Ending This Crisis

7/29/2019 Ending This Crisis

http://slidepdf.com/reader/full/ending-this-crisis 1/69

JCS Engineering [email protected] 00352 621 219 375 23-9-2013 page 1 of XX

ending this crisis, avoiding the next

5 years on …

JCS presentation at A.L.I. 23-9-2013



JCS Engineering



en finir avec cette crise, et éviter la prochaine

presentation held at A.L.I. in Luxembourg on 23 august 2013

Jean-Claude Schmitz

consultant

Dipl Ing ETHZ

Luxembourg



JCS Engineering


Money rules the world

Questions:

Who rules over money ?

According to which principles ?

Where does money come from ?

Has there ever been a public debate about this ?


http://slidepdf.com/reader/full/ending-this-crisis 4/69JCS Engineering [email protected] 00352 621 219 375 23-9-2013 page 4 of XX


Introduction

This presentation will analyze the

monetary and financial background

of the current crisis

and propose

ways and means

to get out of it


http://slidepdf.com/reader/full/ending-this-crisis 5/69JCS Engineering [email protected] 00352 621 219 375 23-9-2013 page 5 of XX


The Pyramid of State Organization

Organisation of the State

level level

8 8

7 7

6 6

5 5

4 4

3 3

2 2

1 1







level level

8 8

7 7

6 6

5 5

4 4

3 3

2 2

1 power system 1







level level

8 8

7 7

6 6

5 5

4 4

3 3

2 legal & judicial system 2

1 power system 1







level level

8 8

7 7

6 6

5 5

4 4

3 monetary system 3


1 power system 1







level level

8 8

7 7

6 6

5 5

4 tax & finance system 4

3 monetary system 3


1 power system 1







level level

8 8

7 7

6 6

5 economic structure 5


3 monetary system 3


1 power system 1







level level

8 8

7 7

6 investments 6



3 monetary system 3


1 power system 1







level level

8 8

7 socials 7

6 investments 6



3 monetary system 3


1 power system 1







level level

8 culture 8

7 socials 7

6 investments 6



3 monetary system 3


1 power system 1

The pyramid means that any higher level depends on sound lower bases;

that

the quality of the monetary and finance systems seriously impact real life







level level

8 culture 8

7 socials 7

6 investments 6



3 monetary system 3


1 power system 1

d e

m o c r a c y

? a u t o c r a c y

?





a few quotes …

Franklin D. Roosevelt, 1936:

‘Government by Organized Money

is Just as Dangerous as

Government by Organized Mob’

Dwight D. Eisenhower, 1961

… we must guard against the acquisition of unwarranted influence, whether sought or unsought, by the military industrial complex. The potential for the disastrousrise of misplaced power exists and will persist.

The prospect of domination of the nation's scholars by … the power of money isever present and is gravely to be regarded.

… be alert to the equal and opposite danger that public policy could itself becomethe captive of a scientific technological elite.





EuroZone Key Financial Figures

According to Simon Thorpe’s sums (http://simonthorpesideas.blogspot.fr) , total EuroZone debt is 2,5 times bigger than

the mass of existing money M3. We see that the public part of debt, non-circulating money mass, gross domestic product

are in the same range as M3.

But the money that manages to circulate is only 8% of M3; the rest is idle!!

From year to year, M3 is progressing in sync with public deficit, debt and non-circulating money; total debt is increasing

faster than that due to interest; while economic activity (GDP) and circulating money hardly move

EuroZone Key Financial figures

year 2010 value & increments

0

5

10

15

20

25

30

Debt Debt; details PDB GDP CMM NCMM M3

Trillion €

%

PRD

PDF

PDB

pr i v a t e d e b t

p u b l i c d e b t

t o t al d e b t

p u b l i c d e b t

m on e ym a s s

M 3

n on- ci r c ul a t i n g

m on e ym a s s

C i r c ul a t i n gM on e yM a s s

Gr o s s

D om e s t i c

P r o d u c t





Compounded interest

Why do we have 2,5 x more debt than money ?

Since all our money is borrowed, 30 .. 45 years later the value of that debt has more than

doubled in real terms due to real interest rates, and continues to grow relentlessly

compounded interest ( ZinsesZins ):

value of debt after x years

0,0

0,5

1,0

1,5

2,0

2,5

3,0

3,5

4,0

0 5 10 15 20 25 30 35 40 45 50

year

factor

3%

2%





Paying back the Debt ?

today tomorrow today tomorrow

? ?

result: result:

as

Conclusion: debts are piling up that can never be repaid within the current system;but ask for an ever-growing part of GDP being transferred to bond-holders as interest payments

most of the debt is still there

long after we used up all our

money

real economy would

immediately collapse

paying back out of live

economy

paying back out of the live

economy and out of savings will not help much

either

ov e

r al l D e b t

ov e

r al l D e b t

ov e

r al l D e b t o

v er al l D e b t

n on- c i r c ul a t i n

g

n on- c i r c ul a t i n

g

n on- c i r c ul a

t i n g

paying back the debt ? I paying back the debt ? II

?

With debt 2,5 times bigger than money,

and only 7 % of that actually circulating, will we ever be able to pay back our debt ?





EuroZone Objectives & Mantras

declared objectives of the European Union and the EuroZone

peace, freedom, growth & jobs

our Mantras:

protection of private property

free circulation of

goods

servicescapital

people

di thi i i idi th t





EuroZone Rules & Targets

Our Rules:

independent Central Bank

100% money creation as money-debt

Central Bank does not finance the State

Bond/debt service guaranteed

Our targets:

Central Bank: inflation 0 .. 2 %

public finance: < 3% deficit and < 60 % debt

hidden target ?

offer enough tax loopholes to well-connected and well-heeled,

so that they can hoard their money and place it out of sight

di thi i i idi th t





results 2013

13 years after setting the Lisbon targets

14 years after introduction of the Euro

5 of those years in full crisis

we have:

6 .. 10 .. 25 .. 35 % unemployment

- 5,5 ... 0 ... 0,4 % growth

3 .. 8 % public deficits

25 .. 80 .. 120 .. 200 % public Debt

monetary mass neither managed nor controlled

monetary flows neither managed nor controlled

debt mass neither managed nor controlled

debt flows neither managed nor controlled

di thi i i idi th t





Results 2013 & Comments

Unemployment: 6 .. 10 .. 25 .. 35 % - even more with the young and the old

Growth: - 5,5 ... 0 ... 0,4 % - anemic, much lower than anybody’s interest rate

public deficits : 3 .. 8 % - despite all the efforts public Debt : 25 .. 80 .. 120 .. 200 % - and growing, any level is unsustainable by itself

neither managed nor controlled:

- monetary mass: - un-controlled creation & destruction of money by commercial banks

- monetary flows: - flows faster out of real economy than public debt

can put it back, but readily flows towards

speculation and hoarding

- debt mass - debt increases faster than money

- debt flows - to the public

ending this crisis avoiding the next





Results 2013 : Conclusions

We must be doing something wrong,

the set of mantras and targets and laws we use does not lead to success

When something so important goes so wrong for such a long time,

despite everybody forcing himself to do as “required”, then

we have to question

The

ruling philosophy

rulemaking process

rulemakers

rules

rulers






Our Mantras Comments

protection of private property “ roman” law; essential, but what about:

Hellange, Petite Marquise,Taxes, Monopoles,GDP

free circulation of

goods invasion from China & Germany ?

services for tax avoidance

capital flees from taxation and accumulates in havens

people should move to where the jobs are:

more Spaniards and Greeks to Germany !?

Central Bank independent from Finance Ministry

100% money creation as money-debt by commercial banks ! All lent out against interest

Central Bank does not finance the State State is financed by taxes and debt

bond safety a bit less safe in Greece and Cyprus … ?






EuroZone Targets & Comments

Central Bank:

inflation 0 .. 2 % instead of targeting circulating monetary mass,

and working on that with the finance minister

public finance:

< 3% deficit and < 60 % debt unless growth is bigger than interest rate

and the debt’s rate of growth,

it is

impossible to stabilize any level of public debt,

let alone paying any of it back

without causing another recession

and that growth is far from being there

hidden target :offer loopholes great success

to well-connected and well-heeled,

so that they can hoard their money

and place it out of sight






Gross Domestic Product


GDP EuroZone ~ 9 T€ / year

GDP9 TE

the sum of our salaries and profits








GDP EuroZone ~ 9 T€ / year

GDP9 TE

CMM

Since most of us get paid by the month,

and do a good job at spending the cash just as fast,

money tends to circulate once per month,

So the money that circulates is 1/12 of GDP

Circulating Mass of Money

CMM EuroZone = GDP / 12 = 0,75 TE






Circulating Monetary Mass

CMM

This the money that while circulating keeps us all busy, and pays for our salaries

If 10 % of it is lost,

there will be ~ 10 % more unemployment,

If it increases by 10 %,

we will employ 10 % more people,or earn 10% more,

or have 10 % inflation,

or any combination thereof






year-to-year changes of Financial System main figures

GDP9 TE

Public Debt7 TE

PDF0,6 TE

dGDP

Private Debt18 TE

M310 TE

NCMM

dM3

0,7 TE

CMM 0,8 TE

1 TE = 1 Trillion € = 1x 1012 €= 1 000 000 000 000 €

GDP : Gross Domestic product

M3 : money mass

CMM : Circulating Money Mass

NCMM: Non-Circulating Money Mass

PDF : Public Deficit

PRF : Private debt growth

PRF

0,7 TE

Conclusion:

A lot of money and debt are created each year,

But very little of the money reaches the real economy,

While all the debt has to be supported by the real economy






C i r c u l a t

i n gM M





g , g

C i r c u l a t

i n gM M

Public DebtPrivate Debt





g , g

Commercial Bank

C i r c u l a t

i n gM M






g g

N o n - c i r c

u l a t i n g M o n e t

a r y M a s

s

Commercial Bank

C i r c u l a t

i n gM M






N o n - c i r c


a r y M a s

s

Commercial Bank

C i r c u l a t

i n gM M

Public Debt

Central Bank

Private Debt





N o n - c i r c


a r y M a s

s

Commercial Bank

g o v e r n m e n t

C i r c u l a t

i n gM M

Public Debt

Central Bank

Private Debt





N o n - c i r c


a r y M a s

s

Commercial Bank

g o v e r n m e n t

C i r c u l a t

i n gM M

Public Debt

Central Bank

Private Debt





N o n - c i r c


a r y M a s

s

Commercial Bank

g o v e r n m e n t

C i r c u l a t

i n gM M

Public Debt

Central Bank

exi s

t i n g a s s e t s

bubbles ?

speculation items

real estate

bonds

stock; shares

gold ; silver

raw materials

food

Private Debt

Foreign exchange





N o n - c i r c

u l a t i n g M o n e

t a r y M a

s s

Commercial Bank

g o v e r n m e n t

C i r c u l a t

i n gM M

Public Debt

Central Bank

exi s

t i n g a s s e t s

bubbles ?

speculation items

real estate

bonds

stock; shares

gold ; silver

raw materials

food

Private Debt

Foreign exchange





N o n - c i r c


t a r y M a

s s

Commercial Bank

g o v e r n m e n t

C i r c u l a t

i n gM M

Public Debt

Central Bank

exi s

t i n g a s s e t s

bubbles ?

speculation items

real estate

bonds

stock; shares

gold ; silver

raw materials

food

Private Debt

Foreign exchange

the situation today





Growth drowned by Debt and hampered by unreformed Structures





What is at stake ! Excerpts from the Economist July 27, 2013 Free exchange Blog on a paper by

Martin Ravallion, economics professor at Georgetown University, ex- World Bank Research Director Penury portrait: evolution of thinking on poverty over the past three centuries

Not that long ago every element of the received wisdom—that poverty is a problem, that public policy

should try to reduce the numbers of poor, and that there are good ways to try to do so without

hurting the economy—would have been suspect.

According to the mercantilist thinking that dominated European thought between the 16th and 18th

centuries, poverty was socially useful. True, it was miserable for the poor. But it also kept the

economic engine humming by ensuring the availability of plentiful cheap labour.

de Mandeville: “Going to school in comparison to working is idleness”

If poor people were regarded as instrumental in ensuring economic development, that explains whythere was little appetite for policies to help them leave poverty behind. What action there was

tended to be palliative in nature

Thomas Malthus, a clergyman, blamed the plight of the poor on their own flaws

“Outdoor relief”—giving the poor money—needed to be stopped.

… why the poor stayed poor. The fault had long been placed at their door: the poor were variously

lazy, prone to alcoholism and incapable of disciplined work

…. but the horrors of the Depression in the 1930s led many to re-evaluate the idea that poverty was

mainly the result of people’s own actions

worldwide consensus now : … everyone thinks that poverty alleviation is both desirable and possible





N o n - c i r c


t a r y M a

s s

Commercial Bank

g o v e r n m e n t

C i r c u l a t

i n gM M

Public Debt

Central Bank

exi s

t i n g a s s e t s

bubbles ?

speculation items

real estate

bonds

stock; shares

gold ; silver

raw materials

food

Private Debt

the situation today





N o n - c i r c

u l a t i n g

M o n e t a r y M a s

s

Commercial Bank

g o v e r n m e n t

C i r c u l a t

i n gM M

Public Debt

Central Bank

exi s t i n g a s s e t s

real estate

bonds

stock; shares

gold ; silver

raw materials

food

Private Debt

C o n t i n u o u s f e e d

Germany during hyperinflation

The central bank pumped so much money into the real economy, that money & savings got worthless

and debt lost its meaning. Assets remained unchanged, umemployment or food was not that serious a problem as later on.

C o n t i n u o u s f e e d





N o n - c i r c


t a r y M a

s s

Commercial Bank

g o v e r n m e n t

C i r c u l a t

i n gM M

Public Debt

Central Bank


bubbles ?

speculation items

real estate

bonds

stock; shares

gold ; silver

raw materials

food

Private Debt

While pulling money out of circulation, Central Banks had an easy time wrecking every economy,

“ getting the rot out the economy “; Governments sat idle

The great depression ; D; US





N o n - c i r c

u l a t i n g

M o n e t a r y M a s

s

Commercial Bank

g o v e r n m e n t

C i r c u l a t

i n gM M

Public Debt

Central Bank


real estate

bonds

stock; shares

gold ; silver

raw materials

food

Private Debt

O n e k i c k o n l y

Germany after WW II, at the moment of the Währungsreform

With nothing left, no debt but a good deal of cash from the Central bank, strong anti-cartel and

keep-money-in-circulation initiatives, things went well for a long time after that.





Anything we want to learn ?

It should not

take another big war

nor a revolutionto “solve” the problem

and it doesn’t need to

Bob Dylan: Masters of War

come you masters of war

….

You play with my world

Like it's your little toy





N o n - c i r c

u l a t i n g M o n

e t a r y M a

s s

Commercial Bank

g o v e r n m

e n t

C i r c u l a t

i n gM M

Public Debt< 3% of Budget

Central Bank


bubbles ?

speculation items

real estate

bonds

stock; shares

gold ; silver

raw materials

food

Private Debt

< 0,5 * M3

= Tax

decisive action





N o n - c i r c

u l a t i n g M o

n e t a r y M

a s s

g o v e r n m

e n t

C i r c u l a t

i n gM M

Public Debt

< 3% of Budget

Central Bank


speculation items

real estate

stock; shares

gold ; silver

raw materials

food

Private Debt

< 0,5 * M3

= Tax

Knowledge

capital

Commercial Bank

E r a s e d e b t s o n l y

the Financial System; optimized for general prosperity

P o s i t i v e m o n e y





Decisive Action : Commercial Banks I

the business model of universal banks has by now lost all credibility

so:

1) forbid the commercial banks to speculate, neither with their own, nor with borrowed, nor with deposited money, nor with money-debt generated by themselves

2) tell the banks to limit their activities to lending out money for real economy &businesses, not for speculation

3) dump the fractional reserve principle and forbid the banks to generate their

own money-debt ; they either lend and spend their own shareholders money, or up to twice as much as borrowed from the Central Bank => 33 % reserve

4) No bank to bank lending ( no more Libor/Euribor scandals nor domino effects )





Decisive Action : Commercial Banks II

4. move all cash & transaction accounts to a

Centralized Monetary Institution (postal cheque account ?),

which does only transactions and savings, and may cover inflation

5. Commercial banks do not handle cash

6. Commercial banks do not take deposits, only investments, no state guarantees

7. All other financial services as separate businesses, each

no universal bank nor service: loans, deposition, transactions, share and bond management, consulting, fund management, insurance : all separate

Note: carefully manage the switch to 33% reserve, with authorities

Proposal: buy out & nationalize all banks, put in sufficient capital, then sell again





Decisive Action : Goals for Finance Ministry & Central Bank

The Finance Minister and the Central Bank Governor have to take

responsibility for the health of the monetary situation and circulation,

with the balanced (scorecard ?) goals of:

1) GDP growth + Inflation = 4 .. 5 %

2) Total Debt < 0,5 x Monetary Mass

3) No public budget deficit, no public debt to speak of ( < 3 % of Budget )

In order to achieve that,

circulating monetary mass has to be managed in a positive manner:

- inject enough money into the system (Central Bank)

- keep enough money circulating in the system (Finance Minister)

This goes beyond just asking for low inflation, but like everybody else in the world,the Central Bank should be able to respect more than one requirement, and balance them against each other if needed





Decisive Action : Central Bank

Since fractional reserve by commercial banks will be forbidden,

- Central Bank has to issue and lend Money-Debt to the Banks

Since total debt should to be drastically reduced by a factor of 5,

- Central Bank has to issue Money-no-Debt, or Positive Money to

keep circulation up, while avoiding both deflation and inflation and

enabling economic growth in line with population and productivity growth

To keep politicians in line and guarantee equal benefit for all

- Positive Money -no-Debt is best distributed equally to all the citizens of the

EuroZone, on a monthly basis, directly from the Central Bank to everybody’stransaction account (may be part of Basic Income )

- amounts of Positive Money distributed may change up or down in order toreflect the economic situation





Decisive Action : Financial Cloud

The Financial Cloud , the Non-Circulating-Monetary-Mass

- represents money that is not allowed to circulate in the real economy :

savings, profits, pension capital, funds, speculative funds, etc

- is 13 times bigger than the Circulating-Monetary-Mass

- a lot of it has never been taxed ( pension, tax deductions for shares, etc )

- a lot of its (speculation) business is not taxed either

- blows up asset prices, not asset values

- blows up total debt that is borne by the system, that means the real economy

- is almost as big as Monetary Mass itself

- absorbs each year almost all of the circulating money, which then needsto be reinjected by government debt

This can’t go on !

We have a free-market system that relies on enough money kept in circulation

The system is being sabotaged, knowingly or not, by those who earn, collect profits,save and do neither invest nor spend into the real economy





Decisive Action : Managing the Financial Cloud

since the interest of humanity takes precedence over the interest of a few

let us

- agree on a target average savings rate and total, save into postal accountscompensating for inflation; ( rate & total as compared to income and expenses )

- have the Central Bank compensate for those savings by

injecting adequate Positive Money-no-Debt into the economy

- have the Finance Minister ensure enough money flowing back to the real economy, through : tax discipline

elimination of tax havens

taxation of financial transactions

taxation of wealth, if nothing else worksreduce the outflow by rebalancing wages versus profits

Note: a lot of currently overvalued assets will then come back down to earth.





Private Debt

Some private debt will always be around,

but it is not advisable to exaggerate

just in order to keep the economy humming for a short while more

Throughout history, money owners have always relished in indebting their surroundings

As Tennessee Ernie Ford had it in “sixteen tons” :

Another day older and deeper in debt un jour de plus et encore plus endettéSankt Peter don't you call me 'cause I can't go St Pierre ne m'appelle pas, je ne peux pas m'en aller

I owe my soul to the company store j'ai vendu mon âme au magasin de l'usine

We do not have to follow the US in every aspect, so:

- encourage use of debit cards, not credit cards

- no chasing of customers with consumer debts

- no chasing of potential homeowners with mortgages that they cannot repay

- no chasing people from their homes with expanded collateral demands





Home foreclosures …

As Woody Guthrie saw things in “ Pretty Boy Floyd the Outlaw” :

Yes, as through this world I've wandered oui je me suis baladé un peu partout I've seen lots of funny men; et j'ai vu beaucoup de gens étranges

Some will rob you with a six-gun, y en a qui te volent au révolver

And some with a fountain pen. y en a qui te volent au stylo

And as through your life you travel, et comme tu suis ton chemin

Yes, as through your life you roam, oui et comme tu suis ta voie

You won't ever see an outlaw tu ne verras jamais un hors-la-loi

Drive a family from their home. chasser une famille de son chez-soi





Decisive Action : Public Deficit & Debt

Public Deficits serve two purposes

- fill the holes in the budget as caused by too many outlays and too little income

- get money back into circulation and thus hold up economic activity

and have one collateral: public deficits are private profits

Public debts have accumulated over the decades, since the money to pay themback would be squeezed out of the real economy, no government can ever pay

them back without causing recession and deflation(unless it uses current a account surplus & thus shifts debt to foreign countries; D ?)

When compared to GDP, public debts will come down only if the economy growsfaster than the debt: growth % > deficit / debt

This leads to some interesting mathematics:

France 2013: 80 % debt; 4,2 % deficit : growth needed = 4,2/80 = 5,3 %

Actual growth : - 0,3 .. 0,5 => debt will grow to 84 .. 85 %





Austerity, and its effects

Greece 2013:

160 % debt; 5,3 % deficit: growth needed = 5,3/160 = 3,3 %,

actual growth: - 5,5 % => debt will grow to 165 %

According to (Neo-)Classic Economics,

the only way to get that formula under control is: reduce the deficit to zero or below

But, the actual experience is that

- since so much money is lost in the circuit and not replaced - growth will turn negative faster than deficits can be reduced

And nothing is achieved except

more debt, recession, deflation, misery, political unstability. War ?

another example:

Japan 2013: 240 % debt; 8,4 % deficit: growth needed = 8,4/240 = 3,5 %

With Abenomics, this they might well achieve …





Public Debts: the way out

Since we

cannot pay the Public Debt back without contracting our Monetary Mass,especially the circulating sort

we might as well

change our thinking,

stop worrying about the debt,

have the Central Bank take over public debts, and

pay their interest by the month,

pay the principal down over 20 years

with Positive Money -no-Debt

government to live from taxes, without deficits, from that moment on

Excessive inflation will be avoided by adjusting taxation and the amount of money paid out to citizens,

That will call for fine collaboration between Central Bank and Finance Ministry, and possibly for putting both back under one authority …





Pension Systems : Pay-as-you-go or Capital-based I

While contributing 10 % of his brut salary for 40 years, the person gets back the net equivalent of 22,2 % for 20

years. The same return can easily be achieved in a parallel system.

The results are linear with the % contribution: if contribution is 5%, divide it all by 2; if it is 20 %, multiply by 2.

capital-based pension system

-100%

0%

100%

200%

300%

400%

500%

0 5 10 15 20 25 30 35 40 45 50 55 60 65 70 75 80 85 90 year

% of yearly salary

level

capital savings = f (age ) at 10 %

average savings capital

contribution / pension % of salary





Pension Systems : Pay-as-you-go or Capital-based II

Capital-based systems

induce large capitals building up, those aresubtracted from the the real economy, as they

join the financial cloud,

the average savings capital of 200% in this case shows that on average2 people will be unemployed for 60 years due to this choice !

If that is a choice made by 1 million people, the result is disastrous.

Conclusions:Capital based systems suggest that we can beat demography that way, but neglect the fact

that there will be not one more person around to work in the real economy later on.It is an attempt to pull the linen closer to us as we get old, at the expense of our children.

And it has the disadvantage of penalizing the contributing generation as it does penalizethe same real economy within which they are contributing.

=> Go back to full Pay-as-you-go systems (Umlaufsystem), raise the maxima to avoid forcing well-earners towards private systems, tax private systems, europeanize/internationalize,avoid the deflationary and other risks of large capital accumulations


Economic Data; Shows the problems of the EuroZone:




The Economist ; July 27th 2013

p

D & NL make a lot of money but do not spend it.

Interests are greater than growth, which is unsustainable within classic economicsDifficult situation in Italy, dramatic in Spain and above all Greece


&




Trade & Account Balances

When looking at the

trade : + 165 B$ = 127 B€ current account : + 238 B$ = 183 B€ balances of the EuroZone

the question is:

Why on earth are we in trouble ?

A closer look says that almost all of the surplus is realised by D & NL

But D & NL economies do not grow either, despite 6,4 .. 8,9 % of money flowing into their country when compared to their GDP.


T d & A t B l Q ti




Trade & Account Balances : Questions

Where does that money go to ?

Is it being taxed, or are there 20 000 folks like Uli Hoeness out there ?

Why is it not used, invested or at least distributed and spent !?

Whom do D & NL shift the debt towards, while they take in the cash ?

Are they hoarding it on Bank & Stiftung accounts ?

Are they destroying it by paying their own debts back ?

Are banks cleaning up their balance sheets and build reserves with that ?

What (hidden ?) agenda is causing this approach ?

So despite good performance in some areas of Europe,

the citizens in all of Europe are stuck in the mud because

we lack the push that this money could and should enable,while suffering from the deflation politics that made its earning possible


M Shift ithi th E Z




Money Shifts within the EuroZone

By first lending out money freely into other EuroZone countries, agressively indebting people & institutions like in the US “sub-prime” market, D (& F & .. )banks & funds have made it too easy for years in those countries, so that

competiveness there decreased, activities disappeared while debts increased

After that, when disappearing activities caused concern over the capability toshoulder the debt, the banks abruptly stopping the lending and caused thecollapse of these economies ( see Latin America in 1980’s; Asia in 1998 )

Economies have collapsed, activites have gone and need to be rebuilt from scratch,deficits and debts have grown nevertheless, leaving situations that might take ageneration or so to be repaired

While economic activity is booming in the north, without its citizens benefitting fromit, the south is struck with deflation and economic desertification.

So what ? We are the north, after all !


Economic war ? I




Economic war ? I

Well, we are all citizens of Europe and

- should stick together,

- not fight wars against each other, also not economic wars

- certainly not willingly inflict deflation, default,or “reparation” payments on others, while destroying their economic base

What to do ?

- Start spending your money, share it with at least your own people

- set up northern factories in the south of Europe, get those people back to work

Note: this does not dispend all countries from making the necessary structural changes, it just provides a much better framework within which to do that


Economic war ? II




Economic war ? II

Without any of that,

- the European South is doomed, wrecked by the north just like the Global Economy was doomed and wrecked in the 1930’s by USA & France hoarding gold without increasing their Monetary Massaccordingly, thus paving the way for the last Great Depression

- the losers of the economic war may separate from the Euro,

but even that may not help much as so much damage is already done


Paradigm Change ? I




Paradigm Change ? I

We have the difficulty of thinking that (L’avare ; schwäbische Hausfrau)

- saving is good,

- borrowing and spending is bad

While living in a system that relies on

- people and governments getting into debt to have any money at all

- people spending their money to ensure our employment

Too many people, politicians, economists are

- stuck on the upper part of the story, and

- do not or understand or refuse to acknowledge the lower part of it - would not assume responsibility for their actions & inactions in that respect


Paradigm Change ? II




Paradigm Change ? II

Something clearly has to give, I think that

- saving should continue to be a good thing

- for the sake of freedom, debt should continue to be avoided if possible

But

- our system should be set up in way that is does not contradict those basic human principles

So let us explain to everybody, even in D- how the circulation of money is ensuring the jobs of everyone

- how the reduction of circulation brings misery, and ultimately, added costs

And set up a system that

- encourages a limited target size of the financial cloud to correspond with our savings

- uses Positive Money -no-Debt from the Central Bank to manage thecirculation and neutralize debt on a continuous basis

Documents

Ending This Crisis