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Argentina: How To Establish Mathematically Perfected Economy

by mike montagne - PEOPLE For Perfect Economy (mike.montagne [at] perfecteconomy.com)
The world's "financiers" would not have us understand how "Argentina's" "economy" collapsed under insoluble debt — because the debt of Argentina was ultimately multiplied beyond the means of Argentina, without rendering Argentina anything but multiplying debt.

January 17, 2002


[PFMPE] Argentina: Opportunity and Obligation To Establish Mathematically Perfected Economy



Martin Luther King said, "Our lives begin to end, the day we become silent about things that matter."

Argentina's inevitable collapse under "their" US-IMF-imposed "economy" — an "economy" purposely insulated from public apprehension, approval, or recourse — identifies the opposition of one of the most important disputes in history.

The victim is the people — not just Argentina, but nation after nation of the world. The oppressor is an alliance comprising the instruments of modern usury, which, by "central banking" systems which inherently and irreversibly multiply debt in proportion to commerce, deprives populace after populace of ever greater proportions of the wealth they produce. Populace after populace and generation after generation pay their lifetimes, to a "central banking" system, for homes they produced by a mere few months' work.

Under the ostensible justice of modern "economy" then, mankind is to pay many times over, for his very own production. The wealth stolen from the people by a "financial" elite, in turn subverts and usurps representative government — so in turn the unjust system can be further entrenched and perpetuated despite the inevitable, strictly adverse consequences to every unassenting populace — and generations deprived of opportunity ratify or rescind a system which can only impede their prosperity.

Yet the capacity to service debt is finite; and therefore irreversible multiplication of debt in proportion to commerce can only culminate in collapse under insoluble debt. A circulation which can only be retained if payments against principal and "interest" are re-borrowed as subsequent debts increased as much as periodic interest, means debt is inherently and irreversibly multiplied in proportion to a commerce by every such system. Thus under every such system, an eventual, inevitable accumulation of debt exceeds commerce, and renders system-wide failure under insoluble debt.

Such unjust systems are imposed across the world. Argentina's fall marks the beginning of their end. Should Argentina or any other nation prevail in solving the multiplication of their debt, the cause of world-wide multiplication of debt will be laid bare.

The usurers of the world cannot afford exposure, because their system cannot survive an intelligent, self-determined public — wanting naturally, to prosper, and to realize the fruit of its doings. One example of proper economy in the world, and no self-determined populace will elect usury in its stead. Argentina's struggle for rectitude thus can determine the fate not only of Argentina, but the world.



Mathematically perfected economy — with an absolutely immutable currency, entirely without inflation and deflation, and completely free of multiplication of debt in proportion to commerce — is immediately possible everywhere. As long as Argentina's infrastructure and immediate re-employment potential remain, Argentina can immediately be elevated to full prosperity — far above the ever more impeding subjugation which can only be suffered under usury.

Inherent, irreversible multiplication of debt in proportion to commerce can only make production and consumption ever less affordable. Throughout the inherently limited lifespan of an "economy" based on interest-bearing debt, those who can afford to produce, and those industry can afford to retain in production, are relegated to the possibility of acquiring ever less of their own production.

If the people of Argentina stand fast for no less than their right to real economy and justice, they might soon have real prosperity in lieu of perpetual multiplication of debt at the hand of central banking systems. Usury is not economy. Multiplication of debt serves no populace. No representative government imposes multiplication of debt upon its people.



Thomas Jefferson emphasized every representative government's eternal obligation — one conspicuously denied to every country fallen before the usurer: "Leave no authority existing, not responsible to the people."

Is any nation of the world offered the choice of usury-free economy? What representative of the people comes forth, arguing it, offering it? Indeed, there are reasons for unapproachable, unaccountable figureheads in government everywhere.

If Argentina will settle for no less than absolute solution of the instruments of their oppression, they now may be the first to secure full prosperity. Argentina may be made impervious to the singular fate to be administered across the rest of a dying age, at the hand of the old order's usurers. Look beyond the underlings at their purse strings, and you will find those who wish to secure their crime through further history.

Follow the money all the way, Argentina. Know your enemy by their fruit. Make your new currency "interest" free, that your unproductive enemy has none — and you may keep the fruit of your doings.

What "economy" precludes prosperity to any degree whatever? What true economy perpetually multiplies debt in proportion to commerce — ultimately rendering all proven, sustainable commerce dysfunctional?

How to end your oppression, and how finally to realize true prosperity, is how to establish mathematically perfected economy.


http://www.perfecteconomy.com/nl20020117-argentina-model-for-mpe.html


_________________________




"Our lives began to end, the day we became silent about what mattered."



The world's "financiers" would not have us understand how "Argentina's" "economy" collapsed under insoluble debt — because the debt of Argentina was ultimately multiplied beyond the means of Argentina, without rendering Argentina anything but multiplying debt.



Why are the "economies" of the world failing under insoluble debt? Why is commercial failure ever more prevalent in every country "served" by a "central bank"? Why is homelessness, joblessness, and bankruptcy mounting across the world? Who manipulated Argentina into such disadvantage and ultimate dysfunction for naught?

The spin doctors of the "financial" world are purporting now that Argentina's problems are unique — that they will not be replicated, or spill over elsewhere. What a grand lie, when all the nations of the world are succumbing to insoluble debt. Every nation may cope more or less effectively with inherent, irreversible multiplication of debt. But in the end, a system which can only multiply debt in proportion to commerce will take down any and every subjugated populace.

The fact is, what brought Argentina down is falling every nation of the world.



The world's "economies" are not economies at all — but systems designed from their beginning to take from the respective population by the device of a currency which perpetually and irreversibly multiplies debt in proportion to commerce.

Long before "modern economy," two farmers discussed increasing their production. The first raised fowl. The second grew feed.

The first approached the second with a proposition. He intended to double his production — but to then had raised his own feed to the exhaustion of his feed-growing resources. His proposition was that the second farmer raise the additional feed he needed in return for so much of his further crop of fowl. The two agreed to this, and as a matter of integrity, recorded their contract to each other on paper.

The value of that paper was constituted by the production and integrity of these two men alone. But it could be traded about the community, as the feed-grower may have traded some portion of the promised fowl for the production of others.

Currency was born. Perfected economy arose as a natural manifestation of principled business and unencumbered effort to prosper. The currency retained one consistent value. There was no inflation or deflation. The circulation was sufficient to pay the debt alone. Debt was not multiplied in proportion to commerce. Every producer received the equal of their doings. No imposed impediment precluded prosperity.

How then would they have benefited, if instead their promises were written on the paper of a third party who produced nothing, and collected over all further time, ever greater portions of their further production?



One of the most preposterous facades in all history, is the proposition that although the people could, by common consented government, issue a currency on the direct and worthy principles of our two farmers without cost or adversity... instead, commerce benefits from the paper of central bankers — that a medium of exchange is a better medium of exchange if it costs the subjects of every "economic system" whatever central bankers take from them.

It is this lie, and the corruption behind it, which bankrupted Argentina. It is this lie which is bankrupting every country of the world where the circulation is subject to "interest."



Argentina is not alone in needing to rectify the cause of Argentina's demise.

What do the World Bank, International Monetary Fund, or "the United States" as the political strong-arm of central bankers provide Argentina when they "loan them money"?

New money, to finance new production, is borrowed into circulation. All new money is a debt. Largely, new money is merely created in records. It costs the central banking system virtually nothing.

With every nation of the world subjugated to a "central banking" system, the currencies of every nation are not mere mediums of exchange. They are mediums of exchange subject to interest.

In every nation of the world where the currency is subject to "interest," merely to maintain the circulation, the subject populace must, in every successive period of business, borrow back so much as what it pays toward principal and interest as a subsequent debt increased so much as periodic interest.

Initial borrowing requires further borrowing to maintain a circulation; and this perpetual necessitation of further borrowing multiplies debt perpetually and irreversibly in proportion to a given commerce. The subjugated populace has no alternative but to borrow perpetually, and to assume ever greater debt.



Debt increases by ever greater increments, as greater sums of periodic interest on greater existent debt are converted into further debt. Merely to maintain a circulation, debt is multiplied perpetually, irreversibly, and by inherently ever greater increments.

No matter the rate of interest, debt is multiplied in proportion to a given commerce.

Profit becomes ever more negligible. Production is ever less solvent. Costs become preclusive. "Credit-worthiness" is vanished. Debt is multiplied beyond the means of the subjugated society, and the "economy" collapses.

All for the nature of a currency purported to be better — but which in fact proves to the inevitably ever greater disadvantage of the many, for the entirely unjustified profit of wicked few.



The political constituents of the usurers will not help Argentina. They will try to bind Argentines to the instrument of their further multiplying profit — where a truly representative government would provide a medium of exchange.

Is the purpose of representative government to profit from the people?

Nor is it to see a privileged few profit from the people, even to the degree of imposing collapse.



The answer to Argentina's problem is not complex. But it must be realized within a volatile, contentious environment, purposely seeded with confusion. Real solution will be recognized by inability to disprove it.





Mathematically perfected economy is immediately possible.

An immutable currency is achieved without free market constraints, by maintaining a circulation equal to the remaining value of indebted assets, and by paying off debt according to the debtor's consumption of the asset. Only such a circulation is free of inflation and deflation — because only such a circulation equals the current value of indebted assets at all times.

Only if debt is not subject to interest, is it possible to pay off the debt according to the rate of consumption or depreciation of the asset — while maintaining a circulation equal to the current value of the indebted asset.

Only in mathematically perfected economy then is it possible to pay for the production of others with an equal measure of our own production.

Only in mathematically perfected economy is debt not multiplied by interest.



Under mathematically perfected economy, a hundred-thousand-dollar home with a hundred year lifespan costs one thousand dollars per year, or $83.33 per month to own — and there is little question what homelessness or class subservience we would suffer then if a populace were allowed to pay for their consumption with an equal measure of their production.

There is little question either how much further production and consumption could be afforded, with so much more of a circulation free to sustain prosperity in lieu of perpetually and irreversibly multiplied indebtedness under usury.



By mutual consent (representative government), the people issue their own currency. Debtors pay only for certifying their credit-worthiness, and for the accounting of the payment of their debt.

There is no income, or property, or inheritance tax. Taxes are levied only for actual services or assets rendered by the government. Thus proper taxes are attached to consumption of services or infrastructure, and they are properly paid only by the consumer, and only for so much as consumed. Certainly, the costs of government are not multiplied upon the people, by "financing" government with interest-bearing debt.



A real economy's condition never falters, because it cannot and does not impede prosperity to any degree. It requires no nursing or coaxing or relief. It is perpetually well. It is perpetually sustainable. A real economy's condition is always what the people can and will produce without impediment. Its prospects are limited only by natural resources and the willingness to incorporate resources into production.

No "economists" are required to deceive us of its condition or prospects, that grafted to the great tree of usury, they may profit from us for diminishing prosperity.



How do we establish and maintain a proper currency in the wake of usury?

We reverse the damages.

We re-finance debt without interest, and re-schedule payment to equal the rate of consumption. We return payments already made beyond consumption to the abused debtor. We restore businesses to productivity. We provide new infrastructure we could not afford under usury. We simply publish the necessary monies, pay those who produce the infrastructures, and charge those who consume them, as they consume of them.



Imagine every person having lived undamaged by the world's usurers. To what degree is possible, this is what we give back to them.



How does Argentina pay back its foreign debt?

It is impractical to repay a debt systematically multiplied beyond the real value of a nation's wealth if the value of a credible circulation is to be equal to that wealth — particularly if the only value of the credit was constituted by the wealth created by the people.

But it is certainly not right to have to do so.

In the case of "innocent investors," have them look to their own country for restoration of losses. Why? Lost savings/investments will be restored in Argentina. Foreigners who sought to protect the value of their money from unjust "economies" should not have their losses restored at the further cost of Argentina.

It is the responsibility of every foreign citizenry to establish proper economy, that savings for any purpose are not diminished by an uneconomic system itself. It is not the responsibility of Argentina to restore to the citizens of other countries, losses resulting from iniquities imposed upon Argentina by the usurers of the world.

In the case of usurers, write them an irredeemable promise to pay — a castoff currency no worse than theirs — never to be redeemed in anything of value by any people anywhere. "Say no to usury." Let usurers be glad the costs of delivering proper economy are not made greater to them — for what they have stolen and deprived every people cannot truly be restored to the people to whom greater things rightly belonged.

Grant usurers — like all other persons — only the equal of their very production; and thereafter, instead of devaluing your own, proper currency, every day devalue every imperfect, impoverishing currency — exactly as its effective value is diminished by the costs of usury to every poor soul subject to the abomination which made them desolate.



True representative government would have given us real economy long ago.

But usurers did not.



There is no end of oppression or injustice without mathematically perfected economy.



Yes, "Our lives began to end, the day we became silent about what mattered." After all, where it matters, silence allows every threatened, mattering thing to escape us.

Always remember, ideals can never die. No person can be privileged above others. There is one true law for all. Oppression and injustice will always be repulsed. So long as a single person can conceive of rectitude, there will always be hope.



mike montagne — PEOPLE For Mathematically Perfected Economy





To find the players in all the corruption of the world, "Follow the money." To find the captains of world corruption, "Follow the money all the way."



TRANSLATE AND PROLIFERATE:

The purpose of this effort is to help the people, not only of Argentina but everywhere in the world, achieve rectitude. PLEASE, if you have the resources, translate this singular prescription for mathematically perfected economy in its entirety and distribute by all possible means to every nation of the world. You WILL make every necessary difference, and we thank every such good person for their efforts.

"A country voting each for the self determines a subclass few of them will truly belong to, prevailing at the cost of the rest. Even a country voting for the good of all determines a good country only if it votes so well. It is incumbent on the wise to spread word of real solution."

PLEASE promote mathematically perfected economy by forwarding our newsletters to your address book, and by publishing PFMPE URLs to forums, newsgroups, websites and newsmedia. Where an ostensibly representative government and media serve oppression, everyone not participating effectually in solution is an accessory to the consequences.


PEOPLE For Mathematically Perfected Economy

http://www.perfecteconomy.com/

PLEASE JOIN OUR FREE NEWSLETTER from links at the bottom of any of our pages.

http://www.perfecteconomy.com/index-newsletter-archive.html#nl20020117-argentina-model-for-mpe.html

by Fred Freeguy
It's Not Too Late to Dollarize in Argentina
by Steve H. Hanke

[Steve H. Hanke is a professor of Applied Economics at the Johns Hopkins University in Baltimore, a Senior Fellow at the Cato Institute in Washington and Chairman of the Friedberg Mercantile Group in New York.]

The most recent arguments against full dollarization at an exchange rate of 1 peso = 1 dollar are based on unfounded claims that it's no longer a feasible option. If the claims are true, they imply that the BCRA is breaking the Convertibility Law and operating illegally. Unless the claims are backed up by sound analysis and hard facts, they should be dismissed as nonsense.

The convertibility system is near the end of its existence. As my colleague Kurt Schuler and I have said for more than ten years, convertibility is an unorthodox mixture of a currency board system and a central banking system. Argentina has two choices: officially dollarize, which is consistent with the spirit of an orthodox currency board system, or float the peso, which means expanding the powers of the BCRA and hoping it will use them wisely.

Argentina's experience with floating exchange rates and other forms of independent monetary policy has been disastrous. From the time the central bank was established in 1935 until 1991 the peso depreciated against the dollar by a factor of 3,000,000,000,000. That leaves dollarization as the only choice that experience suggests will provide stability.

Does the exchange rate have to be devalued because Argentina is not competitive? The classic sign of not being competitive is a decline in exports. Argentina's exports have risen every year of the last ten years except 1999. If the rest of the economy were growing at the same pace as the export sector-about 3 percent a year-Argentina would not be in a recession.

If devaluation alone could make a country competitive, Argentina should have been one of the world's most competitive countries in the 1980s, when the currency was depreciating rapidly. Devaluation can give exporters a temporary cost advantage, but making a country competitive over the long term requires an efficient and honest legal system, a tax code that encourages enterprise and compliance, flexible labor laws, and other institutions that are outside of monetary policy. Argentina made great progress in these areas in the early 1990s, but has done little since then. In some areas, notably tax policy, it has even retrogressed.

Does Argentina have enough reserves to dollarize at 1 peso = 1 dollar? There are two misconceptions about the reserves necessary for dollarization. The first misconception is that dollarization requires reserves beyond those necessary to cover the monetary base (the monetary liabilities of the central bank). That is not correct. Moreover, dollarization in the form I have proposed (see below) is likely to reduce the reserves Argentina's financial system needs.

The second misconception is that Argentina now lacks sufficient reserves to cover the monetary base. Although it is true that the "pure" foreign reserves of the central bank were only about 14.8 billion pesos on Dec. 5th, versus a monetary base of 15.8 billion pesos, the central bank also has domestic assets exceeding 11 billion pesos. Provided that the central bank is reporting its accounts accurately and does not have large hidden liabilities, it could eliminate the gap in foreign reserves by selling some domestic assets for dollars. Even if the gap in foreign reserves were much larger, there would be ways to minimize its effects.

Any exchange rate other than 1 peso = 1 dollar would create widespread disruptions. Devaluing the peso would hurt borrowers by bankrupting many people who have borrowed in dollars. Making a forced conversion of dollar loans into pesos would hurt bank depositors and other lenders by devaluing their loans. A forced conversion would be the third such event in 20 years. The lesson people would learn from it is that they should never again keep their savings within the reach of the Argentine government.

Would dollarization intensify the current loss of confidence in the banking system? Loss of confidence in the peso has affected the banking system. Bank depositors do not want to see their savings evaporate as part of an ineffective attempt to defend the currency, such as the first Cavallo plan or the Bonex plan. By eliminating the peso, dollarization would eliminate that fear. Ecuador froze its bank deposits in March 1999 (under a floating exchange rate) and the government seized bankrupt banks that held about two-thirds of all bank deposits. The currency remained unstable and the economy plunged further into a recession. After Ecuador dollarized in January 2000, although the banks remained troubled, deposits rushed back in, increasing from 2.5 billion dollars in December 1999 to 3.3 billion dollars in November 2001. Dollarization has helped Ecuador's banks become stronger. It would have the same effect in Argentina.

I have proposed that banks in Argentina be allowed to issue their own notes, denominated in dollars, to replace both peso notes issued by the BCRA and dollar notes issued by the U.S. Federal Reserve System. (The text of the proposal is available at http://www.cato.org/pubs/fpbriefs/fpb-067es.html.) This step has the potential to increase bank reserves by billions of pesos, because the public currently holds 8.3 billion pesos in notes issued by the BCRA and an estimated 25 billion dollars of notes issued by the Federal Reserve. If the public can be persuaded to use bank-issued notes even to a small extent, bank reserves (Dec. 5th= 10.7 billion pesos) would increase by a corresponding amount. The replacement of government-issued notes with bank-issued notes would be on a purely voluntary basis, with no forced exchange involved. Historically, systems of bank-issued notes have operated in many countries, and where they have been free of intrusive government regulations they have worked quite well.

Dollarization was a good idea when it was debated in 1999 and it remains a good idea today. With dollarization Argentines know that they will receive a stable currency and eliminate devaluation risk. The same cannot be said about allowing the peso to float.
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