Michael Duerr: Practical Monetary Reform Experience and the Insights for a Possible Greek Solution
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Michael Duerr: Practical Monetary Reform Experience and the Insights for a Possible Greek Solution

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Michael Duerr: Practical Monetary Reform Experience and the Insights for a Possible Greek Solution Michael Duerr: Practical Monetary Reform Experience and the Insights for a Possible Greek Solution Presentation Transcript

  • Practical Monetary Reform experienceand insights into a possible Greek solution by Michael DürrConference - „The Future of Money: What does the evidence teach.“Athens University of Economics and Business - Executive MBA & International MBA, January 24th 2013 © DenkManufaktur AG, Schliersee / Bavaria: Any use of this material is very much appreciated! www.denkman.com
  • First they ignore you, then they laugh at you, then they fight you,Today´s Discussion then you win. Describing the stages of a winning strategy of nonviolent activism. JUSTMONEY The Future of Money and it´s transformation by an activist central bank shareholder Practical monetary reform experience in South Africa: transformation through the nationalisation of money - JUST MONEY proposal Isolated island money reform: transformation in the Seychelles – JUST MONEY proposal thwarted by the IMF Insights and a possible transformation in Greece - nationalised legal tender creation and the freedom of currencies Alternative (complementary) currency blessing for Greece One solution: Bank of Greece – takeover or liquidationTransition agenda to get rid of the Greek odious debt situation and to restoredemocracy from debtocracy! © DenkManufaktur AG, Schliersee / Germany denkmanufaktur.net I 1
  • JUSTMONEY The Future of Money ... Although academic results from Irving Fisher et al. are still valid, those findings had to be adapted to the 21st century and the necessities of electronic money. This is one possiblity: dated March 1935 was the 20th century guideline for the Future of Money: safe money, smoothed business-cycles, controlled inflation, seignorage in the public purse, public debt redeemed.is guaranteed by the nationalisation of the creation of money Source: DenkManufaktur AG - Research, Analysis, Insights denkmanufaktur.net I 2
  • JUST ... and the transformation by an activistMONEY central bank shareholder – part 1 Own a central bank and have your say!Leverage of ownership in a 100% privately owned central bank of a G20 country Source: DenkManufaktur AG – Vorsprung durch Denken denkmanufaktur.net I 3
  • JUST ... and the transformation by an activistMONEY central bank shareholder – part 2Shareholders should ideally enhance the independence of the Reserve Bank Source: DenkManufaktur AG – Your Global Think Authority denkmanufaktur.net I 4
  • JUSTMONEY ... and the transformation by nationalisationHistory and future of phasing out privately issued money in favour of public money 19th century: 20th century: 21st century: nationalisation nationalisation nationalisation of of coins of banknotes electronic moneyBundesbank Act (latest version as amended on December 22 nd 2011) Systematic risk today: only banknotes are sole unrestricted legal tenderDeclare Money Supply M1 (means-of-payment) as sole legal tender Source: DenkManufaktur AG - Research, Analysis, Insights denkmanufaktur.net I 5
  • Today´s Discussion JUSTMONEY The Future of Money and it´s transformation by an activist central bank shareholder Practical monetary reform experience in South Africa: transformation through the nationalisation of money - JUST MONEY proposal Isolated island money reform: transformation in the Seychelles – JUST MONEY proposal thwarted by the IMF Insights and a possible transformation in Greece - nationalised legal tender creation and the freedom of currencies Alternative (complementary) currency blessing for Greece One solution: Bank of Greece – takeover or liquidation„The Government should create, issue, and circulate all the currency and credits needed to satisfy thespending power of the Government and the buying power of consumers. By the adoption of theseprinciples, the taxpayer will be saved immense sums of interest. Money will cease to be master andbecome the servant of humanity.“ (Abraham Lincoln) © DenkManufaktur AG - Vorsprung durch Denken denkmanufaktur.net I 6
  • Practical monetary reform experience in South Africa: Two shareholders of the South African Reserve Bank meet the President: he wants to understand and change (December 1st 2009)Transformation through an instant 100% minimum reserve requirement Source: DenkManufaktur AG - Research, Analysis, Insights denkmanufaktur.net I 7
  • … and the subsequent problems in the transformation The banking lobby (oligopoly) defends its turf and hits back: through the media, the Treasury and the Reserve Bank – even an agreement with the President gets vaporisedThe lessons learnt from this 6 year fight are helpful for a Greek solution Source: DenkManufaktur AG – Your Global Think Authority denkmanufaktur.net I 8
  • Today´s Discussion JUSTMONEY The Future of Money and it´s transformation by an activist central bank shareholder Practical monetary reform experience in South Africa: transformation through the nationalisation of money - JUST MONEY proposal Isolated island money reform: transformation in the Seychelles – JUST MONEY proposal thwarted by the IMF Insights and a possible transformation in Greece - nationalised legal tender creation and the freedom of currencies Alternative (complementary) currency blessing for Greece One solution: Bank of Greece – takeover or liquidation„The issue of currency should be lodged with the government and be protected from domination by WallStreet“ (Theodore Roosevelt) © DenkManufaktur AG, Schliersee / Germany denkmanufaktur.net I 9
  • The isolated island money reform transformation in the SeychellesJUST MONEY in competition to a Paris Club Agreement and the IMF Source: DenkManufaktur AG - Research, Analysis, Insights denkmanufaktur.net I 10
  • … JUST MONEY proposal thwarted by the IMF The banking lobby (IMF) defends its turf and hits back: the lessons the IMF learnt due to the monetary reform evolution worldwide and the proposals presented in various countriesNow the Club (IMF, BIS, IIF, etc.) allows false flag operations to see the light of day Source: DenkManufaktur AG - Vorsprung durch Denken denkmanufaktur.net I 11
  • Today´s Discussion JUSTMONEY The Future of Money and it´s transformation by an activist central bank shareholder Practical monetary reform experience in South Africa: transformation through the nationalisation of money - JUST MONEY proposal Isolated island money reform: transformation in the Seychelles – JUST MONEY proposal thwarted by the IMF Insights and a possible transformation in Greece - nationalised legal tender creation and the freedom of currencies Alternative (complementary) currency blessing for Greece One solution: Bank of Greece – takeover or liquidation„If Congress has the right under the Constitution to issue paper money, it was given to be used bythemselves, not to be delegated to individuals or corporations“ (Andrew Jackson) © DenkManufaktur AG, Schliersee / Germany denkmanufaktur.net I 12
  • Insights and a possible transformation in Greece > 2 million viewers 2012: www.catastroika.com2011: www.debtocracy.gr ?The next documentary in 2013: 100% Money (aka Vollgeld,Just Money, Positive Money, The Chicago Plan Revisited, etc.)The basis for a Greek monetary reform revolution is present and well informed Source: DenkManufaktur AG - Research, Analysis, Insights denkmanufaktur.net I 13
  • … a possible transformation: The Bank Run Problems of the current and faulty fractional-reserve banking system Minimum Reserve Requirements only 1% Deposit Insurance systems are a myth Self-fulfilling prophecy when a bank run starts Current proposal by MoF to reduce cash payments to Euro 500 maximum MoF plans to incentivise electronic payments in 2013Banknotes in circulation (31.12.2012): Euro 23.576 billion Contingency banknotes perGreek population: 11.3 millionEuro banknotes per Greek citizen: Euro 2,086 Greek citizen (using Bundesbank data):Contingency cash available at any given timecalculated by Bundesbank figures: 10-15% Euro 210 to 315 per personhttp://www.bundesbank.de/Redaktion/EN/Downloads/Publications/Monthly_Report/2011/2011_01_monthly_report.pdf?__blob=publicationFile(Monthly Report January 2011 - pages 29 to 41: Foreign demand for euro banknotes issued in Germany)MORALHAZARD(excerpt: Wikipedia)A probable bank panic is when many commercial banks suffer runs Source: DenkManufaktur AG – Your Global Think Authority denkmanufaktur.net I 14
  • … „The only way to stop a eurozone bank run“ „Case for a bloc-wide deposit insurance and bank resolution regime“ – this will not work„It may not be rational to start a bank run, but it is rational to participate in one“ (Sir Mervyn King, Governor Bank of England) Source: DenkManufaktur AG - Research, Analysis, Insights denkmanufaktur.net I 15
  • … nationalised legal tender creation and the freedom of new currencies Nationalisation of toxic / problem assets or bad banks sell-by-date expired! Nationalisation of the creation of money with a simultaneous introduction of free alternative / complementary currencies is the only way forward! Local markets will determine the best solution to fit the Greek society and economy! Monetary Diversity is the name of the game – variety is healthier and more stable!Transformation with the support of a Greek version of 100% (Just) Money makes bank runs / panic obsolete Source: DenkManufaktur AG - Vorsprung durch Denken denkmanufaktur.net I 16
  • … use the ODIOUS DEBT situation - copy Correa style or create Venizelism 2.0 Odious Debt in the 21st century: from debtocracy back to democracy Odious - when it is without knowledge of and benefit to the people plus lender knows about it Use the illegality and illegitimacy of most of the debt due to the fact that it is odious Create an audit committee to evaluate what debt is odious and what will be accepted Use the examples and results from Argentine and Ecuador to learn for Greece Support a Greek Rafael Correa: „boot the henchmen from the zombie institutions like the IMF“ Use the „Chopper“ as a symbol: Greece most recently got new helicopters anyway – on debt Stop Merkiavelli, the Hellenic Republic Asset Development Fund and the Reichenbach task force Give them a run for their debt money created by the MFIs, based on the fractional-reserve scheme Venizelism 2.0: respect the law and use it against the plutocracyTransition will be achieved through the right leverage and fulcrum Source: DenkManufaktur AG - Research, Analysis, Insights denkmanufaktur.net I 17
  • Today´s Discussion JUSTMONEY The Future of Money and it´s transformation by an activist central bank shareholder Practical monetary reform experience in South Africa: transformation through the nationalisation of money - JUST MONEY proposal Isolated island money reform: transformation in the Seychelles – JUST MONEY proposal thwarted by the IMF Insights and a possible transformation in Greece - nationalised legal tender creation and the freedom of currencies Alternative (complementary) currency blessing for Greece One solution: Bank of Greece – takeover or liquidation„History records that the money-changers have used every form of abuse, intrigue, deceit, and violentmeans possible to maintain their control over governments by controlling money and its issuance“(James Madison) © DenkManufaktur AG – Your Global Think Authority denkmanufaktur.net I 18
  • Alternative (complementary) currency blessing for Greecewww.wir.ch is only one example of an alternative currency to be copied Founded in 1934 by 16 people as a cooperative based on the system developed by JAK in Denmark 1931 Pioneer phase until 1952 Demurrage (Silvio Gesell) until 1958 Growth phase until 1988 Innovation phase until today: Membership 70,000 companies and since 1997 open to the public WIR (since 2004 with ISO 4217 code: CHW) is not covered by the Swiss Franc (ISO code: CHF) Immediate implementation by one of the 12 Greek coop banks (which comprise 40% of Greek banks)Swiss cooperative WIR Bank as a model case for one electronic barter system Source: DenkManufaktur AG - Research, Analysis, Insights denkmanufaktur.net I 19
  • Today´s Discussion JUSTMONEY The Future of Money and it´s transformation by an activist central bank shareholder Practical monetary reform experience in South Africa: transformation through the nationalisation of money - JUST MONEY proposal Isolated island money reform: transformation in the Seychelles – JUST MONEY proposal thwarted by the IMF Insights and a possible transformation in Greece - nationalised legal tender creation and the freedom of currencies Alternative (complementary) currency blessing for Greece One solution: Bank of Greece – takeover or liquidation„I am a most unhappy man. I have unwittingly ruined my country. A great industrial nation is controlled byits system of credit“ (Woodrow Wilson) © DenkManufaktur AG - Vorsprung durch Denken denkmanufaktur.net I 20
  • One solution: Bank of Greece – takeover or liquidation Buy into the system and fight it as a shareholder: Bank of Greece shares → ISIN: GRS004013009A takeover or liquidation of the Bank of Greece, listed at the Athens Stock Exchange, istheoretical, but the leverage and fulcrum of being a central bank shareholder is enormous.75 shares grant one vote. The „Have a Say“ in your central bank would cost Euro 1,300. TheAGM of BoG owners will be held on February 25th (shares to be registered 5 days before).This will be a great short term opportunity and contribution for a Greek citizen to change thecourse of events, create more awareness and to personally vote for a money reform.It will be a life-changing practical experience and one would gain first hand insights in theinner workings of a major puzzle piece in solving the Greek dilemma.And the best of all, over the last month one would have made a profit of 35%.(share price at January 22nd 2013: Euro 17.45 compared to Euro 12.9 at December 21st 2012)One step for a Greek monetary reform revolution is getting a BoG shareholder Source: DenkManufaktur AG - Research, Analysis, Insights denkmanufaktur.net I 21
  • … this may seem unreal, but there is a logic behind it!At its meeting on 21 January 2013, the General Council of the Bank of Greece approvedthe Bank’s audited Annual Accounts for the financial year ending 31 December 2012.Takeover by the state or liquidation due to bankruptcy is part of the solution! Source: DenkManufaktur AG - Research, Analysis, Insights denkmanufaktur.net I 22
  • The End of Today´s Discussion -> Conclusions 100% (Just) Money will replace the fractional-reserve banking system Alternative & complementary currencies will be allowed unconditional Nationalisation of means-of-payment is a prerogative like coins and notes Transformation is the most important issue – the academic base is sound Greece is ripe for the monetary reform revolution needed for the change Practical experience has to be used to avoid further ambush by MFIs Greek transformation through a bank run or a bank panic very likely Greek transformation through an activist shareholder approach (BoG) Greek people have to take the pride back they deserve, get rid of the odious debt, free themselves from the shackle of the current system, create a debt- and interest-free currency, which can flow into the economy through public expenditure, avoid direct taxation and much more!„ First they ignore you, then they laugh at you , then they fight you, then youwin.“ © DenkManufaktur AG, Schliersee / Germany denkmanufaktur.net I 23
  • Practical Monetary Reform experienceand insights into a possible Greek solution by Michael Dürr (ceo@dmag.cc) Thank youConference - „The Future of Money: What does the evidence teach.“Athens University of Economics and Business - Executive MBA & International MBA, January 24th 2013 © DenkManufaktur AG, Schliersee / Bavaria: Any use of this material is very much appreciated! www.denkman.com