Curated by: Luigi Canali De Rossi

Monday, June 19, 2006

Is The Demise Of The Dollar Coming And Will It Usher Opportunities For New Forms Of Economic Transactions?

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The imminent demise of the US dollar as the kingpin of economic transactions world wide is predicted by several commentators. Johnny 'Silver Bear' comments that the Federal Reserve has kept the printing presses rolling too liberally for too long and he continues:

"The Fed has lost control of the dollar. Their mindless creation of credit has insured a mind-boggling meltdown of the entire financial system. This is not a good thing for anyone, anywhere. The dollar is the world's reserve currency. Seventy-five percent of all dollars in existence are in foreign hands. Whatever their value was when those foreigners got them, that value is evaporating right before their eyes. It's like buying ice by the pound and watching it melt away before you have time to use it."

Photo credit: Bob Smith

Like Silver Bear, others say the dollar is doomed and they advocate a return to the time before 1971, when Nixon was forced by the French, who insisted on being paid in gold for dollars, to end the direct convertibility of the dollar at a fixed price.

The advocates of precious metal as currency say that a return to the old gold standard would prevent the Fed from creating "funny money", the cause of runaway inflation. What they overlook is that their cure might be worse than the disease.

Linking a currency to gold or silver or any other precious metal would not only be unnecessary as shown by the many currencies that work quite well without having that link - it would make the economy of the country that attempted such a link depend on the amount of gold available, rather than on the willingness of people to work and produce. The mining of all that gold to be used as "money" - or rather as the idea behind money - is by no means of benefit to our environment. Those mines are connected with serious problems.

The real problem is not even the Fed's printing of money but the facility the Fed and other central banks afford private commercial banks - to "create money" and loan it out for interest.

This has made control over the amount of money in circulation and thereby control of inflation very difficult and the cumulative interest to be paid for practically all money in use has been a substantial drain on modern economies. There are means of 'taming' money to suit economic activity.

One of them would be for Congress or any legislative assembly or even for the people themselves to take back their right to issue money. The banks today create money for their private interest and that is the worst of all conceivable scenarios.

But back to the dollar and its predicted demise. The reason may not be so much the overprinting, but the fact that other countries are increasingly unwilling to support the American economy by buying and using dollars for transactions.

Almost two years ago, I asked "Will Oil End the War Economy?"

What had propped up the dollar for all the years before then was the fact that it had become an international exchange currency, necessary for countries who wanted to buy oil - and who doesn't these days. But the Iraq war changed all that.

America is seen as an aggressor. OPEC mooted the possibility of passing from dollar to euro, and some countries actually did the change, Iraq first, then Venezuela, and now Iran is considering opening its own oil bourse denominating black gold in euro instead of dollars. Russia just started to sell its own oil and gas for rubles.

You may have noticed that all these countries are "in bad" with the US. So what will the future bring? Some say that the world economy might well collapse. Silvano Borruso is more optimistic. He says the American economy might adjust in a short time. But he also sees a chance that our present monetary system could be in for a big change.

Mammon, meaning the money powers behind the throne, the banksters who have sold us into a modern day slavery, is seen as the dark force. According to Borruso that force might fall, together with its favored creation, the US dollar.

Adieu, Mammon?

The demise of the dollar

The announcement by Venezuela's Chavez and Iran's Ahmadinejad that they will accept euros instead of dollars for their oil is sending shockwaves throughout the world.

Photo credit: João Estêvão A. de Freitas

Frequently asked questions are:

  1. How will the world economy be affected by a switch from the dollar to the euro as a reserve currency, given that the economies of all countries are closely interlinked?
  2. How will America manage its economy, the stability of which depends on the stability of the dollar?
  3. America has become addicted to the dollar's hegemony as a reserve currency. Wouldn't she consider it as a hostile action, any attempt by another country to end that privileged status?
  4. Can we expect anything other than chaos, pain and hardship?

Let's us answer the last question first.

Chaos, pain and hardship need not hit those who earn their bread by the sweat of their brow, provided they understand the basics. The situation has come to a head in the "secular war between usurers and peasants, between the usurocracy and whoever does an honest day's work with his own brain or hands."

A not-too-short historical analysis is in order if we want to understand.

This is the second collapse of the dollar, for exactly the same reason as the first, i.e. a glut of the stuff. The forces behind the double collapse I will refer to with the time-honoured nickname of "Mammon." The only difference is that this time Mammon is at the receiving end of his own misdemeanours.

Let's go back to the 1770s. The hyperinflation of the Continental dollar was the result of the financial policies of the Patriot governments. The above sentence, with a few cosmetic touches, can be read virtually in all standard works of reference.

The truth is that:

  1. The Continental dollar supported the American war of independence to within four months of victory;
  2. Continental Congress decided to print up to 200 million worth of Continentals, and they did;
  3. The hyperinflation, which caused the collapse, was due to the printing presses of British General William Howe (1729-1814), who from warships anchored in the New York harbour counterfeited Continentals by the cartload to the extent of an estimated billion units.

Hence the saying, "it isn't worth a Continental." This was the first historical collapse of the dollar.

Before tackling the second, let me remark that Mammon has prospered for 3000-odd years thanks to the superstition (there is no other word for it) that money must have a magic ingredient known as "intrinsic value."

Therefore he has tried, and succeeded, by all means fair and foul to hide the truth, which is exactly the opposite, i.e. that a medium of exchange functions the better, the less intrinsic value it has. Of course the other function, money used as a store of value, is what Mammon is after, for by it he exercises usury. Usury is the tribute that those who use money as means of exchange must pay to those who hoard it as store of value. The sooner this point is understood, the clearer all subsequent issues will become.

  1. The first issue is that Mammon has always been deadly afraid of paper money, i.e. paper unabashedly declaring to be money, and not a "promise to pay" anything.
  2. The second is that paper money has proved unstoppable, despite, or perhaps because of, its unattractiveness. Monetized gold is much more likely to be hoarded than spent, thus strengthening the practice of usury.

The history of the struggle can be roughly divided into four periods:

  1. The Store of Intrinsic Value period, from Croesus of Lydia (d.546 B.C.) to the foundation of the Bank of England (1694). The "intrinsic value" superstition held the whole of mankind in thrall for more than two millennia. It still does, for a vast majority of people.
  2. The widespread Store of Extrinsic Value period, 1694-1931. Paper notes were "promises to pay" gold stored in bank vaults. Mammon was by now forced to acknowledge the usefulness of paper, but continued to bamboozle the public into believing that the pieces of paper functioning for all intents and purposes as money were not really money, but tokens "backed" by a yellow metal gathering dust in the vaults of his temples (banks) instead of being turned into gorgeous jewellery, false teeth and (now) electrical contacts in silicon chips.

    Mammon succeeded in keeping under wraps two successful attempts at monetizing paper, thus preventing paper money properly so-called from spreading beyond the reach of his clutches. This period lasted 237 years, roughly one tenth the previous one.

  3. The restricted Store of Extrinsic Value period, 1931-1971. Paper dollars printed in excess of the requirements of the U.S. economy were supposedly "backed" by tons of gold ingots stored at Fort Knox and available "to governments" on demand. This period merely continued the previous one, except that Fort Knox was the sole location of the gold and governments the sole entities authorized to demand it. Note the duration: 40 years.
  4. The gold-less pure Paper Store of Value period, 1971-2006, the demise of which is imminent. It has lasted 35 years.

The step-by-step history of the struggle is outlined below. Mammon's hostility against paper money is a most interesting mix of counterfeiting, mystification, exercise of raw military power, political assassination, etc.

His strategy was first, to remove monarchs and guilds, which used to act as checks and balances against the power of usury; second, to govern by the proxy of puppet governments that impoverish their citizenry to his exclusive advantage.

A brief history of paper money

Photo credit:

1227: The first ever paper money is issued by Kublai Khan in Mongolia, but comes to an end with the Ming dynasty.

1685, French Canada during Louis XIV's reign: 30 000 livres of King's money for military wages were on the way. Soldiers could not buy anything and merchants could not sell. The commanding officer cut up decks of playing cards into four and distributed the pieces as money. The economy revived, because the economic operators accepted the quarter cards as payment for their wares. Had the coins failed to arrive, the arrangement could have continued and acceptance spread.

1690: Massachusetts, followed by the other twelve colonies, issues the first colonial currency, causing a debt-free economy to take off independent of British control.

1694: Mammon founds the Bank of England, designed to issue paper money as credit to the State, and therefore for his own private gain. B.O.E. notes bear the inscription "The B.O.E. promises to pay..." to this day. The Bank of Scotland follows the same policy.

1720s: Mammon sinks John Law's paper money experiment in France. The economy was doing fine, but the "intrinsic value" superstition led the Prince of Conti to send to the Banque a sizable bunch of notes with three wagons to be filled with gold. There was no gold, and the superstition carried the day. Whether the Prince was consciously acting as Mammon's agent is a moot point.

1750: Mammon prohibits the American colonies to issue their own currency. Rebellion takes off. The 342 cases of tea thrown into Boston harbour still decorate school textbooks as a diversionary caper from the real issue.

1770s: Mammon sinks the Continental dollars as seen above.

1774-88: Mammon's lackeys: the Assemblies, the high clergy and Freemasonry block all attempts by Turgot, D'Ormesson and Calonne to issue paper currency and thus save France's finances. Mammon's chief operator Necker indebts King Louis to a point of no return, thus encompassing the ruin of the French monarchy and of the Ancien Régime.

1790s: Mammon sinks the French Assignat by repeating General Howe's feat. France printed 45.5 billion units (livres and francs) worth of Assignats. Divided by 26 million citizens it would have meant 1750 units per head. But the purchasing power sank to less than 1%, indicating prodigious counterfeiting. 17 printing presses, located in London, were responsible for "hyperinflation." The Assignat died in 1796.

1793-1815: Mammon finances the Napoleonic wars with "promises to pay" issued by the Bank of England. The British are still paying off the interest on that "loan."

1815: The Channel Islands manage to escape Mammon's clutches by issuing debt-free State currency. Ten years later Mammon counterattacks by flooding the islands with "promises to pay." The States of Jersey protest. Mammon compromises by forcing on them a yearly limit of £40 000 of States paper money. The arrangement will last until 1914.

1830-40: The spectacular development of the American Mid West east of the Mississippi is fuelled by a myriad (literally: 10 000+) small banks issuing paper money in unorthodox denominations ($10.25, $3, $13 etc.), with discount rates of up to 68%. Mammon is anxious to suppress these and found a Central Bank, but runs into the determined opposition of President Jackson (who survives an assassination attempt) and Van Buren. But Van Buren, a gold buff, causes a severe depression.

1848: The 5th plank of Marx's Communist Manifesto proposes "Centralisation of wealth in the hands of the State by means of a national bank with an exclusive monopoly." Mammon spreads the institution of the central bank from England to the rest of Europe.

1861-65: Amidst severe opposition by the banking interests, Lincoln finances the war effort with a State issue of 450 million debt-free Greenbacks. Greenbacks were not "promises to pay." They were money. Lincoln is assassinated. The Confederacy's money, in "promises to pay," manages to contract debts for $826 million by 1864. It failed.

1865-79: Mammon re-establishes the gold standard (Resumption Act 1879) after a 14-year long tug-of-war against the supporters of Lincoln's Greenbacks. Booms and busts reappear. Financial panics destroy hundreds of small banks.

1860-90: Mammon diverts attention from paper to silver, his main aim being to wrest the control of the issue of paper money from Congress, empowered by the Constitution to issue currency.

1893: General Coxey marches on Washington with a 4 000-strong army of unemployed, demanding $500 million of debt-free Greenbacks so as to employ four million men in road construction. Mammon has him arrested for trespassing on the gardens of the Capitol. Coxey's policy: print money and spend it into productive public works, is one that Mammon continues to oppose to this day, as it exposes the fallacy on which his rule stands. Only China is defying him on this issue.

1906: Gesell publishes the first edition of Natural Economic Order, unmasking the gold standard and lucidly explaining how paper money can be not only debt-free but also interest-free, by separating the monetary unit from the object representing it. While one country after another adopts paper money pretending it to be "backed" by gold, Mammon's high priests (read: economists) continue to talk about the merits of the "intrinsic value" of gold. 100 years later Gesell is still taboo in all faculties of Economics.

1907: Banks refuse to honour deposits. Financial panic ensues: J.P.Morgan withdraws $300 million from circulation, and "saves the situation" by lending them back to the U.S. government.

1913: By a glorious sleight of hand Mammon gets Congress into ceding its Constitution-granted right to issue money to a newly created private outfit called Federal Reserve System. From now on every dollar issued in the U.S. is loaded with debt, thus duplicating Bank of England methods in the U.S. The FRS is neither Federal, nor has reserves of any kind, nor is a "system" judging by its effects.

1914: The war puts an end to the 50 year-old Latin Currency Union between France, Italy, Switzerland, Belgium and Greece. The union functioned with a single denomination 5-franc silver coin freely circulating as legal tender side by side with the national currencies of the five countries. It was also used for foreign transactions. Whenever a country experienced either a glut or a dearth of five-franc pieces it adjusted its internal prices accordingly to restore equilibrium. The union would have worked even with a 5-franc paper note. This feat can be duplicated today, between any number of agreeing countries.

1914-18: As had happened with the Napoleonic wars, the wholesale slaughter called World War was financed with "promises to pay." The Channel Islands make use of the chaos to wrest financial independence from Mammon. Their spectacular development since can be verified by paying them a visit on the Net.

1922: Italy issues debt-free, but not interest-free, lire, thus taking up the policy suggested by General Coxey and practiced by the Channel Islands. Unemployment rapidly disappears and prosperity increases visibly.

1923: Mammon attacks the savings of the German people with the Weimar inflation.

1925: Mammon demands a return to the gold standard, and hence to the salary levels of 1913. The British workers reply with the General Strike of 1926.

1927: Mammon convenes an "ecumenical council" of central bankers allegedly to an "informal luncheon" in Washington D.C. Agenda: to coordinate the imminent Great Depression.

1927-29: President Coolidge encourages American citizens to purchase overpriced securities. The Great Crash wipes out $180 billion of ordinary people's savings. Central bank-concerted deflationary policy causes the worldwide hardship known as the Great Depression.

1930: First experiment with Gesell's Free Money: Herr Hebecker of Schwanenkirchen, Germany, keeps his coalmine open during the Great Depression by issuing Wära, a private currency redeemable in coal. Mammon's agent Chancellor Brüning quashes the experiment.

1931: To Mammon's great irritation, British Prime Minister MacDonald announces that Britain is off the gold standard. All countries follow suit except the United States.

1932-33: Second experiment with Gesell's Free Money: Mayor Unterguggenberger of Wörgl in the Tyrol issues debt-free and interest-free municipal certificates for work done. 5 300 units of Wörgl certificates circulating some 450 times move goods and services for about 2.5 million Schillings. Wörgl built a bridge over the River Inn, tarmacked four roads, renewed the sewers and took electricity to new areas. It even built a ski jump. Economists flocked to the shrine, but were not converted. Irving Fisher tried to repeat the experiment in America, but with a demurrage rate of 2% per week (250% per year) which nipped the idea in the bud. Mammon's High Temple (Austrian National Bank) orders the experiment scotched after 14 months. Hunger and unemployment return.

1933-38: Germany follows in the footsteps of Italy, the Channel Islands and Coxey: debt-free (but not interest-free) paper money pays for an unprecedented economic development: 6 000km of Autobahns, 1.5 million housing units for workers, the Volkswagen, scholarships for university students, and even three cruise ships for workers' families holidays. Foreign trade is organised on the basis of straight barter. In 1938 unemployment is no more than a memory.

1939-45: Like the first, the Second World War is also financed by "promises to pay." The debt-free Reichsmark loses no more than 12.5% purchasing power in six years of war.

1940-47: The Dominican Republic becomes solvent under Trujillo, following intense negotiations with the U.S.

1944: Bretton Woods. The U.S. dollar, as the only currency "backed" by gold, is imposed on the rest of the world as "reserve" currency. The meaning is that it cannot be used for anything other than matching the issue of domestic currency to the quantity of dollars in "reserve."

Economists accept with enthusiasm Keynes' plan of "deficit spending" to make up for hoards. Deflation is avoided but inflation takes its place. The "stagflation" of the 1970s proves that the economy of production and that of money are two independent realms.

1961: Trujillo is assassinated.

1963, June: President Kennedy (Executive Order 11110) authorizes an issue of four billion debt-free (but not interest-free) dollars directly from the Treasury, effectively duplicating Lincoln's Greenbacks and bypassing the Federal Reserve System. In November he is assassinated.

1971: De Gaulle plays the same role in regard of President Nixon as Prince de Conti had played in regard of John Law 250 years earlier: he demands gold for the heap of Eurodollars in France's possession. There is no gold. President Nixon throws the sponge. The U.S. is off the gold standard.

1971: The rest of the world is on a paper dollar standard, working to exactly the same rules as the gold standard: an inflow of dollars permits the printing of domestic currency; an outflow of dollars forces its withdrawal. Inflation and deflation occur regardless of what happens to the economy of production and exchange.

1973: The oil "crisis" begets the petrodollar. The London and New York oil bourses force all countries to use dollars to buy and sell oil world wide. The gate is wide open for the U.S. economy to rely on printing dollars with which to buy things produced by other countries. Coupled with the concomitant destruction of the American economy of production, the situation is clearly unsustainable. It is coming to a head now (2006).

1978: China fuels a spectacular development with debt-free but not interest-free Yuan according to the Channel Islands-Coxey-Italy-Germany model of 1815-1930s.

1979: Paul Volcker, Chairman of the Fed, inaugurates an era of speculative, but not productive, growth. A financial bubble of immense size grows unrelated to production and exchange.

1982: First experiment with a social (people-issued) currency in British Columbia, Canada. Community currencies take off in a variety of countries, each community being more or less independent of official control.

1987: Mammon's gold-mining companies found the World Gold Council, with the view of stimulating demand for the yellow metal. WGC ads extol the virtues of gold-backed currency, allegedly "strong," whereas purely paper currencies are deemed "weak." Mining companies go on extracting gold from the ground to rebury it, smelted and refined into ingots, in bank vaults.

2000: Mammon gambles. With the euro he takes away the sovereignty of the European states, but the euro begins to challenge the supremacy of the dollar as "reserve currency." Saddam Hussein is the first to accept euros for oil. There is no way to continue imposing the dollar other than war.

2001: The Red de trueque (barter network) cushions Argentina's financial collapse with people-issued paper currency. When the municipalities took to it, the IMF vigorously intervened to "rescue" the country.

2005: Some 30 000 communities round the world issue their own paper currencies, some on Gesellian principles.

2006: Iran threatens to follow Saddam by opening a petro-euro oil bourse. Fear is in the air that the collapse of the dollar is imminent. Gold shoots to $700 per ounce.

A post-dollar world

Photo credit: Even mosbæk

Perusing the foregoing rather long list of events, it is possible to spot an interesting trend:

  • Debt-free (but not interest-free) paper money increasingly disrupted Mammon's attempts at forcing the world into clinging to gold; and
  • Debt and interest-free paper money made a brief, successful appearance at the beginning of the "Fort Knox Store of Value period." Only general lack of awareness prevents the world from taking the last, irreversible step towards delivering the death blow to usury, and the world from the clutches of Mammon.

The opportunity is in the offing. It will depend on how people and non-puppet governments will react at the collapse of the dollar. From now on the scenario becomes speculative, but not (I hope) unreal.

Let us answer the first three questions posed at the beginning.

Question One: How will the world economy be affected by a switch from the dollar to the euro as a reserve currency, given that the economies of all countries are closely interlinked?

Now that Putin has begun to demand roubles for his oil, it is not at all clear that the euro will act as "reserve currency." But let us suppose it does. The financial "bubble" denominated in dollars will disappear.

Dollar-denominated cheques, bonds, bills of exchange, credit cards, futures, etc., in a word all dollar-credit instruments, will become worthless. The $100 bills now cluttering the treasuries of most countries could however be made to circulate together with the national currency, much like the silver coins in the erstwhile Latin Currency Union.

Dollar bills of lesser denomination could continue to circulate as before, especially in the U.S., which would have to restore its economy of production. Given American adaptivity and spirit of enterprise, this turnaround could happen in less than a year.

Countries that have euros would purchase oil with them. Those who do not would have to start trading with Europe for euros and with Russia for roubles. In other words, a real economy of production and exchange would quite rapidly replace the economy of speculation, fraud, bullying, and war that has plagued the world for the whole of the 20th century.

Another welcome disappearance would be that of "export-led" economies.

Perhaps the most grotesque example of such is the export of some 100 000 hectolitres of milk from England to Holland, compensated by a somewhat equal quantity (of milk, yes) from Holland to England. Only parasites can possibly profit from such an arrangement. Others are no less nonsensical.

Countries would develop their economies (or return them) towards their natural end, which is to look after the domestic market first and export any surplus if available. Thus the "interlinking" of the economies would attain a reasonable level, free from artificial distortion.

Question two: How will America manage its economy, the stability of which depends on the stability of the dollar?

An economy does not "depend" on the stability of its currency. A currency will have a stable purchasing power if and only if:

a) prices are kept stable by sound economic policy, and

b) the currency is not a "commodity" to be bought and sold like any ordinary good.

The first has not happened ever since the checks and balances provided by the guilds of traders and workmen with their "just price" policy and the social security provided for their workers were abolished together with the right of association (by the 1791 Chapelier Law in France). For the past 200-odd years speculation has dominated the field, and speculation is not interested in either stable prices or a stable value of the currency.

The second has been a feature of money ever since Croesus of Lydia. The American economy can recover its production first by returning to Congress its constitutional currency-issuing power, abolishing the Fed and using dollar bills up to $50 as domestic currency and $100 bills as currency for foreign trade. How long this will take is anybody's guess, but given the American spirit of enterprise I would guess one year or so.

Question three: America has become addicted to the dollar's hegemony as a reserve currency. Wouldn't she consider it as a hostile action, any attempt by another country to end that privileged status?

Of course she would. That's why she restored the dollar as the purchasing currency of Iraq's oil immediately after the invasion of 2003, and why she intends to move war on Iran now. But Venezuela has already declared its switch from petrodollars to petro-euros, and Russia from petrodollars to petro-roubles. Let another country dump its reserve dollars and America's addiction will come to an end.

Countries with huge dollar reserves will be well advised to get rid of every worthless scrap of paper except 100-dollar bills, for the reason spelled out above.

Communities that are already using local currencies need worry the least. Not only will they continue producing and exchanging as they have done up to now, but businesses would see the sense of accepting these currencies (which they have not so far) thus reviving the local economies.

Has the time for Free Money arrived?

Photo credit: Greek Golangco

The three questions above have been answered with the present form of money in mind. But what is needed now is to take the fifth and final, irreversible step, leaving behind the pure Paper Store of Value period to enter the liberating domain of Free Money for good.

By "Free Money" here is meant money stripped of its function as store of value, and therefore free not only from debt but also from USURY, as Gesell recommended 100 years ago.

Free Money made its appearance twice in the 1930s, both times successfully, and both times squashed by Mammon's raw power. This happened in a low-tech world. It is not possible for Mammon to crush it now. The collapse of the dollar will upset Mammon's power to the point of no return, unless the world is foolish enough to let him regroup and "save the day" with his incantations about "intrinsic value" and the like.

Who, or what, is in a position to deliver the first blow to USURY? Ideally it should be a State brave enough to take the brunt of Mammon's retaliation top such an act of aggression. But it is not necessary. If Herr Hebecker could issue Wära redeemable in coal back in 1930,

1. A consortium of schools could issue its own currency denominated in school teaching periods and redeemable in the same;

2. Ditto a utility company with a currency denominated and redeemable in kilowatt-hour;

3. Ditto a transport company or consortium of companies, with a currency denominated and redeemable in passenger/km or ton/km.

Were a State to do it, it could begin by overprinting its existing currency with a date of issue and another of expiry twelve months apart, plus twelve boxes to be punched/stamped/embossed at the rate of one per month. The bill would circulate fast for a whole year, become worthless at the end of it and ready to be exchanged for a new one with the first box stamped/punched/embossed.

Before considering how dramatic and instantaneous the results of such an action would be, please re-read the historical review of events in the preceding pages, and try to imagine what would have happened had Free Money been in existence at the time. Not ONE of the events listed would have taken place as it did. What happened did happen that way because of the power of USURY. To spell this out case by case would take an entire volume.

The advent of Free Money would entail a fundamental paradigm shift, from the rule of money to that of work. Production would be organized for the sake of human needs, not for the sake of paying interest on debt. Money would thus be dethroned from its secular pedestal to become the servant of the economy.

The scandal of poverty in the midst of abundance, of artificial, chronic scarcity, of the wanton destruction of food to keep prices artificially high, of economic crises and of the ills that have been plaguing mankind from time immemorial, would come to an end, first in that happy country and then in the rest of the world.

Current economic terms like "dear" "cheap" "money laundering" "credit line" "cost-benefit analysis" "financial budget" and so on and so forth, would become obsolete. A not exhaustive, but telling, list of benefits follows.

Money would no longer be a limiting factor to development. "Funds," deadlines," capital" etc. would no longer be necessary for beginning anything.

Hours of work would replace money as a standard of work done. Any enterprise, private or public, could be launched with as little as 1/100 of the sum needed for completion, simply waiting for it to circulate 100 times. The time needed for completion would become the true limiting factor.

Unemployment would disappear for good.

Fast-circulating Free Money would absorb the entire workforce of any country in next to no time, shortage of labour becoming now the main economic problem.

Physical development would know no limits.

Double or triple deck roads, railways, airports, underground parking lots, amenities, etc. would mushroom everywhere.

Credit would no longer be required, as would hire purchase and all other gimmicks devised along the centuries to face the chronic dearth of means of exchange.

Salaries would not be paid "at the end of the month" or of the week or of any other period necessary to finish a given job.

Any work done would be paid "cash on the nail." Money would be what it has always been meant to be had it not been prevented by usury: a certificate for work done.

"Having money" would no longer be synonymous with "being rich."

Having more money than one needed would be a recipe for disaster, not one for well-being. Savings would exceed present-day amounts, but not in one's pockets or strongbox. Savings would be lent out to banks or to individuals with projects in hand, and returned on agreed upon terms.

Counterproductive immigration laws would be revised towards attracting human capital, not punishing it by imprisoning it within "national" borders or the barbed wire of refugee camps.

Free trade would be truly free, i.e. taking place between free people, not as now between free trans-national corporations enslaving local populations and exploiting the environment to destruction. There would be no need to criminalise people's innate trading instinct with hordes of officials at the borders extorting tariffs, duties, excise etc.

Tax avoidance/evasion would be not only unnecessary, but downright harmful for the evaders.

Taxes would be paid in advance, in a continuous stream and not in fits and starts as now, without the need for an army of semi-military revenue-collecting officials. Public revenue would be invested as soon as received, without need for the farce called "Budget Day." The State would receive its revenue from the municipalities, which in turn would receive theirs from the citizens.

The movements to the cities would be reversed. Slums would first shrink and then disappear. Cities would have to vie with the countryside to attract well-paid workers.

Embezzlement, graft, corruption private and public, counterfeiting, speculation, money manipulation, stock exchanges, confidence tricksters and all the practices that now enrich a few at the expense of many would become either too difficult or counterproductive or both. It would become more expensive to craft a criminal scheme than to earn one's keep by honest work.

People unable to work would be very easily distinguished from those unwilling to do so.

The first could be helped without difficulty; the second would be arrested and sent to development projects as forced labour, unless they somehow got the ravens to feed them.

The civil service would slim to a well-paid, indispensable force necessary for services, not a parasitic plethora of idlers sitting behind desks to disguise unemployment.

So would the army and the forces of law and order. The State would have to pay very high wages to entice people away from paid work into outfits meant to destroy wealth.

And the destruction of human capital by such anti-economic practices as abortion would be stigmatised as it deserves, not promoted as a "social conquest."

Women raising children, who today are the worst exploited members of society, would be paid and allowed to enjoy not only the fruits of their labour but also the positive contribution they do to society with a physically, intellectually and morally healthy offspring.

All of the above is possible. Will enough people be willing to start driving in the right direction? Only time will tell.

See also some earlier articles from Sepp Hasslberger giving more background on Gesell and the dangers of the interest mechanism:

What is wrong with our Economy?

Interest suffocating the world

and more recent press:

Russia Shifts Part of Its Forex Reserves from Dollars to Euros
09.06.2006 - MosNews
On Thursday, June 8, Russia became the latest in the list of countries that shifted a part of its Central Bank reserves from the dollar. Sergei Ignatyev, chairman of the Central Bank, said that only 50 percent of its reserves are now held in dollars, with 40 percent in euros and the rest in pounds sterling. Earlier it was believed that just 25-30 percent of Russia's reserves were held in euros, with virtually all the rest held in dollars.

Originally written by Silvano Borruso on May 30th 2006.

Originally published by Sepp Hasslberger on June 7, 2006 as "Will Demise of Dollar Usher in Free Money?"
on Sepp Hasslberger Blog

Silvano Borruso and Sepp Hasslberger -
Reference: [ Read more ]
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posted by on Monday, June 19 2006, updated on Tuesday, May 5 2015

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