Not the measures announced by the G20 change nothing. Money is not neutral, neither economically nor ideologically. It is because money is not 'neutral', that is not a simple 'veil', that should not let private interests hedge and the task of issuing the currency , so potentially disruptive.
Four questions arise because anyone who wants both understand and possibly reform the current monetary system:
1) Who makes (or 'created') that currency-money?
2) How (how much) does it make?
3) Why (and who) makes is this money?
4) Who controls (and controls) this issue?
I'm not going back to the first question, as everyone knows, more or less, that the monetary system involves both the central bank (for paper money - banknotes - actual) and financial institutions , both banks (second row) itself, or intermediate Financial.
Banks issue mainly of bank money (beyond their own reserves fiat money) - as part of some lax prudential -.
Other institutions are acting as mere financial intermediaries, lending to some economic savings - more or less long term - performed by other agents.
(For further reading of such issuers of currency, we can see various sites, including that of ' counterfeiters ', or association 'Societal ' remains the basic reference book M. Allais, "Tax on Capital", pp. 176 to 209)
I'm going to ask me here on reasons for changes in currency , limiting myself here to what is called monetary aggregate M1, which includes notes (and coins) in circulation and demand deposits (definition Banque de France, 1999).
This issue therefore contains items 2 (How) and 3 (Why) I then show that the point 4, the control and regulation, is not really addressed by the G20, having failed to appeal clearly - not ideological - questions 'How' and 'Why'. Why
of currency fluctuations?
This question, often touched upon, but rarely depth can be written as: Why
the money in circulation does need to be increased (or decreased) from one period to another?
still says otherwise, why the economic system taken as a whole did he need more (or less) money-money than before?
These questions are obviously beyond the monetary aggregate chosen for reasoning. I got here M1, traditionally considered as corresponding to all means of payment (cash and cashless), we could have in a system where there would only currency in circulation, asking the same questions.
For the hurried reader, I shall now give some answers, before justifying this position a little further.
The increase was used primarily Monetary financial sector.
The increase in the money found in Europe - and France - the last dozen years (before and after the changeover to the euro), and one could make the same reasoning to the world - even if the numbers are more difficult to comment is related to the following phenomenon.
Regardless of any problems associated with inflation, most of this increase in monetary (average inflation deducted from 7 to 9% to an average growth of 2.5%) is due to funding needs financial assets, in other words stock speculation.
Specifically, instead of the money supposed to be a simple 'monetary veil' to serve the economy as a whole, plays the role of 'normal', this increase has mainly benefited financial sector to the detriment of the sphere of the real economy. The 'rentier' and 'speculators' have enriched themselves at the expense of producers (entrepreneurs and 'workers').
Two figures speak for themselves to prove this 'theft' of the 'real' economy for the benefit of so-called 'capitalist', the ECU men portrayed by Karl Marx in the book 1 of Capital.
a) Monetary aggregate M1 (all means of payment 'on demand') is passed in France in 10 years, from 1997 to 2006, 26% to 44% of GDP . If M1 had a simple veil monetary of this aggregate would maintain the same proportions relative to domestic production. Unless, of course, assuming that the velocity of circulation of money has declined in the same proportions, which, until early 2008 at least, has not been found.
b) The evolution of stock prices (supposedly summarized by the evolution of the CAC 40) had thought about the last 15 years twice as fast as GDP , with dramatic changes it is true, after the collapse of the dot.com bubble and the terrorist attacks of September 11 and other crises yet. But if you look at the level reached May 2, 2007, 6000 points, this observation remains true in trend.
It is therefore not surprising
c) the CAC 40 currently operates between 2600 and 3000 points, representing a correction 'normal' if one considers at least the market value of companies should reflect their economic value, as represented by the evolution of GDP and profits 'normal' made on this occasion - profits 'normal' supposed to finance future investments. Without growth, no profit is 'normal', there should be none.
d) than those who had enriched themselves unduly, to their advantage by capturing the essential of the money sent (or 'created') by the banking system - in return for their assets 'financial' (doubtful based in part on assets 'Toxic') - to claim the body and screams an extension for their own monetary profit, this extension can not move, of course, by the banks.
Two solutions are therefore reward the thieves, or help producers:
Facing the heist committed 15 years - more likely - by speculators whose share of national wealth (income not earned yet ) is not far from doubling, one can decide validate this holdup.
is apparently what the G20 has decided.
remember about 'robbery' speculators that switching to increase their monetary income alone has led to a near stagnation of the purchasing power of 'workers' in recent years, and over- debt throughout the economy (over-indebtedness on the part of the 'capitalist' who has emerged as after the onset of the subprime crisis, and the workers, playing the gamble that this debt on future income, they will probably not due to the current depression).
Another solution, the only socially correct, would of course consider that the losses (virtual) must remain capitalists losses, and to declare that the bad loans granted by banks are worthless.
As a complementary measure, apart from the 'nationalization of money' (not banks), ie the takeover by the state directly from the issuing currency (this is obviously not ' printing money, which caused - at least for the most part - this increase monetary encouraging speculators, through a financial system where everyone, young or old, believed to be unduly rich) it is essential to transform all deposits in cash, while prohibiting now banks to grant loans not fully covered by the new fiat currency.
would not change the current money supply, M1, but that now prohibits commercial banks - again become mere financial intermediaries - to issue interest ('ex nihilo' some would say) of the new currency, regardless of actual needs of the real economy. And whether to create new money, this money must go directly to businesses and households, In no case speculators and banks (apart from the previous restriction by: banks can and should act as financial intermediaries, lending to economic savings already achieved by other agents).
But, again, I do not, alas, that the G20 takes such decisions. He probably prefers playing to the gallery by cutting tax havens. It's probably a good thing, but very marginal compared to what to do. The money must go to the real economy, not to the financial economy, not by taxing a little more speculators that the underlying problem will be addressed.
Appendix: a short explanatory model of currency fluctuations, speculation out '
(see attached ticket, the ticket currently being already very long).
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