domenica 31 ottobre 2010

Time for a New Theory of Money

Time for a New Theory of Money

The reason our financial system has routinely gotten into trouble, with periodic waves of depression like the one we’re battling now, may be due to a flawed perception not just of the roles of banking and credit but of the nature of money itself. In our economic adolescence, we have regarded money as a “thing” — something independent of the relationship it facilitates. But today there is no gold or silver backing our money. Instead, it’s created by banks when they make loans (that includes Federal Reserve Notes or dollar bills, which are created by the Federal Reserve, a privately-owned banking corporation, and lent into the economy). Virtually all money today originates as credit, or debt, which is simply a legal agreement to pay in the future.

Money as Relationship

In an illuminating dissertation called “Toward a General Theory of Credit and Money” in The Review of Austrian Economics (vol. 14:4, pages 267-317, 2001), Mostafa Moini, Professor of Economics at Oklahoma City University, argues that money has never actually been a “commodity” or “thing.” It has always been merely a “relation,” a legal agreement, a credit/debit arrangement, an acknowledgment of a debt owed and a promise to repay.

The concept of money-as-a-commodity can be traced back to the use of precious metal coins. Gold is widely claimed to be the oldest and most stable currency known, but this is not actually true. Money did not begin with gold coins and evolve into a sophisticated accounting system. It began as an accounting system and evolved into the use of precious metal coins. Money as a “unit of account” (a tally of sums paid and owed) predated money as a “store of value” (a “commodity” or “thing”) by two millennia; the Sumerian and Egyptian civilizations using these accounting-entry payment systems lasted not just hundreds of years (as with some civilizations using gold) but thousands of years. Their bank-like ancient payment systems were public systems — operated by the government the way that courts, libraries and post offices are operated as public services today.

In the payment system of ancient Sumeria, goods were given a value in terms of weight and were measured in these units against each other. The unit of weight was the “shekel,” something that was not originally a coin but a standardized measure. She was the word for barley, suggesting the original unit of measure was a weight of grain. This was valued against other commodities by weight: So many shekels of wheat equaled so many cows equaled so many shekels of silver, etc. Prices of major commodities were fixed by the government; Hammurabi, Babylonian king and lawmaker, has detailed tables of these. Interest was also fixed and invariable, making economic life very predictable.

Grain was stored in granaries, which served as a form of “bank.” But grain was perishable, so silver eventually became the standard tally representing sums owed. A farmer could go to market and exchange his perishable goods for a weight of silver, and come back at his leisure to redeem this market credit in other goods as needed. But it was still simply a tally of a debt owed and a right to make good on it later. Eventually, silver tallies became wooden tallies became paper tallies became electronic tallies.

The Credit Revolution

The problem with gold coins was that they could not expand to meet the needs of trade. The revolutionary advance of medieval bankers was that they succeeded in creating a flexible money supply, one that could keep pace with a vigorously expanding mercantile trade. They did this through the use of credit, something they created by allowing overdrafts in the accounts of their depositors. Under what came to be called “fractional reserve” banking, the bankers would issue paper receipts called banknotes for more gold than they actually had. Their shipping clients would sail away with their wares and return with silver or gold, settling accounts and allowing the bankers’ books to balance. The credit thus created was in high demand in the rapidly expanding economy; but because it was based on the presumption that money was a “thing” (gold), the bankers had to engage in a shell game that periodically got them into trouble. They were gambling that their customers would not all come for their gold at the same time; but when they miscalculated, or when people got suspicious for some reason, there would be a run on the banks, the financial system would collapse, and the economy would sink into depression.

Today, paper money is no longer redeemable in gold, but money is still perceived as a “thing” that has to “be there” before credit can be advanced. Banks still engage in money creation by advancing bank credit, which becomes a deposit in the borrower’s account, which becomes checkbook money. In order for their outgoing checks to clear, however, the banks have to borrow from a pool of money deposited by their customers. If they don’t have enough deposits, they have to borrow from the money market or other banks.

As British author Ann Pettifor observes:

[T]he banking system . . . has failed in its primary purpose: to act as a machine for lending into the real economy. Instead the banking system has been turned on its head, and become a borrowing machine.

The banks suck up cheap money and return it as more expensive money, if they return it at all. The banks control the money spigots and can deny credit to small players, who wind up defaulting on their loans, allowing the big players with access to cheap credit to buy up the underlying assets very cheaply.

That’s one systemic flaw in the current scheme. Another is that the borrowed money backing the bank’s loans usually comes from shorter-term loans. Like Jimmy Stewart’s beleaguered savings and loan in It’s a Wonderful Life, the banks are “borrowing short to lend long,” and if the money market suddenly dries up, the banks will be in trouble. That is what happened in September 2008: According to Rep. Paul Kanjorski, speaking on C-Span in February 2009, there was a $550 billion run on the money markets.

Securitization: “Monetizing” Loans Not With Gold But With Homes

The money markets are part of the “shadow banking system” where large institutional investors park their funds. The shadow banking system allows banks to get around the capital and reserve requirements now imposed on depository institutions by moving loans off their books. Large institutional investors use the shadow banking system because the conventional banking system guarantees deposits only up to $250,000, and large institutional investors have much more than that to move around on a daily basis. The money market is very liquid, and what protects it in place of FDIC insurance is that it is “securitized,” or backed by securities of some sort. Often, the collateral consists of mortgage-backed securities (MBS), the securitized units into which American real estate has been sliced and packaged, sausage-fashion.

Like with the gold that was lent many times over in the 17th century, the same home may be pledged as “security” for several different investor groups at the same time. This is all done behind an electronic curtain called MERS (an acronym for Mortgage Electronic Registration Systems, Inc.), which has allowed houses to be shuffled around among multiple, rapidly changing owners while circumventing local recording laws.

As in the 17th century, however, the scheme has run into trouble when more than one investor group has tried to foreclose at the same time. And the securitization model has now crashed against the hard rock of hundreds of years of state real estate law, which has certain requirements that the banks have not met—and cannot meet, if they are to comply with the tax laws for mortgage-backed securities. (For more on this, see here.)

The bankers have engaged in what amounts to a massive fraud, not necessarily because they started out with criminal intent (although that cannot be ruled out), but because they have been required to in order to come up with the commodities (in this case real estate) to back their loans. It is the way our system is set up: The banks are not really creating credit and advancing it to us, counting on our future productivity to pay it off, the way they once did under the deceptive but functional façade of fractional reserve lending. Instead, they are vacuuming up our money and lending it back to us at higher rates. In the shadow banking system, they are sucking up our real estate and lending it back to our pension funds and mutual funds at compound interest. The result is a mathematically impossible pyramid scheme, which is inherently prone to systemic failure.

The Public Credit Solution

The flaws in the current scheme are now being exposed in the major media, and it may well be coming down. The question then is what to replace it with. What is the next logical phase in our economic evolution?

Credit needs to come first. We as a community can create our own credit, without having to engage in the sort of impossible pyramid scheme in which we’re always borrowing from Peter to pay Paul at compound interest. We can avoid the pitfalls of privately-issued credit with a public credit system, a system banking on the future productivity of its members, guaranteed not by “things” shuffled around furtively in a shell game vulnerable to exposure, but by the community itself.

The simplest public credit model is the electronic community currency system. Consider, for example, one called “Friendly Favors.” The participating Internet community does not have to begin with a fund of capital or reserves, as is now required of private banking institutions. Nor do members borrow from a pool of pre-existing money on which they pay interest to the pool’s owners. They create their own credit, simply by debiting their own accounts and crediting someone else’s. If Jane bakes cookies for Sue, Sue credits Jane’s account with 5 “Favors” and debits her own with 5. They have “created” money in the same way that banks do, but the result is not inflationary. Jane’s plus-5 is balanced against Sue’s minus-5, and when Sue pays her debt by doing something for someone else, it all nets out. It is a zero-sum game.

Community currency systems can be very functional on a small scale, but because they do not trade in the national currency, they tend to be too limited for large-scale businesses and projects. If they were to grow substantially larger, they could run up against the sort of exchange rate problems afflicting small countries. They are basically barter systems, not really designed for advancing credit on a major scale.

The functional equivalent of a community currency system can be achieved using the national currency, by forming a publicly owned bank. By turning banking into a public utility operated for the benefit of the community, the virtues of the expandable credit system of the medieval bankers can be retained, while avoiding the parasitic exploitation to which private banking schemes are prone. Profits generated by the community can be returned to the community.

A public bank that generates credit in the national currency could be established by a community or group of any size, but as long as we have capital and reserve requirements and other stringent banking laws, a state is the most feasible option. It can easily meet those requirements without jeopardizing the solvency of its collective owners.

For capital, a state bank could use some of the money stashed in a variety of public funds. This money need not be spent. It can just be shifted from the Wall Street investments where it is parked now into the state’s own bank. There is precedent establishing that a state-owned bank can be both a very sound and a very lucrative investment. The Bank of North Dakota, currently the nation’s only state-owned bank, is rated AA and recently returned a 26 percent profit to the state. A decentralized movement has been growing in the United States to explore and implement this option. [For more information, see here.]

We have emerged from the financial crisis with new clarity: Money today is simply credit. When the credit is advanced by a bank, when the bank is owned by the community, and when the profits return to the community, the result can be a functional, efficient, and sustainable system of finance.

mercoledì 27 ottobre 2010

Morgan, HSBC sued over silver price suppression

Morgan, HSBC sued over silver price suppression


By Jonathan Stempel
Wednesday, October 27, 2010

NEW YORK -- JPMorgan Chase & Co. and HSBC Holdings Plc were hit with two lawsuits on Wednesday by investors who accused them of conspiring to drive down silver prices and reaping an estimated hundreds of millions of dollars of illegal profits.

The banks, among the world's largest, were accused of manipulating the market for COMEX silver futures and options contracts from the first half of 2008 by amassing huge short positions in silver futures contracts that are designed to profit when prices fall.

"Defendants reaped hundreds of millions of dollars if not billions of dollars in profits" from the conspiracy, one of the complaints said.

The respective plaintiffs, Brian Beatty and Peter Laskaris, each said they traded COMEX silver futures and options and contracts and lost money because of the alleged manipulation.

Beatty lives in Connecticut and Laskaris in New York, court records showed. The lawsuits seek class-action status, damages that may be tripled, and other remedies. The defendant banks are major participants in the silver market.

JPMorgan declined to comment. An HSBC spokeswoman had no immediate comment.

The lawsuits were filed one day after the Commodity Futures Trading Commission proposed regulations to give it greater power to thwart traders who try to manipulate prices.

The CFTC began probing allegations of silver price manipulation in September 2008.

"Going back to the early 1980s, silver has been an extremely volatile market," said Bill O'Neill, managing partner at Logic Advisors, an Upper Saddle River, New Jersey, investment firm specializing in commodities. "I often describe it as a speculative playground. You have to be a big boy to play."

Only once in its 36-year history has the CFTC successfully concluded a manipulation prosecution, in a 1998 proceeding concerning prices for electricity futures.

Speaking on Tuesday, Chairman Gary Gensler said the proposed regulations would give the regulator greater power to police "fraud-based manipulation."

Commissioner Bart Chilton added that there had been "fraudulent efforts to persuade and deviously control" silver prices.

A CFTC spokesman said the regulator does not comment on investigations and would not discuss the investor lawsuits.

Earlier this year the CFTC began looking into allegations by a London trader that JPMorgan was involved in manipulative silver trading, Rhe Wall Street Journal said on Wednesday, citing a person close to the situation.

Silver prices have faced regulatory scrutiny in the past, perhaps most prominently after the Hunt brothers in Texas in 1980 attempted to corner the market, driving prices above $50 an ounce. The price later plunged.

Since the CFTC began its probe, spot silver prices have ranged between $8.42 and $24.90 an ounce, Reuters data show. They traded Wednesday at roughly $23.53. Silver futures prices SIc1 are up 39.1 percent this year.

The cases are Beatty v. JPMorgan Chase & Co et al, U.S. District Court, Southern District of New York, No. 10-08146, and Laskaris v. JPMorgan Chase & Co. et al in the same court, No. 10-08157.

Le Fondazioni bancarie

Le Fondazioni bancarie

dal blog di Beppe Grillo


Quando Chiamparino del Pdmenoelle o Tosi della Lega si sono occupati di Intesa San Paolo e Unicredit lo hanno fatto come azionisti che vogliono incassare i dividendi. Questo perché i partiti controllano indirettamente quote di proprietà delle banche attraverso le fondazioni bancarie delle varie città, da Torino a Verona. La cacciata di Profumo è dovuta al prosciugamento dei dividendi verso le Fondazioni. L'aumento delle quote della Libia in Unicredit è stato un pretesto, infatti chi lo ricorda più? Quanti soldi arrivano alle 88 fondazioni bancarie ogni anno? Un fiume di denaro. Le banche italiane distribuiscono la metà del profitto netto in dividendi agli azionisti. Le Fondazioni usano questi soldi per progetti no profit nel territorio. Gli utili delle banche sono spesi dalle Fondazioni per attività di loro scelta (il cui ventaglio possibile è molto ampio) per ottenere un vantaggio elettorale. I partiti possono anche decidere le nomine bancarie. Un esempio è Chiamparino che scelse il presidente del consiglio di gestione di Intesa San Paolo in quanto, come sindaco, era delegato della Fondazione San Paolo che possiede il 10% di Intesa San Paolo.
Fassino che si rallegra di avere una banca o Boss(ol)i che vuole le banche del Nord dopo la vittoria in Piemonte e in Veneto sono sintomi di una babele di ruoli, parole di schizofrenici della politica trasformati in banchieri. Il cui compito non dovrebbe essere incassare dividendi o fare nomine bancarie, ma amministrare la cosa pubblica. Il denaro compra consenso, voti, e questo è uno dei compiti occulti delle Fondazioni. La capitalizzazione delle banche italiane è tra le più basse d'Europa, in sostanza la cassa piange. Il meccanismo delle banche "mucche da mungere" che non reinvestono una parte importante dei profitti perché destinata ai partiti sta per finire. Il primo motivo è la crisi, il secondo le nuove regole di Basilea 3 che impongono l'aumento del capitale di copertura sui possibili rischi entro il 2013. La coperta è sempre più stretta, salteranno prima i partiti a livello locale o falliranno le banche?
Ps: Vorrei che la destinazione della spesa delle Fondazioni e la motivazione di ogni scelta siano rese pubbliche in modo capillare e comprensibile al cittadino.

28 ottobre 1922: la rivoluzione

Il « 28 Ottobre »…

di: Alberto B. Mariantoni

Il 28 Ottobre (in realtà, tra il 27 ed il 31 Ottobre) del 1922, avveniva la « Marcia su Roma »: un’insurrezione nazionale, popolare e rivoluzionaria che metteva fine alla situazione di disordine strutturale e di guerra civile permanente e generalizzata che regnava in Italia dalla fine della Prima guerra mondiale.

Nell’arco di quelle giornate, all’incirca 100 mila squadristi erano insorti con sincronia militare in tutta la Penisola ed avevano preso il controllo delle principali città italiane, a cominciare da quella di Siena; mentre altre 50 mila Camicie Nere, ripartite in tre colonne – che provenivano rispettivamente da Monterotondo, Tivoli e Santa Marinella (senza contare i 5 mila uomini di riserva che si erano attestati su Foligno) – erano confluite sulla capitale e, stringendola d’assedio, avevano dato lo «scossone finale » all’allora governo di destra dell’on. Luigi Facta, ed indirettamente costretto il Re Vittorio Emanuele III a dare l’incarico di formare il nuovo Governo italiano a Benito Mussolini, il Duce della rivoluzione fascista.

L’idea di quella rivoluzione era nata appena 43 mesi prima, da una serie di articoli e di comunicati stampa, redatti dallo stesso Mussolini, che erano apparsi su « Il Popolo d’Italia », in risposta al disfattismo generalizzato e alla disobbedienza civile che in quell’epoca erano largamente alimentati e favoriti dal massimalismo socialista trionfante e dalle prime avvisaglie dell’allora sbocciante tracotanza bolscevica.

Il 2 Marzo del 1919, in uno di quegli articoli, Mussolini invitava « corrispondenti, collaboratori e seguaci del Popolo d’Italia, combattenti, ex combattenti, cittadini, e rappresentanti dei Fasci della Nuova Italia e del resto della Nazione ad intervenire all’adunanza privata che si terrà a Milano, il 23 Marzo ».

Il 6 Marzo successivo, in un comunicato dello stesso giornale, lo stesso Mussolini specificava: « (…) da quella adunata usciranno i Fasci di Combattimento il cui programma è racchiuso nella parola ». « (...) Il 23 Marzo sarà creato l’antipartito, sorgeranno cioè i Fasci di Combattimento che faranno fronte contro due pericoli: quello misoneista di destra e quello distruttivo di sinistra ».

Il 18 Marzo, un nuovo pezzo del futuro Duce d’Italia, sottolineava: « Noi vogliamo la elevazione materiale e spirituale del cittadino italiano (non soltanto di quelli che si chiamano proletari... e la grandezza del nostro popolo nel mondo. Quanto ai mezzi non abbiamo pregiudiziali: accettiamo quelli che si renderanno necessari: i legali e i così detti illegali. Da tutto questo travaglio usciranno nuovi valori e nuove gerarchie ».

Il 23 Marzo 1919 - dopo una riunione preparatoria che si era tenuta il 21 dello stesso mese - l’attesa assemblea, presieduta dal Capitano degli arditi Ferruccio Vecchi e composta da appena 53 persone di origini politiche le più svariate (per lo più, ex interventisti, futuristi, ex sindacalisti, ex socialisti rivoluzionari, ex arditi, reduci di guerra, ex volontari fiumani, ecc.), ebbe luogo nella sede dell’Alleanza Industriale e Commerciale di piazza San Sepolcro, a Milano.

In quell’occasione, fu lo stesso Mussolini a definire la natura e la portata del nuovo movimento fascista: « Noi siamo - egli disse - degli antipregiudizialisti, degli antidottrinari, dei problemisti, dei dinamici; (...) noi abbiamo stracciato tutte le verità rivelate, abbiamo sputato su tutti i dogmi, respinto tutti i paradisi, schernito tutti i ciarlatani - bianchi, rossi, neri - che mettono in commercio le droghe miracolose per dare “felicità” al genere umano. Non crediamo ai programmi, agli schemi, ai santi, agli apostoli: non crediamo soprattutto alla felicità, alla salvazione, alla terra promessa. Non crediamo a una soluzione unica - sia essa di specie economica o politica o morale - a una soluzione lineare dei problemi della vita, perché, - o illustri cantastorie di tutte le sacrestie - la vita non è lineare e non la ridurrete mai a un segmento chiuso fra bisogni primordiali» (Benito Mussolini, « Scritti e Discorsi », Ulrico Hoepli Editore, Milano, 1934 - XII, Tomo II°, pag. 33 e 53-54).

Il Fascismo era nato.

Inutile, in questo contesto, ritracciare il calvario di quella rivoluzione. In particolare: le sconfitte elettorali, le persecuzioni poliziesche, le impari battaglie con i sovversivi, gli infiniti lutti subiti, le delusioni, le amarezze, le frustrazioni.

Sembrava davvero impossibile che un pugno di patrioti irriducibili potesse arrestare la valanga sovversiva social-comunista e cambiare il corso della Storia. Eppure, con il coraggio e la fredda determinazione che li animava, quel manipolo di eroi riuscì a dare l’esempio ai tiepidi ed ai rinunciatari, riuscì a scuotere i pigri e gli ignavi dal loro torpore, riuscì ad amalgamare attorno a sé la parte sana della nazione e masse sempre più vaste di italiani.

Sarà il miracolo di quella rivoluzione!

« Il fascismo comincia a crescere, tumultuosamente, impetuosamente dopo il novembre del 1920; richiama alla mente di tutti, amici e avversari, una sola immagine: quella di un corso d’acqua che d’un tratto si gonfi e rompa ogni argine e dilaghi oltre ogni previsione » (P. Rauti, R. Sermonti, « Storia del Fascismo », Centro Editoria Nazionale, Roma, 1976, Tomo II, pag. 117).

Dopo le sanguinose violenze, gli scioperi, le occupazioni, le aggressioni e gli agguati che avevano continuato a subire durante il famoso « biennio rosso » (1920-1921), i fascisti - rincuorati ed ingigantiti dall’indescrivibile affluenza di nuove reclute - riusciranno a restituire colpo su colpo ai loro avversari ed a distruggere progressivamente la forza offensiva dei partiti sovversivi.

La resurrezione della Nazione italiana era ormai alle porte.

I fascisti, infatti, con il loro sacrificio, oltre a mettere fuori combattimento i loro avversari, « avevano colpito a morte il vecchio regime. Avevano salvato la civiltà italiana alla nuova storia. Avevano difeso tutta l’Europa da una delle più convulse esplosioni di barbarie. Avevano ridestato a vita immortale - con il sangue dello stesso sacrificio - i padri del Risorgimento e i nipoti non indegni ch’erano caduti nella grande guerra » (Roberto Farinacci, « Storia del Fascismo », Società Editoriale Cremona Nuova, Cremona, 1940, XVIII, pag. 245-246).

Quegli uomini, il 28 Ottobre del 1922, dopo tante privazioni e rinunce, ebbero la gioia di vedere realizzato il loro sogno e quella di potere, in fine, assaporare il gusto della loro meritata vittoria.

Lo stesso non posso dire per me e per quanti, da più di sessant’anni, hanno cercato di essere fedeli a quella medesima tradizione.

La mia generazione, purtroppo, ha conosciuto solo le sconfitte, le delusioni e le amarezze. E’ nata troppo tardi per marciare con coloro che durante il Ventennio contribuirono alla rinascita della nostra Nazione e, probabilmente, troppo presto per farlo con coloro che sicuramente verranno per riscattare di nuovo la libertà, l’indipendenza, l’autodeterminazione e la sovranità della nostra Patria.

La sola gioia che posso vantare nel contesto della mia fede, è quella di avere avuto l’opportunità e l’onore, nel corso della mia gioventù, di conoscere personalmente un certo numero di squadristi di quella rivoluzione.

Difficile descriverli. Impossibile dimenticarli. Erano degli uomini per cui, ancora oggi, vale la pena di vivere e di continuare a soffrire, semplicemente per potere testimoniarne l’esistenza e tramandarne le gesta.


L'Actualité économique, Revue d'analyse économique, vol. 65, n. 3, septembre 1989
Département d'économique, Université Laval

Ce qu'il y a de paradoxal dans votre glorieux destin, ce n'est pas ce que les initiés appellent « le paradoxe d'Allais », qui n'en serait pas un, mais plutôt la disproportion entre, d'une part, l'ampleur, l'envergure, l'originalité exubérante et la valeur intrinsèque de votre œuvre et, de l'autre, la longueur de temps qu'il a fallu pour que celle-ci soit reconnue et appréciée. Votre problème ressortirait plutôt du paradoxe d'Adam Smith : celui de la valeur d'usage et de la valeur d'échange, de l'eau et du diamant.

En octobre 1985, à l'ombre de la Tour Eiffel, vous me faisiez la confidence désespérante que votre vie avait été un échec. Cependant, peut-on imaginer vie
scientifique plus féconde, alors que le simple catalogue de vos contributions à la
science économique au cours de la période 1943-1978 couvre 176 pages. Depuis
lors, heureusement, par la force d'une justice immanente, vous avez trouvé place
dans la constellation des Prix Nobel. Votre étoile y brille d'un éclat particulier, ne
serait-ce que par son caractère français.

Votre œuvre, gigantesque par son ampleur, son originalité, sa profondeur, sa
rigueur, sa pertinence universelle et permanente, est le fruit d'une pensée qui a su
dominer son temps. Vous avez eu le privilège de vivre une époque tumultueuse,
tourmentée par des conflits idéologiques, sociaux, internationaux. Vous avez
traversé deux guerres mondiales. Dans la première, vous perdiez votre père ; dans
la seconde, vous enfantiez votre ouvrage magistral : À la Recherche d une disci-
pline économique. Dans les conditions difficiles de l'Occupation, alors que vous
exerciez vos fonctions d'ingénieur des mines, vous avez rédigé en trente mois un
ouvrage de près de mille pages. Cette œuvre fantastique fut celle de l'autodidacte
que vous étiez à l'époque, puisque votre formation préalable était celle de mathématicien, de physicien, d'ingénieur. Non seulement vous êtes-vous hissé, par vos propres forces, bien au-dessus du niveau de la théorie économique de l'époque,
mais vous aviez, en 1943, innové par rapport au Foundations ofEconomie Analysis
que Samuelson publiera en 1947. Autodidacte, vous aviez déjà pris quelques
longueurs d'avance sur le grand pontife américain d'après-guerre.

Je me souviens très bien, quitte à paraître démentir votre loi de l'oubli, de
l'époque exaltante de l'immédiat après-guerre. C'est le 1er décembre 1945 que je
découvris, rue Soufflot, votre plaquette : Économie pure et rendement social. Dès
le second paragraphe, vous y définissiez le problème économique dans toute son
ampleur : « parmi tous les modes de gestion possibles de l'économie, y en a-t-il qui
soient préférables à d'autres, et, dans l'affirmative, comment peuvent-ils être
définis ? » Je fus acquis d'emblée à votre idée directrice. Je pris contact avec vous
et, en février 1946, vous me receviez à Saint-Cloud et me faisiez l'hommage de
votre grand traité. Vous m'aviez aussi introduit dans vos groupes de recherches et
de conférences. Vous aviez réussi, à l'époque, à attirer à vous la fine fleur de l'élite
technocratique parisienne.

À l'instar de Walras et de Pareto, dont vous continuez la tradition exigeante de
rigueur, vous avez longtemps souffert d'être ignoré, voire ostracisé, par l'establishment des économistes français. Au début, ce fut l'expression mathématique qui servait de prétexte pour vous tenir à l'écart. Mais, depuis toujours et encore maintenant, c'est votre résistance aux idéologies en vogue. Que l'on se souvienne de la faveur du planisme dans l'après-guerre et jusqu'aux années soixante ; que l'on pense aussi au keynésianisme, c'est-à-dire à la conception agrégative, simpliste et à courte vue, qui fut sans doute pertinente à la Grande-Bretagne de l'entre-deux-guerres, mais dont l'application aux conjonctures d'après-guerre a été tellement décevante, à la fois sur le plan de la science économique et sur celui des politiques réelles.

Vous avez préféré reformuler le problème économique en des termes véritable-
ment généraux, en explicitant les comportements individuels. Le problème de la
maximation du rendement social, soit par un mécanisme de concurrence établissant
un ensemble de prix d'équilibre, soit par un régime permettant la recherche
décentralisée de surplus, a le mérite d'embrasser tous les problèmes particuliers, y
compris celui du chômage.

De Walras, vous avez l'idéalisme, sans la candeur ; de Pareto, vous avez le
réalisme, sans le cynisme. Le 14 août 1945, jour de la capitulation du Japon, vous
écriviez vos Prolégomènes à la reconstruction économique du Monde. Dans ce
manifeste, semblable à celui publié par Marx et Engels en 1848, vous faisiez le point
des situations et des idées au lendemain de la plus grande tragédie du XXe siècle,
elle-même conséquence de trente années d'inepties, d'illusions, d'opportunismes
à courte vue. Dans ce manifeste lucide et passionnant, vous écriviez : « l'étude de
l'économie concurrentielle ne peut en aucune façon être considérée comme une
explication apologétique du régime existant ; elle ne peut être qiï une étude critique
de ce régime. Elle n'est pas une panacée qui permet de résoudre tous les problèmes; elle n'est que l'introduction théorique à des recherches fécondes sur l'organisation de l'économie réelle. L'économie concurrentielle n'est pas une image de la réalité ; elle n'est qu'un système de référence, qui nous permet de nous rendre compte à quel point la société, dans laquelle nous vivons, est loin de réaliser ses possibilités. »

Comme Walras, vous avez toujours été un idéaliste. L'étiquette qui vous convient le moins, celle dont vos détracteurs ont le plus abusé, est bien celle de conservateur, à moins d'entendre par ce terme l'attitude de résistance systématique à la tentation de démagogie. De tous les économistes que j'ai connus depuis cinquante ans, il n'en est pas un qui, à mes yeux, ait cédé le moins à la tentation d'opportunisme que vous-même. Votre intégrisme scientifique vous a toujours gardé de toute compromission avec des intérêts politiques ou autres. C'est votre absolue fidélité à vos convictions constantes qui explique votre intransigeance et votre déficit de popularité.

Vous êtes farouchement libéral. Qu'est-ce à dire ? Les malveillants disent que,
dans l'acception européenne, ceci est synonyme de conservateur, de défenseur de
l'ordre établi. Rien n'est moins vrai dans votre cas. Votre libéralisme consiste
essentiellement en une défense de la personne contre toute contrainte illégitime ou
superflue. Votre libéralisme s'apparente à celui de Montesquieu et de de Tûcque-
ville, plutôt qu'à celui de J.-J. Rousseau. D'ailleurs, votre doctrine n'a rien de
dogmatique ; elle est toute personnelle et tient compte de multiples exigences et de
la diversité des circonstances. Vous vous démarquez de Hayek et de Milton
Friedman. Vous êtes loin d'être anti-étatique, ce en quoi vous demeurez dans la
tradition française.

Après que vous eûtes posé les fondements de la théorie générale dans votre
traité de 1943 et votre Economie et Intérêt de 1947, vous avez abordé le domaine
vaste et varié de l'économie appliquée. Ces travaux qui s'étendent sur quatre
décennies ont tous été marqués de l'empreinte de votre esprit judicieux et novateur.
Leur liste est longue, et je ne puis évoquer ici que quelques titres. En 1949, vous
publiiez un mémoire sur La gestion des houillères nationalisées et la théorie
économique : en 1954, une Evaluation des perspectives économiques de la recher-
che minière sur de grands espaces - Application au Sahara algérien ; en 1963,
Quelques réflexions sur l'organisation du marché des transports (pour la CEE). En
1965, vous anticipiez Milton Friedman en publiant une Reformulation de la théorie
quantitative de la monnaie. Ceci sera suivi d'une série d'écrits remarquables et
originaux sur la dynamique monétaire, l'inflation et la croissance. Parmi eux, il me
plait de citer l'article Inflation, répartition des revenus et indexation avec référence
à ïéconomie française, 1947-1975, signée Maurice et Jacqueline Allais. Madame
Allais, à qui je rends un respectueux hommage, a été depuis près de trente ans votre collaboratrice dévouée et discrète.

Pour revenir à ce préjugé que d'aucuns entretiennent à votre égard, et qui vous
a fait tant de tort, celui de conservatisme, qu'il me suffise de les référer à votre
ouvrage de 1977, récemment réédité : L'impôt sur le capital et la réforme moné-
taire, dédié « aux réformateurs sociaux de tous les temps et à leurs adversaires » est d'une richesse inouïe et d'une originalité audacieuse. Vous y faites des propositions qui, du point de vue de la répartition des revenus et de la justice sociale, répondraient entièrement aux aspirations et aux conclusions des grands réformateurs sociaux de tous les temps, des Pères de l'Église à Proudhon et à Marx... en « remettant en cause tous les droits acquis, quels qu'ils soient, lorsqu'ils correspondent à des inégalités indues ».

Parmi vos publications moins connues, je dois mentionner une étude de 147
pages sur un sujet qui n'a cessé de nous submerger de littérature démagogique.
Cette étude, de 1958, est intitulée : Le Tiers-Monde au carrefour : centralisation
autoritaire ou planification concurrentielle. Tout y est dit d'une façon tellement
lumineuse que Walter Scheele, à l'époque Ministre de la Coopération de la RFA,
fort séduit, l'a préfacé en y insérant un poème de Goethe.

Pour revenir au « paradoxe d'Allais », qu'il me suffise, pour introduire les non-
initiés à son mystère, de lire un extrait du compte-rendu de votre plaquette :
Fondements dune théorie positive des choix comportant un risque et critique des
postulats et axiomes de l'école américaine (1955), que j'avais écrit pour UActua-
lité économique, il y a 33 ans. « Depuis la parution de la Theory ofGamesdevon
Neumann et Morgenstern, en 1944... les théoriciens les plus puissants, tels
Samuelson, Marchak, Savage et Friedman ont tenté de donner une explication du
comportement de l'homme réel devant un champ aléatoire et une définition des
choix rationnels parmi les éventualités incertaines. Ces auteurs fondent leurs
systèmes très rigoureux sur des ensembles d'axiomes qui définissent la rationalité.
Or, M. Allais s'en prend violemment à ces axiomes, dont il nie l'évidence.
.. .L'auteur fait montre, une fois de plus, de la grande pénétration et de la subtilité
de son esprit très supérieur. Son exposé est merveilleusement limpide et se lit
agréablement malgré l'aridité du sujet. Disons aussi que ses arguments sont
convaincants, et devraient avoir décimé les adversaires ». Ex-post, c'est précisé-
ment pour ne pas devoir s'avouer vaincus que ces adversaires ont frappé le cliché
« Allais' paradox ».

En Nouvelle-France, votre nom et votre œuvre nous sont familiers depuis plus
de quarante ans. En 1948 ou 1949, je créai un cours intitulé Rendement social et
systèmes économiques, à l'Université de Montréal. Dès cette époque, votre « ligne
des états de rendement social maximum » était tracée sur nos tableaux noirs. Mes
étudiants en ont eu connaissance avant que Samuelson ne la redécouvre (mystère!).

Cette frontière des possibilités de rendement social est demeurée une pièce
maîtresse de mon enseignement jusqu'à ce jour. C'est ainsi qu'au cours des quatre
dernières décennies, plusieurs générations d'économistes canadiens-français ont
été imprégnés de votre esprit.

Le sacre du Prix Nobel dont vous venez d'être honoré nous remplit d'une
immense fierté. Nous vous sommes fort reconnaissants de vous avoir parmi nous
ce soir.

À titre plus personnel, je tiens à ajouter un mot de gratitude exceptionnelle.
Depuis près de 43 ans, vous m'avez prodigué vos lumières et un fil directeur auquel
je demeure toujours attaché. Vous m'avez surtout honoré de votre amitié. Voltaire
aurait dit : « L'amitié d'un grand homme est un bienfait des dieux ». Je vous en
remercie infiniment.

*À l'occasion de sa visite au Canada et au congrès de la Société canadienne de science économique, Mont-Rolland, Québec, 24-26 mai 1989.


ALLAIS,, M., À la Recherche d'une discipline économique, Paris, 1943.

Économie pure et rendement social, Sirey, Paris, 19. Économie et Intérêt, 2 v. Paris,

Prolégomènes à la reconstruction économique du Monde, Sirey, Paris, 1945.

La Gestion des houillères nationalisées et la théorie économique, Paris, Imprimerie nationale, 19.

Évaluation des perspectives économiques de la recherche minière sur de grands
espaces - Application au Sahara algérien, Alger, 1957.

Reformulation de la théorie quantitative de la monnaie, SEDEIS, Paris, 1965.

Le Tiers-Monde au Carrefour-Centralisation autoritaire ou planification concurentielle, Bruxelles, Cahiers africains, vol. 7,8.

Fondements d'une théorie positive des choix comportant un risque et critique des
postulats et axiomes de V école américaine, Paris, Imprimerie nationale, 1955
(Compte-rendu par Roger Dehem dans L'Actualité économique, XXXII, avril-
juin 1956).

ALLAIS, M. et ALLAIS, JACQUELINE, « Inflation, répartition des revenus et indexation,
avec références à l'économie française 1947-1975 », Économie appliquée,
1976, t. XXIX, n° 4.

ALLAIS, M., L'impôt sur le capital et la réforme monétaire, NlIe éd., Paris,
Hermann, 1988.



October 25, 2010

As those of you who follow this website know, on February 11, 2010, the Supreme Court of Florida entered an Administrative Order requiring all residential foreclosure complaints to be verified. Foreclosure mills have since been filing alleged “verified” complaints only on “knowledge and belief” and by persons who are not employees of the plaintiff or by employees of the plaintiff’s law Firm.

Judge Anthony Rondolino of the Sixth Judicial Circuit for Pinellas County, Florida says “no” to this procedure. In a 7-page written opinion, Judge Rondolino states that “any verification of a foreclosure complaint must be in conformity with F.S. 92.525 as construed by Moss v. Lennar Florida Partners, 673 So.2d 84 (Fla. 4th DCA 1996)” and that because of this he will reject verifications based on “information and belief” or using language indicating the declaration is only true and correct “to the best of my knowledge and belief”. He will also reject a “verified” foreclosure complaint if it is demonstrated that the person who verified it is counsel of record or an employee of the law firm.

Judge Rondolino’s rationale is grounded upon the Supreme Court of Florida’s directive that the Plaintiff appropriately investigate and verify its allegations (in a foreclosure complaint), and an attorney should not become a witness substituting for these “essential client verifications”.

The case involved a series of assignments and a Deutsche Bank securitization, and facts which indicate that the 2010 post-filing assignment was from a company (New Century Mortgage) which went bankrupt years ago. The Court was concerned with the same concern we here have with assignments from bankrupt “lenders” and have previously raised to the courts in such situations: that there is no proof that the assignor had authority from either the bankruptcy court or the liquidating trustee to dispose of the specific asset of the bankrupt estate (the mortgage loan) to anyone, which would present a disputed issue of material fact precluding summary judgment.

The fact pattern in this case is all too common. What we applaud Judge Rondolino for is holding foreclosing plaintiffs to a real verification, not some phony series of conditional statements by persons unrelated to the transaction. Bravo! We hope that more Florida Judges will adopt this very sound reasoning.

Jeff Barnes, Esq.,

Chavez Reveals Creation of New Financial System

Chavez Reveals Creation of New Financial System

Escrito por Dayami Interián García
martes, 26 de octubre de 2010

Imagen activa
Caracas, Oct 26, 2010 (Prensa Latina) A new financial system is being created in Latin America, Asia and the Middle East which refutes the rumors that his government is giving away oil for free, Venezuelan President Hugo Chavez affirmed.

Speaking on a special television program on Tuesday, Chavez referred to an agreement reached some time ago with Argentina, based on cooperation and mutual respect.

The president noted that the funds resulting from that exchange allowed the country to obtain food, powdered milk, and agricultural vehicles, and to build a tractor factory.

The idea was to create a similar mechanism during his recent international tour of seven countries in Europe, Asia, and Africa, he added.

Some countries cannot pay the world market price for oil, and "that is why we try to reach an understanding with them," Chavez stated, giving the example of Portugal.

"The funds resulting from that exchange will be used to build a modern ferry line, and we will cotinue receiving Portuguese computers, as agreed in the Canaima project with that country," the president sustained.

These are clear, legal agreements that will benefit everybody, so it is important to explain this reality to the Venezuelan people, so they are not misled by the opposition, Chavez said.


Commissioner Chilton's statement on silver market rigging

Commissioner Chilton's statement on silver market rigging


Statement of Commissioner Bart Chilton
U.S. Commodity Futures Trading Commission
Public Hearing on Anti-Manipulation and Disruptive Trading Practices
Washington, D.C.
Tuesday, October 26, 2010

I take this opportunity to comment on the precious metals markets and in particular the silver markets.

More than two years ago the agency began an investigation into silver markets. I have been urging the agency to say something on the matter for months. The public deserves some answers to their concerns that silver markets are being, and have been, manipulated.

The legal definition of manipulation under the law is a high bar to prove. It is a much different test than what the average person might consider as manipulation. Under existing law, to prove manipulation, the government is required to demonstrate not only specific intent; we also need to prove that as a result of the intent and market control, that activity caused an artificial price -- a point that can certainly be debated by economists.

Attempted manipulation is less difficult to prove -- requiring an intent to manipulate and some overt act in furtherance of that intent. There are also other violations of law that could contort markets and distort prices.

I believe that there have been repeated attempts to influence prices in the silver markets. There have been fraudulent efforts to persuade and deviously control that price. Based on what I have been told by members of the public and reviewed in publicly available documents, I believe violations to the Commodity Exchange Act have taken place in silver markets and that any such violation of the law in this regard should be prosecuted.

In saying this, I am fully aware of the prohibition from divulging trader names or information about their positions I am extremely careful not to violate the law in this, or any, regard. I also cannot pre-judge anything the agency may do with regard to our silver investigation, or any other matter.

The Wall Street Reform and Consumer Protection Act, which I strongly supported, contains new manipulation provisions as well as anti-disruptive trading rules. These new authorities, along with the implementation of thoughtful position limits in metals, will go a long way toward ensuring more efficient and effective metals markets devoid of fraud, abuse, and manipulation.

Thoughtful investigations take time. The CFTC staff has worked extremely hard on the silver investigation. That said, there is a point at which it is our responsibility to say something. Within the law, I have done so. I am hopeful that the agency will speak publicly about the investigation in the very near future and when they do so that it will be in a more granular fashion than I am permitted from doing at this time.

Il Massachusetts prepara una banca di proprietà pubblica

Anche nello Stato del Massachusetts si preparano ad una banca di proprietà pubblica.

by Andrea Gianni on Friday, October 22, 2010 at 10:28pm

dal sito ufficiale dello Stato del Massechussets:

a seguire sotto, la traduzione in italiano...

Ecco la parte che ci interessa:


(a) There shall be a commissionto study the feasibility of establishing a bank owned by the commonwealth or bya public authority constituted by the commonwealth.

(b) The commission shall consist of the secretary foradministration and finance and the secretary of housing and economic developmentor their respective designees, who shall serve as co-chairs of the commission;the state treasurer or the treasurer?s designee; the state comptroller or thecomptroller?s designee; 2 persons to be appointed by the president of thesenate, 1 of whom shall be a member of the senate; 1 person to be appointed bythe minority leader of the senate; 2 persons to be appointed by the speaker ofthe house of representatives; 1 of whom shall be a member of the house ofrepresentatives; 1 person to be appointed by the minority leader of the house;the executive directors of the Massachusetts Development Financing Agency andthe Massachusetts Housing Finance Agency or their designees; president of theMassachusetts Growth Capital Corporation or the president?s designee; and 8persons to be appointed by the governor who shall not be employees of theexecutive branch, 3 of whom shall be drawn from a list of 5 names submitted bythe Massachusetts Bankers Association, at least 1 of whom shall be arepresentative of a community bank operating in the commonwealth, 1 of whomshall be drawn from a list of 3 names submitted by the Associated Industries ofMassachusetts, 1 of whom shall be drawn from a list of 3 names submitted by theSmall Business Association of New England and 1 of whom shall be aprofessor at an institution of higher education in the commonwealth who hasresearched and published articles on banking. Of the governor?s remainingappointments, not more than 1 may be a representative of a financial servicesfirm located in the commonwealth. The governor shall ensure geographic diversityin the governor?s appointments to the commission. The members of the commissionshall be appointed not later 90 days after the effective date of this act.

(c) The commission shall examine the technical, legal andfinancial feasibility of establishing a commonwealth-owned bank, including butnot limited to a commonwealth-owned bank for infrastructure investmentpurposes. The commission shall seek participation in its deliberationsfrom the president of the Federal Reserve Bank of Boston or the president?sdesignee. The commission shall evaluate the experiences of other states withstate-owned banks, identifying the financial performance of such banks andevaluating the lending practices of such banks to show whether such bankssuccessfully fill lending gaps not filled by the private sector. The commissionshall also evaluate the manner in which public funds are invested or depositedby the commonwealth and its political subdivisions including funds managed bythe state treasurer; the Massachusetts Municipal Depository Trust and state andlocal pension funds. The commission shall examine the infrastructureinvestment activities conducted by other states with state-owned banks. Thecommission shall also examine the lending practices, including lending tosupport infrastructure, of the existing public agencies in the commonwealth thatperform lending services. The Massachusetts development finance agency,Massachusetts Housing Finance Agency, Health and Educational FacilitiesAuthority, Massachusetts Growth Capital Corporation and any other publicauthority in the commonwealth that lends money shall cooperate fully with thecommission and shall supply information reasonably required by the commission tocarry out its charge. (d) The commission shall hold at least 3 public hearings indistinct geographic regions of the commonwealth. (e) The commission shall publish its findings and recommendations,together with drafts of legislation, if any, necessary to carry thoserecommendations into effect, in a written report not later than 1 yearafter the effective date of this act. The report shall be published on theofficial website of the commonwealth, and shall be contemporaneously filed withthe house and senate committees on ways and means and the house and senatechairs of the joint committee on financial services.

traduzione automatica (cercate di capire il senso...)

SEZIONE 180. (A) vi deve essere una commissione per studiare la fattibilità della creazione di una banca di proprietà del Commonwealth o da una pubblica autorità costituita dal Commonwealth.

(B) La Commissione è composta dal segretario per amministrazione e finanza e il segretario di sviluppo residenziale ed economico da queste designati i rispettivi, che funge da co-presidenti della Commissione; ? Il tesoriere dello Stato o il tesoriere s designata; il controllore di stato o la ? Controllore s designata; 2 persone da nominare da parte del Presidente della Senato, uno dei quali è un membro del Senato; 1 persona da nominare da parte il leader della minoranza del Senato; 2 persone che dovranno essere nominati dal Presidente del la Camera dei Rappresentanti, 1 dei quali è un membro della casa di rappresentanti; 1 persona da nominare da parte del leader della minoranza della casa; gli amministratori esecutivi di sviluppo del Massachusetts di finanziamento dell'Agenzia e il Massachusetts Housing Finance Agency o loro designati, presidente della ? Massachusetts Growth Capital Corporation o il presidente s designata; e 8 persone che devono essere nominati dal governatore, che non devono essere dipendenti del ramo esecutivo, 3 dei quali sono prelevati da una lista di 5 nomi proposti da il Massachusetts Bankers Association, almeno 1 dei quali è un rappresentante di una comunità che operano banca nel Commonwealth, di cui 1 devono essere scelti da un elenco di tre nomi proposti dalle industrie associate di Massachusetts, uno dei quali è tratto da una lista di tre nomi proposti dalla Small Business Association del New England e di cui 1 è un docente presso un istituto di istruzione superiore nel Commonwealth, che ha ricerche e pubblicato articoli in materia bancaria. Del governatore? S rimanenti appuntamenti, non più di 1 può essere un rappresentante di uno dei servizi finanziari azienda situata nel Commonwealth. Il governatore deve assicurare la diversità geografica nel governatore? appuntamenti s alla Commissione. I membri della commissione sono nominati entro 90 giorni dalla data di efficacia del presente atto.

(C) La Commissione esamina gli aspetti tecnici, giuridici e fattibilità finanziaria della creazione di un Commonwealth Bank di proprietà, compresi, ma non limitata a un Commonwealth Bank di proprietà per gli investimenti infrastrutturali scopi. La Commissione si adopera per la partecipazione alle sue deliberazioni dal presidente della Federal Reserve Bank di Boston o il presidente? s designato. La Commissione valuta le esperienze di altri Stati con i banche statali, individuando i risultati finanziari di tali banche e valutare le pratiche di prestito delle banche tale da dimostrare se tali banche con successo colmare le lacune di prestito non colmata dal settore privato. La commissione valuta anche il modo in cui sono investiti i fondi pubblici o depositati dal Commonwealth e la sua suddivisione politica, compresi i fondi gestiti da il tesoriere dello Stato, il Massachusetts Comunale Depository Trust e statali e fondi pensione locali. La Commissione esamina le infrastrutture attività di investimento effettuata da altri Stati con le banche di proprietà statale. L' Commissione esamina anche le pratiche di prestito, anche l'erogazione di prestiti supporto delle infrastrutture, delle agenzie pubbliche esistenti nel Commonwealth svolgono servizi di prestito. La finanza Massachusetts Agenzia di Sviluppo, Massachusetts Finance Agency alloggio, sanità e strutture scolastiche Autorità, Massachusetts Growth Capital Corporation o altro pubblico autorità del Commonwealth che presta denaro deve cooperare pienamente con il Commissione e fornisce le informazioni ragionevolmente richieste dalla Commissione per svolgere la sua carica.

(D) La commissione si riunisce almeno tre audizioni pubbliche in distinte regioni geografiche del Commonwealth.

(E) La Commissione pubblica le sue conclusioni e raccomandazioni, insieme ai progetti di legislazione, se del caso, necessari per trasportare persone raccomandazioni in vigore, in una relazione scritta entro e non oltre 1 anno dopo la data di efficacia del presente atto. La relazione è pubblicata sul sito ufficiale del Commonwealth, ed è contemporaneamente depositata presso i comitati di Camera e Senato sui mezzi e Camera e Senato presidenti della commissione mista sui servizi finanziari.

domenica 24 ottobre 2010

A Day in the Life of a BerkShare

A Day in the Life of a BerkShare

What’s it really like to deal in regional currency?


50 Berkshare, image by Jason Houston

Photo courtesy of Jason Houston.

Want to encourage the local economy? Try printing your own regional money.

In Great Barrington, Massachusetts, I gave the nice man in the Mr. Ding a Ling truck a W.E.B. Du Bois for my fudgesicle, and he gave me four Mohicans back in change. I walked over to the food co-op and broke a 50—the one with Norman Rockwell on the face—and my excellent sandwich came with four Robyn Van Ens in change. If I hadn't been so hungry, I could have spent my BerkShares on website design, some septic work, a game of billiards, snowplowing, or a horseback-riding lesson. Hell, if the horse got sick, I could have taken her to the vet. But I was still hungry, so I wandered north to Stockbridge and headed over to the tavern at the Red Lion Inn, the quintessential Berkshires hostelry. And there I found waiting for me a nice glass of Berkshire Blonde ale and a burger, only a Melville all together.

Also waiting was Susan Witt, the force behind America's most successful alternative currency. "Oh," she said when I told her about my day, "the midwife takes BerkShares, and so does the undertaker. You can get a will done; you can build an addition to your home, fix your car... I like shoes," she added, wiggling her toes. "These weren't cheap."

The sheer power of money—the fact that you can use it to command someone in China to do something for you—can create problems just as it solves them.

Money, when you think about it, is hard to explain. Where it comes from, who decides how much is in circulation, where you get a spare trillion to bail out your banking system—it's all kind of mysterious. How can I take paper out of my wallet and use it to persuade someone in China to make me something? But most of the time we don't think much about it, any more than we ponder the mysteries of gravity. If gravity stopped working from time to time, however, we might start wondering a little more—which may explain why the BerkShares website got 3.5 million hits in the year after our financial crisis erupted.

Move Your Money
Dollars with Good Sense: DIY Cash
Three ways ordinary people are printing their own money without breaking the law.

In fact, the regional currency for Massachusetts' westernmost county is just the most prominent of many experiments with money now taking place across New England, from New Haven, Connecticut; to Portland, Maine; to the entire state of Vermont. None of these schemes aims to supplant the greenback, but all try to mend some of its very real defects—and to serve as a laboratory for what comes next. Call it "Currency 3.0": lean, local, and maybe very logical indeed.

Not that the idea is brand-new—just the opposite. Some of the first money that circulated around New England was local: Next door to the Red Lion Inn is a Berkshire Bank branch; the building's original occupant, the Housatonic Bank, printed its own money in the 1800s. You can still see some of those notes hanging on the wall.

But as the nation prospered and consolidated, the federal currency became the thing we meant when we said "money." It's always come with drawbacks, however: the bust-and-boom cycle, for instance, that saw many communities issuing scrip during the Depression. Beyond that, the sheer power of money—the fact that you can use it to command someone in China to do something for you—can create problems just as it solves them: The folks in China, or at Wal-Mart headquarters in Arkansas, may take away the jobs your community depends on, for instance. Through the 20th century, as consumers transacted more and more of their business at a distance, local food systems waned; then big-box stores reduced the civic engagement that came with Main Street.

It's not an experiment anymore: The 2.5-millionth BerkShare went into circulation last fall.

It's probably no wonder, then, that the impetus for BerkShares came from the E. F. Schumacher Society, a Great Barrington foundation formed to promote the legacy of the British author of Small Is Beautiful. The Berkshires were an early hotbed of the local-food movement: Robyn Van En, whose face graces the 10 BerkShare note, founded one of the first two CSA (community-supported agriculture) projects in the country in the mid-1980s at her Indian Line Farm in South Egremont. When the famous economic historian Jane Jacobs called for regional currencies in a talk in 1983 at the Society's annual meeting, her plea fell on receptive ears.

"We'd started with a microloan program [in 1982]," Witt explains. "We got people to open savings accounts at local banks and pooled that money to collateralize loans for useful things. Mostly they went to women, and for products that weren't really understood by traditional bankers." Then a favorite local deli came looking for money so it could move. "We said, No, you have your customers; borrow from them." And thus was born "Deli Dollars," which let people loan money that could be redeemed in pastrami, say, once the expansion was complete.

"It got huge press," Witt says. "People were really interested." The local Chamber of Commerce asked the Schumacher Society to help with a summertime promotion: Whenever shoppers spent $10 at any of 70 local stores, they got a $1 certificate that they could redeem over three days in September. "People came all the way back from Cape Cod to spend $20 worth of these certificates," Witt recalls. "Merchants loved it. And since we had an Excel spreadsheet going, they could see how interconnected they actually were."

Berkshares, image by Jason Houston

Photo courtesy of Jason Houston.
All Rights Reserved.

The leap from gift certificate to currency came in the fall of 2006, when several community banks offered to issue the money. "You have to remember," Witt says, "local bankers are just local guys, their customers are local businesses; they're thinking of what will work for these local businesses. They'll stretch for them."

Here's how it works: You walk into any branch of the five banks that offer the notes and hand the teller $95 in U.S. dollars. She hands you 100 BerkShares. You spend them at the deli, the bar, or the bookstore. The bar owner then takes her BerkShares from the till and spends them at the deli, the bookstore, or Jakob Kent Jewelry. Or, if she has to pay for something that nobody local is producing, she takes her BerkShares back to the bank and reconverts them into dollars, at the same 95 percent exchange rate.

Some people get paid partly in BerkShares; some towns are considering taking them for certain fees and taxes. It's not an experiment anymore: The 2.5-millionth BerkShare went into circulation last fall.

It's also not the only new approach to money under way in New England. In Greater New Haven, for instance, SHARE Haven Time Bank is busy converting spare hours into spending power. You offer something you're good at; at press time, the website listed a variety of services, from cat sitting to architectural design. If you spend an hour helping someone in the network, you've earned an hour of someone else's time; you can get someone to shovel your drive, or give you a massage afterward.

Hour Exchange Portland is larger and more established. Current projects include making sure the homes of all 600 active members get weatherized with the donated labor the network can mobilize; you get spray foam insulation, caulking, and weatherstripping, and you pay it back to the system in baking, or midwifery, or whatever it is you do.

Grapes, photo by leedavHow to Share Time:
When dollars are scarce, timebanks help neighbors swap skills, instead.

Time-dollar programs derive from old-fashioned bartering, of course, but with an egalitarian twist: Every hour is worth the same thing. Portland's credo states it simply: "Everyone has value, everyone's time is equal, everyone has something to offer. The real economy is people. We value work. We value the work it takes to make healthy children, a healthy community, a sustainable future." It sounds positively Scandinavian.

If you're a little more hard-nosed, then consider the new Marketplace program launched this past spring by Vermont Businesses for Social Responsibility and Vermont Sustainable Exchange. It's kind of like barter, too, but highly computerized, and filled with excitingly business-like buzzwords. "We think of it as a recession beater—a cash-flow management tool," says VBSR executive director Will Patten. "Every business has extra capacity, or products it's overstocked on," he explains. "Everyone has extra capacity." Now other member businesses can buy that extra capacity with their own excess, no money involved.

"Say I need to buy some compost," says Will Rapp, who often needs to buy compost because he's the founder and chairman of Gardener's Supply Company, an enormous mail-order house based in Burlington. "I may be short of cash, and the compost guy may have a glut at the moment. So I can transact that in the online exchange system, and the compost company can take the credits I give it and use them to buy fuel for the truck to load the compost onto. The fuel company says, 'I need accounting services,' and finds someone in the network to provide them."

The currency is literally teaching people to think more carefully about how their habits build or erode community. It's about creating trust in a world where economists have taught us that we're self-interested individuals and nothing more.

It works like money, but it lets you pay for what you have too little of (fuel) with what you have too much of (compost). If you had to barter point-by-point, not only would you have to find a fuel dealer who needed compost, but you'd have to find him at just the moment when he also had extra fuel he needed to get rid of. "Barter requires the incidence of coincidence," says VSE founder Amy Kirschner, who runs the Marketplace software under a license from the Scottish inventors. "Instead, we're a little bit Amazon, a little bit Craigslist, a little bit eBay."

Kirschner started work on Marketplace's business-to-business electronic exchange after her attempt to start a BerkShares-like local currency in Burlington had foundered. "Having a piece of paper go around is a bit of a logistical nightmare," she says. "Burlington Bread didn't fit into cash-register drawers, it was hard to make change, employees weren't trained to deal with it." She's happier with the electronic model, in part because she's dealing directly with businesses that are used to thinking in hard economic terms.

"We finally nailed the economic argument—it's spare capacity," she adds. "Would you rather pay a bill with a gift certificate to your business or with cash? There's already trust within our network of businesses; these are the kinds of people who want to work with one another."

Susan Witt wouldn't argue with any of those logistical challenges, but for her they're part of the rationale for BerkShares: The currency is literally teaching people to think more carefully about how their habits build or erode community. It's about creating trust in a world where economists have taught us that we're self-interested individuals and nothing more. "I'll be in line behind someone at a store, someone who's supported us," she says. "And yet she's whipping out a credit card to pay. I ask her, 'Where are your BerkShares?' And she'll say, 'It's inconvenient. And I get airline miles with this card.' We're so entranced by the ease of this economic exchange."

Robert Shetterly's portrait of David Korten
Get Free From Wall Street: An Interview With David Korten

How to avoid money games and create real wealth.

Witt wrote recently about another local woman, someone who had called her office to ask how to make a donation to a local nonprofit in BerkShares. She couldn't just write a check, Witt explained to her. She'd need to "walk or drive to the project's office, call the staff together, look them directly in the eye, tell them how important their work is to the community, and hand them an envelope with a big stack of BerkShares."

Those bank notes would be nice, but so would the sentiment; in the end, it's entirely about building community, and so the connection counts as much as the money. Here's Jasmine Stine, an intern at the Schumacher Society: "My housemate was in line at Guido's [an upscale produce market in Great Barrington], right in between two other people who were paying in BerkShares. It turns out that one guy was making biodiesel, and the other guy needed some. That's the kind of conversation we've got to start having."

The Schumacher Society—which is now combining forces with England's New Economics Foundation, another booster of local currencies—sees lots of room for BerkShares to grow. The currency is now spreading out of the southern half of the county—the Tanglewood Berkshires—into the grittier Pittsfield area, and even to a few towns just over the New York and Connecticut state lines. And the Society is also trying to figure out how to start making loans in the local currency, not tied to federal dollars, which would mean backing the BerkShares with something real. Not gold, but a basket of commodities—firewood, apples, wind power—the kinds of things you can produce in Western Massachusetts, where gold mines are scarce.

The loans would be designed to build local economic power: to capitalize the factories and workshops that could bring production and jobs back home. That could reduce the scale of the sprawling global economy at least a little—and trim the danger of the next crash a little, too. I'm betting a Melville it just might work.

Bill McKibben authorBill McKibben is founder of and the author, most recently, of Eaarth: Making a Life on a Tough New Planet. Earlier this year the Boston Globe called him “probably the country’s leading environmentalist” and Time described him as “the planet’s best green journalist.” He’s a scholar in residence at Middlebury College. Bill originally wrote this article for Yankee Magazine.

Visit Yankee Magazine to read more articles from his series called "How New England Can Change the World." Including:


Default or Hyperinflation: The US’s Only Two Options

Default or Hyperinflation: The US’s Only Two Options


10/22/10 Tampa, Florida – I thought I had seen and heard it all after the ludicrous Ben Bernanke, asinine chairman of the Federal Reserve, announced that the official (and thus a lie!) 2% inflation in prices was too, too low, and he wanted higher inflation because, somehow, in some weird little fantasy world that only he and other neo-Keynesian econometric cyber-nerds can see, higher inflation is “consistent with the mandate of the Fed” to achieve stable prices (zero inflation)! Hahahaha!

This is so bizarre that I had a hard time dealing with it, as I have enough problems of my own in distinguishing reality from my own weird little mental world without this dimwit forcing his schizophrenia on me.

So I cleverly doubled up on some of my medications, which didn’t help much, although I finally did relax enough to unclench one fist.

Of course, the other mandate of the Fed came in the ’70s when Hubert Humphrey and other leftist weirdo morons changed the Fed’s charter to include a mission to, somehow, with magic perhaps but certainly with creating more and more money and driving interest rates down and down, always maximize employment. Maximize employment! How convenient an excuse for the Fed to create more money!

And speaking of maximizing, I thought I had, with this one statement by the chairman of the Federal Reserve to purposely create the horror of higher inflation, maximally achieved a state of complete loathing for the Federal Reserve.

With my newfound Maximum Mogambo Contempt (MMC) for Ben Bernanke and the Federal Reserve, you can imagine that I was not very surprised to see an essay with the title “Three Horrifying Facts About the US Debt Situation” by Graham Summers of

Initially, I was “ho-hum” mostly because I can, offhand, think of about a thousand horrifying facts about the US debt situation, and that is all without even touching upon the inflationary horror of the federal government deficit-spending untold trillions of dollars per year, year after year, increasing the national debt by borrowing an avalanche of money that the foul Federal Reserve magically creates out of thin air, and that the Federal Reserve will itself use, in an outrageous episode of historically treacherous monetary infamy known as “monetizing the debt,” to buy the trillions and trillions of T-bonds, a terrifying example of fiscal and monetary insanity that will, to wax poetic, reverberate through the ages.

You can tell by the way I ended that paragraph with a mere period instead of an exclamation point to denote horror and terror that I was pretty bored.

Well, I was, until he went on that, firstly, “The US Fed is now the second largest owner of US Treasuries” after just recently overtaking the stash of US bonds owned by Japan, “leaving China as the only country with greater ownership of US Debt.”

To his credit, he went on that the horror is that “we’re printing money to buy it. Setting aside the fact that this is abject lunacy, this policy is trashing our currency which has fallen 13% since June…as in four months ago. Want an explanation for why stocks, commodities, and gold are exploding higher?”

I raised my hand to make a comment about how, “We’re Freaking Doomed!” but before I could interrupt, he went on that, secondly, “There are only about $550 billion of Treasuries outstanding with a remaining maturity of greater than 10 years.”

Out of all this, he deduces the third point, which is that “The US will Default on its Debt.”

Apparently, he had a second thought about that “will default” thing, as he says, correctly, “either that or experience hyperinflation. There is simply no other option.”

I am happy to see that Mr. Summers still maintains some of that sunny optimism of youth, a quality that I completely lost years ago when the realization of the immense degree of stupidity and corruption in the world crushed my hopes, when he says that there are no other options except default or hyperinflation.

I say, ominously, which explains the scary and ominous soundtrack, that the other option is (pause for effect) “both.”

And speaking of “both” if ever there was a time when you should buy both gold and silver, this is it! And the fact that you can get them by merely plunking down depreciating Federal Reserve Notes in payment should make you giddy with delight, so that you giggle as you say, “Whee! This investing stuff is easy!”

The Mogambo Guru
for The Daily Reckoning

giovedì 21 ottobre 2010

Camerieri in Lussemburgo, il piatto freddo è servito

Camerieri in Lussemburgo, il piatto freddo è servito
di Marco Cedolin - 20/10/2010

Fonte: ilcorrosivo

Lo scorso lunedì i ministri delle finanze europei, vestita la livrea da camerieri della BCE e dei grandi poteri finanziari, si sono recati in Lussemburgo per prendere ordini in merito alla loro condotta futura in tema di macelleria sociale e annientamento generalizzato delle prospettive occupazionali e potenzialità salariali dei cittadini che vivono sotto la loro giurisdizione.

Sostanzialmente nessuna novità eclatante, tanto meno per quanto concerne un paese come L'Italia che ha ormai consegnato alla UE qualsiasi tipo di sovranità, fino al punto da demandare alla stessa l'autorità di redigere le future manovre finanziarie, anzichè limitarsi a dettarle come accaduto con l'ultima in approvazione in questo periodo.
Il piatto freddo, servito sulle tavole di tutti i paesi europei sia pur con tempistiche e contorni diversi, non si discosta da quello già sperimentato in Grecia.
Tagli sempre più sostanziosi della spesa sociale, privatizzazione di ogni residua risorsa pubblica (raschiare il barile finchè esiste un fondo) eutanasia del potere contrattuale dei lavoratori, innalzamento dell'età pensionabile, costante livellamento al ribasso dei salari e dei redditi, denaro pubblico "regalato" alle banche tramite cervellotici escamotage, totale appiattimento di ogni interesse nazionale, immolato sull'altare dei grandi interessi internazionali incarnati dal FMI e dalla BCE.....

Il tutto presentato, come nella migliore tradizione della nouvelle cousine, con colori alettanti e nomignoli accattivanti, come parte di un progetto necessario per meglio gestire la crisi, ritrovare la crescita perduta, ridurre il debito pubblico e costruire una politica economica di rigore, prodromica di verdi vallate e cieli azzuro cobalto.

Naturalmente, ancorchè edulcorata con attenzione, alla notizia della riunione e alla composizione del piatto freddo nonè stato dato grande risalto mediatico. Al più qualche articoletto sintetico posizionato nelle pagine interne dei giornali e nella parte bassa dei siti internet. Dove hanno trovato spazio le parole del ministro Tremonti, con la sua livrea cangiante di lessico latino, che ha dichiarato "Habemus novum pactum" riferendosi agli ordini da lui ricevuti come ad un nuovo patto di stabilità di suo gradimento, poichè particolarmente favorevole all'italia.

Una vittoria insomma, ma di quelle da celebrare sottovoce, poichè a fare confusione fra ministri e camerieri gli italiani potrebbero iniziare a realizzare come ora che a governare è solamente più Bruxelles, la classe politica che bivacca al baccanale di Montecitorio e di Palazzo Madama sia costituita da esuberi che alimentano la voragine del deficit, inutili e di fatto sacrificabili nel nome di una corretta politica di rigore economico.