Monetary Reform:

A Sleight of Hand, rabbit out of a hat competitive and exploitive, free for all
economy is in vogue in our World. The capacity to harness the power of money
to serve the public good as well as ensure economic justice and the realities of
the Information World is conspicuously lacking. I am paraphrasing from
“Monetary Reform – Making it Happen” (James Robertson and John Bunzl). To
quote directly: “”Dematerialized non-cash money (i.e. electronic, bank created
money held in bank accounts and transmitted between them by modern
information and telecommunication technology) is now overwhelmingly important.
About 97% of this country’s (UK) money supply is created in that form by
commercial banks, and only 3% as banknotes and coins issued by the Bank of
England and the Royal Mint. The commercial banks create the non-cash money
out of thin air, calling it credit and writing it into their customers’ current accounts
as profit-making loans. That gives them 20 Billion Pounds a year in interest, while
the taxpayer gets less than 3 Billion Pounds a year from the issue of banknotes
and coins. Stopping commercial banks creating non-cash money, and
transferring to the central bank responsibility for creating it and issuing it debt
free to the government to spend into circulation will result in extra public revenue
of about 45 Billion Pounds a year”. This is a completely Islamic Ideal as it is
proposed to issue electronic money debt free for sustainable development.
The above extract goes on to illustrate the impact as follows:
1. Taxation and Government debt can be reduced, or public spending can be
increased, by up to 45 billion Pounds a year (UK).
2. The value of a common resource – the national money supply – will become a
source of public revenue rather than private profit. That will remove an economic
injustice.
3. Withdrawing the present hidden subsidy to the banks will result in a freer
market for money and finance, and a more competitive banking industry.
4. A debt-free money supply will help to reduce present levels of public and
private debt, which are partly caused by the fact that nearly all the money we use
has been created as debt.
5. The economy will become more stable. Banks inevitably want to lend and their
customers want to borrow more at the peaks of the business cycle and less in
the troughs. So when the amount of money in circulation depends on how much
the banks are lending, the peaks and troughs – the booms and busts – are
automatically amplified.
6. The central bank will be better able to control inflation if it itself decides and
directly creates the quantity of new money the economy needs. It now tries to
control inflation indirectly, by raising interest rates (i.e. the price at which people
borrow from banks). But raising costs in that way actually helps to cause inflation.
That partly explains why inflation has been allowed to rise steadily every year –
by 2.5% in the UK – in order to avoid deflating the economy.
7. Environmental stress will be reduced. When, as now, almost all the money we
use is debt, people have to produce and sell more things in order to service and
repay debt than they would if money were put into circulation debt-free.
The “Earth Emergency Call To Action” initiated by the Schumacher Society,
the Sustainable Society, Positive News, the Gaia Foundation and the Right
Livelihood Foundation as a Civil-Society statement was a call to the
Johannesburg World Summit on Sustainable Development to:
1. Replace Polluting Energy Systems in industry, agriculture, transport and the
built environment with renewable energy technology.
2. Co-operate globally to revive local democracies and local economies – with
emphasis on local production for local consumption and less long distance
transport of goods.
3. Make sustainable agriculture the global norm – securing food supplies with
minimal environmental impacts.
4. Create a participative earth democracy – fundamentally reforming global
governance for the benefit of people and nature, so that international decision
making is open and accountable within the framework of a strengthened and
democratized United Nations.
5. Initiate a progressive shift of funds from military spending towards
environmental security – providing adequate water, nutrition, healthcare, shelter
and sustainable livelihoods for all.
6. Shift taxation from labor to the use of resources and pollution and waste –
promoting conservation and clean production, and enhancing social welfare and
jobs.
7. Reform worldwide monetary and financial systems to protect and enhance the
well being of human communities and the natural environment on which they
depend.
Many intellectuals elucidate the last point as they have clearly shown how the
dollar hegemony is harming the entire world. “For example, one report calculates
that every US citizen owes the rest of the world $7,333, while every citizen of
developing countries owe it only $500. But while developing country economies
must pay debt service repayments totaling more than $300 billion a year, the US
must only pay $20 billion a year to service an almost equivalent amount of debt.
Americans have been engaged in a consumer binge, which has led to the largest
current account deficit in history, a staggering $445 billion or 4% of US GDP.
This deficit has been increasing by 50% a year in recent years, and economists
predict it will rise to $800 billion by 2007. Given this daily deficit of up to $2 billion,
plus capital outflow of $2 billion, the US in effect has to borrow $4 billion from the
pool of world savings every day. More disturbingly, it is being financed by the
poor through capital flight from poor countries and the forced holding of high
levels of dollar reserves. To build up reserves, poor countries have to borrow
hard currency from the US at interest rates as high as 18%; and lend it back to
the US in the form of Treasury Bonds at 3% interest”. (Romily Greenhill and Ann
Pettifor, The United States as a HIPC (heavily indebted prosperous country) –
how the poor are financing the rich, New Economics Foundation, London, 2002;
www.neweconomies.org. Thus the claims of progress by holding an increasing
amount of Foreign Exchange Reserves is a hoax upon our citizens and actually
only in the interest of the US. This has been forced upon us by increasing
indebtedness despite full knowledge of the fact that World Bank and IMF loans
were subject to blatant corruption by Pakistani Political as well as Military and
Civilian Bureaucracy. This was a deliberate policy in order to perpetuate a
stranglehold upon our economy and political order due to indebtedness.
“Another report finds that “ever since 1971, when US President Richard Nixon
took the dollar off the gold standard, the dollar has been a global monetary
instrument that the United States, and only the United States, can produce by fiat
….World trade is now a game in which the US produces dollars and the rest of
the world produce things that dollars can buy. The world’s interlinked economies
compete in exports to capture needed dollars to service dollar-denominated
foreign debts and to accumulate dollar reserves”. (Henry C.K. Liu, US Dollar
Hegemony Has Got To Go, Asia Times Online Co Ltd. 2002).
A third example: “At the root of this new form of imperialism is the exploitation
of governments by a single government, that of the United States via the central
banks and multilateral control institutions of intergovernmental capital….What
has turned the older form of imperialism into a super imperialism is that, whereas
prior to 1960s the US government dominated international organization by virtue
of its pre-eminent creditor status, since that time it has done so by virtue of its
debtor position”. (Michael Hudson, Super Imperialism: The Origin and
Fundamentals of World Domination, Pluto Press, 2003, pp23-24).
“Finally the researchers of Richard Douthwaite and the Irish NGO Feasta
(Richard Douthwaite, Defence and the Dollar, 2002 and Feasta, Climate and
Currency: Proposals for Global Monetary Reform, 2002, prepared for the
Johannesburg World Summit on Sustainable Development) confirm that the total
annual subsidy (or ‘tribute’) received by the US from the rest of the World as a
result of dollar seigniorage is at least $400 billion a year. This is roughly
comparable to the annual US balance of payments deficit. It also explains how
the US has been able to maintain its extraordinary scale of annual military
expenditure compared with all other countries. The huge dollar seigniorage
subsidy has even been justified by some US commentators as a payment by the
rest of the world to the US as the ‘policeman’ on whom the world relies to keep
order! However, as Douthwaite notes, ‘’given the policeman’s record of
destabilizing or overthrowing governments with which he has had ideological
differences and the fact that he would continue to put his ‘particularistic national
interests’ ahead of those of the rest of the world, I doubt if many countries would
be entirely happy with the arrangement”.
Thus it is pretty obvious, despite propaganda, that it is the US, which is
practicing Financial Terrorism. The cover up is Islamic Terrorism in order to
promote its Resource Grabbing to fuel an already highly exploitive situation. This
does not promote hate against the US, there are many red blooded US citizens
who would be outraged if they knew what the game is.
This exploitation has no origin in the Holy Bible, just as Terrorism has no
origin in the Holy Quran. When people knowingly or unknowingly participate in
debate regarding ‘Islamic terrorism’ they are actually playing the game for US
neo colonial imperialism supported by neo conservative chicken hawks.
The main contention is “If others can do so for their own advantage, Why
can’t we?” Instead of succumbing to the machinations of vested interests, why is
it not possible for a Pakistani bank to underwrite the present Flood related
housing and rehabilitation process? Why are we saddled with an expensive
Organization meant to act as a conduit for Foreign Aid that is mostly recycled
back to them while the local organization shares the loot, photo ops and
perpetuates itself with NO practical on-ground results. The affectees of the 1972
Floods, the 2005 Earthquake and the present 2010 Floods are still struggling to
regain some form of normalcy in their lives. Even though that ‘normalcy’ was just
a shadow of a dream long gone sour!
Example:
Floods 2010: Affectees 2 million Households homes and Livelihoods.
Package for Rehabilitation Rs. 5 million per Household.
1st Mortgage 60%.
Land: Rs.0.1 million.
Home: Rs. 0.3 million.
Livelihood Rehabilitation Fixed & Working Capital Value: Rs. 0.2 million.
Total Future value Rs. 0.85 million.
Refinancing Rs. 0,5 million.
Payback at 5 % Service Charges after 8 years with grace period of 2 years.
The objections are obviously corruption and utilization of funds for non productive
uses. This can be overcome by the communities themselves to save their lands
and achieve prosperity through active support from Development Authorities and
Conglomoculture for Production.