Letter
from Lhasa, number 381. Our currency?! Their currency!
by
Roberto Abraham Scaruffi
Saba, M., Moneta Nostra, Centro Studi Monetari, Milan, Italy, 2009.
(Saba 2009).
Marco Saba
http://www.studimonetari.org/
http://www.marcosaba.be/
fotogian@yahoo.it, Frottole e illusioni sul tema del
signoraggio, http://www.econoliberal.it, December 2010.
(fotogian@yahoo.it
December 2009)
fotogian@yahoo.it
https://www.bancaditalia.it/compiti/emissione-euro/signoraggio/index.html
(Saba 2009) is
an impressionist and intentionally deceitful book using non-understood
historical events, and just mixing them for simulating some theoretical base
for its claims, as well as non-understood monetary, and other technical,
mechanisms for political or para-political propaganda. There are
government-sponsored currents disinforming factions of self-defining
not-conformist people, claiming that money be just an illusion so it could and should
be freely spent, while it be not freely spent for keeping people in poverty.
Of course, money is
variously manipulated for power reasons, although the problems be not those claimed
from these agitprops of the Public Super-Expenditure Party.
If a Prince coins
currency founded on gold, first he takes gold from people and later he coins and
prints currency. If a Prince imposes fiat money, which does not need any more
to be fully covered from gold or other precious metal or material, he uses the
coined or printed currency for his and his government’s expenditure.
Is there any real
difference? No there is not. Since it is not possible just printing currency
for covering the Prince’s and government’s expenditure, there is anyway
taxation. Finally, it is always people paying with goods and services. People,
current people and government people [the Prince] do not eat and consumes coins
and banknotes. It eats and consumes goods and services. The only function of
the money is that of intermediary. A barter economy would be excessively
complicated.
The author is a banal
chap full of opportunistic stereotypes. He does not understand how government
[what in continental Europe is called “State”] work, how society work, and even
less how economy work. He pretends to be an iconoclastic chap, a debunker,
while he is actually subjected to current propagandist frames. He is an admirer
of Di Pietro [one of the Carabinieri-NATO secret agents activated for the
1992-93 Great Purge in Italy, indispensable for promoting super-corrupted
Statesmen/women and realizing the Privatizations’ Great Fraud, and so for finally destructuring the Italian
economic system] and other servile and corrupted clowns at power service. What
a debunker! Allow us to avoid discussing about such rubbish here! Secret Police
disservices, alias government/power, activate their covert agents, as
well as whatever other bureaucracy, private companies too, when real power
needs that for its insanities and crimes. What a great debunker is the author
of (Saba 2009)! Secret
Police disservices and magistracy just obey government, and specifically real
government alias powers and power. Cheaters, or naive people, claim State/government
apparatuses have any autonomy from power and so they could be tools of an
imaginary ‘people’. Secret Police disservices and magistracy are just at Prince
[State/government/power] service. It pays, and even a lot, them, and it also
covers the personal corruption of its own members. They have just to obey. When
they seem not to obey, or to be against, it is only because either they are
leading clandestine operations cannot publicly be confessed or they take orders
from higher, more powerful, powers. Government has a hierarchical structure
with command chains. Cheaters deceive about that. Ignorant [even only about
these matters] people simply do not understand that.
Seigniorage is the rent
of the Prince. The author suggests a general monetary reform where seigniorage
...go on being taken from the Prince!!! What a reform!!! A real gattopardo “revolution”!
With a ‘public’ expenditure taking even more than 50% GNP, seigniorage just
contributes to it. Taxpayers pay anyway for this Prince expenditure for itself
and its clients. Seigniorage is the difference between the material cost the
money, in its various forms [coins and banknotes, while electronic money is nearly
without costs], and its nominal value. Of course when and if fractions of money
are withdrawn from circulation, there is negative segniorage, a segniorage with
a negative sign relatively to the quantity of withdrawn money.
1. For the author, since
there is, in Italy, a 2% of reserve requirement ratio, as a consequence of
that, banks would create new money for 48 times the amount of each deposit. For
him, fractional-reserve is a fraud and it is subversive. Of course! He claims
that money can be freely created! He claims that credit could be infinitely
created and so whatever enterprise financed. Actually, economy does not work in
this way. People do not eat money. They need food. The author even claims that
money is really infinitely created and that, when it be not, that be just for
some evil purpose of power. Actually, it is everything different and more
complex.
2. For the author, there
would be no real public debt if seigniorage were taken from the Treasury
Ministry. In practice, for the author, public debt consists of funds in some
way expropriated for the benefit of mysterious private owners or controllers,
or de facto controllers, of the Bank of Italy. For the author, even
taxation would be a fraud. For him, if government needed money, it might just emit
it. While he claims that money be a free good and taxation useless, he’d
pretend taxation on credits. In such a case, creditor should pay a higher
interest rate. Ah, no, for him it is not necessary to reimburse a debt, so not
even to pay interests, because money is freely generated. He moves constantly
from a level to another and just he is contradicted he explodes is nervous
breakdowns. Observe him in debates. He is not even good as a demagogue. The
absence of any ground for his claims makes him easily panic.
The Italian government frequently
spends more than 50% GNP for its wastes and its clients. Taxation and seigniorage, plus public debt of course,
and government debts de facto not paid to creditors, and various expropriations
as pension funds variously stolen from government and its clients, finance
government expenditure. Public debt [the official one] is about 133% GNP.
Monetary circulation [part of which is seigniorage - government needs also to
coin, print and replace coins and banknotes; from the other side coins and
banknotes variously destroyed are, deducted their material cost, additional government
seigniorage because they do not need to be ‘reimbursed’] is a continuously
changing quantity, according to the economy’s needs. Only part of this quantity
is seigniorage, although already spent for government expenditures.
The author suggest that
since banks create money from nothing, and this money created from nothing be
immediately a profit, whatever interest on credits be usury. This oddness is
connected to his theory that money come from nothing. He constantly claims that,
just one deposit money into a bank account, the bank get both the material money
and its accounting registration so, for him, a double quantity of money. He
does not understand basic accounting principles, evidently. If I lend a car to
a company renting cars, it gets one car, not two. He equally “theorizes” that just
bank accord a credit, that be money creation. In part, it is such, in part it
is not. If it were so easy, a bank could accord infinite credit to itself so
producing infinite quantities of money. However, if a bank is systematically
not solvable, it may rapidly incur in bankruptcy. It is not sufficient to have
that 2%, or x%, in fractional reserves by the Central Bank. When you go to your
cash dispenser, you need to find the money you need. Of course that will change
with a 100% electronic money system, although also in that case there would be
compensations among banks. Even electronic money obeys to rules. It cannot be
freely created by a bank just free putting numbers in its databases.
The author preaches
about crimes of imperialist powers and interests. What a novelty! That does not
change the fact that he do not understand monetary mechanisms.
Whatever the world power
hierarchies, actually those who have created prosperous and competitive
economies have been the so-called Developmental States. These are
governments having accepted current parameters, alias constraints, and,
exploiting them, have created competition relatively to the same world powers
and hierarchies they have accepted. While all the governments having simulated
opposition to the world powers and hierarchies have done and are doing that
only for masking their ineptitude. Not casually, they are still plunging into
growing non-competitiveness and poverty. That is certainly too difficult to
understand for the stereotyped reasoning and arguing of the author. Monetary
trick are inside the dependency spiral illogical logic.
Complaining is a
propagandist technique for preserving and justifying underdevelopment, or
dependent or limited development. There are centres creating a climate of
complaint about “imperialist oppression and exploitation” instead of looking
for solutions which inevitably are inside the actual world context. The
so-called Developmental States have exploited imperialist and
inter-imperialist contradictions and contingencies for successfully promoting
projects of real development, while the States/governments of, for instance,
the Third World ‘movement’ just denounced ...their incapability to promote some
real development and prosperity. Governments/States as Italy and Greece, a lot
of others too, are not different. The ones built and build, while the others
complained and preserved their corrupted and predatory governments and
oligarchies. Compare the starting points of Korea and Brazil. The first became
an economic and technological power. The second (a country of inept, ignorant,
corrupted and arrogant chaps and oligarchies) is plunging into
underdevelopment.
(Saba 2009)
deceptively claims that just a bank concedes a credit it creates money from
nothing and that it [the same credit], just detracted what deposited as central
bank reserves, be a bank’s profit. For (Saba 2009),
the taxation of these for-him-enormous profits would permit to reimburse the
greatest public debt and even to finance enormous public expenditures.
Not only.
For (Saba 2009),
a government currency would permit to suppress taxation. Now he would like to
increase it, now he would like to suppress it. These are the pathologies of
bank-phobia.
For him,
lying, now government borrows money from private banks. They print it, and they
borrow it to government, he claims. Actually, even when central banks are not
formally government property, their profits, overall seigniorage, goes to
government/State. Clearly, cheaters refuse to report to their epigones what is
written in central banks’ budgets and in legislation on these matters. If he
refers to the fact that, in contexts of public super-debt, banks buy public
debt bonds, this is a pathology deriving from public debt. Banks find more
profitable to buy public debt bonds than lending money to companies. When
public debt depresses the economy, the therapy is reimbursing it. Excessive
spending is the problem, not the solution!
On the
contrary, in practice, for him, government should finance public expenditure
just printing money, waste-paper-currency/money!, and creating money from
nothing according credits to everybody. This is the cheaters’ ‘theory’ that
credit creates real money (which can actually be created only from central
banks), instead of just a flexible and additional ventilation for the
circulation needs at bank risk, if the central bank do not later cover these
risks if there are bottlenecks. A bank cannot find the money for its daily
needs incurs in bankruptcy. In addition, this bank-creation of monetary base
verifies under Central Bank control. Banks are risk-avoiding institutions.
Coherently
with these deliria, for (Saba 2009) whatever bank interest rate on its credits is usury,
as well as it would be abusive to refuse a credit requested from a subject to a
bank. If a customer does not reimburse his/her debts to a bank [credit accorded
to him/her], for (Saba 2009) the bank has no
losses because the bank previously created this money from nothing. (Saba
2009) claims that a bank according a credit gives
imaginary money to its customer, imaginary money which becomes real when the
received credit, the debt, is reimbursed from the client. In practise for him,
the customers receives no money while he/she’ll reimburse it. Some hundred
people believe such stupidities.
(Saba 2009) is clearly
in bad faith. He is a professional cheater at the service of the Public
Super-Expenditure Party [government bureaucracies
wanting infinitely expand expenditure and taxation]. The few people believing
him, and other professional cheaters as him, simply are ignorant subjects not
understanding basic accounting principles.
(Saba 2009) never
explains and discusses the technical mechanism for justifying its deliria.
Typical propagandistic technique, just (Saba 2009) proposes one of its deceptions it ‘justifies’ them
talking about something else. (Saba 2009) is
just deceptive propaganda and clearly identifiable as such.
The banking system is generally
affluent and powerful?! There are other reasons, not surely “the money created
from nothing”. This [“the money created from nothing”] is just para-fascist/communist
propaganda, at predatory interests’ and predatory powers’ service, for
deceiving fanatic and idiotic subjects. There are also banks and banking
systems frequently collapsing or in need to be subsidized with public money, so
with other people money. That would not happen if money could be infinitely
created from nothing. Money is a commodity as whatever other one.
For the author, capital
is not made of goods/merchandises, but it is magically generated only when
these goods/merchandises are transformed, and also multiplied, using pieces of
paper. His misunderstandings and cheatings are going on.
(Saba 2009) constantly
does digressions for trying masking the absence of whatever technical basis for
its claims. Adding new nonsense does not change that all these claims about
money, confused with wealth [so to be submitted to taxation, according to (Saba
2009)], magically created from each bank be without
any ground.
When a bank grants a
credit, it puts in its budget more credits and more debts, for the same
identical amount. Differences go into interests’ accounts. So that finally
there be not any difference in the accounting books or software. Credits [in
the active side] are what the bank needs to recover from its clients. Debs [in
the passive side] are what the bank puts on accounts at disposal of its
clients. The former ones are active and the latter ones passive. When the
client withdraws the sums at his/her disposal, the debts of the bank decrease
as well as the active side of its cash account decreases. In the double entry
system, what there is in the active side there is in the passive one.
Differences, about debts and credits, are relative to what is put in interests’
accounts [or eventually in losses accounts]. Roughly, the difference between revenues
and expenses finally produces profits or losses. However, whatever recording on
one side of the double entry accounting sees identical amount on the opposite
side.
When a bank grants a
credit, it may have not the physical amount of money. However, when the clients
or the clearing houses claim their money, the bank needs to provide it. If it
cannot, it becomes insolvent. Eventually, it goes in bankruptcy, if it cannot
rapidly solve its lack of cash.
Where be the money created
from nothing, and so becoming a profit [enormous profits, since, for (Saba 2009), the amount of
the granted credits minus what deposited in reserves by the Central Bank is
automatically a profit], there is only in the deceptive purposes of (Saba 2009). Credits are
not profits. Profits are interests minus banking costs and looses. There is no
other profit from the lending money activities of a bank.
Of course,
in the bank’s ‘machine’, if a client disappears and nobody claims his/her
money, this money is finally transformed in profits. At the same time, if there
are credits cannot be finally cashed, they’ll be transformed in looses.
The money/profits
created from nothing are just deception for naive and ignorant subjects. If one
wanted to unmask the misdeeds of a bank, or of the banks, or of the banks
system, they are not here.
The ‘authorities’ in
this field?!
Giacinto Auriti had no
competence on this field and he finally cheated those who bought his SIMEC and
saw them confiscated from the fiscal police. If you sell 1 SIMEC for 1 and you
buy it for 2, that is possible only until all the issued SIMEC are not
converted back. Central bank seigniorage [finally given to State/government] is
possible because there is a fiat currency. Seigniorage is a rent. A credit
granted because the bank is convinced it will be able to face the compensations
of the clearing houses is a risk. The mechanism of the money multiplier is not
anyway that the bank can grant credits for the reciprocal of the percentage of
fractional reserve. This is only the theoretical maximum although, in practice,
the bank need avoiding going short of cash. In addition, there are the real
needs of the economic system and the concrete possibility of not suffering
looses. For instance, if all the banks invest all their disposable funds, minus
what they need as cash, in treasury or other bonds, the deposit and money
multipliers are negative.
Counterinsurgency
manuals [quoted from (Saba 2009), which follow currents stereotypes and
idiosyncrasies] are not sources of truth. In addition, (Saba
2009) understands what it can understand,
nearly nothing about what he quotes, what is anyway irrelevant about the
official goal of this work [(Saba 2009)]. To quote them is the usual
propaganda/deception technique of trying impressing the reader (even more the
non-reader referring to this kind of works as sure evidence that great
intellectuals and experts confirm this stack of stupidities and deception!)
that the author be a reliable expert.
(Saba 2009) simulates
to be against State/government, and power and powers, while it actually claims
more taxation and so a further expanded government, what concretely is more
power for the forces, financial included, controlling government. He is doing
only a dirty game.
In his rhetorical style,
the author glides and scratches about over details, and mixes irrelevant facts
or supposed facts. That gives the impression of a sounding and convincing arguing,
while he himself does not even understand what he is writing about.
From the point of view
of government and of the people, there is no difference that currency be a gold
coin of a banknote. Actually, for the people it is decidedly cheaper that
government issue banknotes and coins without gold backing.
The author constantly
uses the populist deliria, confusing people and government, and government and
people, while reality is different. Government is the Prince. The author constantly
claims about recovering sovereignty, sovereignty for the Prince, because no
people can have any sovereignty, nowhere, ever.
Of course, the author
would like to see issued and Italian currency for better allowing government wasting
additional resources and freely increasing public debt, so further
deteriorating an economy already deeply and irreversibly deconstructed and
annihilated, overall by and since the 1992-93 coup d’état, and connected
judicial terrorism and open British Embassy-Quirinale dictatorship.
At the same time, the
author is so against an issuing bank and a fiat currency that he constantly
hopes for new issuing banks for and a proliferation of new currencies while
technology is actually overcoming how banks and currencies are and will be. He
is just a partisan of government, and local governments, free spending and free
predations. He is mystifying the matter only for this goal. If a free currency
is not accepted, it is useless. If it is accepted, somebody has to pay for it.
Only a government-backed and -enforced fiat currency must be accepted. The
author pretends to claim that wealth come from nothing and that it be just an
illusion. If you do not produce anything, there is no wealth and no currency
representing it! The author pretends to claim that, if you spend more, wealth, alias
commodities and services, creates by itself. If you just print currency, you
just create inflation.
One does not accept a
currency one cannot spend. The author may also spend money, real money, his own
money [no, he pretends yours!], for printing his imaginary ITN equal to one
euro, if he wishes that. Personally, I’d prefer euro and I would not accept his
ITNs! Why should I?!
Public debt is created
spending what government has not from taxation and seigniorage. This is the
source of public debt. The author just mystifies this matter too.
Cut 90% of public
expenditure, and public debt will rapidly disappear and economy would be
revitalised! Public debts annihilate personal and collective entrepreneurship! It
is a delirium that companies be not annihilated since high taxation and public
corruption, but only because they cannot get free and unlimited credit.
Saba, M., Moneta Nostra, Centro Studi Monetari, Milan, Italy, 2009.
