Dissidentpress

September 5, 2006

When The Pound And the Nordic Kroner Shall be Abolished

Filed under: Economic History, Economics, International Economics — jensn @ 7:07 am

Currency-sovereignty and independent finance policy
The prerequisite for the ddk to be coupled to the EURO is that the Danish government lives up to the expectations of the savings and other claims from the ECB – European Central Bank. It is just cracy to go on with a national currency-independence, when the EURO has been accepted by our politicians anyway. It must mean that the finance policy and the monetary policy in Denmark is being ruled directly as some equalizing yield to the coupling. If the claims are not met – concerning the amount of money, and the interest- and finance-policy, the coupling is given up, and the ddk is then floating free. As long as there are monetary-monopolies – the national central banks have monopoly of money-issuing – there can not be another monopoly above.

Denmark’s Constitution is being abolished too via the old EU-doctrine acquis communautaire, that implies all power transfered to (the European) community is being made European law, and at the same time drawn out of the nationational sets of laws. Invented by Jean Monnet in 1950s together with the road map tactics that really conflichts with the Danish Constitution (i.e. section 56).

Jean Monnet: http://www.lilliput-information.com/mon.html

Claims of convergency – Stability
The claims of convergency gives a hint of the firmness of rules. For instance in the Maastricht-treaty, article 104C you read: ‘After a general estimation the Council… states if there is a relativily big deficit’.

This is certainly not a stringent rule about the yearly deficit on the public finances that must not be bigger than 3 p.c. of BNP in market prices. You also read in the treaty that the interpretation of these claims is a matter for the Council of Ministers. The claims are generally almost radom and mostly inconsistent to one another. For instance the claim of convergency concerning the rate of inflation. It is the weakest of the claims. You also read that a country to secure price-stability must not reach a rate of inflation of more than 1.5 p.c. more than the average of the rates in the three most price-stable countries in the monetary union. This tells nothing at all about the real rate of inflation. The debt-claims are really inconsi-stent. The amount of deficit on the public finances – taxes minus the public expenses – which must not reach more than 3 p.c. of BNP (minus the require-ments of raw materials) is surely not so important as the claims about getting the debt of the state down to 60 p.c. of BNP. The half of the countries in the Euro-zone can not fulfill that last claim without accepting crisis of instability.

Stability is really not accounted by an index of prices that means some quantitative standards are to be fulfilled, and we then say the currency in stable. Stability includes the dynamics of capital formation, securing the process of investment, economic growth and high productivity. All this cannot be reached or calculated on the basis of some static conception.

Capital flight – Social crisis – Declining of rules
Foreigners as well as domestic people, which do not trust the new money, will transfer their values to other currencies, if oil-trade is not being based on Euro. The EMU will begin with a crisis. The capital flight will throw Europe into a social crisis, because the capital flight will force ECB to raise the common interest rate. This the southern countries and Belgium, Irland and Denmark – cannot get through. When the social crises is there the temptation is big to try to manage it with public investments and with a consciously public increase the amount of money. This means deficit on the public finances, and then we are back in Keynesianism, where the responsible in a – now 60 years old – era have followed the line of least resistance to remain in office. Very soon it will prove that the taken measures against the inflation as desribed in the Maastricht treaty will not be of any help. We will then face a lasting crisis thanks to the new currency of unit. This will break the currency-union.

Inflation – Social crises
The competent individuals of the ECB will certainly not be unscrupulous inflationists to start with. Through a price-stability oriented policy they will try to make the new currency truth-worthy. But they are left with the problem that stability-oriented policy have to be strengthed cause by the capital flight – and that the policy itself must meet national resistance, which will appear because of the sharpened structural and social crises. It is not the interest rate but the expectations of profit, i.e. the wage-rate which decide the activity in Europe.

A currency reform, where you state the dates of all the changes, and where you principally keep the national currency-sovereignty for three year in a changing phase have to be made by politician without any real insight at all and by reality-entrenched technocrates or made by traitors. When the speculation quite foreseeable is one of the mighty problems at the establishment, then it is nonsense. It was not quite unforeseeable.

Eventually a stop for capital flight
Article 73F in the Maastricht treaty deals with an Europe where control with capital movement may be introduced. The investors can then no longer escape to Swiss franc, yen or dollars. As if the investors were enough scared enough. Speculators/investors keep up with this very care- fully all the time.

 

A little Monetary History to light up

 

Let’s go back and perhaps revise a little from history. It is one the reasons why we are here. How the international monetary-system before the EURO was established? But first let’s turn to the representatives of Norway at the concluding negotiations in Bretton Woods in New Hampshire, New England, U.S.A. 1944.

The old international monetary system created the foundation of and urge to the belief in internationalism or the federal integration of Europe of today. It was constructed directly for this purpose. The system collapsed in the 1960s, and it broke finaly down when The U.S. Government defaulted on its payment in on August 15, 1971.

In 1930s all the nations of Europe was totally indebted. In the 1990s all the same nations in EU are indebted like EU itself. The result in the 1940s was war. But while the war killed people and destroyed material things a new international monetary system was created and finally agreed. Denmark did not participate in the money-plan negotiations e.g. because Denmark was placed in the lowest cathegory of debitors next to Abessinia. So let us look at the reaction from Norway.

Knut Gertz Wold represented Norway, he made the work as secretary and skilled assistance for the monetary-plans made in 1940s. Gertz Wold was employee in The Department of Finance. Christian Brinch and Finance Minister Paul Hartmann of course were involved. Gertz Wold seems to have done the work.

Some of the Bretton Woods Agreement’s monetary history was witten in The Truth Is that what You Believe In (?), chapter 2: http://www.lilliput-information.com/truth/tru2.html

Like in USA there was a large divergence between the centralbank and the officers in the Department of Finance in Norway.

Knut Gertz Wold belonged to a group of younger ’social-economists’, which had been educated by professor Ragnar Frisch in the 1930s. The chief of office Erik Brofoss from the Department of Reconstruction and Transportation belonged to the same group.

It looked very different in the Management of Norway’s Bank in London (in exile). Keilhau and Raedstad had quite other backgrounds. Their points of view shortly sketched:

They stated the primary theme after what had been declared should be shortrun credits. Alone this fact did not harmonize with another fact: Norway had not had any problems with obtaining short run credits in foreign countries not since the middle of the 18th century. The problem for Norway was entirely long run credits, especially those concerning the reconstruction after the war that Norway very much would have been without.

The plans and especially the Keynes-Plan (Keynes representing U.K.) did not by any mean take into account the varying ability of the countries to bear debt, and without forcing them to devaluation or to loose the trust of the foreign creditors either, Norway’s Bank considered.

[I give you all the credit you deserve, we used to say. But find out how much]

To be credit-worthy (Norway’s Bank considered) could be expressed in this way:

“Ability of a country to bear credit was in the opinion of the bank dependent of series of qualitative factors, such as for example laws, traditions, national character, structure of businesses ans. To connect changes in the currency-rates with problems of the balances of payments was, the bank considered, not durable, and it was a pure quantitative criteria that, if it was used, would lead to just crazy conditions”.

It certainly did. Today almost all countries are indebted to the international banks.

Norway’s Bank preferred parts of the White-Plan (Weiss or White re-presenting USA), if it had to choose, most of all because it did not require devaluation, when the deficit of a country on the running balance of payment reached a certain point. Norway’s Bank would as well prefer that The Tripartite Agreement-system from 1936 had continued, because it did not interfere with the monetary policy of a country, also though the system urged weak, perhaps dissipated governments to leap over the necessary monetary political interference. It was explained in “Truth..”, this system and the foundations of stability from 1932. To the final compromise of planning Norway’s objections were repeated.

Is money the most important of all, I ask? It is at any rate more important than war, I answer! Is there things in the background of World War II that has not been thrown light on in the official version of history? Was another war carried on, a war with just other aims or perhaps the same purpose, and were there some actors in the principal parts, actors just formally placed a little lower on the cast and perhaps behind or above the scene?

As mentioned earlier, at first in Keynes’ carrier ‘behind the scene’, later on after he has written ‘The Economic Consequences of The Peace’, and having received the Nobel Prize in the leading role ‘on the scene’.

In ‘The Worlds Crisis And Denmark’ Professor in Economics and member of the Danish Parliament L. V. Birck wrote in 1922:

“We live in a world, where ‘the state-machine’ we in reality should lean against is weakened in its foundation. It is hated by the riches, and just accepted by the poor. In Germany and Austria the owners of the economic society-power are the organized capital, which is preparing to destroy the parliamentary so-called democratic, and of the will of the people influenced state to take the power itself. In United States the conflict between political and economic temporary has been postponed by the fact that the political power at the latest selection of the president has got into the hands of the political oligarchy (mine: C.F.R. and Federal Reserve System). Everywhere we find the signs of the powerlessness of the state, and the possibilities to establish the power outside the state without oligarchy seem very distant for the moment)”. (unquote).

Now you have the possibility do compare with 1999- 2006!

In 1972 when Denmark joined the EEC we could not live secure without this membership, the politicians told us. Today they tell us that the NO-voters will prevent the East-European countries from EU-membership. When they very seldom talk about the EURO, they talk about the colour of the notes or they give us a vivid description of advantages, time and cost savings (in a monopoly- oligopoly price-setting bank-sector), the advantages to the speculators, to the producing businesses, and to on holyday going travellers, when they use the same currency.

‘When 11-15, perhaps more super-indebted deficit-countries write it on a new piece of paper instead of the old dirty papers, EURO most be strong’. The same rate of interest in Sicily and in Baden Würtenberg (where the district of Ruhr is situated) is not very easy to understand. It began instantly when the Euro was introduced:The deficit on the balance of household or deficit of the public finances in the region Sicily (amounted to 1 billion US$) can not be finances in January 1999. If the rules made for the European Central Bank in Frankfurt have to count, the collaps or political instability will be the result. In order to keep the capital – not necessarily domestic capital – in Europe the central bank will have to rise the interest rate. This results in more unemployment, and the ‘responsible’ national politicians will then have to bring their nations in focuse again. If the rules of the central bank do not count, the subsidy-economy, as we have seen it and felt it fin the 1990s in Denmark, will have to continue, and the lies must continue further more in EURO- STATE. Jacques Delors the former President of the European Commission – now a Bilderberger – proposed this Danish model in EUROPE No. 9. 1996 from EU Commission. This result is then a more and centralizied dictator-ship.

You cannot separate nation, central bank and welfare, and if you integrate them in a cyberstate, where the differences are very large, you have to choose between economic or political stability. You cannot have both.

I have even 10-12 seriously scientific objections more.

The EURO is a “junk-currency” even if its floating in oil, and that means: The EURO will fail, if Europe does not get much richer suddenly to secure its new artificial currency – the oil perhaps! How this should happen is not easy to foresee. Just wait a few years. Nobody has not – till now – been apple to remove the law of gravity either.

The debt of the states will be removed, when all fortunes accounted in EURO fall. Nearly everything has been tried before. Perhaps this was the purpose and the real meaning of the European Union.

A new International Monetary System is what is needed:

http://danmark.wordpress.com/2006/05/19/new-monetary-system/

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