Mint, realities and utopias
playback of a video, very interesting, produced by the organization ** " theMoneyFix " prompted me to take the explanation of the "monetary system" both to try to stop the fantasies associated with them, and also, most importantly, to try to indicate some possible solutions so that the currency is more a means available to the economy an end in itself.
First, I'll fix the vocabulary used, before browsing the outline of the video above in commenting on key points.
I shall make some comments more personal.
vocabulary monetary
What the Anglo-Saxons call " money" will be translated as ... " money" (within the meaning of " currency, or whether to be more explicit and precise monetary aggregate M1).
The word " currency" will be translated as " cash" or "cash" or "paper money" (Other equivalent would be "cash", "fiat money", "liquidity") . The "paper money" is issued by the central bank in Europe by the ECB.
The "money" has, therefore, as proper subset, paper money . Some questioned, but we'll see why this is not debatable.
That tells us, or reminds us, this video, on the sociological aspect currency :
1) Facts and sociological phenomena.
The money seems to govern most of existences, that we have very little or a lot.
Few people really know what money is, and seem also not really worry about it. It's more uses of money, what can be done with, than it is of concern to most people
2) After noting that the Federal Reserve in America has been based 1913, a consortium of private banks and is neither "federal" or "reserve" the problem " social reality "of money is raised.
3) Two lines of inquiry are suggested: Why
money, which should be at the service of all, we manage it, at least in the U.S. by a private organization?
Would not it because there a link between the monetary system and the collective unconscious of society : with no doubt, subliminal, that it would change society in order to change monetary system - on this point, I call rather for the opposite?
The big "secret" or the mystery of money will then be revealed to us, after 14 minutes instructive because of the impressions from the "common man"
4) For this, we first recall the role of bankers time the "gold standard".
The first currency, or the first "paper money" was simply to received gold cons. Instead of wandering and pay with gold coins, gold was deposited to his bank in exchange for a receipt, and we paid with the receipt, which circulated so instead of gold, one currency jangling of the time.
5) As it was not very "profitable" for our bankers, they began to issue more paper money they had in their trunk .
We do not say is how it was possible (since these pieces of paper could not be delivered as received, since the new gold was not made by the same assumption). One can only assume that was the beginning of the currency debt or bank credit. A banker said his client B. I lend you $ 1000, or better, I'm worth $ 1000 paper: B, delighted, asked rarely to be seen whether that gold existed, or where that gold came from another client C, which have deposited their gold to the bank.
6) It is the beginning of "money creation" by banks . Banks issue more paper money they really have gold, or "received gold" or "deposits" of gold. This secrecy did not really have a , at least he appears periodically on each bank run, when people want to "touch" their gold - supposed to be sufficient - instead of simply using only as payment means the "piece of paper" issued by a particular bank.
7) What follows in italics is a personal comment:
The only "secret", perhaps, is that the same applies now to the "paper money" vs.. "money well."
Let me explain: When only the
golden stock gave rise to receipts issued by the bank, received the "circulating" consistent with an initial saving (gold) that was used for various exchanges: at one point there were so many pieces of paper and deposits .
When the number of pieces of paper began to exceed the number of receipts - that is to say, the real gold, it only means that saving is insufficient to meet the needs of trade.
This is neither good nor bad, it's like that. The pieces of paper "circulating" outnumbered the "received".
This is not necessarily the "wind" as the pieces of paper flowing correspond to real wealth, a triptych production-consumption- additional investment.
Only if this triptych is gone we may wonder what all these pieces of paper. If you prefer a stock of gold - still - that can be bought with pieces of paper flowing - because we no longer believe that you can buy with these bits of paper - that is when the bank run, the cash crunch is not far.
8) Thus, when the stock of gold has been replaced by the stock of paper money (banknotes), and when the "moving bits of paper" were replaced by " money "- simple inscriptions on the books of accounts of banks, nothing has really changed.
Prospectors and depositors of gold have been replaced by the Central Bank the exclusive right to "create ticket".
The "pieces of paper" issued by banks ... have been replaced by bank money issued by banks ....
But the principle was and remains the same: banquent create additional payment paying more than they have in deposits "credits are deposits, even it is necessary that there be some initial deposits to extend credit - more important.
9) But why banks carry them this: when they give more loans they have on deposit, whether gold or paper money (dollars or euros), they take the risk of be "liquidity" - and hence be "liquidated", put into bankruptcy. They make a bet, and a finding .
The bet made, or risk taken: it can not provide enough liquidity (gold, a century ago, or tickets today) they appear weak, very weak, for interest they get for this money creation.
One example to illustrate this.
Consider a bank that has 10 billion cash, $ 8 billion of customer deposits and $ 2 billion in equity. With ratios of "prudential" classic, it could lend up to $ 100 billion. If it lends to 5% (which is not very high) it will earn in a year 5 billion (2 billion of capital: cost, 250%). His
risk: that his clients want to withdraw more than 8 billion or more than 10 billion in cash: low risk in a "normal" but may nonetheless.
To hedge, she knows - better than the time of the gold standard - it can rely on three resources: its fellow-on the interbank market, other financial institutions-the-bank money market Central, then the only way of "creating" paper money, the "real cash". Currently
(Natixis report of January 2010), European commercial banks can obtain the monetary base (currency paper or central bank money) to 1.5%, to lend at 4% or 5 - (4% for the state French, although he is allowing banks that loan to 1.5% ....)
The risk is not very important, much less so than the time of the stocks of gold: not easy find a new gold mine in the event of bank runs ...
To return to the video itself, the authors insist on a very sound idea, but not always well understood, which is that the currency is more of an idea, an agreement, an "agreement" (ie a convention) a reality. The monetary system is an information system in which some people recognize owe money to others, these IOUs can take several media, including the physical, tangible, becomes less and less used (3 to 5% of trade), whereas Information itself is increasingly dematerialized (how to use essentially the credit card, check and bank transfer between accounts), money "intangible" is used in more than 95% of cases .
loans underlying the issuance of currency virtualized, this book money, in concrete terms simply write in "bank accounts", sight deposits (it would be better to call deposit accounts because there was no advance deposit)
10) So the best interest including banks, which is the basis of bank loans, these loans are justified or not, "I am interested in your money" say the banks. In fact it would rather " loans that I grant you I'm interested " should say that each bank.
11) It is from this "interest" that the authors of the video broadcast two theses, which are based on reality, but whose conclusions are partly questionable. Since
as principal of the debts, loans and is expected to be repaid a loan of 10 billion will not create permanent 10 billion, a gross balance of $ 10 billion should not be confused with a net balance of 10 billion. Should we, in contrast, conclude that there is no money creation "scriptural" durable, like keeps (wrongly) a small current heterodox? The authors of the video does not directly address this point - which is odd, by developing two theses following:
The interest is not created during the credits - which is true - will not be reimbursed from the loan - which is still true, and the corresponding resources will be found elsewhere - which is still true. They conclude that the interest can not be paid until other resources - which is still true - and that these resources are necessarily in debt, which is partly questionable.
If there was growth, it is also conceivable that the Central Bank was able to accompany this growth of an issue of additional paper money, or that the interest paid to banks has been used to these banks - which have the right to spend their own money (= "money"), even if they prefer to spend the their clients, created ex nihilo "- to buy additional production allowed for growth.
Moreover, these authors argue that if every person indebted repaying its debts, the monetary system would collapse , as there would be more money.
Again, it is "almost" true, it all depends on interest rates and liquidity ratio. If we return to our example, with 10 billion money (= banknotes), an interest rate of 5%, and 100 billion in loans must repay 105 billion: there will be more debt, and it will remain 5 billion of "liquidity" of fiat money.
Their thesis is "theoretically" wrong - at any given time, depending on the accumulation of interest already made - but "almost real", interest eventually accumulate more than reason, and this, more faster than the interest rate exceeds the growth rate of the economy. Indeed, in practice, the average interest rate is surely higher than the one I mentioned, and it seems difficult that everyone can repay all its debt without jeopardizing the general economic equilibrium.
In another form, the oldest writing in the years since 1940, Louis Even, we'll see about Social Credit, said in a manner equivalent to the body (when not controlled) Bankers:
" The banker made the capital, just capital. Nobody's interest, since nobody else is making money. But the bankers demand both principal and interest. Such a system can take only with a continuous stream and increasing borrowing. Hence a system of debts and consolidation of power dominating the bank . "
So much interest is the major cause of monetary crises : should however addressing the role of creation monetary banks? is a possible solution for bringing real money - as way - serving economic prosperity-the end . We'll talk later.
I would argue more readily For my part, the proposal Next: delete (or remove) the debts of state and excluded : it would put several banks into bankruptcy, but it probably would rely.
We come now to the tracks more or less realistic, even utopian, proposed by the authors of the video: I will mention three, and adding two more of my own.
The proposed five tracks all have the same goal: allow the socio-economic system in which we live does not remain forever hostage to a flawed monetary system , and prevent the potential development wealth, material or not, either blocked or directed by the iron grip of a currency is not primarily benefiting only the wealthiest at the expense of poorer or less fortunate.
These five tracks are: complementary currency "conventional" mutual credit, barter, social credit and currency melting.
Mint complementary "classical" and barter share a common vision: it is not to replace the currency "normal", that operated by bankers, but to supplement it. The
complementary currency in the video is based on a practical experience (that of Ithaca in upstate New York) and is issued hourly equivalent, which would not have repudiated Karl Marx and his labor-value, time of work is the standard measurement of all things. This idea is similar to that developed by the proponents of the French écosociétalisme, one of the best known representatives is Andre-Jacques Holbecq. I think
medium for this type of money that, in my opinion, can not be meaningful at the level of a community rather swaging not exceeding a few hundred individuals, this However, a good approach to currency "complementary."
It may also have a sociological and psychological impact not negligible, re-socializing of excluded or vulnerable people by the "system". Another problem highlighted by one of the authors of the video is that currency "zone" is a currency, and its amount is defined. It may therefore be insufficient money, money stock (cons this argument seems questionable, however, because the number of hours in a day is limited, too)
The barter ("bartering") Again, do not want to replace the currency classic, but complement it. We will exchange services products, through a grant, a news magazine, possibly web sites, the principle being to fight against the unused resources and unmet needs: printing does not turn that 50% of its possibilities, vintage cars sleeping in a garage, restaurant half empty, etc..
Again, at a local association or community not too large, this can lead to socio-psychological, but I do not see what barter industrialized as the track for the future.
Runway mutual credit seems richer, because it leaves decidedly off the beaten path. It is based on the fact that there is no system in this "stock" of money: the overall balance of the "credit mutuel" is necessarily zero.
At one point, there are accounts receivable and payable, but the debit-credit balance is necessarily zero. Everyone starts his day, or year with a zero balance, and according to its consumption and its "production" (of goods or services) is found at a given time debit or credit. The idea seems very interesting, and its use "community "Entirely conceivable. But its widespread use remains a mystery to me, despite all the books and articles or pointers I traveled on the issue. (See also )
In a world where all individuals are caring and generous, there would be no problem. In the real world, the issue of control seems fundamental.
The last two tracks are not included in the video.
One is the Social Credit Louis Even (http://www.michaeljournal.org/vraics1.htm) context in which production and consumption directly socially recognized and (therefore?) monetized. The currency is issued at the time of production, and destroyed at the time of consumption. Prices are expressed in what one wants, "euros normal" or "hours", depending on the socio-economic development. Banks are removed, at least in their role as shapers of debt (and interest rates), they can maintain their role as an accountant. For me, it "LA" runway digging, because it can be generalized and / or imposed on a department, a region or an entire country: it is not a utopian community restricted to a community "fun." It may be a utopia, but if it materializes, it does not depend on the kindness or good nature of individuals who constitute the society concerned. The social credit
talking about what should be done , what could be done: " Wealth is the thing, the money is the sign. The sign should go after the thing " (Louis Even , which also mentions the social doctrine of the Church and Pope Pius XI: 'Those who control money and credit have become masters of our lives ... without their permission no one can breathe')
Another track finally , complementary currency or substitute currency, I do know that of the slush money S. Gesell. It is an anti-hoarding currency, a currency biodegradable, a currency that is forced to circulate. The fact that she automatically loses, officially, a little of its value each month (eg 1% per quarter) is supposed to allow, even require, its traffic problems.
If the possessor of money is an incentive to spend it as soon as he receives it, separating the two parts of the transaction, selling a good or service against receipt of money, and spend money buying a cons good or service should make this shorter period, or almost instantaneous, and thus boost sales, so the production: less temptation to build a precaution, a mattress tickets.
The "store of value " portrayed by some as the absolute evil no longer exist. Again, this is probably an idea to dig, because it does not particularly appeal to good feelings, even if such feelings are very desirable course.
Among other tracks, some suggest no change in the 'small' detail near prevent money creation by private loans private banks, an expression of the slogan "100% money . I do not think if we are pleased with this, but ...
When we talk about currency reform, it is difficult not to mention the proposals Allais, specifically the focus of its monetary reform ( the other point would be a tax reform, we will not discuss here): Maurice Allais
has proposed (see C. Gomez ) in many studies to separate the functions (deposits and credits) by making exercise by separate entities. We have thus:
- Commercial banks , which would take care of that cash management customers, by covering 100% of paper money (issued by the central bank )***.
- loans banks that receive deposits / savings and loans at terms slightly shorter borrowers.
Comments and criticism welcome, BL
** see commentary 'anonymous' ***
point reminds AJH in a comment
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