Who is Funding the IMF?



Who Is Funding the IMF?
 
 
(you)






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The Case For
Alternate Currencies
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Have we jumped straight from the “Age of Reason” into
the “Age of Illusion?”

 
The protesters who went to Prague in September
to confront the IMF/World Bank events as well as the ones at the Seattle
WTO meeting, and those in Australia protesting the World Economic Forum,
and even those 50,000 protesters back in June 1996 MAI protests in Lyon,
France, — all could add some fuel to their demonstrations if they understood
more fully how deep the deception of the Political/ Economic/ Corporate
coalition runs.
While the protests are top priority they are not and end in themselves;
They don\'t fix the problem. There are other things to be done as well. 
It is one thing to understand that something is wrong and something
entirely different to understand why; it is one thing to protest
the Symptoms and another to work on
the Solution to the
Fundamental
Problem.

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The SYMPTOMS
  

 “Let me issue and control a nation’s
 Money and I care not who makes the laws.”
   — Amsched Rothchild,  1838

 The currencies of nine countries - 
Thailand, Indonesia, Singapore, Russia, Brazil, Philippines, South Korea,
Malaysia, and Mexico —  went down the currency tubes during the years
1994 -1999, and after each collapse you find hundreds of stories like this
one from the Hindustan Times, January 12,1998, Vulture Capitalism,
by N. C. Menon, P. 1:
“Seoul is planning to use the bailout money to buy out Koreafirst and
Seoul Bank. It will then clear the bad loans and sell the institutions.
And who are the prospective buyers? Citibank and Chase-Manhatten... Under
the regimen of the survival of the fittest, as Korea’s plunging currency
and stock prices play havoc with its economy, an average of 45 companies
a day go under.”
 http://www2.hindustantimes.com/ht/nonfram/120198/detopi01.htm
Hundreds of examples of Northern countries using fiat (baseless) money
to buy up the real hard assets of developing nations.
The multi-national corporations love this screwball money system. As
Bernard Lietaer puts it in the Summer 1997 issue of IFG news (International
Forum on Globalization), “The largest profit sector of GE is not defense,
not light bulbs, not power stations. It\'s GE\'s treasury department, because
of its many financial transactions.”  The \'\'financial transactions\'\'
he is talking about is foreign currency speculation; 50% of all currency
trades come from the US and the UK (USUK). It is also worth pointing out
that it is precisely this currency trading that brought down the above
nine counties\' banks. So corporate traders are making hay in the good times
during the feeding frenzy, and the bad times, when Asian and Southern currencies
crash; can it be any wonder that the USUK economies are booming?
For more on Lietaer and money see:
 http://www.transaction.net/money/gc/gc02.html
(From the Hindustan Times again, citing James Tobin, 1981 winner of
the Nobel Prize for economics)
Tobin: “It is hard to escape the conclusion that the countries\' currency
distress is serving as an opportunity for an unrelated agenda such as the
obtaining of trade concessions for US corporations and expansion of foreign
investment possibilities.”
Is this economic colonialism all done on purpose? Joseph Stiglitz thinks
so.
During the IMF-World Bank annual meetings in April 2000, Joseph Stiglitz,
chief economist at the World Bank from 1996 until he quit in November,
1999, and former top adviser to President Bill Clinton, attacked the World
Bank, IMF and the U. S. Treasury for adopting policies that crushed some
countries\' economies for the benefit of Wall Street.
Details of his critique were published in the New Republic, 6 Apr, 2000.
 http://www.tnr.com/041700/stiglitz041700.html
and in the Australian Financial Review (AFR), 25 May 2000, by Joanne
Gray
In the end, Stiglitz laid the biggest hunk of blame on “the pressure
coming from the IMF board of executive directors -  the body, appointed
by finance ministers from the advanced industrial countries, that approves
all the IMF\'s loans.”
So what you have here is a handful of unelected elite, the IMF board
of executive directors, handing down orders to Washington IMF officers
to knowingly oppress developing nations. And Washington complies.
AFR quotes Stiglitz: “In 1944, when the Bretton Woods lending agencies
were formed, the US got the right to appoint the World Bank\'s president
and Europe won the right to choose the IMF managing director. Developing
countries, the main borrowers, have no say. . . That colonial history is
still there,” says Stiglitz. “I would have thought they would have been
embarrassed by it.”
If you are interested in the origins of how this bloodless war is fought
you might take a look at the process of \'\'monetization\'\' of African colonies:
  http://www.warrenmosler.com/docs/docs/pavlina.htm
“African communities that were engaged in subsistence production and
internal trade had no need for European currency.” But to force Africans
to use British currency, “Money taxes were introduced on numerous items;
cattle, land, houses, and the people themselves.”
     “This turned out to be a highly effective
means of compelling Africans to enter cash crop production and to offer
their labor services for sale. In addition, as the only local source of
British pounds, the colonial authority was also in a position to determine
the price it would pay for those goods and services.”
 
Modern financial technology has become vastly more efficient since the
old days. . . however, there is a way to change the situation. .
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The  PROBLEMS
 
 
 “The most costly of all follies is
to believe
 passionately in the palpably not true.
  It is the chief occupation of mankind.”
                                 
— H.L. Mencken

 
The battle to be fought today is against the imperial power of money
and its cozy relationship to politics and business. Until people really
understood what money is, well. . .  it\'s a losing battle.
    To understand why colonial powers wanted
Africans to use their money system, and how the IMF is continuing the practice,
you need to understand what money is... and what it is not.
To that end, the URL below  is probably  The Most Important
Page on The Web.
  http://www.ic.org/market/money/chp2.html
It\'s from a book by Thomas Greco and it explains in crisp easy terms
what money is— check it out.
You do not need to be an economist to understand this stuff.
 


Thomas Greco: Chapter 2: WHAT IS MONEY?
 
 


EXCERPTS  &SUMMARY





“The fundamental exchange process is the barter exchange. 
When Smith delivers to Jones a sack of flour and Jones gives to Smith a
bushel of apples in return, a complete barter transaction has occurred.”
 
[the “money,” what I will call REAL Money, is the apples and
the flour.
REAL Money is commodities (goods & services)]

“The use of commodities [gold, cattle, tobacco
- any and ALL commodities not intended for consumption] as a medium
of exchange really amounts to indirect barter.”
 
Then on to paper money,  based on commodities like gold,
cattle, tobacco.

“. . .one must first recognize this essential fact,
that [paper] money has a beginning and an ending; it is created
and it is extinguished.”
“The money issued may be thought of as an I.O.U. which
the buyer uses to pay for the goods and services he bought.  That
I.O.U. might be passed along from hand-to-hand as each recipient in turn
uses it to pay for his/her own purchase.”
 
And then,   The Most Important
Part:

“Eventually, it must come back to the originator
of the I.O.U. who redeems it by selling something of value.”
“As an example,  The originator, Mr. Able, buys
something of value from Mr. Baker.  He gives Mr. Baker his I.O.U. 
Baker then uses the I.O.U. to buy something from Mr. Cook, who, in turn
uses it to buy something from Ms. Drew. The I.O.U. may continue to change
hands any number of times as others use it to buy and sell, but eventually,
it must return to Mr. Able.  At that point, Able has fulfilled his
commitment to redeem the money he issued (the I.O.U.).”
 
So all legitimate paper money has to return to the issuer,
which brings us to the logical conclusion. . .

A citation of E. C. Riegel, 1944: \'\'That the Government
can issue  money for the people, is an utter fallacy.\'\'
 


This is not a matter of opinion nor an attempt to be simplistic; it
is an obvious matter of Fact, Logic and Common Sense.
If it is in the least bit confusing, you owe it to yourself, to me,
and to the rest of humanity, to read all of  Greco\'s chapter two (url
above). If you don\'t understand the basics, the “economists” around the
world will find you an easy target and continue to confuse the issue.
You may notice that Greco\'s description of money bears little resemblance
to the money we use today.
In the past 2000 years we have gone from a group of traders passing
the time of day, to a time when a banker stepped in the middle to hype
his bill of goods: Money, a simpler easier, faster way to trade. 
And now the bankers have changed over to Fiat Money, and have teamed up
with politicians and businessmen and they are calling the shots for the
rest of us who are the producers of real wealth. And then calling it “democratic.”
 
 
Governments around the globe issue money but never redeem that money
with something of value. And that is the Fundamental
Flaw with our money systems: The belief that governments and
banks should  properly issue ALL money.
(We won\'t even get into Fiat Money here —
fiat money is not a Flaw, it\'s an Absurdity.
The very notion that a corporation like the Federal Reserve
can conduct an even-handed fiat currency while maintaining
their profit motive verges on psychopathy)
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The SOLUTION: LETS

(LETS: Local Employment Trading System
aka: alternate currencies, local currencies, time dollars,
etc)



I know, I know. . . you have heard of LETS and you thought they were
‘quaint’ if not a little hokey, and awfully awkward - that\'s what American\'s
think anyway. LETS are more accepted in Canada and Europe. But don’t judge
them so quickly. LETS have something that we do not have now:


LETS are commodity based currencies. They are not fiat currencies.


Lack of real commodity based currencies has resulted in the totally bogus
system of establishing foreign currency exchange rates we have now, and
caused the collapse of the banking systems noted above. Local currencies
fix that.


LETS are Local. They do not permit the kind of centralization and concentration
of power and money that government money does.

The bottom line is that REAL Money is commodities; all commodities. Institutions
or individuals that do not create commodities cannot legitimately create
currencies.
 
 
Most societies have their bullies and pushy un-empathetic
gluttons. A perverted monetary system provides the ladder that such people
can use to climb to extrordinary heights of power.  When we heard
the recent statistic that 400 businessmen own more than the entire nation
of China, it became obvious to most of us that there is something wrong
with the accounting system. When we heard that 1% of the people in the
U.S. own 80% of the wealth, it is clear just how high that ladder goes.
    Alternative currencies decentralize the power of
State issued money. They effectively disarm the national and international
centralized Corporate, Economic, and Political powers and disperse those
powers back into the hands of those who create wealth.
 
Today there are over 700 LETS in 40 countries listed at:
 http://www.cyberclass.net/turmel/urlsnat.htm
Join their mailing list at:
 http://www.egroups.com/group/turmel
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It is a given that governments and their business cronies around the
world are not about to simply change their monetary systems unilaterally.
    LETS offer a nice alternative. LETS can grow slowly
and simply replace government money.  Alternative currencies are happening
right now but it should be acknowledged that they have a long history in
Europe and that most if not all of past local currencies that were successful
were shut down by government edicts. Presumably the world is a smarter
place and any future attempts to close down local currencies will be met
with strong resistance. Right??
    When the current money system collapses — and more
and more people are seeing that as a distinct possibility — alternate currencies
will still be there. Remember that not long ago Japan had some of the largest
banks in the world; but they still crashed. Many many economists predict
the same will happen to the U.S. dollar, and if the dollar goes, everything
goes. One compelling and well researched description of what happens when
currencies are issued by the State, is painted out by Michael Rowbotham
at:
 http://cfoss.com/grip.html
If the collapse comes, alternate currencies will be in a stronger position.
Alternate currencies may actually keep a disastrous situation from becoming
catastrophic. If the collapse is not forthcoming, then the transition to
local currencies will be more difficult but nonetheless important.
    Given the state of modern technology, it\'s easy
to picture a time when all regions of the globe are covered by some form
of local currency; where exchange rates are established between those regions;
where one local currency is accepted and exchanged outside it\'s own community
in the same way a cashier now makes change for a State issued note. It\'s
easy to imagine a time when local currencies are as easy to use as the
currency we use now - maybe even easier, and it\'s not too hard to imagine
that citizen\'s might rightly demand that their government agencies accept
local currencies as payment of taxes— indeed governments may have no choice.
 


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TECHNICAL STUFF
The problem people have with local currencies is that they are, well...
Local. They think that local currencies will be slower than the magical
money-making machine that we have now. That is, they want a “fix” for the
current system; leave the magic and sorcery in place and just make the
system more equitable.
    This is just unrealistic. It\'s like the people who
want to lose weight but don\'t want to change their eating habits.
    They also view local currencies as cumbersome and
limited, accomodating only individuals while ignoring larger business transactions,
and they think that interstate and international trade would be impossible.
But Why?
    Well, because they confuse LETS with the State money
systems and commercial banks.
    When F.A. Hayek, wrote his paper Commodity Reserve
Currency, in 1943, he proposed a shift from the gold standard to a
commodity based currency based on what he called a \"basket of goods.\" That
is, Hayek saw that money was not just gold alone, but ALL commodities.
It was a sound proposal,  (except that he too, assumed that currencies
should be issued by the State) but it was criticized because of the “difficulty
in warehousing perishable goods.” The critics (no doubt well represented
by the gold lobby) were thinking about the existing gold system which involved
the need for a Fort Knox to store gold. But Fort Knox was necessary only
because the currency was issued by the State.
    Real commodity currencies, local currencies, are
not issued by the State. If the government doesn\'t create money, and they
have to issue it like everyone else — by creating something of value, as
per Greco — then there is no need for Fort Knox.
    Thomas Greco comes close to this topic in chapter
13 of his book. He talks about paper money being issued for wheat, corn
or whatever “on the strength of a particular warehouse receipt. . . based
upon the price history.” But Greco talks about this “warehouse” system
as being something new that would have to be created from scratch. That
is not the case.
    Since money - REAL money is commodities, then the
system to make it all happen is set up and functioning as we speak. It\'s
called the Commodities Exchange. Taking over the commodities exchanges
and turning them into commodity reserve note money creators means there
would be no “price history” to deal with at all; prices rise and fall with
supply and demand every day.
    Would all of this mean that the commodities market
would be able to make loans against their reserves the way that banks used
to lend on gold reserves? Yes.
    Would the commodity markets be able to issue currencies
at the rate that the U.S. government is doing now? Hell No.  And that\'s
not a Problem; that\'s a Benefit.
    The U.S. is now nearly six trillion dollars in debt
($6,000,000,000,000). It is now borrowing money from Europe at the rate
of $450 billion per year from Europe. Putting a stop to such insane rates
of money creation is not so likely to ruin the economy as it is likely
to take a bug chunk out of the disparity between the rich and the poor.
So, yes. Alternate currencies can work on a large scale
too.
 
A Word About Gold
Gold is just one of many commodities. If you single out gold as a separate,
special  commodity as banks did earlier this century, you create an
Elite Class of commodity brokers. Once you have an elite class who have
priveleges that are denied to The Rest Of Humanity, it just goes downhill
from there — you pave the way for the formation of very powerful groups.
. . all the way up the the untouchables like the IMF.
    Menger talked about \"salability\" — how people will
buy a commodity, not because they want it, but because they know its more
salable than what they have. Sure! I\'ll trade my beans for a sack of tobacco
because Everybody wants tobacco. I can move tobacco.
    Well. Everybody wants gold. It\'s \"salable.\" It\'s
Popular. But that does not mean gold should be moved to a monstrous marble
edifice while ALL other commodities stay in the barn— and if you are concerned
about
institutions with an inordinate amount of power, you certainly don\'t
want to single out gold as the \"official\" and  \"state authorized\"
medium of exchange- to the exclusion of all other commodities.
    So, if you can go to the commodities market and
buy or sell gold as an investment, you should be able to buy or sell copper,
zinc, lead, .... whatever, from the same counter, from the same clerk,
using the same
form. If somebody wants to trade gold certificates and someone else
wants to trade corn certificates, who cares, if the playing field is level.
 

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Over 50% of Americans do not vote in “The Greatest
Democracy In The World,” as they are fond of saying in their Corporate
Media. Britain is only slightly behind in that trend, and the European
Commissioners have been showing an increasing preference for corporate
friendships over their voting constituency. It has become obvious to most
Americans that their vote does not count in such a “democracy.”
    Meanwhile, members of the PCB Club, or Political/Corporate/Bankers\'
Club, are becoming exceedingly wealthy and disturbingly insensitive, from
their intentionally delusional money system and the bills are being paid
by developing nations as well as their own less powerful citizens.
Just remember: each time you pay an inflated bank charge, the IMF benefits
a tiny bit. Every click of inflation helps the PCB Club members. Every
worthless product you buy from a multinational helps fuel the system. And
every time you pay a bill with State issued fiat money, you are voting
for the PCB Club and the status quo.

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LINKS
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Transaction Net,
Non-traditional and local moneys -has Forum
  http://www.transaction.net/
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CIRC, Community Information Resource
Center
mailto:   circ@azstarnet.com
Thomas Greco - and his book are here, LETS, Community Economics, 
Monetary Transformation, Economic Transformation,  Civil Society/Peace/Freedom,
Sustainable Development, Intentional Communities, etc.
  http://azstarnet.com/~circ/circhome.htm
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\"Reform the Global Financial System\"
by Henry C. K. Liu
  http://wfhummel.cnchost.com/globalfinancereform.html
A single page, not a site.
Written more for the economist because it\'s by an economist.
Continues the notion that government and bank issued money would work,
but suggests, logically, that government money should be based on commodities.
A rare but important admission for a conventional economist.
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POLCAD Program on Corporations,
Law and Democracy
  http://www.poclad.org/
  people@poclad.org
If you want to lern more about how corporations have gained their power,
check it out. Look for Richard Grossman\'s Can Corporations be Accountable?
at:
  http://www.poclad.org/articles/grossman01.html

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Cheers,
J.W.P.
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© 2000, by J. Walter Plinge, France
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