From False Money based on Public Debt to a Social Accreditation System CITY INTEGRATED ECOSYSTEMS MANAGEMENT 2011-2012 Silvio Pelaggi
The Crisis 1. 2.
??? FUTURE ??? 2008
“It’s the end of a civilization that cannot be stopped just with financial instruments. What’s needed is a political vision, not a banking one”
Towards a creation of false money: phases
•PHASE 1: Exchange of Goods (Multiple steps to reach the desired good; trade restrained, impossibility of savings)
•PHASE 2: Commodity Money: Coin with an intrinsic value resulting from the material of manufacture, usually gold or silver (difficult to transport and store, limited)
•PHASE 3: Representative /Currency Money: Banknotes, Checks etc. (no real value but determined by an agreement).
Financial (History) • • • •
Towards a creation of false money
Industrialization: welfare increases the number of those who can save money. Consequently, comes the “Commercial Banks", which collect public savings and lend money. The gold gradually, exit from the market and goes into the central banks as reserves (Gold Standard System) The 1929 crisis puts in crisis also the gold standard. The gold reserves of central banks lose their leading role in favor of the dollar that becomes currency base of the international monetary system. 1971. The end of the dollar's convertibility into gold which represents a shift to a flexible exchange rate system where the deficit does not generate flows of gold or other assets, but produce devaluations of currencies. Nowadays there is no more correspondence between reserves of gold and banknotes and the monetary authority can issue currency in the desired quantity
Towards a creation of false money: some definition
• Public debt is the debt of a state towards people, companies, banks or foreign governments, who have a credit towards the state (usually bonds). • A State contracts a debt in order to cover the deficit in the Government’s budget and to invest. • All the currencies (both paper and virtual) are a debt. Banknotes are issued by central banks (which are private), which lend the notes to the Governments asking an interest rate in returns. • In this way the debt exceeds the total value of banknotes in circulation and therefore can never be paid.
Towards a creation of false money: the bank’s point of view
• The basis of all money is gold. • Gold is not made for circulation. Gold is the soul of real money and the soul is always invisible. • Banks lend money which allow the trade to be more efficient and ask back the initial capital plus the interests (under the raise of a mortgage on the property as guaranty). • At this step seems that the banks are not interested in property belonging to others, but they are satisfied only with the money earned from the interests. • The degree of civilization of the country is measured by the amount of debt to banks. No debts means no progress ???
How the false money is made: a numeric example
• The world Central Bank issued a total of 1000€ (Overall amount of money in the market). • Interest = 10% • Time of the loan = 1 year • So after one year the Bank is asking 1100€. No one has issued the 100€ additional. • So the bank can take over the entire world because all the inhabitants together can not repay the total amount of capital plus interest, and this is due to the fact that this extra money simply does not exist, it is False Money.
Towards a creation of false money: consequences
Monetary Rarefaction: The people save money in order to pay the installments of interest and so the money began to coalesce rather than circulate freely.
Towards a creation of false money: Conclusion
CRISIS Many people and companies will become â€?slaves of the banksâ€? Who has the power knows that in order to control the population it is necessary to keep the people in a state of misleading information and distraction from the real problems.
No concentration of power could exist if people were united and properly informed. Consequently, those who have power try to provoke, as much as possible, the dispute between citizens.
• • • •
A Solution: The Social Accreditation System
The money should be an accounting instrument: credits that go from one account to another have to follow the logic of purchases and sales. The total amount of money should be equal to the sum of the products on the market. Every increase of the production should correspond to an increase in the amount of money. If someone needs money to expand the production, the amount required will be issued and paid back once the products have been sold. The property rights of the new money issuance should belong to the community… why?.. because the community increased the productivity. Each account should be increased periodically in proportion to the community wealth so that everyone can benefit from the progress of society. (National Debt replaced by National Dividend) In this way the money is transformed into a service tool. Progress not by increasing the public debt, but by giving a equal dividend to each member of the society.
A Solution: The Social Accreditation System
The real economy has to be based on a Social Accreditation System
• The economic bases on which our society is standing are collapsing, starting with energy. • The price of oil will increase more and more. In 2011, EU paid 402 billion dollars for buy oil (280 in 2010). This means price increases for almost all the goods, even for agriculture. • Travelling could once more become a luxury as it was in the nineteenth century. In 2015, the EU will be the world’s top importer of oil, a good that is destined to increase because of its growing scarcity and for the increase in demand, especially from the emerging countries.
• The climate changes are costing a lot. In 2010 there were 950 disasters in the world with damage amounting to 130 billion dollars. • The CO2 emissions are going up instead of going down with a consequent raise of the world’s temperature. • In 2035, the number of cars in the world will double and arrive at 1.7 billion. • Despite this problems, our politician, are thinking about growth.
“Towards the catastrophe with optimism”
Think about it…..!!!
From False Money based on Public Debt to a Social Accreditation System