Unser Politikblog | 04.03.2015
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We are at a turning point. The sovereign debt crises and the humanitarian crises can be nearly completely overcome with a combination of a debt reduction at the standard of the human rights and with decisive changes of the giral money system. The logic of scarcity comes to an end, and the selloff of the states can be overcome. In times, when transnational corporations are richer than states, the financing of states via banks is not up-to-date any more.
At the 09.12.2014, the Austrian economic scientist Prof. Dr. Franz Hörmann and the German human rights activists and bloggers Sarah Luzia Hassel-Reusing and Volker Reusing have addressed themselves together to the UN in a paper with two statements. See also the Welt article mentioned below. Prof. Dr. Hörmann has shown, that the hitherto money creation via the granting of loans by the banks takes place out of nothing via the booking entry „demand“ | „liability“. The liabilities of the banks, which are created that way, are the hitherto giral money. The interests, however, are booked to profit, so that, in our current money system, they have to be earned via work in the real economy. The whole giral money always only suffices for the repayment of the nominal value of the created loans without interests. In addition to that, it follows from that way of money creation, since every bank can create a manyfold of its capital out of nothing, that already in our current debt money system every bank is replacable (see statement by Prof. Dr. Hörmann and section III. of the statement by Sarah Luzia Hassel-Reusing and Volker Reusing). „Too big to fail“ is just a lie. The human rights (e. g. to dignity, to life, to food, to health, to equality, to property) are system relevant, not single banks.
Section VI. of the paper proposes a three-step plan (first money creation to equity for UN relief organizations to overcome the humanitarian crises, second the same right also for the bankrupt debtor states also limited to the humanitarian supply, third for the states, which want it, the shift to the information money system, which has been developed by Prof. Dr. Hörmann, which does not need any banks at all, except for one democratical central bank per state). The paper imagines the first step in a clearing unit, whose value would depend on an international currency basket consisting of the currencies of those countries,which would be willing, that the entrepreneurs (farmers, doctors, pharma firmes etc.), who provide the goods and services, can change the credits they get in the clearing unit, into their currencies, in the second step the same rights also for the bankrupt debtor countries, and in the third step the information money as giral money besides the cash.
The information money does not circulate, but it is deleted at the level of the payer and newly created at the level of the payee. Since the information money does not really circulate, but only fluctuate at the level of the single market participant, it makes feasible asymmetrical prices, which are bound to the fulfillment of social human rights. That can be designed depending on the economical system. One can introduce it with basically free market prices, i. e. simulate the circulation, and make feasible, e. g., reduced prices for existential goods for poor people, and in order to, at the same time, grant the entrepreneur the full price, without using tax payer money for that, or in order to reduce the wage costs for more competitiveness without any reduction of the wages. If one makes the application of asymmetrical prices dependened on referenda, one can make sure, that this instrument is focused on the fulfillment of those social rights, for which the public is willing to accept a certain extent of inflation. On the other side, in the information money system, in contrast to the debt money system, there is no new interest pressure added on the prices.
Or one goes a step further and uses the asymmetrical prices, in order to democratically determine the equal payment for human work, and focuses the competition on a quality competition. In addition, the information money makes feasible to pay for cooperation for the benefit of the public.
If one wants to remain in the debt money system, we regard as necessary, in addition to that, the limitation of the giral money creation to a fixed figure per bank and year, which would very unbureacratically force the bigger banks to deliberately split into smaller banks.
The amount of debt reduction in the event of a state bankruptcy can, according to our conviction, be lawfully done only at the standard of the basic rights and human rights in the respective country. That enforces a fair compromise instead of a preference of the private creditors. If the debtor countries are obliged to measure the debt reduction at the standard of the basic rights and human rights, then the decision can also be made by the debtor country itself (sections IV.+V. of our statement).
The debt reduction at the standard of the human rights would go further, than what is necessary to reach the Millenium Developement Goals, and shall be supported by step 2 of our three-step-plan. The giral information money, finally, would create enough space for sustainable development.
The reason for the statements of the 09.12.2014 has been the resolution of the UN General Assembly of the 09.09.2014 for the creation of an international state insolvency procedure, according to which the developing countries want to prevent the prefered treatment of „vulture funds“, and to reduce the debts to a level, which makes feasible for them to reach the UN Millenium Development Goals and sustainable developement (economic growth, social progress, and environmental protection).
At the same time, the resolution of the 09.09.2014 also demands the strengthening of the international financial system (of the banks), and that the international state insolvency procedure shall bring more predictability in favour of the international financial system (for the banks), that, for that purpose, the „costs of non-compliance“ shall be further increased (no. 23), and that there shall be no adverse incentives for „non-compliance“ (no. 24), and it wants the cooperation of the IMF, the World Bank, and the private creditors within the state insolvency procedure. See the Unser Politikblog article of the 27.10.2014.
At the 03./04.02.2015 has been the first working session for the creation of the text of the treaty for the international state insolvency procedure (see Pagina 12 article „Una jaula para los buitres“ of the 21.01.2015).
A concept for the state insolvency procedure, which is debated i. a. in a working group at the UNCTAD level, comes from the NGO „Erlassjahr“. In their concept, a proposal shall be filed by 3 arbitrators (like in TTIP) per insolvent debtor country, who shall be bound to no human rights at all. And the decision on their proposal shall then be made by the assembly of the private creditors of the country (like in the state insolvency procedure of the ESM of the eurozone). Erlassjahr, however, claims, that they want the Millenium Developement Goals to be reached. See the interview by Unser Politikblog for the „Macht und Menschenrechte“ of the 25.09.2014.