Tuesday, 7 July 2015

Demolishing the “neutral” money theory



"If money was neutral, as many economists would have us believe, we should release all the thieves of money because they would not have stolen no value"

This repeated the Professor. Auriti when in the various debates and economic texts came across the concept of neutral value of money. Therefore, by logical-legal deduction, according to this definition of neutrality of money, a neutral value does not involve any substantial difference and therefore it would be indifferent to have money in your pocket or not, both because it is a paid job or you have it as proceeds of theft.
The unfounded on the neutrality of money manifests itself under the logical point of view, legal and economic. From the logical point of view it is clear that it is very important to have money in your pocket or not have it.
From the legal point of view the currency is a collective good as created by social convention to measure and incorporate the values, good with financial content and repeat-use and owned by the bearer.

Not surprisingly, the money is considered as "movable property" and the goods have of course an owner as they are objects of law movable property. Otherwise you could not accuse the thieves for theft. In the case of money, however, central banks have reached such a degree of professionalism appropriating other people's resources, by having consolidated in themselves, and in governments, the belief that they have the right to do so, through a real form of legalized theft, blatantly unconstitutional.
The obstacle on which all economists stopped it is based on the original error to have not define the currency as legal case and the same law as an instrument, or right itself, and that is, as an expression of their own value, different from that of the asset covered by the law. On this initial misunderstanding, it is purported to justify the monetary value on the basis of the gold reserve and confusing impersonating under the guise of credit value, the induced value, ie configuring the currency, not as a measure of value, but as the title of credit representative of the reserve. Money is not credit but the object of credit.
Besides, if it were true that the reserve is used to give to currency the purchasing power, after the abolition of the Bretton Woods Agreement, and with the abolition of the gold reserve, the dollar would have totally lost its value: while not only it did not lose value, but it has replaced gold as monetary base in the world monetary system.
From the economic point of view the statement that the money has a value neutral is removed with irrefutable data that provides us with Pierluigi Paoletti, a member of the Scientific Committee of the School of Legal Studies and Money "Giacinto Auriti" and director of CENTROFONDI
Many economists say / write that the role of issuer of currency is neutral.
Just a chart to demolish their claims. Look carefully at the graph of % variation year-on-year of industrial output and money supply (M1) in America being compared:



If you notice the money supply (blue line) conditions anticipating the trend in industrial production following the increase or decrease in the money supply. In practice, the economic cycles are nothing else the dynamics induced by the opening / closing of the "tap" on money. The circle shows that industrial production is turning down after several months that the money supply decreases constantly.
Who then holds the power to issue currency determines the performance of the economy, beyond reasonable doubt, the prosecutor could say.
The other dynamic that is never considered it is the dynamics of the debt in the long run that has an exponential trend in 50/60 years and requires a system reset as a beautiful and powerful devastating war or a crisis to bring debt under normal conditions,


The exponential increase of the debt began in the late '70s to coincide with the season of the great privatizations and as this grew the economy was turned financial moving from an economy of production to that financial, because it allowed stratospheric gains obviously inversely proportional to those of the majority of the population that was being strangled by debt. Meanwhile, the debt also affects the economic growth that, to not being swept away, it needtry in vain to keep pace consuming huge quantities of natural resources.
At this point, those who say that money is a neutral element and that debt is a wealth, probably he misunderstood something although it is in good faith (which is not possible for economists).
Just as you see a single wise action on the "tap" Oxygen (M1) and the virus debt relating to the issue currency and the game of abuse are done without much effort. Do you think that with the divorce between the Treasury and the Bank of Italy in 1982 the Italian public debt went from 60% to 120% in 1992, has done that?. To think and say that the economy is a free market it is impossible if you put together the public and irrefutable data...… it is just that almost never does!

From: giacintoauriti.eu


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