mfioretti: money*

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  1. The last 40 years has seen a steady rise of deficit-hawking, in which the world's postwar social safety nets are shredded because the state "can't afford" them -- think of all the times you've heard of national debt being money that "the taxpayers" will have to pay back, and misleading comparisons between sovereign governments (who print their own money) to households and businesses (who don't), as though sovereign state finance was just a scaled-up version of balancing the family check-book.

    But a pushback has been quietly building against this trend, based in economic theories that treat money "not as a finite abstraction, but a limitless public utility that can be used to meet human needs." These ideas started to move outside of wonkish economic circles with David Graeber's Debt: The First 5000 Years, which became required reading during the Occupy Wall Street years. Graeber sets out the theoretical underpinnings of Chartalism, which holds that "money does not emerge from barter-based economic activities, but rather from the sovereign's desire to organize economic activity. The state issues currency and then imposes taxes. Because citizens are forced to use the state's currency to pay their taxes, they can trust that the currency will carry value in day-to-day economic activities."

    Chartalism became "Neo Chartalism," AKA "Modern Monetary Theory," whose core premise is that "The state can spend unlimited amounts of money. It is only constrained by biophysical resources, and if the state spends beyond the availability of resources, the result is inflation, which can be mitigated by taxation."

    MMT is the key to understanding how governments can pay for pensions, public education and universal healthcare, creating universal prosperity instead of brutal, wildly unequal, unstable states. It's gained so much currency that even archconservative economists are pushing its policies, even when they dare not speak its name.

    These ideas have been around since the early 1900s, growing up as a dissenting counterpoint to Keynesianism, pointing out that Keynes and the neoclassical economists assume that markets will be dominated by "active owners" -- companies run by the people who owned them. But the reality of corporatism is that the majority of companies are owned "passively," by investors whose interests are generally short-term and narrow, and who are willing to destroy the companies they invest in, provided they get a payday in the process.
    http://www.truth-out.org/opinion/item...d-democratic-socialism#15153656154571
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  2. La Bce va molto fiera della sua indipendenza, bene. Ma questa è una relazione bilaterale: tu non puoi essere indipendente da me, se io sono dipendente da te. Quando Mario Draghi si esprime in questo modo, oppure nel modo in cui si era espresso prima delle elezioni politiche italiane, quando aveva affermato che “non importa chi vincerà, perché tanto avete il pilota automatico deciso da noi”, dimostra una cosa molto semplice, che Stiglitz ed Axel Leijonhufvud hanno ampiamente messo in luce: l'indipendenza della Bce dal potere politico è una colossale inganno il cui scopo è sottrarre allo scrutinio democratico una serie di decisioni politiche fondamentali che riguardano la redistribuzione del reddito.

    A partire dagli anni '80 si assiste alla stagnazione dei salari reali, in Italia come nel resto del mondo, che è la radice più profonda della crisi debitoria: se un capitalismo molto maturo e molto produttivo decide di ridurre i salari, per permettere agli operai di continuare a comprare i beni, ed evitare la paralisi del sistema, deve riempire questo “cuneo” con debito: pubblico fino agli anni '90 e poi privato.
    http://www.lantidiplomatico.it/dettnews.php?idx=6&pg=6838
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  3. As the currency-commodity-technology’s true character comes to light, however, at least one finance expert feels it is set to drop to as low as $10 by the middle of this year.

    Bitcoin began 2013 at $13 a coin, only to ring in 2014 around $800 with worldwide fascination driving the 60-times gain. But according to Boston University Finance Professor Mark Williams the price has really been driven by an influential few. Just 47 people own 29% of all outstanding Bitcoins; 930 own 50%. Another 10,000 folks bring the total owned by the largest coin holders to roughly 75%, leaving a sliver to be split among about 1 million small-change Bitcoiners.
    http://www.forbes.com/sites/samanthas...on-what-bitcoin-will-be-worth-in-2014
    Tags: , , , by M. Fioretti (2014-09-09)
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  4. Bitcoin believers–and I’ve come to number myself among them– believe that, one way or another, it will usher in a new era of frictionless commerce and programmable money. Bitcoin true believers think it will ultimately do to Wall Street what the Internet did to fax machines, while also decentralizing much of the Internet. Bitcoin extremists believe it will replace “fiat currency” like the US dollar or the euro (in the Bitcoin world, “fiat” is a four-letter word) and bring on the Libertarian Rapture. If those are the stakes, then obviously we want competition.

    What you may not realize is that we’re already close to a fairly critical decision point.
    http://techcrunch.com/2014/12/06/a-bitcoin-battle-is-brewing
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  5. People are using Bitcoins to buy real goods and services, to hedge against European financial calamity, and to score drugs. That’s money.

    scale inevitably attracts attention. Like it or not, the state will not sit idly by if vast sums of drug money start getting money laundered through Bitcoins, or if a significant enough stream of tax dollars starts getting diverted into the Bitcoin ether. Just try to avoid paying taxes on the proceeds of those 3-D-printed guns you are selling to all and sundry. The Eye of Sauron will come looking. In fact, it already has, as proven by FinCEN’s Monday release. Welcome to the real world, Bitcoin.
    http://www.salon.com/2013/03/22/a_lib...ightmare_bitcoin_meets_big_government
    Tags: , , , by M. Fioretti (2013-03-24)
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  6. how restricting ourselves to the Western mindset, mythologies, philosophies and understanding of human relationships robs us of valuable knowledge and tools that are critical to our being able to respond to systemic crises.

    The notion of a “national currency” is disappearing with mobile technology and alternative currencies – if not disappearing then adapting. We are seeing post-national means of exchange arising, as well as sub-national ones. By now everyone has heard of BitCoin, but did you know that cross-border mobile money transfer between Tanzania and Rwanda is already happening? Liquidity exchanges for poorer people are also driving innovations such as Bangla-Pesa: an alternative currency developed in a Mombasa slum which incurred a violent reaction from the state before anybody really understood what was really happening, and why. In the Edgeryders community, this resonates our own @Matthias's Makerfox based on a homebrewed network bartering algorithm.
    https://edgeryders.eu/all-our-futures-and-africa
    Tags: , , , , , , by M. Fioretti (2014-05-30)
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  7. Massive credit collapses that erase very large sums of notional wealth and impact the global economy are hardly a new phenomenon . . . but one thing that has never happened as a result of any of them is the sort of self-feeding, irrevocable plunge into the abyss that current fast-crash theories require.

    The reason for this is that credit is merely one way by which a society manages the distribution of goods and services. . . . A credit collapse . . . doesn’t make the energy, raw materials, and labor vanish into some fiscal equivalent of a black hole; they’re all still there, in whatever quantities they were before the credit collapse, and all that’s needed is some new way to allocate them to the production of goods and services.

    This, in turn, governments promptly provide. In 1933, for example, faced with the most severe credit collapse in American history, Franklin Roosevelt temporarily nationalized the entire US banking system, seized nearly all the privately held gold in the country, unilaterally changed the national debt from “payable in gold” to “payable in Federal Reserve notes” (which amounted to a technical default), and launched a series of other emergency measures. The credit collapse came to a screeching halt, famously, in less than a hundred days. Other nations facing the same crisis took equally drastic measures, with similar results. . . .

    Faced with a severe crisis, governments can slap on wage and price controls, freeze currency exchanges, impose rationing, raise trade barriers, default on their debts, nationalize whole industries, issue new currencies, allocate goods and services by fiat, and impose martial law to make sure the new economic rules are followed to the letter, if necessary, at gunpoint. Again, these aren’t theoretical possibilities; every one of them has actually been used by more than one government faced by a major economic crisis in the last century and a half.

    That historical review is grounds for optimism, but confiscation of assets and enforcement at gunpoint are still not the most desirable outcomes. Better would be to have an alternative system in place and ready to implement before the boom drops.
    http://thearchdruidreport.blogspot.it...can-delusionalism-or-why-history.html
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  8. When World War I broke out in August 1914, economists on both sides forecast that hostilities could not last more than about six months. Wars had grown so expensive that governments quickly would run out of money. It seemed that if Germany could not defeat France by springtime, the Allied and Central Powers would run out of savings and reach what today is called a fiscal cliff and be forced to negotiate a peace agreement.

    But the Great War dragged on for four destructive years. European governments did what the United States had done after the Civil War broke out in 1861 when the Treasury printed greenbacks. They paid for more fighting simply by printing their own money. Their economies did not buckle and there was no major inflation. That would happen only after the war ended, as a result of Germany trying to pay reparations in foreign currency. This is what caused its exchange rate to plunge, raising import prices and hence domestic prices. The culprit was not government spending on the war itself (much less on social programs).
    http://www.counterpunch.org/2012/12/28/americas-deceptive-2012-fiscal-cliff
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  9. The euro zone is to benefit German industrial output.

    ECB turned off the money supply to Greece to force Greece to its knees. Once there was unconditional surrender, a choice between suicide or execution, ECB turned back on the money supply to Greek banks. The money that was lent, flowed back out to pay off international creditors, a point Germans should note when they keep referring to bailing out Greece.

    The Fourth Reich showed they would happily destroy a country if that country did not give in to its demands. They forced onto Greece, not only a surrender, but an unconditional surrender, part of which is rape and pillage of the country, enclosure of the commons, sell off of Greek assets on the cheap. But at least we all now know what the Fourth Reich is capable of, Its brutality was exposed for all the world to see. At least Podemos in Spain now know exactly what they are dealing with.

    It was meant to set an example to Podemos, do not dare oppose the Fourth Reich this too will be your fate.

    But it has had had the opposite effect, for pro-democracy activists across Europe to double their efforts to defeat the Fourth Reich.

    What we have learnt, we have to work from the grass roots upwards. Syriza has grass roots support that most parties would die for, the NO vote showed that. But it was not enough. We have to restructure society from the bottom up.

    Greece may have lost a battle, but not the war, the fight continues.

    John Cassidy, writing in The New Yorker:

    Syriza’s surrender wasn’t necessarily an ignominious one. As Lenin commented of the failed 1905 revolution in Russia, it was a retreat for a new attack, which ultimately proved successful. “I’m not going to sugarcoat this and pass it off as a success story,” Tsipras said to parliament on Wednesday, prior to the vote, acknowledging that the spending cuts and tax increases contained in the agreement would deal another blow to the Greek economy. However, that wasn’t the full story, Tsipras insisted. “We have left a heritage of dignity and democracy to Europe,” he said. “This fight will bear fruit.”

    The euro zone is to benefit German industrial output.

    The problem Greece has is many idle hands, work that needs doing, and no money to connect the two. What connects the two is money.

    In the Great Depression there was no money, in US banks were closed, because they were bust.

    They created scrips, alternative currencies, across Europe and in the States. They were successful, incredibly successful. The reason they do not exist today is because they were too successful, the Central Banks closed them down.

    In 1931, a German coal mine operator decided to open his closed mine by paying his workers in wara. It was backed by coal. Because it was backed by coal, which everyone could use, local merchants and wholesalers were persuaded to accept it. The mining town flourished, and within the year at least a thousand stores across Germany were accepting wara, and banks began accepting wara-denominated deposits. Feeling threatened, the German government tried to have the wara declared illegal by the courts; when that failed, it simply banned it by emergency decree.

    The following year, the depressed town of Wörgl, Austria, issued its own stamp scrip inspired by the success of the wara. The Wörgl currency was by all accounts a huge success. Roads were paved, bridges built, and back taxes were paid. The unemployment rate plummeted and the economy thrived, attracting the attention of nearby towns. Mayors and officials from all over the world began to visit Wörgl until, as in Germany, the central government abolished the Wörgl currency and the town slipped back into depression.
    https://keithpp.wordpress.com/2015/07/27/an-alternative-greek-currency
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  10. Buenos Aires è vicina al fallimento a causa delle politiche valutarie sbagliate del governo. E può rappresentare una lezione per l'euro: lo sganciamento da un cambio insostenibile deve essere gestito con intelligenza, evitando di ricadere negli errori del passato
    http://www.ilfattoquotidiano.it/2013/...-rischio-default-unaltra-volta/646006
    Tags: , , , , , by M. Fioretti (2013-07-08)
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