e servizi”. Riprendiamo anche la citazione del premio Nobel Allais: “Fondamentalmente la creazione di denaro dal nulla (ex nihilo) effettuata dal sistema bancario è identica, non esito mai a dirlo per fare ben comprendere con cosa si ha a che fare, alla creazione di denaro da parte dei falsari, per questo motivo giustamente condannati dalla legge. Nel concreto essa provoca gli stessi risultati. La differenza è chi ne trae il profitto.” Questo per rispondere alle baggianate di chi, scrivendo su Wikipedia, afferma che certe cose non le afferma nessun economista.

Gli ultimi articoli proposti sul signoraggio hanno suscitato, come prevedibile, un vivace dibattito, sia di chi mi invita ad approfondire l’interessante argomento, sia di chi argomenta con espressioni squalificanti, del tipo “la solita bufala”; commenti, questi ultimi, conditi a volte da toni un po’ fuori le righe, ma soprattutto da argomentazioni che, di fronte ai dati ufficiali e a documenti delle stesse Banche Centrali, mostrano tutta la loro inconsistenza. Sono per lo più di luoghi comuni, sostenuti e favoriti da una ideologia nichilista, di cui spesso non ci si rende conto; luoghi comuni che non reggono appena il confronto con il buon senso e la lettura dei dati.

Il buon senso, proprio questo invoco, prima di ogni presunta conoscenza di economia o della struttura di funzionamento del sistema bancario o dei mercati finanziari. Proprio quel buon senso che mi permette di dire che tutta la moneta è debito. Mi è stato detto: eh no, ignorante, la moneta è debito per la Banca Centrale, mica per tutti noi! Ma la Banca Centrale con cosa copre quel debito? Con titoli di stato, cioè con un debito i cui interessi paghiamo tutti noi.

A tal proposito, una ulteriore questione è bene porre in evidenza dell’attuale sistema: quanto paga di interesse la Banca Centrale per il suo debito? Nulla, iscrive la moneta nei passivi senza avere alcun debitore concreto, a cui pagare gli interessi. E perché lo stato dovrebbe pagare un interesse alla Banca Centrale, la quale copre un suo debito (privo di interessi) con un nostro debito (che frutta interessi)? Non vi pare completamente immorale, oltre che finanziariamente discutibile?

In un commento all’ultimo articolo, mi viene detto: “Lei dice di non trovare differenza tra il collocamento primario e quello secondario. Se aspira al Nobel dovrebbe almeno ripassare la differenza tra monopolio e concorrenza nella domanda di mercato”. E poi mi si accusa di disonestà intellettuale: ma onestà intellettuale vorrebbe che non si estrapolasse la mia frase dal contesto, e che si affermasse che quella frase era relativa al giudizio sull’inflazione.

E lo ripeto: non si capisce cosa c’entri l’inflazione con il fatto che la Banca Centrale acquisti i titoli di stato direttamente o li acquisti da un privato. Casomai l’inflazione dipenderà dalla quantità di moneta prodotta. Ma se si affermasse questo semplice criterio, potrebbe venire in mente di controllare cosa ha fatto la Bce; invece, ideologicamente, non si deve controllare la Bce, e si deve impedire a chiunque di pensare soltanto a un intervento dello stato. Per questo la risposta ideologica è sempre la stessa: se lo stato stampa la moneta, arriva l’iperinflazione, arriva lo Zimbabwe, arriva il dittatore Mugabe.

In questo senso, l’ideologia attualmente vigente nelle Banche Centrali non permetterà mai un processo inflattivo: smettendo di creare nuova liquidità, creeranno rarefazione monetaria (mancherà la moneta per pagare i debiti con gli interessi, anzi lo stanno già facendo) e quindi casomai deflazione, che aumenterà il peso reale dei debiti, con conseguenti fallimenti e perdita reale dei posti di lavoro. Non avremo mai inflazione dalla Bce, anche a costo di farci morire tutti disoccupati.

A questo indirizzo del SIC (“Signoraggio informazione corretta”; molto scorretta, a dir la verità) è stato recentemente pubblicato un lungo articolo che dovrebbe smentire le mie considerazioni sul signoraggio. Riprendo alcune frasi per aiutarci ad approfondire alcuni concetti espressi, con tutte le loro conseguenze. Ci aiuterà a comprendere meglio il nocciolo della questione.

“Se chi emette moneta considerasse un profitto il valore nominale, avendo avuto come costi solo quelli di produzione, agirebbe come un falsario. Sarebbe ingiusto anche dal punto di vista etico, con un costo irrisorio, appropriarsi di un valore molto più grande. Questo vale per chiunque, Stato, banca centrale o qualsiasi altro ente. Come fare allora affinché questo non avvenga? Chi emette la moneta deve considerarla un proprio debito. Accade quindi che le banche centrali considerino la moneta che emettono come un proprio debito. Se una banca centrale stampa una banconota da 100 euro, non consegue alcun guadagno, perché non ha fatto altro che stampare un proprio titolo di debito, come se avesse in tasca un proprio assegno”.

Tutto giusto, tutto vero, anche se tacendo un giudizio fondamentale: se a compiere l’azione da “falsario” fosse lo stato, il beneficio sarebbe per tutti. Ma andiamo oltre, andiamo alle ragioni profonde. La prima considerazione è sul fatto che un sistema monetario in cui tutta la moneta è debito è insostenibile: pagare quel debito pari a tutta la moneta con la stessa moneta sarà sempre strutturalmente impossibile. L’unica alternativa praticabile è il ricorso al rinnovo del debito; e poiché non si può realmente pagare un debito con un altro debito, già conosciamo il finale: il fallimento. E siccome, a livello mondiale siamo in una economia “chiusa” (il numero degli stati è limitato), avremo per primi i fallimenti dei più deboli. Come la Grecia in area euro.

La seconda contestazione è sul fatto che questa moneta debito non rappresenta adeguatamente la realtà, poiché in natura e nell’ambiente sociale in cui viviamo vi sono molte cose che sono date, sono donate, e il cui utilizzo da parte di qualcuno non costituisce un debito, una mancanza per qualcun’altro. Invece, nell’attuale sistema finanziario, tutto è debito. Questo è un tipico dogma del moderno nichilismo, che discende da una errata concezione del concetto di proprietà, cioè l’idea che la proprietà privata è un bene del quale il proprietario può fare quello che vuole.

Si tratta di un pregiudizio, tipico del nichilismo moderno, che scambia la definizione di libertà con l’idea di fare quello che pare e piace. Ma questa “morale” è possibile solo se nulla ha valore, se tutto il valore si consuma nell’istante e nel possesso. E per negare la positività della realtà, occorre che tutto ciò che è positivo venga definito “debito”. Secondo la dottrina sociale della Chiesa, invece, occorre “riconoscere la funzione sociale di qualsiasi forma di possesso privato” (Compendio della Dottrina Sociale della Chiesa, n. 178). La moneta è prima di tutto un bene sociale. Ed è per questo che occorre che l’Autorità Monetaria sia una funzione dello Stato.

Un altro commentatore mi accusa scrivendo: “A quanto ho capito vorrebbe tornare alle svalutazioni. Svalutare significa rubare alla gente”. Il ragionamento schematico è che stampare moneta vuol dire creare inflazione (o “svalutare”); l’inflazione è una tassa occulta; l’inflazione è cattiva. Al contrario, ora veniamo proprio da un (quasi) decennio di Bce, cui abbiamo avuto un aumento selvaggio di massa monetaria, che nessuno può smentire visti i dati ufficiali della Bce: eppure, inflazione molto scarsa o praticamente nulla. Ancora, si parla subdolamente di “tassa occulta”: da sempre l’inflazione è definita una tassa occulta, ma è difficile definire occulta una tassa che conoscono tutti. E ancora più subdolamente ci raccontano dell’inflazione “cattiva”.

Ma l’inflazione “cattiva” è in realtà l’unica inflazione che ci hanno fatto conoscere, una inflazione cattiva che dipende da un sistema finanziario cattivo: cioè quella per cui i prezzi salgono mentre gli stipendi rimangono inalterati. Ma se i primi a salire sono gli stipendi, l’effetto inflattivo sui prezzi diventa nullo rispetto agli stipendi.

Nell’attuale sistema perverso, la massa monetaria aumenta e (attraverso un sistema bancario che persegue unicamente i propri interessi) finisce soprattutto nei mercati finanziari; come effetto collaterale abbiamo anche un processo inflattivo, mentre i salari sono fermi. Ma se la massa monetaria finisse direttamente negli stipendi, l’inflazione sarebbe solo un normale adeguamento dei prezzi alla nuova moneta che è già presente negli stipendi.

Ora lo dico esplicitamente: quello che spero si realizzi è un sistema monetario e finanziario in cui per tutti i dipendenti pubblici vi sia un aumento costante dello stipendio, del 2% per ogni mese, con moneta stampata dallo stato, quindi senza creare alcun debito. Già immagino gli sberleffi di alcuni commentatori, quelli che parlano di frottole del signoraggio, tanto inclini a ripetere i luoghi comuni e così poco inclini al ragionamento.

“Robe da matti - diranno - così finiremo con una inflazione folle, come lo Zimbabwe”. E giù via a sproloquiare: con un aumento del 2% mensile, nella ipotesi che gli stipendi di tutti si adeguino a questa crescita, calcolando un interesse composto per 12 volte avremmo un aumento del 12% annuale della massa monetaria . Quindi dovremmo avere un aumento inflattivo “pari” come dicono alcuni, o almeno proporzionale, come dicono altri.

Ma cosa accade nella realtà, ora che abbiamo la Bce? Vuoi vedere che la Bce ha fatto lo stesso, ma non a favore degli stipendi? Vediamo i dati ufficiali della Bce, ossia il grafico pubblicato sul suo sito dell’aggregato monetario M1 (quello relativo a banconote e conti correnti). I dati sono espressi in milioni di euro.

Questo è quello che ha combinato la Bce. Secondo i dati pubblicati dalla stessa Bce, l’aumento annuale dal luglio 2009 si è stabilizzato tra il 10% e il 13,4 %, mentre l’ultimo valore registrato a maggio è pari al 10,3%. Stiamo parlando quindi di aumenti superiori a quelli da me ipotizzati (superiori perché nel mio esempio non tutti in realtà sono dipendenti pubblici). Un aumento indiscriminato che finisce in mano a sistema bancario e speculatori, mentre tutti noi abbiamo sempre gli stessi soliti stipendi.

Ancora dalla pagina del Sic: “Ossia lo Stato avrebbe, dal nulla, un utile di 100 euro, ossia tutto il valore nominale della moneta creata dal nulla. [...] Equivale a stampare soldi gratis e farne ciò che si vuole. Questo è inammissibile eticamente, e anche sciocco, perché nessuno accetterebbe una moneta che qualcuno emette come un falsario”.

Ecco, proprio questo è il punto: si tratta precisamente di una questione etica. La gestione della moneta è una questione etica. E ognuno di voi può giudicare se una questione etica di tale portata può essere gestita unicamente dal sistema bancario o da loro emissari. E una questione così grave dovrebbe essere quantomeno oggetto di referendum popolare, non soggetto a un processo di privatizzazione, in modo da divenire soggetto alle leggi del libero mercato.

E soprattutto, visto che parliamo di etica e di moneta, bisogna iniziare ad affermare che lo Stato è un valore, e che la sua capacità di stampare moneta è il riconoscimento di questo valore. Il valore sottostante alla moneta stampata dallo Stato è precisamente quella fiducia sociale di cui occorre recuperare il valore. Proprio quella fiducia che è l’esatto contrario del nichilismo. Quella fiducia il cui carattere sociale definisce il valore sociale della moneta.

Quella fiducia che nella pagina del Sic viene negata: “Passali parla di fiducia, omettendo di citare il motivo unico che genera la fiducia che quella moneta sarà accettata dalla collettività: il corso forzoso, ossia il fatto che l’accettazione è imposta dalla legge, la certezza morale è una novità, priva di alcun significato, di Passali”.

Ma uno stato, in cui il motivo unico di fiducia sociale è la forza, si chiama dittatura. Questo sarebbe uno Stato che si afferma solo in virtù di una violenza, e non delle ragioni che costituiscono la convivenza civile. Per pensare a una configurazione di Stato che non sia la dittatura sotto le mentite spoglie della moneta debito e del corso forzoso, proponiamo un brano della lettera del prof. Auriti ai vescovi italiani.

“La Dottrina Sociale della Chiesa è sinteticamente ed esaurientemente formulata in cinque parole del Pater Noster: ‘Dacci oggi il nostro pane quotidiano’. Qui la parola più importante non è ‘pane’, ma ‘nostro’ che sta a significare che non bisogna dare solo il pane, ma anche il diritto di pretenderlo, cioè la ‘proprietà’. Il pane soddisfa il bisogno di mangiare comune a tutti gli esseri viventi. Il diritto di pretendere, che distingue l’uomo dalla bestia, soddisfa il bisogno di giustizia, il bisogno della certezza del diritto e conferisce all’uomo la dignità giuridica di essere ‘soggetto’, non ‘oggetto’, di diritto”.

Uno Stato, quindi, per generare fiducia, deve affermare l’uomo e la sua dignità, insieme all’ambiente naturale che costituisce tale dignità (la famiglia). Se tutti gli esseri umani hanno un uguale diritto a utilizzare i beni della terra, come sarà possibile realizzare questo diritto? Come sarà mai possibile fare in modo che questo diritto sacrosanto non rimanga una pia intenzione, senza una equa distribuzione gratuita di risorse monetarie?

Per questo la ripresa della sovranità monetaria da parte degli stati è solo il primo passaggio indispensabile; il secondo è la ridefinizione di cosa siano la moneta e la finanza, e di come queste possano essere utilizzate per il bene comune. E se la moneta rientra tra i beni sociali, va redistribuita anche gratuitamente, così come accade per diversi servizi sociali. Per questo occorre una adeguata formazione culturale sulla questione monetaria, in modo che, raggiunto lo scopo, nessuna parte politica osi tornare indietro, pena la sollevazione popolare. E allora torniamo col dito sulla piaga della mala informazione.

“E qui casca l’asino”. Così commentano quelli del Sic la mia spiegazione di come funziona la creazione di moneta da parte delle banche commerciali, esposta in un mio articolo. Ma tale spiegazione io l’ho copiata proprio dal sito della Banca Nazionale Svizzera, esattamente a questa pagina dove ciascuno di voi può verificare quanto riportato. Sono asini pure loro?

Ebbene, la volete sapere tutta? L’esempio di cui sopra, così come tutti quelli analoghi reperibili su internet e sui libri di testo, non sono precisi, poiché danno l’idea che gli impieghi nascono dai depositi: prima qualcuno deposita, poi la banca offre i prestiti. Ma nella realtà non è così. Sono gli impieghi a creare i depositi. Prima un soggetto A prende a prestito; poi spende la moneta presso un soggetto B, il quale deposita. Quindi i depositi sono paragonabili ai prestiti per definizione, non perché le banche prudentemente prestano non più di quanto depositato.

Un sistema monetario e finanziario dove tutto nasce a debito, corrisponde forse alla realtà in cui viviamo? La rappresenta adeguatamente? O sarà destinato al fallimento, nella sua capacità di costruire il bene comune di un popolo? Per definizione, può dal nichilismo nascere qualcosa di buono? Questo è il peccato originale del moderno sistema monetario. Di “peccato originale” parleremo dunque in un prossimo intervento.

Barter-Spy exchange rates: 4 US Spies = 10 Russian Spies

'Spy swap' under way as 10 plead guilty in US court

Anna Chapman is to be exchanged for Igor Sutyagin, Russian media reports, as exchange process begins

Composite of Anna Chapman and Igor Sutyagin
Anna Chapman and Igor Sutyagin, who are expected to be exchanged. Photograph: AP/Rex Features

Ten people accused of spying for Russia have tonight pleaded guilty to a conspiracy charge, setting up what could be one of the biggest, most unusual and least secret spy swaps known to superpower espionage.

The defendants, members of a deep-cover spy ring broken up last week, all told the federal judge in New York they would plead guilty.

They were charged with being long term "deep cover" spies, eight of them posing as married couples with children. But they were not accused of collecting classified information.

Two Obama administration sources said tonight that the Russian government would release four alleged western agents.

Igor Sutyagin, a Russian scientist convicted of working for the US, was reportedly flown to Vienna today as a first step toward the release of more than 20 alleged agents held in the US and Russia.

Britain was directly involved in the swap, officials made clear.

Sutyagin, an arms control analyst jailed for 14 years for passing military secrets to a British company the Russian authorities said was a CIA front, was reported to be bound for the UK after his release from a Moscow prison.

Today, riot police secured the perimeter of the former KGB Lefortovo jail in Moscow where Sutyagin was being held, as a convoy of armoured vehicles arrived. A few hours later the Russian media reported he was seen leaving a plane in Vienna, but his family said it was "speculation".

Sutyagin's father, Vyacheslav, said he had received no official confirmation of his son leaving Moscow or arriving in Vienna.

"There have been some unconfirmed reports that Igor flew in to Austria earlier this afternoon, but so far it seems to be wishful thinking. We are waiting for Igor to call us himself. We had expected it to be today, but it looks like it could be tomorrow."

The Russian website reported that Anna Chapman, one of the Russian spy suspects arrested in America, might be delivered to Moscow in exchange for Sutyagin.

It quoted a diplomatic saying the 28-year old businesswoman would be flown home in the coming days.

Sutyagin has consistently denied being a spy, saying the information he supplied was available from open sources. But his family said he agreed to effectively be forced in to exile rather than face another four and half years in the "harsh regime" penal colony at Kholmogory near Arkhangelsk. His mother, Svetlana, said he was unshaven and gaunt when she saw him today at Lefortovo.

Moscow was reportedly preparing to release several Russians convicted of working for the CIA or MI6.

Lawyers for the alleged deep cover Russian agents held in the US speculated that they could be on their way to Moscow within hours provided a court approves a deal for them to plead guilty to a single charge of failing to declare payments from a foreign government. They are likely to receive a minimal sentence of the time they have spent in jail since their arrests and then agree to be deported.

The true identities of five of the 10 alleged spies detained in the US are still not known to the US authorities.

Eight were living as married couples with children, some of whom were born in the US. They explained away their accents by claiming to be from Canada or Italy.

The fate of at least two of the accused agents remains in question. Chapman is believed to hold a British passport as well as Russian nationality, while another of the 10 is a US citizen.

An eleventh suspect, Christopher Metsos, who is accused of being the spy ring's paymaster, is on the run after skipping bail in Cyprus.

While their departure may avoid any potential embarrassment to either government that a trial might pose, the alleged spies leave behind them considerable disagreement over how seriously to take their espionage ring.

While the FBI has portrayed the deep-cover "sleeper" agents as a threat to American security, their at times bumbling attempts to infiltrate high policymaking circles has made them figures of fun to many Americans.

Chapman has become such a celebrity that a New York newspaper lamented her departure and asked if the city could keep her.

Yet there is evidence that the Russian intelligence service, the SVR, put considerable effort in to the operation, obtaining false identities using, in one instance, that of a Canadian who died as a child in 1963. The SVR also sent hundreds of thousands of dollars in funds.

The putative swap deal emerged when Sutyagin's lawyer and relatives told the media that prison authorities had abruptly moved him from the penal colony near Arkhangelsk to Lefortovo on Monday.

There is speculation in Russia about which other prisoners jailed for treason and espionage might be part of the swap.

Sutyagin, who is married with two daughters, told his mother he had learned of one other name on the list to be exchanged: Sergei Skripal, a military intelligence officer jailed in Russia in 2006 for giving information to MI6.

A Russian intelligence source told the Kommersant newspaper of two other proposed individuals: Alexander Zaporozhsky, an SVR operative sentenced to 18 years for espionage in 2003, and Alexander Sypachev, jailed for eight years in 2002 for working for the CIA. But Sypachev's lawyer said he would not agree to such a deal.

The putative exchange is particularly interesting as the Russians rarely give up Russians they have jailed on spying charges, well-placed sources said.

One reason given for the extreme reticence of British agencies to talk about the spy swap was the fear the Russians might make fresh arrests to use more people as potential collateral for exchanges. It is possible they were already placing potentially vulnerable people under surveillance now, the sources added.

Innovating Complementary Currencies workshop

Innovating Complementary Currencies workshop
– September 20th 2010 – London.

Grassroots Innovations: Complementary Currencies is a new research project focusing on complementary currencies and the conditions which support their diffusion and scaling up. The project is led by Dr Gill Seyfang, is funded by the Leverhulme Trust, and is based at the University of East Anglia. (see

We are hosting a 1-day international workshop in London to learn about and help inform our study. The aims of the workshop are:

· To gain international expert input into our scoping study, to identify the range of innovative complementary currencies around the world;

· To offer a space for currency practitioners to think about their activities as innovative practices, and to explore the implications of this framing for currency development and growth;

· To provide an opportunity for practitioners to share best practice with fellow currency developers from around the world.

The workshop will be oriented around two distinct themes and activities:

The State of the Field: Trends and Innovation in Complementary Currencies
The morning session will focus on identifying emerging innovation and trends within the complementary currency field. There will be the opportunity for brief presentations from participants about their particular area of knowledge. Participants will discuss not only current trends in the field but new emerging models. We will give a brief overview of our project's scoping studies to date, and also draw on the special edition of the International Journal of Community Currency Research that is currently being prepared.

Complementary Currencies as Forms of Innovation
The afternoon session will explore and test the project's conceptual framework (of currencies as innovative niches) drawing on the participants' experience and expertise. It will be a participative exploration of how thinking about currencies as forms of innovation differs from other ways of thinking about them, and what this perspective might offer to help us understand their success, failure and diffusion.

The workshop will be held in the UEA London offices, just 5 minutes walk from Liverpool Street Station.

`Innovating Complementary Currencies'
Monday 20th September
10am – 5pm

UEA London
102 Middlesex Street
London E1 7EZ, UK

We hope that you will be able to join us for this event, and would appreciate your response at the earliest opportunity, as places are strictly limited. We would also welcome any suggestions for other people you think might be interested in attending and contributing. Ideally we are looking for currency developers, network intermediaries and academics with a broad knowledge of currency systems.

There is a small budget to cover travel expenses (economy class public transport), and we hope to be able to support a wide range of participants to come to the workshop. If you would like to attend, please give us an indication of whether you will need to draw on this fund, and an estimate of the likely costs.

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Noel Longhurst
Senior Research Associate
School of Environmental Sciences
University of East Anglia
Norwich NR4 7TJ, UK

01603 592596
Skype: noellonghurst

Grassroots Innovations: Complementary Currencies:

Social Credit: My Conversation with a Cosmic Penguin

My Conversation with a Cosmic Penguin

A good friend poses questions about Social Credit.

"Mark S Bilk"
"Richard Eastman"

Mark S. Bilk: Betty did a good job. [see "Betty's Book Report on Social Credit," below] But I have a question: Does everyone get the same amount of social credit money from the government?

Richard P. Eastman: Yes.

Mark S. Bilk: Seems to me the amount should be inversely based on income or wealth. No point in giving millionaires extra money -- they already have enough to buy things and keep the economy going. It's the poor and middle-class people who don't, so they should get it. That way you don't give out more than is necessary and risk inflation. Right?

Richard P. Eastman: Social Credit is no a redistribution instrument. It is not a tool of social policy. The poor and the rich get about the same amount of oxygen to breathe and they get the same among of Social Credit. If it were otherwise than immediately Social Credit would become an instrument for criminal misallocation, for political argument of how "progressive redistribution" formulas were arrived at. Politicians would run for office either as Robin Hood or as George Bush. Political corruption, and in fact political parties of all kinds, are based on capturing the instruments of redistribution.

Mark S. Bilk: And is getting social credit money dependent on working? Because if it's not, wouldn't people just live off that money and not work?

Richard P. Eastman: Receiving a Social Credit dividend check is not dependent on working, or being needy. Or anything else. If people want to live off that money they can do so. But without exploitation at the job, with lots of interesting employers all making profit and able to hire people that fit their very varied needs -- working is more attractive and easier to obtain. Most people want to so something and be proud of it. Others -- artists, or maybe people like you and me -- will forego larger incomes in order to serve others for free -- the self-sacrificing do-gooder. Everyone wants to work under the right conditions. Those who don't probably shouldn't. If they don't they shouldn't be a drain on family members who do work. We have great modern technology -- Social Credit is modernist -- and plenty of resources (despite the lies of monopolists who seek to hide the reasons behind planned dearth for higher prices of their monopoly/oligopoly corporations. I think we need men who don't work -- people who develop themselves in highly individualistic ways. But for the reasons given, I do not think people will want to forego work -- and one more reason: Without having to pay personal debt, and national debt and with such abundance from business with plenty of demand and no interest payments (i.e. not hobbled by the "B" in the "A" plus "B" theorem of cost of production plus interest payment equalling cost of product -- Social Credit eliminates "B" (interest payment component and related components or it compensates them with Social Credit making up for the drain of "B") with the ultimate result that people don't have to work as long to produce the same amount of product (think of it as less overhead translating into higher wages and lower prices, i.e., higher "real" wages, or purchasing. If going to work means only four or five hours a day -- people will not find work adversive. Almost everyone not overworked enjoys the first one, two or three hours of work. The fourth hour is tolerable, but work becomes aversive if you are tied to in for longer periods. Of course the work that is more interesting -- the professions etc. are especially rewarding for in visible accomplishment and social status -- individual achievement or love of the craft - or dedication to the service -- that many will work long hours and like it. They are free to give their time to work or not -- they are no longer debt slaves forced to work for Rothschild, Rockefeller and their debt collector the IRS. Everyone like work of their own choosing on their own terms. No one likes to hang out in the street when they can really be doing something they feel good about. Also people are competitive -- men will still pride themselves on what they can do, what they can earn, what they can give their families -- that almost defines the middle class ethic. Under Social Credit we will all tend towards that ethic. And that is good -- whatever anarchists or communists or libertarians or conservatives or progressives may urge to the contrary. The Rothschild's substitute for the "real thing" has led us to where we are today.

Mark S. Bilk: But that means that there would have to be enough jobs for full employment. And because of increasing automation, computerization, and other forms of technology, the standard number of hours worked per week would have to be gradually decreased to insure that there would be jobs for everyone.

Richard P. Eastman: "Full Employment" is a bogus goal. The error gained prominence from Keynes who viewed the old excuse for depressions as "over production" -- but we know that there is no such thing -- in the Depression of the 1930's milk was thrown out and crops burned because there was insufficient demand due to insufficient purchasing power in the hands of the people. Keynes put his name to the General Theory because he sold out -- making millions in 1930 -- to the schemers behind the depression. Montegu Norman and Bernard Baruch among them. Keynes book was written by a circle of agent so of the City of London. At any rate, Keynes theory was that when factories were idled because of "overproduction" or "underconsumption" the solution was not Social Credit -- Keynes was bought to be the figurehead of "the new economics" that was simply change the packaging of the old system and sell that to the country, pushing the Social Credit reformers aside. Keynes had a good reputation because of his book The Economic Consequences of the Peace -- which described the mistakes of the Versailles treaty in demanding impossible reparations for Germany when Germany was not the country that kept the war going and when Germany was the country that first agreed to quit the war and accept Wilson's Fourteen Points -- which they never got. Keynes was right and got the international respect he deserved for being right. Keynes also was right when he wrote a shorter piece in 1925 called "The Economic Consequences of Mr. Churchill" in which he foresaw the consequences of Winston Churchill, then the Chancellor of the Exchequer who did a Ron Paul and put Britain on the Gold Standard at pre-war gold-content of the British pound -- this in order that the British ruling and financial elite -- who loaned money in the war effort would now enjoy the windfall that goes to creditors when debts incurred earlier as paper must now be paid in gold at a gold per dollar price (in this case the pound) that represents an incredible amount of purchasing power that must be earned with an incredibly larger amount of labor for the debtor to meet his debt obligations -- of meeting the government's war-debt obligations through the paying of higher taxes through revaluation upward due to the arbitrary setting of the currency's gold content so high. (Note: All fooled people who follow Celente, Paul, Beck and all of the pundits with gold-dealer sponsors -- need to know that the Rothschilds monopolize money to scam people in this way -- right now they are selling their gold accumulation at incredible prices as people panic into turning over their purchasing power for this dead metal. They will get it all back again after the fall of the US. The equipment for detecting gold at a distance by its density is already mass produced and standing in readiness for the day gold confiscation comes. You Ron Paulers really made a big mistake when you bet on gold instead of on saving your country with good domestic investments in productive capactity and store of provisions for what is ahead. I say this over and over -- no Ron Pauler or Becker or Celenteist seems interested in defending their position against these criticisms. I wonder why?) At any rate, back to Keynes and Keynesianism -- his remedy for a shortage of "aggregate demand" his name covering the real problem of insufficient purchasing power for wage earners to buy products that have to cover production costs that include both wages, profits and usury -- his "solution" was to have the govermnment borrow money money from the Rothschilds and use it to "stimulate" the economy, to "prime the pump," with growth of government. But Keynes ignored the fact that the stimulus comes from borrowing which only adds to the interest burden. He thought the "stimulus" would increase production enough that the increased debt could be paid off -- forgetting that a stimulus that is debt financed is nothing but "junk food" -- eventually draining out more than in pumps in.

Mark S. Bilk: Already, lots of people work at jobs that produce nothing, or even do harm, like most advertising, real-estate and stock speculation, enforcement of laws against cannabis, and imprisoning people who use this herb (which is far less harmful than alcohol, and actually beneficial in some circumstances if used correctly). I think these non-productive and anti-productive jobs exist partly because with full employment, people would only have to work 20 or less hours per week to produce everything that they consume.

Richard P. Eastman: Yes, the Dilbert comic strips are not far from the truth of corporation world. A corporation is nothing but a small communist state -- they are run internally like the Soviet Union while outside the thrive because of monopoly power and other goverment bestowed anti-comnpetitive privileges. Single proprietorships like Henry Ford, Thomas Edison, Henry Kaiser, Walt Disney, and perhaps Bill Gates always outperform a corproation apart from any exclusive patents they may have purchases. Most of the government is inefficient. For every person caring for the retarded for example, eighty percent of paychecks go to administrative and consultant personnel who never work directly with the residents. In fact when cuts have to be made, the skilled hands-on caregivers and the group home are replaced by an apartment with uninsured street people hired to be "caregivers" while compensation for bureaucracy and consultants remains undiminished. (I was the administrator of a group home for severe-profound deveopmentally developed youth at the time care for people with developmental disabilities was being gutted in Washington State. The state was totally dishonest and it came from the top down. With Social Credit people will have the money to buy care for their own, without the state. People do not realize that the real enemy of socialism as well as of usury capitalism is Social Credit. I agree that Wall Street is very little about entrepreneurship and investment in America -- it is all about speculation and grabbing peoples incomes so the billionaires can use it for their "o.p.m." leveraged buyouts etc. And you know I will never agree with you on marijuana being good for people. I have seen to many people, once sharp, become lotus eaters talking and thinking like Cheech-and-Chong (hey, remember them, man?) -- As you know I nevertheless favor the government providing every addict with his substance at cost or for free -- i.e., pennies, grown on goverment farms etc. -- in order that people will not rob and kill to get money for drugs and in order that all those trillions of dollars don't keep ending up in the hands of Rockefeller/ Rothschild/ Israel/China hands. People adopting Social Credit around the world will not knock out Rotschild/Rockefell er organized crime unless the profit is taken out of cocaine and heroin and other addictive drugs. When drugs are provided to all addicts no questions asked for pennies -- the pushers will disappear -- the presure will be off to take it. The jails will be empty. People can get back to work again -- possibly with addiction health advice and therapy provided by private charities or local or state taxes. But yes, I agree there is a lot of busy waste in corporations -- especially because of nepotism -- keeping it in the families, while our ruling elite are tjust as sorry as the sorriest bunch of clowns any declining civilization has had to endure.

Mark S. Bilk: Also, the state-run banks that make interest-free loans to businesses would have to require some collateral and/or would have to evaluate the soundness of the business plans. And the borrowers would have to be legally bound to pay the money back. Otherwise there would be all kinds of con-men borrowing money and absconding with it. Right?

Richard P. Eastman: Banks would charge interest on loans, but the loans would not be the source of our money supply. Banks for business and home building investments would have 100 percent backing -- they would actually pay savers to actually lend to the banks -- say at 3% on the same terms that the banks, after bundling up the savings deposits to make big loans, would offer, say 6% to entrepreneur borrowers. These banks would thus not control the money supply in any way. It costs them to keep depositors' money in the vaults, since they are paying 3% for them to have the deposit, and so they will lend the money as quickly as possible to the entrepreneur with the most promise of being successful, paying the loan back and then coming to make a bigger loan. etc. Notice that banks become only savings banks. The checking account function, and clearing checks, could be done through the Social Credit Agency as a public service -- people would use their Social Credit Card for everything -- the Social Credit dividend simply being added to everyones account at the specified time etc. Remember, no more fractional reserve banking -- no more creation of money out of thin air because of the fractional reserve system. Banks will simply be borrowers from the many at low interest in order to be lenders to the few entrepreneurs who have worthy ideas that require a lot of capital for start up. Moselm banking principles would also be allowed under Social Credit -- where the bank becomes a partner in the profits and the depositors get, not interest, but a yet smaller share of the profit -- profit sharing on top of principal instead of interest on top of principal. Lots of of room for creative finance this side of usury.

Mark S. Bilk: Oops, here's another point. The people in charge of handing out social credit money, and the people running the state interest-free banks, would have to be watched and controlled very carefully, and accurate descriptions of all their actions made instantly available to the public (via the Internet). Because the dynamics of such a situation, with people having power over the well-being of others, invites power-hungry people to seek those jobs, and also invites massive corruption. Whether they're called commissars under communism/socialism , or administrators under populism/social- credit, the psychological factors of the situation are the same.

Richard P. Eastman: On the second Tuesday of each month, before live television, the comptroller of the National Social Credit Service and the official Dispenser of the Dividend will go to a small round domed marble building with a single room under the dome and space for cameramen and witnesses. Directly under the dome will be granite block with a numerical keyboard and no letter keys and a windows to type in the date of entry, 9-21-2010, the day the dividend will be deposited and the divident amount each person will receive, say $200; and then both the Comptroller and the Dispenser of the Dividend will insert their individual keys which when both turned will activate the "enter" key which will be the entry, authorization and instruction for the distribution of that amount to each person's Social Credit Card to be created -- out of thin-air and without having to be paid back -- to be recieved at 12:01 am on the first of the month, Friday October 1. The granite "credit stone" will automatically reset to receive the next entry on third Tuesday in October for the amount specified. Then they lock up the Chamber of Social Credit until the next month.

But what about verifiability? Well, since everybody in the country gets the same amount, it is no invasionof privacy to provide that every citizen's name and city shall be listed on a Social Credit Website showing exactly the amount that the single specified amount was indeed created in that persons account. (It is an error to say the money was "transferred" to peoples accounts. It is created in those accounts by the Social Credit Agency -- but the Social Credit agency is not debiting its own accounts. The Social Credit agency has no accounts, no deposits, no money. It merely says "let there be money in each persons account" and it is done. Now everyone will know what the the social credit dividend is each month and each can check the amount against what was created for them -- and so can everybody else check to see that everyone else got the same thing. If people do not consent to have their names on the citizen roster to receive the created dividend then it it will simply be electronically impossible for them to receive their dividend. But the ultimate fail-safe is this: the program will be hard wired in such a way that everyone receives their created dividend together -- that there is no way for the system to look up an individual and change his dividend amount from what everybody else gets.

Public inspections of the software, with public access video of the entire process. The system will be too simple to hack.

Another fail safe could be that social credit money must all be either spent or converted to paper cash by the next month. That way no Social Credit Card will ever have more on it than the specified amount for the current month. Grocery stores, could simply give cash back for unspent social credit in a given month.

I think such a system would be much less prone to tampering, embezzlement and fraud than the system we have now or any other system I have ever heard of.

So there you are, Mr. Cosmic Penguin.


Mark S. Bilk's Cosmic Penguin: http://www.cosmicpe

Betty's Classroom Report on Social Credit

Today I am going to tell you about Social Credit.

Everybody knows that people go to work so they can get money to buy things. The things people buy are paid for with money people earn by making the things people buy. And that would be all there is to say about it if it weren't for a big problem that keeps happening.

Sometimes the good things people make on their jobs simply don't sell even though everybody knows people want those things and need those things. When this happens and selling stops the people who make things have to stop making them. Companies don't get any money when they don't sell what has been made and so they don't have enough money to pay all the people who work at the company. This causes troubles for nearly everyone.

How come there is not enough money for people to buy the things we know how to so easily make for each other?

The troubles start because some of the money that goes around and around from families to companies and back to families again gets taken away so there is not enough money being spent so everyone can keep their job and keep on spending. The big problem is the money that is taken away so it can't keep going around businesses and families doing good for people.

The reason the money goes away is that it is only loaned to people, not given to them. Families and companies have to borrow the money so they will have money to buy and sell. The people who loan the money to companies and familes give it, but then they expect it back or else they will take away the house or the companies for themselves. Sometimes the people who lend the money really want to get those companies for themselves and get the houses and start making people pay rent who live there.

If people didn't have to borrow money to get it, then there would always be enough money to buy things that people make when they go to work. There would be no problem if everybody just got together and voted to print money and send some to every family so they could spend it. Doing that is called Social Credit. With Social Credit the money does not have to be paid back.

Does everybody understand what I've said so far?

Social Credit is easy to understand and it is easy to do, but the reason why we don't get our money this way and avoid all the troubles is that very rich bad bankers can steal a lot of money from everybody when money is borrowed instead of being given to people from Social Credit.

Now there is one more thing you need to know about.

When bad bankers take away more money than they put in they stealing the things that that money could have bought for families if people used Social Credit to put in new money instead of borrowing.

The bad men don't just lend money and then get it back and then lend it again right away to someone else. If that was the way money worked then maybe money wouldn't be gone away as much and there would be enough going around for everybody to keep making things and buying things. But the bad men do something much different. What they do is called usury.

When a man wants to start a company and give people jobs to make things he goes to the usury man at a bank and borrows money from him. The usury man writes on a piece of paper that the man starting the company is to get some new money from the bank. The company is started and people get jobs and people have money to buy the things that are made. But then the money has to be paid back. For every dollar that the man starting the company borrowed, a year later he has to give back to the usury man a dollar plus a dime a nickle and some pennies; and sometimes he has to pay back with each dollar a whole quarter.

That extra money that has to be paid back for each dollar that the man owning the company borrowed is called interest. It is called interest because the extra dime and nickle and penny paid back with the dollar is what makes the usury man interested in lending to the man with the company in the first place.

So all the time people are borrowing new money that comes in but paying back the same amount of money plus more. Money is always being lost by families and companies to the bankers.

And this is what causes troubles. Because all the time the bankers have all that interest they get and families and companies are short that much for buying what is produced and keeping companies busy with everybody working. People lose their jobs. Companies go out of business. And the bankers don't want to lend money to companies because the companies don't have enough customers.

But bankers are in the business of lending money, and if people can't borrow money because the banker knows the people will never be able to earn enough to pay back each dollar with an extra dime, nickle and penny because the banker has taken out all of the money that was going around -- the banker will look elsewhere for people to lend money to. He will lend money to other countries. Or he will pay bad people to get countries angry with each other so they will start a war so that people will have to borrow money to buy guns and airplanes and ships and bombs to win the war. Then the banker can lend all of the money he took away as interest and the companies can hire people again to make the guns and bombs. The bankers will even cause other kinds of disasters if they can so they can lend their money to rebuild after the disaster. These are the kinds of troubles that happen when people get their money from borrowing it from banks rather than just agreeing that money will be printed up for free and given to each man, woman and child to spend without having to pay it back at all.

After thinking about usury and Social Credit I really hope that people will find a way to have Social Credit without usury. If people have Social Credit then companies would make enough money that they could keep everyone hired and make new things and different kinds of things and better things and everyone would have the money to buy the ones they like.

Are there any questions?

Q: How come people don't fix the problem by having Social Credit and not having money that's all borrowed and shit.

A: That's exactly what I wondered. So I looked up the word "economics" in the school encyclopedia and read what it says about what causes companies to go out of business and people to lose jobs. It didn't anything about the real reason of people having to pay interest without extra money being added so they could pay it. Instead there were two famous men who were paid by the bankers to give people different reasons why people lost their jobs and and couldn't buy things.

One man named John and another named Paul said that when companies couldn't sell that the government should spend money so companies give new jobs to people who lost their jobs. But this answer was wrong because the government had to borrow money before it could spend it, and the leak of interest later on would more than undo the spending that the government does now. And besides, the government spending what they want is not the same as the people having the money to spend it on what they want.

Another man with another wrong answer was named Milton. Milton said that the banks that make money should look at prices and if prices go up they should lend less money and if prices go down they should lend more money. Well, of course that sounds good, but of course it doesn't fix the problem of interest draining away the money people have to spend on the goods they make. Even when prices don't change, the bankers are slowly ending up taking out more dollars than they have put in. Milton didn't understand that it makes a difference if there are ten dog food companies making puppy biscuits with everybody working and selling the puppy biscuits for fifty cents a box and having only two dog food companies in business and people without jobs with the price of puppy biscuits still fifty cents for a box. Another thing that Milton said was that while the people were incapable of deciding how much money their should be, that the bankers could be trusted to just lend enough money so that prices wouldn't change. Milton didn't seem to know that bankers would want price to go down and the amount of money to go down most of the time -- because everyone owes them money and if prices go down then the money they are going to get from people paying interest will buy more for the bankers and the people will have to work harder and longer to get each dollar, dime, nickle and penny. They also like to have the amount of money going around to become less and less because then more people will have to come to the bankers to borrow more and pay back a dollar and a quarter for each dollar borrowed instead of just a dollar, a dime and a nickle.

John and Paul and Milton would not tell people that using money that is borrowed rather than money that is just made and given to people is what causes everybody's troubles. It doesn't matter if puppy biscuits are one cent a box or if they are a million dollars a box as long as people receive enough money to buy everything they can make and want to own.

To conclude this report I simply wish to say that I think Social Credit is the best way for companies and families to get the money they use and that usury is a very bad way that only does good for a few very bad people.

Teacher: Thank you, Betty. That was very nicely done. However, before you take your seat, I have a question that I would like you to try answering. Some people say that if our money were gold instead of paper or checking account money created by bank loans that prices would not go up and everything would be fine. In light of what you have learned about Social Credit, do you think that could be true?

Betty: I don't see how it could be true, Miss Shirley. To get gold one has to pay the cost of getting it out of the ground. And when people hide it away it doesn't get spent. With Social Credit the money just comes to every house without people having to do anything. With gold you would have to either get it out of the ground or borrow or buy it from the rich people who own it all, and they would want interest. To pay their debts people would not only have a harder time because money had gone away in paying interest, but because gold is so hard to get hold of to put in people's hands in the first place. The gold money would never be enough and so the bad bankers would prosper at the expense of everybody else even more with gold than without it.

Teacher: Very good. You may take you seat. Now class, it is time to put away your reading notebooks and bring out your geography textbooks.

note: Economists mentioned were John (Keynes), Paul (Samuelson), and Milton (Friedman)

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How to Fix Everything

by the Little Mailman of Bayberry Lane

The things people make and the people who get to own them depends on where our tokens for spending come from, and on who gets to spend those tokens first , and on how much they have to pay back later for being allowed spend those new tokens today.

Mr. Owl said to me the other day that there are so many people making different kinds of things with so many different kinds of machines and so many different kinds of things that go into the things we buy that we have to have Buying Tokens to make it all work. The buying tokens pay people for working. When people spend the tokens they earn that gives messages to other people about what things people will pay the most to own. In bigger words the entrepreneur must have the market price signals to decide which things to produce and how to make them so he can most profitably satisfy the people spending the tokens they earn.

Today things are not going the way they are supposed to go and the reason has to do with a man who makes spending tokens out of thin air, as if by magic, and what that man demands back from people later on for letting them be the first spenders of the money he makes out of thin air today.

Now we all can think when thinking is important and nothing is more important than everyone getting all the food and clothing and pretty houses and other nice things that they want to be happy and to help the people they love to be happy too.

What is going wrong today and what can fix it is easy to understand if you ask the right questions and then think about the answers to these questions. There are only three big questions that we need to answer before we can fix everything up the way it is supposed to be.

This is how Mr. Owl explained it to me:

The three great questions:

1. Who gets to do the "thin air" trick that originates purchasing power,.

2. Who receives the new "thin air" spending tokens to become "first spender."

3. What "kickback" must Mr. First Spender pay to Mr. Thin Air for conferring the privilege of spending first?

Mr. Owl's Glossery of Terms ( In case you need to look up a word as we go along.)

thin air: sovereign power to originate spending tokens

credit: Mr. Thin Air's own best reasons for favoring Mr. First Spender with getting "thin air" exchange tokens for first spending over someone else who lives in the village getting them.

kickback: payments over time to Mr. Thin Air for allowing someone to be a first spender. This tribute to Mr. Thin Air is called usury or interest.

What are the answers to these questions?

Let me tell you.

Mr. Thin Air, for allowing people to first-spend thin-air tokens, exacts tribute in return. Mr. Thin Air receives for conferring immediate use of his thin-air spending tokens, tribute that must be gathered by toil and sacrifice, tribute of purchasing power equaling the full first-spend amount plus an extra amount, to be paid over time plus a compounding of amount as an extra-amount owed also requires a tribute payment, according to the ways of compound interest.

An ancestor of Mr. Thin Air got his special thin-air privileges from a King in return for easing the Kings debts or for giving the King some gold to buy weapons to win a war that Thin Air's ancestor actually instigated.

Since that time the Thin Air tribe have gained control of the world, simply by the power of introducing thin-air spending tokens and conferring the power to be first spenders on condition of repayment in toil-money plus usury.

Mr. Thin Air has lots of reasons why he should hold on to his thin-air power monopoly.

One reason he gives is that he owns almost all the gold and keeps it in his vaults and that the thin-air credit power just simply stems from that "backing."

Another reason that Mr. Thin Air gives for monopolizing thin-air powers is that governments cannot be trusted not to create too much thin-air money. Mr. Thin is against others having his thin-iar powers because he fears too much money would be pulled out of thin air, that there would would be too many token claims to slices of the national economic pie which would mean that the slice each single token buys would become thinner and thinner -- and that would be bad because the agreed-upon tribute First pays each month, would each passing month represent less and purchasing power than Mr. Thin originally envisioned when the contract with Mr. First was signed. Mr. Thin calls this reason, the "anti-inflationist" argument.

In addition to being "anti-inflation, " we should not, and for the same reason, Mr. Thin Air is also a pro-deflationist -- although he never mentions this or uses the fact as a reason for having him retain his monopoly of thin-air and credit power. Nevertheless his policy is that it is better for him to be very stinting in the amount of first-spending of thin-air tokens he allows since reducing the amount of thin-air tokens in the hands of first spenders means there will be more economic pie per token -- which means that his entire stock of tribute IOUs that he hold will grow in value -- a much bigger gain from him than he would have if he made a few more loans so purchasing power in circulation would not deflate and his pile of IOU's would not increase in value over time due to the deflation.

Mr Thin Air and all of his ancestors through the centuries, like to convince people that the thin-air power should be tied to gold reserves because such an arrangement in always deflationary in the long run. With thin-air power tied to the amount of gold in vaults (as arbitrary an arrangement as any other charlaton money scheme) there will never be deflation which to reduce the purchasing power of the future loan payments he receives from Mr. First Spender D.S.. However, as economies, being organic things, usually grown if not mistreated too badly, Mr. Thin Air can expect the benefit of continuous deflation as the amount of economic pie will grow by a larger percent each year than the percent gold miners will be able to increase the size of the gold stock that backs thin-air money creation.

Of all things in this universe Mr. Thin hates and fears the Social Credit idea that American populists are just beginning to discover from the writings men who went up against the Thin-Air Money Dynasty in past ages of economic depression brought on by Mr. Thin Airs favorite policies.

Under social credit, the government takes over the thin-air function and provides first-spending power to each person of each household. Since everybody gets the same social credit amount of thin-air purchasing power each month and since all will be affected by inflation or deflation in the same way and by the same amount -- and since no social credit is paid to the governemnt -- remember, the people own the government and any funds it obtains must come from the people in taxes that are set by the people's chosen representatives.

Under social credit, then, there is no tribute, no debt slavery. You don't have to pay back the amount of first spending purchasing power given or interest on that purchasing power or the amount represented by the extra toil and sacrifice needed to earn tokens more hard to come by because of Mr. Thin's deflationary policies.

Now you understand social credit. Now you can read the following correspondence on the subject -- outlining real solution to the economic crisis -- which chisis is a supremely naughty escapade by Mr. Thin Air which I call "the Kleptastrophe" -- and, hopefully, you will see that there is another way that really is clearly true and superior and worth the effort of using it to skate past hell and reach the future we really always wanted.

The End.

Note the Little Mailman of Bayberry Lane wants you to send this letter from him far and wide, so that we can all come to agreement that this is the best way of fixing the things that are wrong today.

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Here is how the dog who belongs to himself likes to explain it:

Social Credit is better.

Which system would you rather have?

System #1:
The international bankers have monopoly of credit. They keep the credit tight to maximize loan income and the value of their debt portfolios. Unfortunately keeping the money supply tight means that the corporations they invest their money in and buy stock in do not have customers. So, hiring Israeli intelligence they pay for a false-flag attack in New York skyskrapers so they can have a war and a great need for anti-terrorism measures which their defense corporations can cater profitably, solving the problem of insufficient purchasing power to buy their products. They also create weather disasters and other disasters with secret technologies -- because the emergency services business and the reconstruction businesses are also lucrative -- paid for by government which borrows the money from the bankers to pay the corporations. etc. Meanwhile the people not involved with war industry or the disaster business continue to lose jobs and houses and standard of living because of lack of purchasing power.

or System #2:

System #2: The government has debt-free treasury money that it creates without borrowing from international bankers. They give an amount of money to every American -- not a redistribution of funds, but the government giving households the chance to spend the new money into existence -- so that household demand will guide the market economy. The entire economy will shift away from catering war and disasters -- and from making war and making disasters -- as people receive these checks and treat them like they would a tax return or a dividend payment or a pension check. People will still work for a living -- the social credit does not replace work, or entrepreneurship, or the market system, or earning a living -- what it replaces is the way new money enteres the economic loop. Let housewives again decide what this country will make. And under this system the domestic economy will get the stimulus, becuase American families do not spend their money on war. Social credit is the death knell for both finance capitalism and socialism and the welfare state. There can be no free market system with consumer sovereignty without social credit. Their can only be poverty and war without Social Credit.

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Social Credit is Household Spending Power -- sent to everybody like electric power from a public utility.

It it real unborrowed legal tender money that households receive to spend as they choose and never have to pay back.

From where? Who pays for it? From "thin air" and from the fact that good money managed nationally in this way creates economic pie as no other system. It is money from the same "magic hat" that the Rothschilds have monopolized and from which they have from "thin air" made their loans in usury. Money from the same store of assets and potential that the Rothschilds got all their wealth from when they monopolize credit and lend to us for their own interest-harvesting , as they farm the fruits of our labors at our very great expense.


Government administered basic-right dividend checks to everyone providing interest free 'money' backed by the willing acceptance of the entire nation in acknowledgement of the great benefit the system provides at so little cost to the nation. The power of money at the service of all from out of thin air and right to your own home.