October 30, 2006

Nothing has been officially corrected for 15 years

Filed under: Research, Statistics — jensn @ 12:05 am

Danish Professor on Demografics Hans Oluf Hans Copenhagen University maintains that the present account of population with the concepts of immigrants and decendants cannot be used to describe the relation of neither the present nor the future population in Denmark, compare Berlingske Tidende 20 August 2005. 

Read more: https://dissidentpress.wordpress.com/2006/10/29/statistics-of-immigrants-a-farce/

For internal/uofficial use the Ministry of Integration and the Thinktank Rockwool Foundation have got another account different from the official one. It is tragi-comic. 

29 October 2006 

J. E. Vig

October 29, 2006

Statistics of Immigrants a Farce

Filed under: crimes, Demographics, migration, Research, Statistics, Welfare — jensn @ 10:40 pm

The statistical account of immigrants a Farce in Denmark

“The statistics are useless. It certainly does not incount the number of a lot of decendants. Some immigrants of second generation leave the statistics, because their parents get the Danish citizenship. Other are not even registered, and the entire third generation of immigrants is not included in the official account.”

Member of the Danish Parliament Eyvind Vesselbo reports this – unfortunately 15 years too late – about the problems with the Danish accounts of population including the individuals of foreign background in five articles October 2nd 2006, three articles in Berlingske Tidende, one i Aarhus Stiftstidende, and one in Randers Amtsavis.

Thinktank member Erik Bonnerup and Eva Hofman-Bang, director of the School of Commerce in Ishoj and Taastrup agree with Vesselbo. Both of them underline however that they just focuse on the problem with the accounts related to the so-called integration and the problems in this connection.  

Minister of Integration Rikke Hvilshoj who followed Bertel Haarder on the post refuses that the official statistics are problematic. 

One of the articles in Berlingske Tidende October 2nd 2006 was actually aninterview of confirmation with E. Vesselbo by jte(?). In this way the newspaper secures that Vesselbo does not go off the rails. His answer to one of the five sharp one about the political motives behind his critic: “ Yes, if you say that is just the second generation of immigrants that has problem in the schools, you are wrong. And this has to be handled with. When you have an account, you could as well get the right one”, Vesselbo answers.   

These five article on the foreigners’ statistical account were incidentitally the only ones on the subject in Danish newspapers for the last two years. Even not in February 2006 when a corrected account for the last 26 years of citizenships by naturalization and births was presented we were meant to hear or read anything at all on this subject. Both innovations went in due form to the whole Danish Press.  

It was of no interest.   

Why? :  

  • The question of the real number of foreign immigrants and their decendants January the 1st 2006 is not a subject that the Danes have know anything realistic about.
    • How the number of foreigners will increase for the next 40-50 years is not a subject to be concerning the Danes.
    • When the Danes do not know some realistic facts they are not able to correspond verbally to what they are told.
    • Call it a Democracy?

    That the consequences of the continuing intake that even increased last year is becoming a catastrophe within a very short range of years, has to held secret.Yes, even if the immigration was stoped right now, the catastrophe would just be postponed 10-12 years.  

    Six Good Reasons: http://www.lilliput-information.com/six.html orhttp://lilliput-information.blogspot.com/2006/03/six-good-reasons.html orhttps://dissidentpress.wordpress.com/2006/10/23/22/  

    Correction of 26 years’ defects: http://www.lilliput-information.com/uscan.html 

    Especially the number of Turks and Pakistanis: http://www.lilliput-information.com/engtyda.html   

    Our Future – Interested? : http://lilliput-information.blogspot.com/2005/10/our-future-demografically.html  

    Will Europe be darkened: http://www.lilliput-information.com/engeudark.html  

    Europe does not need immigrants: https://dissidentpress.wordpress.com/2006/10/23/europe-does-not-need-immigrants/  

    Welfare a practically Study: http://lilliput-information.blogspot.com/2005/11/welfare-practical-study.html  

    The Swedes a minority year 2050, say at Swedish official researcher:http://danmark.wordpress.com/2006/06/20/svensk-forskerne-svenskerne-i-mindretal/ (in Danish) 

    Danish University Professor cannot use the official statistic of population: http://www.lilliput-information.com/forehel.html (in Danish)     

    29 October 2006

    J. E. Vig, M. Sc. (Economics)

  • October 28, 2006

    Top and Bottom


    Will the welfare be rearranged?

    In all the Western welfare-democracies the debate is going on in these years: Is it possible to rearrange the welfare, and if it is possible, is it necessary then to make substantial changes or just larger or smaller adjustments? In all the countries the welfare is financed partly by the insurance principle partly tax-financed. The taxes are mainly income tax and value added taxation. In Norway 1.3 mio. live on public transfers (2005), of which 625,000 are pensioners of age (Norway’s population 4.4 mio.), in Germany the official unemployment (2005) on about 10 p.c. has to be doubled in reality, when the expelled ones without any connection to the insurance arrangement on the German labour market are counted in.

    The international competition that has to be called globalization these years pushes the development further. The developing countries, the Eastern countries and the Far East begin to supply products and labour to much lower prices respectively much lower wages compared with those of the old welfare-democracies.

    The official accounted Danish working force that should include the number who supplies their working force on the labour market has to be corrected, because expelled ones – over the years a very varying but always increasing group – from the group of receivers of unemployment funds, and then transferred to social security or early retirement pension without having any other handicaps than those of the community have to be counted in in working force as unemployed:

    Table 1 cannot be shown here. Look at it in: http://www.lilliput-information.com/engomlag.html

    423,858 receivers of sickness and childbirth benefits can not be distributed between public and saleable emplyees and are not included in table 1 under the last mentioned link.
    The official number in the working force has been reduced by more than 30,000 in period 2001-2005. The official number outside the working force in the working ages 15-66 years old has increased by more than 50,000 in the same period. The Danish Welfare Commission maintains that there still are 200,000 more in the working force than outside the working force. Here we have to remember that about 1 mio are 18 years old or younger. Only a part of those are included in the figure 1,1000,000 in table 1. Close on 40 p.c. or 440,000 of the 1,1000,000 on public transfers in table 1 are immigrants, descendants of immigrants, naturalized or descendants of naturalized (se below).

    To this must be added the question of ageing that has resulted in a skew age distribution with an increasing part of elderly. This contributes further to the support-problem. The Danish model of welfare has ostensible been constructed to equalize the payments between yielder and receiver on lifetime-basic. This will not be possible in future with a continuous smaller working force and a continuously increased number outside the working force in the working ages. It is even further impossible to finance the existing arrangement, when the development of the population continues with:

    • A distribution of ages changing to a relatively larger number pensioners of age
    • Unsuited immigrants for the labour market

    The immigrants receive 40 p. c. of social security, the former Minister Social Security maintained. May 1st 2005 Aarhus Municipality (the second largest city of Denmark), according to www.filtrat.dk : ’58 p. c. of the immigrants on social security etc. are unsuited for work – the politicians shocked’.

    Even though the question of ageing among Danish in a distinct minor scale is corresponded by a relatively very large part of children and young-ones among the immigrants (35 p. c. are 25 years old or younger) the central issue in a manageable future will be to finance the consumption of the 1,822,000 receivers of public transfers plus the 850,000 public employed. For now there are a small million who provides and sells the saleable production in Denmark.

    In ’Yearbook about immigrants in Denmark 2001 – Balance sheet and development’, Ministry of Interior, 2001, you read officially that 53 p. c. of the male immigrants from non-Western countries are unemployed or outside the working force, for females it is 72 p. c. As the part of pensioners by age among the immigrants still is very small, the mentioned percent-figures will be found again as an absolute number in the figure 1,100,000 in table 1.

    If the immigration could be corrected the ageing problem in the Danish community, where the welfare is built on equalization in life-income is making the system tremendous vulnerable, then the time factor would have caught up with the restoration, and it must be concluded that the immigration actually has increased the problem of finances substantially.

    Economist, chairman of a think tank and lecturer Hans Kornoe Rasmussen has at several occasions like the EU-Commissioner Vladimir Spidla proposed a many times over increase in the immigration into EU and with it to Denmark. The Danish Welfare Commission asks, ‘Can increased immigration solve the support-problem’? Thereafter the commission supposes for the sake of argument that you could imagine 30,000 extra immigrants from more developed countries every year form now and for ever (a lot more if they bring their families too) added to the present 10,000 a year from developing countries, and that those would work and pay taxes here, then the hypothetical problem of finances would have been solved for the Welfare Commission.

    The Danish State-debt has almost been multiplied by 10 (accounted in constant price level) in the period 1960-2001. If the technical development – in spite of the expulsion from labour market – had succeeded to secure enough saleable production to finance a more than doubled public sector inclusive the transfers of the expelled ones in the period 1960-2001 while the ageing of population developed quickly as foreseen from the beginning of the 1970s, and in addition a huge import of immigrants, of which more than the half just contribute to the opposite of the solutions of the problems, in spite of a small share of elderly people among the immigrants, then the international competition still remains. I have to say, this project does not build on any positive knowledge in so far the agenda was as presented to the public.

    Differences of structure and competition will been equalized by the market without any state latitude. The main battlefield is the labour market, the social and ecologic systems. The labour market suffers under the wage and social-cost-competition from the employees in the pure zones anywhere, and the ruling national agreements of wage rates and the least-standards of social levels will inevitably be liquidated. The market brushes them aside, the employers use their potentials of threat more and more: they have the possibility to outsource the productions to favourable wage, social, tax and ecology-cheap areas in Europe and outside Europe. About 10,000 jobs in Denmark were outsourced in 2005.

    The enterprises invest if their marginal profit determine the production or determines an altered/adjusted production. The difference between the costs and expected revenue (sold quantity multiplied by the price) that these costs demands for unit by unit, is too small to employ 700,000-800,000 unemployed of about 2.9 mio. in the official Danish working force, or 3.3-3.5 mio. of the real fitted for production. If sufficient difference can be realized at lower level of production, the production is realized at that lower level including a lower level of employment, if the best alternative is even worse. It is not when you compare with Danish relations. Passive earnings outside the production or production abroad is preferred. Therefore the purchasing power is transferred to private capital outside the production or invested abroad: Capitalization:


    Enterprises do not use price margins to invest, but they use profit-yielding price/cost- margins. The problem is not one dimensional, but at least two or more even multidimensional.

    The economic reality is that the producers drive the economy forward, the savings are looked at as the fuel for this process. The private and the public consumption are nothing but maintenance and rubbish.

    What the consumers spend does not get the economy going, but it just maintains the apparatus, eventually put it on the back burner. The other thing has never, and will never happen. Sometimes you hear the commentators report that the expenditures spend on private consumption makes up to this or that, and it amounts to a certain percent of the entire demand. We also hear a lot of nonsense concerning the expectations of the consumers – that indicates more about their choise of TV-consumption. To give the reader the impression that the opposite actually is deciding: In 1920s the American private consumption was accounted to about 8.5 p. c. of the producers’ expenditures on factors and producer goods. This means that the total consumption on capital goods to provide, distribute and deliver goods was 12 times larger than all private consumption. Today this relation-ship has turned even more skew.

    The problem can certainly not be illustrated just from above and downwards, if by any chance of solution has to be found in the near future. The saleable production has to be increased substantially, or the welfare system has to be canceled. A process that promotes the production is not started by presenting the working force for the businesses. The possibility is to make the productions in this country more competitive. The key to this is a substantial wage and tax-adjustment. The latest four years the problems have just grown bigger, a reduced working force and more to provide for in the working ages (as mentioned above). The problem has just become even more difficult to solve for the last four years. Nevertheless, The Danish Welfare Commission: ‘ it is ambitious to increase the rate employment substantially more than today. The employment is already quite high in Denmark compared with other countries.’

    It has to be underlined that some adjustment of the job release scheme concerning the payments or the time or age-limits, eventually its abolition, or an adjustment the age of pension or in the social transfer payments do not solve any problem.

    The problem is simply that the cost of the entire tax-financed welfare system are put in taxes and thereby into the monopolized claims of wages. The leads automatically to profitable productions, the earnings of which are the conditions for the welfare system, are made unprofitable.

    USA exploited the advantages of the globalisation already in the beginning of the 1980s with outsourcing of quite a few wage-heavy productions. At the same time the Chinese was let to invest in American government bonds for the money they could not real-invest immediately. In this way a part of a safety net was constructed for US-dollar at the same time. EU has broad itself into a defensive position, and chooses protecting duty on varying types of products from low-wage-areas among other China, as the threats against the retained productions appear.

    If we shall see the welfare system gradually break down caused by lacking finances, eventually with a last grasp for inflation outside the Euro-zone, and as long as EU has not stopped it, the near future will bring more and more cheap import products to our country, perhaps second-rate goods with prices better matching the social-rates of more and more who will be allocated to social-welfare-transfers to live on, while we look at a partly derailed sector of education and research, where 2 out 3 educated continuing turn their eyes toward jobs in the public sector. Exchange of goods and factors of production included knowledge with the wage-light areas will be topical for some years to come.

    The experiment to attract well-qualified workers for example to the IT-line in Denmark does not seem to succeed, most because of the personal income-tax, investigations unveil. This should be proof enough, but in addition there are several more burdens on the businesses and on the every hiring.

    We have to conclude, as our own educated people emigrates or turn their eyes toward jobs in the public sector, immigrants for the late 30 years have definitely turned to the knowledge-light lines, if not towards the public transfers, and our unemployed and expelled in the working ages together with about 7,000 Baltics and Poles (in 2005) cannot fit the everlasting ideology-experiment – the Danish Utopia – that reality soon shall stop the projects that certainly was not introduced caused by any popular claims what so ever, but (also) to serve to the ideological leaders themselves from the beginning.

    M. Sc. (Economics) Joern E. Vig, Denmark

    October 27, 2006

    Economics of Tide

    Filed under: Economic History, Economics, International Economics, perspectives — jensn @ 8:25 pm

       Economics of Tide

         Part 1


    Not much has altered in the mind of the human being  since Plato wrote his cave parable 2350 years ago.

     Most honest individuals prefer reality, theories on the other hand are base on a sum of simple/reality-fitting/often cunning selected assumptions from which you deduce often blind logical ending up with still a thought reality. That is the reason why theories always match the whole setup, but never match reality. A figment of imagination can serve as a tool for capture and for fail. To understand a chart is one thing, to capsize a ship …and survive another.   http://www.lilliput-information.com/engiodd/index.html

    The economic science could very early have been approximated much more to natural science thanks to Friedrich von Hayek, Milton Friedman, Ludwig von Mises and Laurids V. Birck among other who have collected and created knowledge on economics. It suites so well that most economic actions, states and results described in economics have both a real economic and a financial side, and at the same time money, finances and banking are not just theoretical and intangible concepts. Nevertheless those were the first that were used to form that cyberspace-reality that has developed to such an extent that it is literaly impossible to describe. Reality suites payments, credit balances, interest, debt, capital very well. When it comes to monetary subjects, amount of money, and interest rate is included here reality obvious does not fit the voluminous thoughts and models containing even the smallest throught detail in mathematical analytical expressions. By adding a monetary, financial and capital interpretation we are at best able to understand, and then perhaps forecast measures of balance and of period using numbers and amounts describing the consequences of the economic actions. My ambition limits to this.  [Just the first few sections are dominated by numbers and amounts]


    January the 11th 2002 Allan Greenspan told us from San Francisco thatSeptember 11th 2001 is the date of which everything is turning. He talked about an unstabled stock market, the failing increase of demand that prevents the growth of the economy worldwide. December 12th the Federal Reserve lowered the interest rate with 0.25% to 1.75%. That was the 11th lowering of the interest rate in 2001 and the lowestin 40 years. The Danish TV : “Even though the employment has not reacted the housing market and the car sales are effected.” [Our spontaneous reaction: employment effected by investments does cer-tainly not react like your-jack-in-a-box at home, little girl. It even does not re-act as we shall see below]   

    “Important quotations to the public”:

    ”Deflation: Lasting general fall in prices. Deflation makes wages, prices, inco-mes, production and employment fall more and more…the power of the de-flation in the world is stronger right now that anything else we have seen since the Great Depression”, Grek Jensen, Bidgewater Associtates; Barrons, announced 09/04/98.  “…somewhere the psycology turns to the ruling of  “do not buy now”, because it will be more unexpensive later on”, Barton Biggs, Strategist, Morgan Stanley, Barrons 06/29/98. “Everytime the comsumption decreases, the revenue cannot cover the pay-ments on debt. Therefore the burden of debt gets worser and worser”, John Rocca, Land of the Rising Sun, February 1999.


    ……Since second quarter of 1998 we have been listening to the harangues of the the world’s dominating, but practical expressed ignorant commentators of the media: ”Collapse, Deflation”, like an unevitable fate we have to live through. First Asia (Japan: ”Kakadu hakai”), then USA and Europe. A few among the the so-called enlightened individuals among the common people have per-haps, if not before, then made it to a question of belief now, a little in the line of the Ten Commandments, if the questions are asked at all.  

    “This problem obvious remains a question of priority higher in the decision-hierarchy”.

     The explanation is clear as the daySince midd 1980s questions on economic policy have been removed from the Danish TV. Things are not in such a bad way anywhere else in the civilized world. In addition we have not been allowed to learn on the subjects. If we have tried we were indoctrinationated with John Maynard Keynes’ odd considerations right from the youth. These considerations or his context a-mong other things have lead us to where we are, first of all the Keynesianwas lead to work for his masters.

    John Maynard Keynes          

    Historical accuracy by the way 

    Let me remove every doubt at once and straightforward: Deflation must be created in the world of today. The responsibles know more or less how to prevent it. It is not an inevitable fate. I shall not reject that there might be interests concerning creation of stagflation, stagnation, deflation, perhaps war, and then more centralization of power as the final result. A centralization or integration of the decisions as those concerning a com-mon European currency Euro leads to further centralization of the visible power. 

     EURO          EURO2 

    Why develop some economic declines further? Simply because what hasbeen done officially to turn the tide is fundamental wrong. If the objectives are the declared ones. So simple is this. Take the American economy, the decline is being deepened all the time. At the end of October you could read from the official accounts that the indu-strial production decreased with 5.8% in September after a decrease of 4.6% in the month before. The yearly rate of growth in retail sales decreased to 0.2% in September from 3.7% in August. The rate of GDP-growth decreased to 0.3% yearly in Q2 from 1.3% in the quarter before. In addition the employ-ment outside the agriculture was reduced by 200,000 in September 2001.   

    The economy-commentators are not sure now if that point to a further weakening in the coming month (they surely listened to Allan GreenspanJanuary the 11th 2002). You should not be surprised. Did the commentators catch some random numbers and amounts from some random months or did they concentrate on collecting the relevant information? Does the numbers and amounts tell anything important, it must be clear to anybody that Allan Greenspan’s easy-money-policy or discount-monetary-policy has gone totally wrong, if we maintain the expressed/expected objec-tive. 11 times he has lowered the rate of interest in a year. And it did not work? Perhaps it turns out to have worsen things.  

    NAPM’s (National Association of Purchasing Mannagement) latest report(11/26/01) shows that the economic activity in the production sector decrea-sed (in index) from 50.3% to 40.9% in October, and a decrease for the last 15 consecutive month. That is presented with a yearly GDP still increasing, and NAPM-sales-index falling from 47% in September to 39.8% in October. The index of employment of the NAPM-organization fell 6.1 points to 35.1 in the same period. Not one of the 20 industries in the manufacturing sector reported growth in October. Mr. Ore, the NAPM-organization (and latest mr. Greenspan 01/11/02) reported that September 11th was to blame for this.      

    “Perhaps they will be talking about the new bachward-bending-effect later on.”  My proposal: ”Falling stars in August 2002 in Denmark” 

    One thing is worrying me: In October we find retailsales increasing 7.1% and at the same time employment and industrial production went down. A few maintained that it was caused by reduction of stocks. It is certainly true, buton the other hand cars and expensive luxurious products must be paid.     If you return to page1 of this article now, you will not doubt for a second that it was here Greenspan entered the stage. He has for the 11th  time overswim-med the market with discount-credits, and that is the reason why the stocks are being emptied.  

    But what should play a part is not the fact that stocks are being emptied or the comsumption is increasing further.

    As things look like investment in production and production aught to have first priority for a responsible President of Federal Reserve Board.  The index of consumer-prices rose 0.3% in October 2001 while the index of producer-prices droped about 1.6%.Deflation, was shouted in chorus. The mistake sticks out a mile.  

    General falls in prices are not deflation, and general prices-falls in one month or two or a quarter perhaps two certainly are not deflation. The rulers possibly work for deflation, but the conclusion is pure false, and the indicators here are not those of deflation.   When I add that the amount of money has been increased with $800 billionsfor the last 12 months in advance, and the amount was increased by $240billions entirely in October and November, every talk of deflation for the time is nonsence. *)  Deflation is simply caused by a reduced amount of money, and not by anything else. Here it is the oposite. Because two phenomenons or states appear at the same time there do not appear to be a coherence between them just for this reason, but to some people the coherences lights from everything happening or not happening at the same time. Essential things and more vital coherences often appears the final result several months later. 

    Few hundred years ago people of my country maintained that the swallows lived under water in lakes during the winter. Every year they had seen them for the last time in the late summer flying close to the surfaces of lakes catching insects. And suddenly one morning they were gone.  

    Now you could ask why the low-rate of interest offered by Fedral Reserve does not work or why it work in the wrong way. The commentators of the day will simply report about consumer-confidenceand the comsumption. It means nothing. If the consumers use more money, the commentators will report that this a sign of the increasing employment and surely a sign of growth. It is not. If the consumption declines, the public shall know how this has negative effects on the employment and on growth.  Nonsense. “The viewer is right, tell him this, and he will choose your channel to look at your spots and buy your products”.  It means nothing that economists 180 years ago stamped out the rumour,in the 1930s John Maynard Keynes rediscovered the beast with a special potent brew very good inoculated with such a mutual inconsistent bogus couched that it appeared as an orginal profound thinking.  It was nothing. His mistakes among other much more serious things have brought us into this ridiculous situation with growth and savings dealt with like the hen-egg-question. Some people still maintain, and try to argue that saving is dange-rous for the economy.   Let us state clearly that consumption does not make growth begin. Absolutely not, in spite fact that something might have been filtered from the universities, and perhaps has partly been taken in by the daily indoctrinators of the time, or other shallow good people. Consumption and confidence of the consumer has never been a problem, but production, employment and debt are problems. Even this was alreadyrealized by the classical economists. I have to mention that every important relation especially on value, prices and costs were not clarified by the classi-cal economists. The so-called prosperities, booms or recoveries also origine from one of the Keynesian myths saying that “the total aggregated demand has to be pumped, in the typical cases by extending the monetary amount”. Unfortunately the expansion of the amount of money reduces employmentby reducing the wagecosts relatively more than the value of the result of production (inflation). What happens is: if the price on the work is 110 and the value of the corresponding result of production is just 100, production are not profitable, and therefore unemployment has to rise. Then you can remove the too high price on work by increasing the amount of money and then (reason) let the price of product be 110 or more.    Factory production has been falling (11/01/2001) for the last 12 months.Nevertheless the commentators insist that concentrating on demand of the consumers is decisive. Not even the classical economists even if we (false) include Karl Marx, were so bad enlightened. In 1930s a lot of these did argue that expenses of the consumers had to be increased to recover the econo-my.  A few others as for an example Stagg Lawrence underlined that the  consumption would be maintained, even though the producing industrieshad the recession. This is exactly what has happened the last year. If this ”school of consumption” – of which we could call Allan Greenspan some kind of a senior teacher – was right, the contrary would have happenedto the economic recession. To encourage the consumption by low-rate-loans directs the resources away from investment, and to activities of consumption. In this way the savings are being spent on consumption.The jungle of public subsidies meaning  taxation-financed subsidies or transfers to productions that would not succed with low or no margens of profit, has the same effect in the end. Resources are transfered away from the natural order: Productions that would have been profitable without the competitive public or fund-financed subsidy to other productions are removed in favour of those productions that would not make a positive result without the subsidy. Every dollar that is directed towards consumption is a dollar lesser to spend on production in the future.Every malinvestment that are being done in deficit-businesses as a bad result of subsidies granted by the government or artificial low-rate-of- interest-suppliers have to be removed again, before recovery is possible. Without removing these delusions the artificial economic life of dead investments will prevent other profitable investments from creation.  

    The essence or the perspective is centralism and slavery.

    Nothing new under the sun

    Two days before Christmas 1913 Congress with Woodrow Wilson as the American President passed the Federal Reserve Act that privatized the money issuing in USA. The first act of these private individuals outside the circle of legaly elected were to reduce the claim of reserve in the banks. Later on the claim of reserve was reduced even further so USA could go unfinanced into WW1 – people do not want to finance a war they don’t want. Easy-money-credit-creation of first degree :When an individual deposit $100, and the claim of the reserve decided normally by government is 10%, the bank will keep $10 but lend out $90. Perhaps those $90 end up in another bank. Now the same happens, $9 kept in reserve, but $81 are lended out again a.s.o. The final result is that a deposite of $100 may lead to a credit of $990.After WW1 inflation was started with 40% more credit [or about $4 billions in the beginning of the 1920s]. This meant “A new epoch”, “a new era”, they declared, like today. People thought the party never ended.  The bank supplied more credit than the businesses were able to invest, so the banks was requested to lend out to the devastated Europe too. Until then it had been nearly impossible to get dollars for the Europeans caused by the fact that dollars had to be exchanged for exported European product. But the import-tariffs of USA strongly prevented this exchange.  We will go further into this, when we come to Europe below.  Back to “the new era” in real terms of the 1920s: Investment in the capital structure of about 6.4% a year got manufactory productivity per worker increase with 43%. The prices remained rather stable, and more stable than today. About 1929 USA actually produced as many cars as in 1953, the sales of electrical products were tripled, sales of radios rised tremendously from $10.7 millions in 1920 to more than $411 millions in 1929. An extended boom of building made it possible for millions of Americans to move into their first house. Those that understood the background of an economic boom and saved, lost their savings. That the period was marked by quickly growing consumption was not discussed.       While we are waiting for another crash on: http://www.lilliput-information.com/truth/app3.html  Like in the 1890s there was a drawback to this story of succes however. In spite of the increase in productivity a lot of workers found it difficult keepthe purchasing power of their income received by wages. There was a begin-ning accession of women to the workingforce that further supported this fact. Even though the 1920s are looked upon as the greatest boom-period in US-history, we have to say that the period 1896-1903 clearly overtook it, in any case what concerns physical production, but certainly not concerning financial stupidities. The accounts show that nearly the half of the increase in productivity in the 1920s refers to the period 1921-1923. Apart from the agriculture the averagereal-wage increased 6% from 1921 to 1929. To secure the price-stability the consumption was destorted like now, and unbalance in production was crea-ted. The quick increase in productivity should have resulted in moderateprice-falls. But the Federal Reserve allowed a massive expansion of creditby choosing an artificial low rate of interest (like now).  The amount of money-notes and coins was considerable stable, $3.68b in 1920 and $3.64b in 1929, but credit increased from $45.3b in June 1921 to $73b in Juli 1929, an increase of 61%.  Speculation in everything to capitalize and consume the future potential profit and other purchaging power from everything, from stock marked shares to land. But at the end of 1928 inflation stopped. Federal Reserve changed from buying government bonds to supply them instead. That meant the amount of money was reduced considerably and quickly. At this time 63% of all govern-ment bonds in the deposite of Federal Reserve were sold, and the economy still seemed perfectly going. The explanation is that the banks still had the resposibility to rediscount or sell their loans to Federal Reserve. The total amount of money (notes, coins and short credit) was $73b at the end of 1928 and $73.26b at the end of June 1929.  Late in August 1929 Federal Reserve increased the rate of rediscount from 5 to 6%. Because money always follow the highest rate of return, a stream of gold from England began to enter USA – here we have to remember that the gold still bore the basic value. That meant share prices on the stock market increased further on a totally false basic.  At this time J. M. Keynes himself intended to speculate in that market. He did so even though he was adviced not to do it. His answer was: ”…there will be no collapse in our lifetime” nearly like one of his countrymen expressed quite another but still related perspective 9 years later: Richard Chamberlain: “Peace in our time” having been going around in Berlin and Munich by night searching for Adolf Hitler (who he really still admired) to get his signiture on a piece of paper – after the closing of the Munich Aggreement 1938.  September 23th 1929 England increased the rate of interest by 62%. Within 48 hours Austia, Denmark, Norway, Ireland and Sweeden did the same caused by their debt. Now the gold floated back as quickly as it got to USA. The artificial high share prices had to go down now, and the banks had to recall the many loans to shareprice-speculators in millions. There remained just one way to pay back the loans, by selling the shares. Then the prices fell further, which resulted in more recalls of loan a.s.o.    Where the Federal Reserve should have limit the credits, it increased them, and where the amount of money were pretty stable it should have increased instead, now the first false disposition had been made.         

    To make it crystal clear: Price fall that originate from increase of productivity – not from money-amount-expansion  – is a benefit to everybody. It is simply the result of increasing investment, often in new technic that can reduce the variable cost per unit drastic and thereby increase the margens that exactly  make the profit in mass production. To try to stabilize the purchasingpower in monetary units, blocks this process because it limits the rise in real income.The credit-expansion was perhaps more or less an ignorance-price-stabiliza-tion-experiment, you could maintain. It was the prices on the market of shares that tripled in 7 years that broad the depression, but the actual cause was still another, as explained. At last you could buy shares on the stock market via a hire-purchase system. Nobody would listen to the warnings, not even the English economist J.  M. Keynes.  It is basicly the same that happens today, when you exclude the more stable level of prices then, and the gold in the 1920s. Price-falls are certainly not the problem. Look at England in the 1800s. Here you actually find falling prices in the whole period 1817-1896. The reason was simply the productivity that increased quicker than the amount of money – and it has nothing to do with goldcoin or the later goldstandard as basics. Industrialism was going quitewell, very well. The price on gold rose measured in units of products. That stimulated the search for gold further. Such a developement lead automaticallyto rising real incomes (nominal incomes corrected for pricechanges). Larger  profit-margens were created, larger than could be eaten by the amount of money.   The easy-credits created the so-called boom in the 1920s.A more restrictive montary-policy would have prevented the Big Crash that happened via the shares-prices on stock market. The easy-credits seduce the investors to believe that a larger propensity to save has made more resources avaible for investment. Now (2002) the press on the prices are beginning to be shown, and profits fall. It is the question if the central bank (FRB) will put the brakes on. Perhaps, but it is precisely the opposite what is needed then, when it has happended (like in 1929 the wrong was done more of less expected). Another sign is the speculation in share-price earnings that are beginningto go in and finance uneconomical unions of corporations. The same happened in 1899, 1902, 1924 and in 1929. The Dane, professor Laurids V. Birck called this practice the paper mill.    Until WW1 the policy of the goverments in Great Britain and in USA until 1920 was to let depressions exhaust themselves. The readjustment-periodwhere unsound investments in the total capital apparatus had to be liquidated in order to make the sound economy go again.  

    Danish experience with financing of war, state-debt, and one the way to

    bankruptcy To illustrate the amounts of the1910s and the1920s – in 1900 dkr100 mill.circulated in Denmark. In 1914 the circulation was dkr 140 mill. In 1919 it amounted to dkr 430 mill. So the government let money printed to get through WW1 as convinient as possible (in the starting point just like FDR in USA). The Danish Treasury misused that type of debt Professor Laurids V. Birck maintained.      

    Later on we shall see state-debt totally loose its meaning, when we get to J. M. Keynes and the Dane Joergen Pedersen from the midd 1930s. 

    The advances in the central bank were paid in cash but exchanged with instruments of debt. In the war the states of Europe drawed in this way on the banks. Totally absurd in France and Midd Europe, but even in England these “advances, way, and means” reached about Pd strl ½ billion in 1919. When the government or the central bank print money and/or let the credit expand in a quicker speed than the growth of real production, it will end in disaster. The prices then rises, Milton Friedman proved. He was very much in line of L. V. Birck as we shall see below. Too much money corresponds to a rise in prices. The money are then lesser worth accounted in units of products what really is demanded.   When WW1 created a lack of products caused by the difficulties in foreign trade in the war, it seemed totally wrong to print money to finance the war.What was bad enough turned even worser. WW1 was driven by counter-feiting turned inside out in a caricature with mad dimension of state-debt.In the European-American economics the state-debt rose from dkr.150 billions to 1 trillion in 1918, to 1½ trillion in 1919 and to 2 trillions a little later.State-debt and losses that got too astronomical to count in some states is not included in this account made by Birck.  Has this been tried before? The War of (In-)dependence and the Civil War were financed in the same way. The Thirty Year-War or Emperior’s War and the Napoleonic Wars the same.It is not easy to get people to pay for a war they don’t want. The worst what could happen is that the government could fall. 

    Denmark near bankruptcy (like now)

    The most peculiar rule of finance by Edvard Brandes can be divided into three period: 1) The first two years of the war with Dr. Brandes’ sinister policy of borrowing (dollars – see above) 2) the last three years of war, and 3) the phasing out years 1919-1923, the two last years under a so-called good market and trade conditions, but with a fatal financial result.

    Denmark at the edge of bankruptcy in 1923. 

    The debt increased 50% in the period 1919-1922, and it rose 100% the next year 1922-1923. To judge Dr. Brandes’ rule of finance of which the impacts reached from 1914-1921, we have to look at his deficit on the actual public finances in the 7 years – 237 mill. (notice quite other units cause by the problem that this article actually is dealing with) – money that he aught to have collected by taxation already in the first three years of war when the amount of money was not reduce respectively in any other way – actually he did the contrary.    This critic that can be directed against finance-policy in and immediately after the war is mostly of an economic kind. He contracted debt when the ability of taxpayers to pay was “fairly good”, and he chose to pay back when the ability was distinctly weak. Those loans were not supplied as government bonds even though it was the only logic thing to do, when especially this period shows money was easy. The dollar-loan had very pleasant conditions, I have to add.   And as we have seen (above) the American banks just wanted to get rid of the mountains of dollars. The end of the Danish financial history of the first half of the 1920s follows in the section on capital and capital-process below, because the subject perfectly illustrates what happened, and happends again in 1990s in Denmark, and will continue in EU henceforward, if you listen to the visible rulers.Danish financial Scandales a lifetime ago: http://www.lilliput-information.com/truth/app3.html   

    We have several from the present an the newer history too, but they all look almost the same with a few variations, including the newest in USA.  Monetary means are primery notes, coins and credits (especially smart cards). Money on the other hand is the right to buy that is corresponding a yield to equalize. That is the reason why it is easy to deprave the means andthereby the money and the right. The international high finance’s words after WW1: “The national currencyas close as possible to par (the price on gold counted in the currency) and state-debt unchanged as much as possible, certainly not instalment once and for all, but a slow amortization born by the ordinary taxes. You willgradually change the empty space of the state-debt to real capital.” They actually knew then that real capital was the problem.    

    The businesses do not invest if their expected margens of profit do not match the condition to produce the production or produce a changed production. The difference between the costs and the expected revenue (sold amount multi-plied with the price), as these costs demand produced unit by unit, is too small. If enough difference or margen still can be made at a lower level of production perhaps the production is realized at this lower level, with the lower employment, if the best/most profitable alternative is lower/humbler.    Businesses do not invest caused by some price margens, but caused byenough profit-giving price/cost-margens. The problem is not one-dimensionalbut two-, and in reality often multi-dimensional. Somebody had said that Keynes was not able to think in more than one dimension at a time. If it is true, it should not surprise that the economic commentators if anything areone-dimensional. The economic reality is and will always be that it is the producers who drivethe economy forward, savings is the fuel in this process, Friedrich Hayek, Ludwig von Mises and Laurids V. Birck would have maintained. What the consumers give out does certainly not activate the economy, and never will, but it keeps up the apparatus at best. Sometimes we hear commentators report that the expenditues used on private consumption constitute some percent of the total demand. To give the reader an impression that the contrary should be of interest this:At the end of the twenties the US-private-consumption was accounted to about 8.5% of the producers’ expenditures on factors of prodution including producer-products. This means that the consumption of capital-goods was 12 times larger than the private consumption.    

    The production-process consists of a vast number of complex states. It follows directly on this that the total combined expenditures on all these states/levels must exceed the expenditures of private consumption considerably. As an illustration you may imagine the total fixed apparatus of capital gradually performed to end-consumption. This will have to happen in a period of several years (here 12). What is given out on consumption originate from the production, while the production originate from capital (inclusive the factors of production) that in the first link originate from the savings. That is the reason why:  The more savings (see the next section) the more real capital is created and accumulated by production, and the more can finally be consumed. SummaryLower and lower interest rate with the results: Consumption is increased or precipitated, savings are used on consumption, stocks are emptied and malinvestments maintained. Falling prices do certainly not mean deflation. Falls in the prices as an effect of increases in productivity benefits everybo-dy. Lasting price-falls as an effect of monetary tightening is deflation starting investments ending in consumption. A fall in consumption has never been a problem for employment or growth in production. The expenditures on factors of production is several times larger than and much more demanding, than all the subsequent links leading to final consumption. Falls in savings partly originate from the monetary policy that stops the production from the first link in the capital- production- and division of work and of production-process widely.  

    Capitalisation and state-debt

    Real capital is the quinteessence of each single good that in the economic business perform our means of consumption and maintain itself. Capital as a function. The fixed real capital is tied for a longer time in land, buildings, plants, eventually in stocks, the floating (or working) real capital is tied in the consumption of factors within the production process, while it runs and eventually in the stocks. The proces is typically repited.   

    Private capital on the other hand is characterized by the sum of legal rights that allow earnings from unearned income so to say (often as interest or share-price-earnings f. ex. from the stockmarked), where you could not point out any connection to productive performance. If I via public subsidies that are meant to effect unemployment and renew some buildings have the possibility to get my buildings rebuilt and after this are able to increasethe rent in the flats by 15-20% at the same time that I find out that the prices of my buildings have risen – alone caused by the public subsidy – I cannot maintain that the community has grown richer or more productive. Perhaps I will get richer (accounted in means of money), when I sell the buildings in good time but what more should it do, when we for a moment forget that it also removed life-capital from the real production. The tax- or easy-money-based subsidy draw the money to another site. Activity then increases for a short period, and the suppliers of factors expect more reve-nue too. Do the subsidies continue the economy of command, the state of officials grow, and the twisted economy away from the natural order increa-ses too. If the subsidies stop the malinvestments begin to disappear with a drastic fall in employment, and unemployment grow fast (the supply of labor market helt fixed), and even to a higher level than before the contribu-tion. In the end the natural order is regained. “Patience” is then the word, but this word has not a lot of a meaning in the so-called democratic representation. Capital Concepts: http://www.lilliput-information.com/kap/capital.html   

    My neighbour does what I did, when he looks at the subsidy-renewsof my block of flats. “New deal”, “New economics” that filled the1930s with subsidiess and the hasty speeding up of public initiatives, and nothing else. 

    Examples from Copenhagen in the 1920s (refered to above)

    When the total rent in blocks with flats in Copenhagen rised from 1914 to1926 by dkr 40 mill, private capital of about dkr 500 mill. was created (the capitalization of 40 mill. a year for 12 years). And that happened without the community became richer. Some of this capital was realised by sale. If you for a moment go back to the total amount of money in Denmark a few sections above, you will find the amount dkr 430 mill. in 1919. The amounts is counted on the 1925 prices-level. Or four times the amount of money beforeWW1. Inactive capital. Some would call this a crime.   (will be translater from Danish) Another exampleThe capital process is being speeded up in a community, where ownershipof capital is an increasing condition for personal freedom and security in life.

    Surplus-capitalization was going on under WW1 via shares of stock, real estate bonds, government bonds, and bankloans. Dividend was paid from those sources, dividend from too high valued stocks, plants obvious justified. Just follow the history of our shipcompanies from 1012 til 1920. One compa-ny is killed,while the ships valued to dkr 1000 per ton was being sold to new companies. The price multiplied by 10. What the new stockholder paid was not transferred to trade and shipping that furthermore had to yield a profit of this capital, while money went into the pockets of stockholders, and many of these so-called new companies reached the limit of insolvency very soon. (Does the name Enron say anything)     Today we have asset-stripping and in Denmark also public credit to ship-companies that have continued, while the authorities looked upon it, and perhaps had, without any intentions to do so, participated wearing different hats. When you think of the manoeuvres under which that capitalization and the overcapitalization take place, and the mountain of papermoney, and especially credits that are being created, and they then want the community amortize this amount, you understand that no community are not able to live with it.  

    The Crash of Agriculture Bank (only in Danish till now)in 1923 shows how sick a community may develop, when all fine gentlemen in public and  private high places participate or just close their eyes, ears and mouths.  I can add that we have several cases of business-strippings from the 1980s of which both persons as well as companies have suffered, and that we are able to give a full documentation from primery sources.    

    An example: http://www.lilliput-information.com/kosan.htm (will be translated to English) A third example The real capital has not yet been destroyed by war, but by secret surplus-spending in the public and fund sectors to an extent that the world’s highest taxes did not manage to finance. The government issues bonds and reduces thereby the monetary amount of M1 that should have been invested as real capital, but that is not enough. The government bonds are also sold in foreign countries. Via this death route the governments tries to get foreign currency in strong competition with other nations.  Keynesians untruely talk of the future that bear some of burdens created in the presence, and they talk of deficits on the public finances that will speed up the economy. Both is completely uncorrect and invented for the objective that remains the hidden secrets of “the dancing mosquitos”. It could be called RD cheques on our children and grandchildren.  

    If the first had been correctly the moral legitimacy would have been more than doubtful, but is not right. It is a lie.   

    By bond-loans and by taxation the purchasingpower of the citizens is transferred to the state that necessarily directs its demand for the products and the services of the presence. War cannot be fought with guns of the future, and soldiers cannot dress in the clotches of the future and live on the agriculture product of the future. The state uses the yield of taxes as well as that of the loans to buy products of the presence. As the citizens in the case of loans broadly keep to the purchasingpower, prices on goods have to rise powerfully as the primery effect of the loans, and the inflation is put into the profits and share-prices that nevertheless have to rise as long as people believe in more rises – that is what going on again today. These profits and share-price-earnings result in a wild surplus-consumption, and the lending citizens do not know that the community has become poorer, because they have among their assets a good obvious secure source of interest in the government bonds (private capital). On the contrary, but he still believes when he conclude from his own that the community has grown richer. 

    They also hear this lie every day on TV (today)   

    When there has not been earnt or saved real purchasingpower in a period of 5 years, no individual has deserved to increase his fortune in that period. The balances of the banks of Copenhagen were dkr.1.1 billions before the WW1,dkr.3.5 billions in 1922.  A great deal of the those means that the bank got into their dispositions had not been used on just to drive the prices up, but much more to drive up our values of capital, stock-shares and real estate. Also the powerful shift of the capital away from real activity into inactive earnings-giving acquisition in form of private capital (as explained above)     The middle class was shortsighted, it would not save the system it was a part of itself by getting this amount of paper out of the world, an amount that threatened to destroy the economic system that bear the middle class.

    Today the same is happening of an even wilder extent. November 29th 1922 (the Danish) Financial Times wrote:As early as 1913 the first bridge was built between Treasury and the central bank (Danmarks Nationalbank), and in the following years when PresidentHeilbuth was placed in the board of directors of the Agriculture Bank the building of the bridge was finished, what his excellency Glückstat later on with the most complete mastery exploited.  

    At this time you could read chief-editor in the Danish newspaper Jyllands-posten H. Hansen’s considerations on Zahle’s intelligense (the PrimeMinister). On the other hand Edvard Brandes (Minister of Finances) and Ove Rode (also in the government) appeared to have good heads to destroy the finances, H. Hansen wrote.  

    Today nobody writes anything.

     After the war the choice stood between to go bankructcy or to continue thismortgaging and borrowing on the nation’s landvalues and the working capacity that already had begun. The debt of the Danish state was dkr.2.4 billions in 1923, when the debt of the municipalities and of the harbours were included, and the price-level was common. In 1900 the debt was about dkr.200 mill. That is 12 times more in 23 years. To the debt of the state should actually have been added the burden of retirements capitalized to presence-value in 1923.  In the official forum you then compared such an amount of debt with interest-bearing assets of the state and municipalities (in the 1920s). They were accounted to dkr.1.8 billion in 1923.  

    Debt of the state should officially be considered as quite the contrary from the midd 1930s, thanks to John Maynard Keynes and his masters. 

    Now (2002) it seems as if state debt is of some importants again. They even speake of it on TV when it concrens other countries. “It is a little difficult to find out the meaning of this.” Perhaps the sun will begin to rise in the West as yet another sign of a new era (remember the Black Sun).   

    Rising prices reduce the real income of the ordinary people, when the issuing of money, the credits and the wages are held at same level, if they are not, it turns worser until the false economcy has recovered.When state-debt finance the goods of the present, the burdens instantly  effects the price-level. Then taxpayers pay again, when the interest and the repayment of debt have to be paid. Here the money or the purchasing-power is reduced again, this time via the taxes that effect broad, and it is felt most among people with smaller incomes.  

    And it goes on and on time after time, if this little smart trick just is not being used too obvious too many times in a lifetime.  

    To John Maynard Keynes’ other uncorrect claim on the role of state is justto remark that by selling of government bonds you remove means of moneyfrom one area, where the private enterprise is ruling, and let the state make its dipositions instead. Then the natural order of the economy – based entirely on needs and honest earned purchasingpower – and the ordinary people is given the burdens from both the price-rises that comes appears instantly, and later on also from the increased taxes to finance the interest- and repayments from the loan contracted by the state. 

    The state is then taking over the initiative without being able to do so, and the citizens pay twice to get more ruled.The active (or real) capital is being weaked by maintaining the false passivecapital (the private capital). 

    The interest receiver from the government bonds look through the eyes of the bank and will understand too late that it is not just the (real-) wages that are reduced, but also the (real-) interestpayment that is increased only in nominal units. That is alone due to the inflation. The reduction of the purchasing-power that enivitably follows exceeds the rise of the interest-payment. The result is that owners of the government bonds will pay, if new postponed but more expensive-making swindles are not made.

    Here the “dancing-mosquitoes” write and rehearse the choreography.    

    Basic macro-economic reality: http://www.lilliput-information.com/infl.html Under inflation the prices were allowed to rise many times over. At same time huge fortunes were collected in private hands, and the state just through binding government bonds out to the citizens. If the government had use a fortune-taxation once and for all to pay back the debt of the war, it would not had left the citizens with the absurd impression to believe that war cost nothing.It was immorally that huge private fortunes could be created by war and deceit of inflation, and it was uneconomic to allow the citizens a consumption on the basic of a seeming fortune that did not related to the real lack of real capital in Europe.  

    You capitalize the future opportunities of yield and for the wealthy you have  made it clear that war is a splendid business, something worth to repite.  

    The same is happening today, but until now without war here, but with our young people in the frontline. And at the same time they build a new Europe-State on a new currency and upon indebted European states. As if we did not know that currency and nation is one and the same (WE don’t). EURO Part 2Does a metallic standard of value prevent inflation  To read further on American and international relations I can recommend:http://store.yahoo.com/realityzone/creature2.htmlhttp://www.lilliput-information.com/truth/tru1.html We have not dealt with foreign trade and exchange rates of currency. This is dealt with on:


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    M. Sc. (Economics) Joern E. Vig, Denmark 

    October 26, 2006

    The Precious Metal

    Filed under: Economic History, Economics, Research — jensn @ 11:06 pm


    The precious metal

    Did metallic basis as international value standard

    solve any of the problems it is throught of to do tomorrow? – Part 1

    “Because two or more phenomenons occurs simultanously in time there does not necessarily have to light a coherence from them.”

    “Let’s learn from Grandfather’s and Greatgrandfather’s experience, the winners take it all.”

    Beliefs still and perhaps always will belong to a rather unpredictable future, even though it certainly is commonly to mix up knowledge with belief.  Facts always count in the long run.”

    „Wir liegen alle in der Gosse, aber einige von uns blicken nach den Sternen.“

    „Es is besser, ein kleines Licht anzuzünden, als auf de Dunkelheit zu fluchen.“

    This historical writing intents to show how gold and silver standard work. In its starting point it concentrate substantially on England and the European mainland in the 19th century. I do not need two continents to show the missing impacts of and the intentions behind the standards. My intention was certainly not to give you a short perhaps disappointing historical account for the metal standards in USA in the 18th and 19th century, but to give you an evercounting picture of what those standards were not and still are not in the light of history in which they were introduced by law and agreements.   

     Up to the break down of Gold-Exchange-Standard-basis the states of the world had all indebted their nations. This implicated the citizens of the respective nations however had to pay for the decisions obvious made by the leaders of the states. The leaders of the states could certainly not pay themselves, and perhaps they should not pay for what they had done or just sanctioned with the gold and other assets in or perhaps already outside their power.

    When the world in every generation reach this certain point caused by facts closely connected to perhaps the human nature and life and definitely close connected to the turn of the world from a barter-economy to a bargain-economy involving monetary units, it often comes to wars of trade or real wars. You could blame the morals of citizens, perhaps the nations, perhaps the states and perhaps the political rulers or the designers of the existing monetary system. I just mentioned several of a lot of opportunities. And it would not help you to change culture and language neither by using very strong weapons and bloodshed nor very much time to do so peacefully. The result of conflicts and wars is often seen to be centralization of power. Experience gives us a good reminder, even though many things change over time. The interior of the human mindset has not, I believe, developed much for the last 2500 years. ‘Dismantle’ is perhaps a more describing verb to use without the denial. And the result of so-called peaceful and gradually centralization of the power often is the same conflicts and wars. You would perhaps even say they were meant to be?

    Monetary units may serve the purpose to make it easier to transact and save and move your values orderly. But monetary units may also be suited to run the risk that a counterfeiter or a lawful money-issuer are running the businesses that he certainly are not in charge of. And if this is actually brought to happen the first service of the monetary units can be neglected.

    Money is not just notes, coins and deposits. Anonymous shares, share certificates, bonds, credits and derivatives and a lot of other papers are also more or less money as long as they can be exchanged without problems for resources, products you need, land, real estate and cash in a useful form.   

    When I hear that the telephone-supplier Nokia made an annual result, 50% larger than last year, and the price on Nokia’s shares  – the expected value of every dollar invested in Nokia – fell with 50% in the same period, something must have gone definitely wrong either with expectations – that is what decides shareprices – or with the emission of new shares along with the own capital flowing into the company. We turn til this part of the problem – the private limited company – in part 2.

    When I hear that Bolivia finance the public/the ruler’s activity, not by taxation, but entirely by issuing money, I have to say, it is actually possible to do so, but it is a great risk to run for the population without a well-educated mass of democracy-acting voters or an unthinkable (therefore theoretical) group of well-meaning power-brokers in the top. The last mentioned is a typical theoretical and contradictory phenomenon. I believe it has a built-in contradiction (having in mind what power is), and of this reason it will be suited to constitute the basis of most power-created and therefore approved science. But when I also hear that this way of financing (in Bolivia) lead to a huge state-debt – that we are not supposed to mention before they tell us on TV, and certainly they did – so severe that IMF does not even answer the telephone calls from the so-called responsible in Bolivia, something has gone definitely wrong with the money-issuing in Bolivia, and the power-brokers there are perhaps not much different from power-brokers else-where on this planet. We can say they have not taken good care by putting monetary units in the role as money.

    The state, its leaders and your bank should also take the responsibility, when you buy and sell in foreign countries by using your money to exchange for foreign currency at home. You have to have confidence in your domestic monetary units or figures on your account, confidence in the exchange-rate and the cost of exchange. To secure that the foreign receiver of monetary units gets what he deserve in a transaction, he has to rely on the same in his country. If he cannot rely on the exchange-rates, the foreign receiver of monetary units just has to suffer a lost (when/if he buys) or go to his state, its leaders or his bank to complain, and expect them to make that correct what was uncorrect. Perhaps the foreign receiver would prefer shares in your business in your country for money, if he expect these shares to give secure returns easy at his disposal. To take good care of this practical threats involved in foreign trade and capital transfers in a more smooth way, an international system of money and debt is needed.  

    Let it be easy, uncomplicated (like this), especially without unexplained terminology and without as much personal threatening defectiveness as just even possible.   

    Traditionally we have to agree upon the purpose of an international system of money and credit to make foreign trade work among nations in the starting point. But as history apparently is asked for to be repeated, let’s look a little on history first. A description of a system suited to serve the ruling of all the economies of the world and primary serve the interests of the power-brokers is not needed, I believe. Such a system is close to the disorder we already have, close to Chaos.

    units of account:

    To get a picture of what gold standard could do and could not do to serve its purpose today, we have to understand what gold standard actually was, the world in which it was introduced and set to work, and the effects of the gold standard (in its three versions) on the international economy, especially (if possible) in terms of its impacts on the phenomenons that it was meant to or was/is believed to have had/have impacts on then and tomorrow.

    1820 the Gold Standard was decided de jure in Great Britain – just after the Napoleonic Wars and the Congress Vienna: A ruined Europe except for Russia, bankrupted states and peoples that it was impossible to plunder more by taxation. Peoples were, seen from view of today, represented by the princes and their agents at the Congress of Vienna in their glory extremely disproportional to the poverty of the peoples. Bankruptcies everywhere. In Denmark (state-bankructcy) a devaluation of 90% in 1813. You wake up in the morning, and the single dollar you may have got has become a 10 cent instead.

    David Hume and the Mercantilists:

    Already the Scottish philosopher David Hume (1711-1776) enriched us with contributions (“Of Money” 1752 and “Of Balance of Trade”) against the thoughts and the thereof founded policies of Mercantilism (expression invented by the later Adam Smith) The Mercantilists focused for a country on getting hold on as much gold, silver and soldier as possible. A primitive and superficial way of thinking inspired by the gold and silver discoveries made especially by Spanish explorers (in 1500s) and the their greediness to acquire these rarities and exchange them for needed commodities. It actually covers an imagination found among people, who have not systematically thought out economic questions, that mistake money for wealth (and I can supplement and anticipate by including to mistake money for gold). Foreign trading was regarded of a one-sided interest so to say. Just the one of the trading-partners would benefit from trade – the comparative advantages that can be explain to a child – had not reached the mind of 1700-mercandiser. Rather: “Don’t export your good natural or produced domestic commodities, but try to get all you can from foreign countries”. If you succeed well with this tactic, you shall become the richest. The winners were shortly those who could collect the largest amount of valuable metal or valuable minerals and earn most by protecting their own goods and reach out for foreign countries’ goods and even build a strong army to get what was needed, wanted or just desired.   

    Just a tiny few of David Hume’s arguments:

    “Money is not, properly speaking, one of the subjects of commerce, but only the instrument which men have to have agreed upon to facilitate the exchange of one commodity for another.” (mine: Notice this starting point!)

     “It is only the public which draws any advantage from the greater plenty of money; and that only in its wars and negociations with foreign states.”

    (mine: Correct, but I have to add: Speculators also benefits from the greater plenty of money)

    “And as to foreign trade, it appears, that a great plenty of money is rather disadvantageous, by raising the price of every kind of labour. To account, then, for this phenomenon, we must consider, that though the high price of commodities be a necessary consequence of the increase of gold and silver, yet it follows not immediately upon that increase, but some time is required before the money circulates through the whole state, and make its effect be felt on all ranks of people. “

    “In my opinion, it is only in this interval or intermediate situation, between the acquisition of money and rise of prices, that the increasing quantity of gold and silver is favourable to industry. When the quantity of money is imported into a nation, it is not at first dispersed into the hands, but is confined to the coffers of a few persons, who immediately seek to employ it to advantage.”

    “It is not very usual, in nations ignorant of the nature of commerce, to prohibit the exportation of commodities, and to preserve among themselves whatever they think valuable and useful. They do not consider, that, in this prohibition, they act directly contrary to their intension; and that the more is exported of any commodity, the more will be raised at home, of which they themselves will always have the first offer.”

    “Suppose four-fifths of all money in Great Britain to be annihilated in one night, and the nation reduced to the same condition, with regard to specie, as in the reigns of the Harrys and the Edwards, what would be the consequence? Must not the price of all labour and commodities sink in proportion, and everything be sold as cheap as they were in those ages?”

    “Again, suppose, that all the money of Great Britain were multiplied fivefold in a night, must not the contrary effect follow? Must not all labour and commodities rise to such an exorbitant height, that no neighbouring nations could afford to buy from us, while their commodities, on the other hand, became comparatively, so cheap, that, in spite of all the laws which could be formed, they would be run in upon us, and our money flow out; till we fall to a level with foreigners, and lose that great superiority of riches, which had laid us under such disadvantages?”

    “The fluid, not communicating with neighbouring element, may, by such an artifice (a public treasury of money out of circulation), be raised to what height we please. To prove this, we need only return to our first supposition, of annihilating the half or any part of our cash; where we found, that the immediate consequence of such an event would be the attraction of an equal sum from all the neighbouring kingdoms.”  


    Money is not one of subjects of commerce, Hume maintained in his starting point. But I am afraid money was already then and is such a subject of commerce in the real world. “It is only the public which draws any advantage from the greater plenty of money.” And of speculators. Hume underlined that money is made of gold and silver. He also maintained that money (gold and silver then) in circulation was what matters.

    By the late 18th century Britain was the only country that had moved to a de facto classical gold standard, after a long period during which silver had continuously disappeared from the domestic circulation. The predominance of gold had begun as early as 1717, when the gold guinea was given a value of 21 shilling. Silver’s importance as monetary units was reduced still further in 1774, when the legal tender status of silver coins was restricted to payments up to £25. However silver was so undervalued in terms of gold thereafter that it soon came to perform the function of a subsidiary coinage, the silver coins remaining in circulation having become so worn that it was unprofitable to withdraw them from circulation and melt down for export. In 1797 the Bank of England freed from its obligation to convert its notes into gold caused by the Napoleonic Wars. The supremacy of gold as unit of account in Britain was assured from that year. You could say that the basic-value-measurement-tool was circulated, so the real expression was gold-coin-basic or classic gold standard and not just a gold-exchange-standard that we shall define separately later on. Hume was also very aware of the distinction between the tool suited for commerce and the real commodities that were the actual subjects of demand – but entirely theoretically.

    The question certainly is if the England ever returned to the (classical) gold standard after the war-inflation and the peace-deflation subsidiary state-loans to secure “some kind of balance.”

    The movement towards the adoption of a so-called gold exchange standard in Britain was halted then during the war years, when, as a wartime measure, cash payments were suspended (as mentioned in the last paragraph). Immediately after the end of the war, however, the de facto gold standard of the late 18th century was (officially) made de jure by the passing of a number of Acts of Parliament, the final in 1820. The first was the Coinage Act that of 1816 allowed for the minting of a Gold Sovereign, a 20 shilling gold piece, the first of which was issued in the following year. The gold content of the sovereign was fixed in accordance with the mint price of gold.

    The industrial revolution started in England at about 1750. The need for capital was very limited at the beginning, and so was the need for money generally in the 18th century. At least 80% of the population was smallholders, and the barter-economy was dominating. Primary the landowners financed the earliest stages of commodity-formation on the countryside, wool and later cotton. The import of cotton was multiplied by 10 from 1770 to 1800 with 56 mill. lbs and in 1830 this amount has been multiplied with 5-6. Amounts of production are not available, but the export value (of manufactured cotton) exists: 1764: £200.000, 1780: £1 mill, 1815: £22 mill, 1830: £41 mill.  

    The bank houses of the Absolute Monarchy (which ruled in most states) were businesses owned by one man or by partners. This should not continue in this way, when paper money was introduced, and a little later on the so-called democracy was introduced. Banks did not existed in the 18th century, but houses of bankers, inherited for generations. Bonds and share certificates of some privileged companies and markets of these originate from 17th century. In the mid-eighteenth century, at the start of the Industrial Revolution there are barely a dozen banking houses in England and Wales outside the London area.

    Exchange technique and speculation in the paper of the privileged companies was central from the beginning, for example the English John Law’s Southsea-Bubble and the French Missisippi-Swindle of large dimension, and of minor dimension in the English, the Dutch and the Danish company-share certificates. This speculation not seldom concerned the state that was a major shareholder (caused by the priviledges), and the state therefore also had to bear the losses in the end (and let the citizens pay – just like to day). When speculation could occur the reason primery was the strongly varying credit supplied by the states. Rumours of war or of the death of the prince could make the bonds fall considerably. The anonymous share has not been introduced in the Mercantile world. So no exchanges had been invented either.

    Repeat the fourth paragraph of this reading:

    Monetary units may serve the purpose to make it easier to transact, save and move your values orderly. But monetary units may also be suited to run the risk that a counterfeiter or a lawful money-issuer are running businesses that they certainly are not in charge of.

    You will find the mentioned full readings by David Hume on: http://socserv2.socsci.memaster.ca/~econ/ugem/3113/hume/money.txt

    and on http://socserv2.socsci.memaster.ca/~econ/ugem/3113/hume/trade.txt

    Two approved and great thinkers of economics in the 1700s and 1800s:

    The private limited company was not really widespread either until the 1800s. Everything was at the beginning, and for example to build a big form formation of installations with equipment you needed the fabrication of steel. For the railroads you needed both the train driven by steam and not at least the invention of the hard steel-production-process that originate the puddling-process in the late 1700s and finally the Bessemer-process in the 1850s (after Henry Bessemer) that became widespread 1850-60. The last mentioned were simply basis of the hard-steel-productionproces and therefore needed for very large cargos of grain to be transported with profit from the American Midd-West and compete with European grain. The large cargos simply needed tremendous solid rails. The huge importance of these single inventions simply cannot be exaggerated. Because of the enormous capital need corresponding the big investment railroads actually needed the anonymous share and the limited company.

     “But don’t let us anticipate and derail events even though it could be tempting”.

    Adam Smith, David Ricardo and the precious metal:

    The founder of economic liberal way of thinking and philosopher Adam Smith (1723-1790) was a popular lecturer in Edingburgh on Rhetoric, Aesthetic and on History of Literature from 1748. In the winter 1750-1751 he touched the theme Social Economics, and became a professor of Logic in 1751, later on of Ethics in Glasgow.  

    1776 (the same year David Hume died, the year Adam Weishaupt established Illuminati [1], and the year of the American Declaration of Indepedence) Adam Smith’s great work “Inquiry into the nature and causes of Wealth of Nations” was published. It was the first systematic reading ever on the subject Economics.

    David Ricardo (1772-1823) was a brilliant British businessman and economist. He was the first economist since Smith to have profound effect on the way government actually behaved of those child prodigies in which the age specialized. His father was an exchange-broker from Amsterdam who came to London and was chosen for one of the dozen brokerships reserved for Jewes in the City. David was making exchange-businesses at age 14. He speculated cunningly in East India Company stock and, like Nathan Rothschild, contracted successfully for many of the governmental loans between 1811-1815. By this and by reinvestment with immence success in country properties he acquired a considerable fortune, and this he made him able to concentrate on writing later in life. Among his books were “The High Price of Bullion” (1810) in which he explained the reasons for the decrease of value of the British bank-notes, “Reply to Mr. Bosanquet and Proposals for an Economical and Secure Currency” (1816) and “Principles of Political Economy and Taxation” (1817). He became a member of the House of Commons (1819).

     “He fretted that an unbacked paper currency was certain to lead to inflation, you read in the mainstream-readings”, but I don’t find the word “inflation” or any synonymos in any his readings (mentioned and quoted above and below and published respectively 1810 and 1817).

    He introduces paper money, did hide that money was meant to be a commodity, and his solution apart from this: “The bank should turn its gold stocks into standard ingots, which could be used by merchants who needed bullions to make gold payments abroad.” He got through with proposal in the House of Commons, and the first gold ingots were issued with the name “Ricardos” on 1 February 1820.

    Adam Smith’s going through on monetary issues (1776) and David Ricardo’s (the founder of Gold Exchange Standard) (1816), a student of Adam Smith as well give rise to the conclusions below the following quotations:

    You have to imagine that the spirit of the time was optimistic and everything at most prosperous and without much worrying, especially after the Napoleonic Wars 1800-1815 (if you was not poor), and new real capital had to be build up almost quicker than any circulation in order to serve the industrial promoters.

    Facts from history:

    Loans of the state 1790-1816 were not just contracted in the form of government-bonds, but also as exchange-loan and advances (in the Bank of England) that got its means by issuing money-notes. In 1792 it had reached 11 mill. with covering-fund of £5½ mill. Without an increase in the tax-income its expenditures doubled every year in the period 1792 to 1794, in 1797 the expenditures were more than tripled, and in 1813 and 1814 it were sixfold compared with 1790, and the tax-income had not even in-creased fourfold in the same period. The budget-deficit in the period 1790-1816 was totally £ 440 mill. The Parliament allowed from 1793 the government to contract interest-free loans from the Bank, which had managed the year of crisis 1792, when 300 banks went bankruptcy, but now obvious was weakened by the draw of the government, from £¼ mill. in 1789, they reached 10 mill. in 1793 and 12 mill. in 1797, what was closed to the total circulation of notes. England lent £11 mill. partly in gold to its allied in 1790s. It became more and more difficult for Bank of England to help businessmen and country-banks, so the government made the notes unredeemable in 1797.

    Quotation from David Ricardo’s “The High Price of Bullion” (1810):  

     “The perfection of banking is to enable a country by means of a paper currency (always retaining its standard value) to carry on its circulation with the least possible quantity of coin or bullion. This is what this plan would effect. And with a silver coinage, on just principles, we should possess the most economical and the most invariable currency in the world. The variations in the price of bullion, whatever demand there might be for it on the continent, or whatever supply might be poured in from the mines in America, would be confined within the prices at which the Bank bought bullion, and the mint price at which they sold it. The amount of the circulation would be adjusted to the wants of commerce with the greatest precision; and if the Bank were for a moment so indiscreet as to overcharge the circulation, the check that the public would possess would speedily admonish them of their error. As for the country Banks, they must, as now, pay their notes when demanded in Bank of England notes. This would be a sufficient security against the possibility of their being able too much to augment the paper circulation. There would be no temptation to melt the coin, and consequently the labour which has been so uselessly besto-wed by one party in re-coining what another party found it their interest to melt into bullion, would be effectually saved. The currency could neither be clipped nor deteriorated, and would possess a value as invariable as gold itself, the great object which the Dutch had in view, and which they most successfully accomplished by a system very like that which is here recommended.” (quotation ends)

    My central argument: Ideal claims, a paper note may be made as seldom as a gold coin, but it is unequally easier to reproduce the note of paper.

    Facts from history:

    In the United States the debate of protection was going on in 1790.

    In the war time between France and England the accustomed channels of trade and production was blocked by the (European) Continential Blockade. The wartime shortage as a result gave an enormous stimulus to those branches of the American industry, such as cotton, wool, and iron manufactures, whose products had previously been imported.

    In 1815 the circulation of notes amounted £27½ mill. with a covering fond of 2 mill. in gold and at the same time the country-banks in England had flooded the country with £30 mill. in notes (all accounted in the prices of the year). This relation between notes in circulation and the covering fond had developed more and more unequally since 1799. £13-13½ mill. in circulation with a covering fond of £7 in 1799, in 1802 an average circulation of £16 mill with covering fond of £4 mill., in 1809 in circulation of £19 mill. and a covering fond of £4 mill, 1810-1812  £23 mill. in circulation with a covering fond of £3-3½ mill. £1 should have the value of 123 ¼ grain of gold, in 1809 it was reduced to 107 and in 1813 87 ¼ grain. Lord Stanhopes act of 1811 tried to stop the price of the notes, not directly by a compulsory price, but doing it a criminal offence to contract agio for goldcoins, but the price of gold in ingots was still free, and became more expensive than goldcoins, what lead to melting down of the coin.

    Had gold risen in price or had the Sterling fallen, was the question that the Bullion-Committee of 1810 should answer. The result was Edwin Cannan’s answer:

    When a paper currency originally founded on and convertible into coins of gold has become inconvertible, it can only be kept up to its proven value by limitation of its quantity based on observation of the price of bullion and the foreign exchanges. The committee proposed the make the notes convertible again, but it did not succeeded, on the contrary the circulation was further increased to the amount £27½ mill. with a covering fond of 2 mill. in 1815 as mentioned in the beginning of second paragraph right above.  

    This phenomenon is called inflation, and it is caused alone by uncontrolled or controlled issuing of paper notes called money.

    The impacts on living costs:

    If you go to the accounts of cost of living as did T. B. Wood (in Econ. Journ. 1899) and N. J. Silberling (in Rev. of Econ. Statistics, Harv. Ec. Serv., 1913) you find by setting 1790 to 100 that the index increased to 170 in 1800 and 174 in 1801. The maximum was reached in 1813 with the index number 187. Thereafter the index decreased very strongly to 108 in 1830, a level as before the wars that with short pauses lasted for 23 years.

    The British war-expenditures on the Napoleonic Wars 1800-1815 were £638 mill. So the small amounts mentioned as advances and governments-bonds were certainly far from the fully financial injection to the wartime 1800-1810. The results of the massive consumption of expenditures were not meant to be overdue.

    But the end of the (Napoleonic) wars changed the relations (??) as we read in the mainstream history-books (…for a short time).

     Speculation in the Napoleonic Wars

    To the more or less coherent financial history of which this was meant to be a tiny contribution

    The last but perhaps most funny theory-fragment is the so-called business-cycles:

    Business cycle theory matters simply because many people believe business cycles exist. This has not been a more permanent belief for ages. In the 19th century business cycles were not thought of as cycles at all but rather as spells of “crises” interrupting the smooth development of the economy. In later years, economists and non-economists alike began believing in the regularity of such crises, analyzing how they were spaced apart and associated with changing economic structures. Even the universities took the cycles and made them so-called scientific after Lord J. M. Keynes’ gospel. Assumption-logic certainly does not have get close to truth if the assumptions are false. If you repeat it enough it will however become truth in the correctly prepared brains.

    A few examples more:

    The Industrial Revolution (1787-1842) is the most famous Kondratiev wave: the boom began in about 1787 and turned into a recession at the beginning of the Napoleonic age in 1801 and, in 1814, deepened into a depression. The depression lasted until about 1827 after which there was a recovery until 1842. As is obvious, this Kondratiev rode on the development of textile, iron and other steam powered industries. More on this in part 2.

    Karl Marx (or Mordercai that was the name his parents gave him), who forgot the international division of work and production though it was incorporated in the textbooks of economics 100 years before he wrote his own book dictated by Albert Pike, did indeed contributed to “business cycles” as well: 7 years on (speculation) in shares, then 7 years in bonds etc. It is very obvious to assume that he most likely unconsciously was inspired by the numbers in the Bible.

    Quotation of David Ricardo’s “On the Principles of Political Economy and Taxation” (1817):

    “The quantity of money that can be employed in a country must depend on its value: if gold alone were employed for the circulation of commodities, a quantity would be required, one fifteenth only of what would be necessary, if silver were made use of for the same purpose.”

    “A circulation can never be so abundant as to overflow; for by diminishing its value, in the same proportion you will increase its quantity, and by increasing its value, diminish its quantity.”

    “While the State coins money, and charges no seignorage, money will be of the same value as any other piece of the same metal of equal weight and fineness; but if the State charges a seignorage for coinage, the coined piece of money will generally exceed the value of the uncoined piece of metal by the whole seignorage charged, because it will require a greater quantity of labour, or, which is the same thing, the value of the produce of a greater quantity of labour, to procure it.”

    “While the State alone coins, there can be no limit to this charge of seignorage; for by limiting the quantity of coin, it can be raised to any conceivable value.”

    “It is on this principle that paper money circulates: the whole charge for paper money may be considered as seignorage. Though it has no intrinsic value, yet, by limiting its quantity, its value in exchange is as great as an equal denomination of coin, or of bullion in that coin.”

    In examining the coming monetary revolution which gave governments the power to manipulate their national currency systems, we must begin by mentio-ning one of the most serious shortcomings of the classical economists.

    Both Adam Smith and David Ricardo primery looked upon the costs involved in the preservation of a metallic currency as a waste.

    As they saw it, the substitution of paper money for metallic money would make it possible to employ capital and labor, required for the production of the quantity of gold and silver needed for monetary purposes, for the production of goods which could directly satisfy human wants.

    After the establishment of Banks, the State has not the sole power of coining or issuing money. The currency may as effectually be increased by paper as by coins; so that if a State were to debase its money, and limit its quantity, it could not support its value, because the Banks would have an equal power of adding to the whole quantity of circulation.

    Paul Johnson’s “Birth of Modern”, London 1991 page 862-863 a few quotations:

    “The rapid expansion of the world economy in the early 1820s marked the upswing of the first modern trade cycle (mine: still not invented). It had innumerable consequences. One was to make the new species of expert, the economist – at least for a time – to be the guide and philosopher of mankind.”

    “When Harriet Martineau was learning economics in 1820s and applying her lessons instantly to best-selling moral tales – The Rioter, The Turn-Out and so forth – there were not yet rival schools of economics, but a single stream of doctrine running from Adam Smith (attended by various heretics), through Thomas Malthus (with the iron-law of wages) and Ricardo”.

    “Economics was not so much a subject to be studied as theory which its advocates believed was unarguable. The only problem, in their view, was how to teach it to the working classes, to stop them from burning hayricks and smashing machines when times were hard.”

    [When it comes to John Maynard Keynes’ gospel of the 1930s it is precisely the same: http://www.lilliput-information.com/truth/tru1.html ]

     “But much weightier tomes also circulated in large numbers. Publishers paid Thomas Malthus and James Ramsay McCulloch, author of A Discourse on Political Economy (1825), impressive sums, running into thousands of pounds, for their works. The universities were suddenly discovering economics. McCulloch got his first chair in science set up at the new University of London. Nassau Senior was appointed to the new one endowed at Oxford. Articles on economics accupied an enormous amount of space in the reviews. Judges, too, were discovering its iron laws and gave tendentious lectures about them from the bench, to scowling machine breakers and arsonists.” (end of quotations)

    At the same time G. W. F. Hegel practiced his lectures on the Dialectical Process (“the final philosophy”) in Berlin reached the highest peak of his carrier, and later on Wilhelm Wundt began practicing his lasting wonders on the human mindsets with his experimental psycology in Leipzig :



    In dealing with problems of the gold exchange standard all important economists failed to realize the fact that it put into the hands of governments or a few private banks related firmly to the authorities the power to manipulate their nations’ currency easily. Some economists blithely assumed that no government of a civilized nation would use the gold exchange standard intentionally as an instrument of inflationary policy. But they did. Notice how the real problem simply is not even touched by mainstreamers. The main factor was the pro-inflationary ideology. The gold exchange standard was merely a convenient vehicle for the realization of the inflationary plans. Its absence did not hinder the adoption of inflationary measures. The United States was in 1933 by and large still under the classical gold standard. This fact did not stop the New Deal’s inflationism. The United States at one stroke – by confiscating its citizens’ gold holdings – abolished the classical gold standard and devalued the dollar against gold.

    Money orders were easier to handle in foreign trade to transport and much more unexpensive than gold-transports. In the beginning of 1800s the circulation of coins was too small. So sometimes they had to pay the workers wages in foreign currency. Deflation was actually threatening Britain.

    Under the classical gold standard (mentioned earlier as Gold Coin Basic) a part of the cash holdings of individuals consists of gold coins. Under the gold exchange (for gold) standard (and later in the 1920-erne furthermore: Flexible Gold Exchange Standard) the cash holdings of individuals consist entirely in money-substitutes. These money-substitutes (most paper) are redeemable at the legal par in gold or foreign exchange of countries under the gold standard or the gold exchange standard. But the arrangement of monetary and banking institutions aims at preventing the public from withdrawing gold from the Central Bank for domestic cash holdings.

    The first objective of redemption is to secure the stability of foreign exchange rates that easily would be pressed hard by all the paper.

    Legal Gold Exchange Standard :

    For a country to be wholly committed to a full gold exchange standard five basic requirements had to be met.

    First, the unit of account had to be tied to a certain weight of gold; second, gold coins had to circulate domestically and any bank notes in circulation had to be convertible into gold on demand; third, other coins in use had to be subordinate to gold; fourth, no legal restrictions were to be imposed on the melting down on gold coin into bullion; and finally, there had to be no impediment to export of gold coin and bullion. Bimetallism, on the other hand, involved the employment of both silver and gold coins as standard money or legal tender under conditions similar to those just outlined for gold. Compared with the gold exchange standard, however, a bimetallic standard had one major and deciding drawback; it worked smoothly only as long as the ratio between the values at which the two metals could be freely minted into coins approximated to their values in the international markets. If divergence of these values did occur, then the metal with the higher international market value would tend to be sent abroad and be replaced by the other, leaving the country with a monometallic rather than a bimetallic standard. Once the mint ratio and the world market ratio diverged, it paid those who could do so to engage in arbitrage at the various exchanges. Suppose, for example, that the Paris exchange is offering 15½ ounces of silver for one ounce of gold and that the American merchant holds 15,000 ounces of silver for his 1000 ounces of gold at an American mint. It will pay him, therefore, to convert his gold into silver in Paris and to convert all his Parisian silver into gold in America. The final result of this process is, of course, that all gold leaves the United States and silver becomes the circulating medium. Gold was ‘undervalued’ and, according to the workings of Gresham’s Law, that ‘bad money drives out gold, when the face value is the same, the gold coinage does not circulate.

    So the legal gold exchange standard actually became the first step but certainly not the last step toward inflation in the so-called civilized world. This was also the outcome of defeat of Napoleon at Waterloo.

    Trade within a country is made easy by the existence of a single currency common to all its regions, but international transactions require a monetary system capable of handling trade involving the use of a variety of national currencies. Of course, this multi-currency barrier to trade can be overcome by conducting the international exchange of commodities on a barter basis, and in ancient and medieval times this type of international transaction often occurred. But bartering obvious result in severe limitations on the growth of trade at any level, and so during quite early times foreign exchange markets, in which different currencies could be exchanged for one another, made their appearance thus placing foreign trade on a monetary basis.

    Mainstream history:

    Young industrialism made populations double and triple without much deficit in the late 18th century. The price of gold had been maintained throughout the 18th century at £3 17 shilling 10½ pence an ounce. Silver coins were legally subordinated to gold and were further restricted by being legal tender for payments of up to only £2. In 1819 the convertibility of bank notes was restored, when an Act of Parliament committed the Bank of England to resume cash payments in gold bullion, and after 1823, in gold coins. This Act also repealed the law prohibiting the melting down of coins into bullion, and the trade in bullion was declared free. With the resumption of cash payments in 1820, Britain was legally on a full gold standard.

    The price on gold rose measured in units of products. That stimulated the search for gold further. That development led automatically to a rise in real inco-mes (nominal incomes corrected for price changes). Larger profit margins were created, larger than what could been eaten by the amount of money. (end of mainstream history)

    The reason to the relatively long period of so-called stability in England in the 18th century is simply the productivity that increased quicker than the amount of money and credits – and it has certainly nothing to do with the gold exchange standard of the 19th century that actually never functioned outside theory. The Price-Specie-Flow theory by David Hume (as a response to Mercantilism did not actually work in practice (more below). The industrialism and London as a financial centre including all the inventions within both industrial formation, transport and in the financial structures are the plain but more real expla-nation. Lower marginal cost every month or every year lead automatically to lower price-level, when competition dominates the markets. Almost no private limited companies either to surplus-capitalised in the 1700s. With an unseen supply of credit originated from both the financial centre (London) and at the beginning of an organization of savings for ordinary people interest rate was very low. So everything went smoothly.

    Gold as international standard unit of account :

    The movement to gold standard was completed by the end of the 19th century. Especially after the German-French war 1871-72 and Germany with the French gold turned from silver thaler and silver to gold when the price of silver in terms of gold commenced to decline dramatically. As a result the demonetization of silver after the midd 1870s. Holland, crushed in between a gold-using Britain and a gold-using Germany, was the next to go. In 1874 it ceased coining silver and not long afterwards adopted gold as its unit of account. Norway, Sweden and Denmark (state-debt!) quickly followed suit and combined this with Scandinavian Monetary Union 1873, extended with Norway 1875. The Latin Monetary Union, under pressure from its inception, encountered extreme difficulties in the early 1870s and its members were compelled in January, 1874, to limit their coinage of five-franc pieces. In 1878 they suspended the minting of silver coins altogether, and from that time on-wards France and her colleagues (debitors) operated on the so-called ‘limping’ (or ‘lame’) gold standard. In the United States bimetallism was not legally abandoned until 1900, but the country was effect-tively operating on the gold standard once convertibility of paper notes was restored (after the Civil War) in 1879. Austria moved to gold in 1892, and Russia and Japan in 1897, the year in which India adopted a gold exchange standard by pegging the rupee to sterling. A year later the Phillippine peso likewise became tied to the American dollar. After 1900, other countries, including Siam and Ceylon in Asia, and Agentina, Mexico, Peru and Uruguay eventually adopted the gold standard, while others, by the out-break of WWI, proceeding in that direction. By 1914 China was alone among major countries in still clinging to a silver standard.

     This brief description of the pre-1914 gold standard brings out one of its most striking features, namely, its relatively short duration as an international monetary system – the shortest we have had. Whereas it is not possible to date precisely its beginnings – it did not exist in 1879, but it did in 1900 – WWI every other greater war certainly marks its end. We have to mention a short restoration period that failed in the midd 1920s. Some would say that citizens had been better off by a quick tax-based financing of the paper money of WWI. The total duration: Less than 30 years, I would say.

    The later the worser, I was tempted to remark, the Bretton Woods Agreement (of 1944) lasted for about 25 years. Here is perhaps another kind time-phenomenon that you certainly cannot call business-cycles either.

    The role of the London Capital Market and sterling as international currency:

    Was the Gold Standard the purpose on the way to something better internationally or was it the mean by which London absorbed every financial link in the world trade building on centuries of experience? In period 1880 or 1897 to 1913 Europe’s proportion of world-export decreased from 64.2% to 58.9% and its proportion of the world-import decreased from 69.6% to 65.1 %.

    The development in the London capital market were of paramount importance for the efficient functioning of the international gold standard. Britain’s increa-sing importance in world trade is difficult to read throughout from statistics, because in reality United Kingdom and Ireland reduces its export-share of the manufactures from 88.1% in 1880 to 69.7% in 1913 and in the same time-period increased its export-share of primary products from 11.9% in 1880 to 30.3% in 1913. But the statistics tells little of the British investments abroad that also contributed to the British dominance in multi-changing markets with USA and Japan coming in as dominating agriculture and industrial respectively industrial nations in 19th century.

    As we have more than hinted another factor of tremendous importance was London as the financial centre of the world for more than 100 years, and 80-97% of that time London sucked in the nations of the world to do trade, insure, lend and borrow through Britain alone on the gold standard.  

    Organized markets were established in London for many types of commodities, a move which was greatly enhanced in the early years by the continued growth of the British re-export trade and later the by the adoption of free trade. These markets in turn acted as a stimulus to the British shipping and created a growing need for insurance facilities to cover the transport risks. As a result of these developments, London grew in importance as a centre of international commerce and finance, and various institutions, such as discount houses, merchants banks, insurance companies, and other specialist financial organizations, which were later to provide the essential services for a rapidly expanding international economy, began to increase in numbers. From the beginning of the 19th century, therefore, London forged ahead of Amsterdam, Hamburg and Paris as the leading financial centre of Europe and thus of the world.

    While these developments were taking place, a growing proportion of the world trade was being financed by short-term credit in form of foreign bills of exchange. Under these arrangements, by accepting a bill an importer guaranteed payment within (say) 3 month of acceptance. The foreign exporter, on the other hand, if he required ready cash before the bill matured, could discount it with a bank (or other financial institution willing to do so) for something less than the face value of the bill, thus allowing interest to the discounter for holding the bill between the date of discounting and maturity and for accepting the risk against default. It was not until the early 19th century that these financial arrangements were perfected in Britain by the merchant banks and bill brokers, each of which came to perform a specialized function. The merchant banks, which were well known and respected for their integrity, then began to accept bills on behalf of reliable businessmen and firms whose names were less familiar than theirs. In other words, for the payment of a small commission, the merchant banks, by endorsing a bill of exchange, would guarantee that it would not be dishonoured on maturity. In this way merchants banks ensured that a large number of bills would be available for discounting. The discounting function was performed initially by the bill-broker – financial go-between who accumulated bills of exchange and sought out banks with surplus funds, with a view to persuading them to invest in the bills in his care. For his trouble and his knowledge, he charged a small commission. Some years later, the bill-broker began to give way to a dealer, who was himself a principal and not merely a commission agent. Supplementing his own sizeable funds with money borrowed on call or short notice from the large London banks, he used the money to discount bills on his own account. Still later came the discount houses, which were little more than large-scale dealers. They had more capital to invest; they took deposits from the public and paid interest on them; and they did a much greater volume of business.

    Before the 19th century the markets of money was very unorganised in big centres in the Amsterdam, Paris and many cities of Italy. The interest rate was rather high. Landlords and merchants were sources. The young industrialization based on capital formation simply needed capital to go on. In the beginning of the 19th century the issuing of money was free. This means that a suitable supply of money deve-loped in the first half of 19th century and the lending and borrow-activities with that. The use of metal coins was actually outdone by the use of notes. Actually the needed credit for industrialization was created by this competition.  

    Another just as important link in the development of banking activity as well as other businesses-activities is freedom of incorporation. There were restrictions in some nations. France, for example, even made restrictions on the issuing of notes as early as 1848. The right was simply conferred on a single monopolistic institution, Bank of France. In Britain, the privileges of the private Bank of England effectively prevented any but very small partnerships from engaging in banking operations.

    More financial institutions to manage the supply of money saw the light for the first time in history and savings from the ordinary man shifted from general very limited hoarding to bank deposits. The short-run supply of credit was increased enormously.

    The acceptance houses did not restrict their business activities to the market for short-term credit. With the growth of British investment abroad after 1820, they came to specialize in foreign security issues as well, and before 1850 they were also important dealers in foreign exchange and bullion. Later, however, the various merchant houses came to specialize either in the acceptance business or in the issue of security, and foreign exchange dealings came to be concentrated in the hands of the branches of foreign banks in London. These branches increased rapidly in number after 1870, when the growth of the London capital market and the extent of Britain’s foreign trade made it essential for many foreign banks to establish branches in the centre. Increasingly, in the years up to 1814, the operations of these foreign banks presented a growing challenge to the supremacy of the bill on London as an instrument of international payments. For, through the use of the telegraphic process, the accumulated sterling reserves in these foreign branches tended to replace the bill on London as a methods of payment across the exchanges.

    The growing importance of the London capital market, especially after 1870, was associated with the increasing use of sterling as an international currency. Throughout the 19th century Britain, on the whole, maintained a continuous surplus on the current account in its dealings with the rest of the world. But she did not amass large gold reserves chiefly because of her willingness to invest the surplus abroad. Yet, from experience over a number of decades, foreign institutions and traders confidently accepted the ability of Britain to maintain the convertibility of sterling into gold. The stability of sterling was unrivalled, and the possibility of its devaluation never even considered. Sterling was as good as gold, and in some respects even better, because it was more convenient, in the sense that British exporters and importers, who dominated world trade, preferred to draw and be drawn on in pounds of sterling, and because it brought in an income, for holders of sterling received interest payments, whereas gold holdings earned nothing.

    Given the general acceptability of sterling throughout the international economy, it is not surprising to find that gold played only a minor role in settling international debt. A huge sum of foreign contracted state-debt developed whether gold standard was acting or not.

    The vast majority of payments were made either by transfer of bills payable in sterling, or by purchase and sale of bills payable in foreign currencies, or simply by the transfer of credits in the books of the banks, although the volume of business conducted under the latter two heads was never large before 1914. Hence sterling bills of exchange were used not only to finance exports and imports of Britain, but also those of a large part of the rest of the world as well. The reason for this world-wide preference for the pound sterling as a medium of international payments were numerous. It came about partly because Britain was the world’s largest trader, the dominant carrier in the world trade, and the largest single source of foreign capital.

    In part also, it was because the value of the pound sterling was kept stable throughout the period 1821-1914 by rigorous adherence to the gold standard, some would say. But of perhaps much more importance was the high standing of the British acceptance houses and the assurance that any bill receiving their endorsement could be readily discounted, at the world’s most favourable rates, in the London discount market. Combined together, these forces turned London into the financial centre of the world, and the pound sterling into an international acceptable currency.

    Whereas sterling was used to finance the bulk of international financial transactions in the 19th century, gold remained the ultimate means of settling balances which could not be adjusted in any other way.

     Mainstream history: 

    Moreover, the international acceptability of sterling in settlement of debts depended in the final analysis in its ready convertibility into gold. For these reasons, it is necessary to examine in some detail the working of the gold standard in the period before 1914.

    Under gold standard, because the basic monetary unit of each country on the gold standard had a fixed gold content, the value of each country’s currency was fixed in terms of all other currencies at the ‘mint parity’ or ‘par’ value. But if the pare rate of exchange between two currencies, say the pound sterling and the dollar, was fixed by the gold content of each currency, the market rate of exchange was determined by the forces of demand and supplies. In the market, if the demand for dollars rose relatively to their supply, demand declined, the market rate would fall. Under the gold standard, however, the fact residents in the member countries could export and import gold freely placed limits on the extent to which the market rate could rise above or fall below the par rate. If the demand for dollars in London increased so much relatively to the supplies that the market rate of exchange (dollars per pound sterling) rose above the mint parity rate by more than the cost of exporting gold, it would have been profitable for those demanding dollars to buy gold in London, ship it to New York, and sell it for dollars in that market.

    Similarly, if the demand for dollars had fallen relative to the supply forthcoming so that the market rate of dollars had declined below the mint parity by more than the cost of shipping gold, those willing to supply dollars (and thus demanding sterling) would have profited by shipping gold from the United States to London and selling it for sterling.

     [The cost of shipping gold from one financial centre to another allowed a certain degree of flexibility of foreign exchange rates.]

    Consequently, the market rate could fluctuate according to the forces of supply and demand between the two values, termed the ‘gold export’ and ‘gold import’ points. These limiting rates of exchange were established at values above and below the par value determined by the cost of transporting gold. The distance between the gold points could change over time if transport and other costs altered. Similarly, the distance between the two points was relatively large or small depending on the distance between the two countries whose currencies were linked together. In general, the spot rate of the dollar in London would move towards the gold export point when Britain experienced a deficit in its balance of payments with the United States (an excess demand for dollars and an supply of sterling in the exchange market).

    Similarly, a British surplus with the United States would produce an excess supply of dollars (demand for sterling) and a decline in the market rate of the dollar towards the gold import point. Normally, most transactions would have been conducted in foreign exchange, and only large and persistent imbalances between the two countries would have produced a gold flows. But while gold flows produced short-run balancing of the supply of and demand for foreign exchange, they obvious could not be continued indefinitely, for a country could not sustain gold exports forever without running out of metal. Gold import could go on somewhat longer perhaps, but eventually the importing country’s trading partners would exhaust their supplies of gold. What then was the nature of the long-run mechanism of adjustment under the gold standard that prevented these situations from arising. (end of mainstream history)

    Reality of the gold exchange standard:

    Gold exchange standard by law 1820 in Britain.

    Already in the mid-1820s the Bank of England, the most powerful and august financial organ of the world had severe problems. Early on 17 December, John Charles Herries (1778-1855), financial secretary to the Treasury, called Mrs. Arbuthnot and told her that “such has been the extra-ordinary demand for gold to supply the country bankers and to meet the general run upon them that the bank of England was completely drained of its specie and was reduced to 100.000 sovereigns, with which it would have to open today and meet demands of probably four times that amount.”

    Quite by accident, however, the bank officials that day stumbled upon a huge, unmark-ed chest that contained £1.5 mill. in solid sterling. But three days later the bank again was down, now to 60.000 sovereigns. Now Rothschild that was used by the bank to keep up its golds stocks, delivered £200.000 more. Thus the bank avoided suspensi-on of payments saved its credit.

    How could it turn out so bad? First of all stats-bonds and loans originating from the Napoleonic wars had to be redeemed. The price of the war was £638 mill. From the end of Napoleonic wars the tradition that governments financed wars issuing notes and then forget the real finance till after the war had changed. Now Rothschild actually went in and financed by lending in peacetime, when the right thing perhaps rather would have been not hide that war means enormous expenditures. In the period 1818-1832 Rothschild handled seven of twenty six foreign government loans raised in London (all in all £21 mill. or 39% of the whole) and an unknown amount of different governments’ bonds.

     In November 1824 the exchanges moved against Britain, when the huge export of capital for foreign-government and private loans and growing imports of consumer goods led to a reversal of the inflow of gold and silver, which now began to leave the country in growing quantities. [The American market competed with the European. The first try to overtrow the Russian Tsar was take place 14 December 1825 financed by the Bank of England. And also huge very risky mining-investments in South America. Among governments and people in these new countries the slogan was to spend money especially to pay for import with with gold and silver The stream of precious metal from South America made possible for Britain return to gold-bullion standard in 1819 and made it possible for Bank of England to resume payments in specie in 1821.]

    The stock exchange bull market increased the feeling of unease in some minds. Wellington was thinking, Mrs Arbuthnot noted: ”the greatest national calmities will be the consequences of this speculation mania, that all the companies are bubbles invented for stockjobbing purposes, and that there will be a general crash!” This prediction was in March 1825, and the Duke was right.

    December 1825 was called the black month. Several big financial houses announced failure in London Times. One of them Chalmer & Co was London key firm with links to the country banks in Yorkshire. On 13 December the real panic started. The country bankers was in London with the purpose to procure specie and bank notes as a protection against a run on them. No one had any gold.

    Mainstream history:

    In the question Britain’s economic crises 1825-1866 we have to notice that the weakness of the credit-system and monetary policy of the Bank of England. It has been claimed from more sides that the issuing bank did not handle the periods of speculation very well, and that was the reason why a metal basic was proposed, so that credits and the circulation of monetary units were not chosen at the bank’s whim. But in reality that is not true. But notice a further inflationary step was taken: monetary units in question were notes decided by the Bill of 1844. It was named by its originator Peel.  

    The law decided that the notes should be covered by gold, when exclude a certain (unknown?) fixed amount, and it was decided that the stock of notes should influenced by anything but exchange in the inflow of gold. This principle was more of less used in other countries and at the same time the right to issue notes was also monopolized in central banks. Flexible gold exchange standard is the keyword. The second step on the inflation-ladder. Now we only need the elected politicians to take the responsibility after they have divided it between them.

    To find out how more money make much more paper and stop the real production via the private limited company at last, you have to go to part 2. I shall also try to give a few proposals pointing in a more wealthy and healthy direction. The unofficial history of finances closely connected to this subject is also included:

    Part 2

    deals primery with the problems of inflation, speculation and subjects concerning the private limited company when the papers get “hot air”, and it also deals with the subjects dealt with in part 1, but now more directly in light of inflation and speculation.

    [1] And the year Wolfgang Amadeus Mozart (1756-1791) finished Lodron Nightmusic (included in Serenate Notturna, K.239), occasional pieces to celebrate the name-day of Countess Antonia Lodron (born Arco) 13th June .

    Jihad in France

    Filed under: crimes, migration, perspectives, Statistics, Terrorism — jensn @ 10:58 pm

    Jihad in France


     This site defintely gives profound information on the issue.


    October 23, 2006

    Consideration in UN you was not meant to know about

    If you find it worth while to investigate some of the considerations made by UN officials on the subject “Fertility, Work Force and Future Welfare”, you could go to:


    [there are also specific considerations about Denmark, Italy og Germany perhaps made in the respective countries, but without the peoples knowing what will come]

    These considerations were never meant to be debated in the open, but as they write in their reading/analysis the conclusions have to be known by the political architects who in reality informs the politicians – (and to my knowledge:) just a few of them are able to understand what is going on.

    One aspect is naturally or rather unnaturally not spoken out:

    Perhaps less politics after a transition period with turmoil to alter things fundamentaly away from the problems made entirely by the politicians would be the best solution.


    Europe does not need immigrants

    Filed under: Economic History, International Economics, migration, Statistics — jensn @ 8:31 pm

    Does Europe Need Immigrants? Population and Work Force Projections

    David A. Coleman, Professor of Demography in Oxford, October 2002

    International Migration Review, Vol. 26, No. 2, Special Issue: The New Europe and International Migration (Summer, 1992), pp. 413-461 doi:10.2307/2547066

    Abstract: It has been argued that Europe needs more immigrants to restore its age structure and its work force. Even if low European fertility continues, decline in the work force is relatively modest in the medium term and is considerably lower than the potential reserve labor force in Europe. It seems eccentric to propose the resumption of immigration for low-grade labor when there are 15 million unemployed in Europe, most under age 25 and many themselves immigrants, especially since future demand for labor emphasizes high skills. A resumption of general immigration to ensure population stabilization would require inflows much higher even than those previously considered unacceptable. Instead, attention should be given to making it easier for women to combine their desires for children with those for work.

    European Future – Interested: http://danmark.wordpress.com/2006/05/23/our-future-interested/ 

    Why not report the real birthrates of Europe: http://danmark.wordpress.com/2006/05/19/12/

    Immigrant load: http://danmark.wordpress.com/2006/06/21/immigrant-load/

    Real Welfare And Real Globalization: http://danmark.wordpress.com/2006/05/18/real-welfare-real-globalization/

    EU Economics In Secret File

    Filed under: Economic History, Economics, International Economics, Statistics — jensn @ 3:11 pm

    EU Economics in secret file

    Somebody may remember that the European Parliament had a voting about a new order on limitation of the Freedom of Speech exactly when the banners’ and ambassies’ arsens wildly caused havoc in the Middle East and in South Asia. In reality the new proposal of the notorious EU-constitution included such general provisions too.

    Perhaps some may take the opinion that the danger is blowing over. Now there will not come more EU to be introduced on this account. EU is exactly constructed precisely in opposite. Always more, never less.

    The system was consciously built in the fifties on the foundation described by Bernard Connolly. In 1995 a senior civil servant Bernard Connolly took on leave from his job as manager in the section for Monetary issues of the European Commission to write his controversial book. It was a product of his freedom of work: ‘The Rotten Heart Of Europe’ was the title.

    He argues that the compulsory monetary value of unit is being used to generate an overwhelming moment as leverage for getting a political union of an progressive scale in place. The elite in Germany and France must divide the power. Mr. Connolly got his resignation at once. He has been proposed to try to defend himself in the European Court in Luxembourg. As far as we know he cleverly did not show up after having experienced both this and that.

    He writes among other things that the European politicians seldom have felt strongly the need to hide their wishes to create the United States Of Europe, especially in their mutual talks in periods between elections.

    “The transformation of power had to begin with the relatively non-controversial functions of ‘economics’ and of ‘production of steel’ to minimize the worries about loosing or the break down of the national sovereignty. You had to secure the functional transformation of power became irreversible (without any possible reverse), a relation guaranteed the treaty-doctrine acquis communitaire to secure that all power transferred to (European) institutions of community was made permanent European law, and at the same time that they were taken out of the sets of laws in the member countries.”

    EU has some so-called regulations of how the create a new law, with which the systems of law in the member states conflicts. The Commission have drawn back the worst. It could be matters of insults connected to subjects abroad, where the press suddenly would have to take all laws in the world into consideration. It is not the only thing. The proposal from the Commission that is on retreat now implied that Italian law had to count, if anybody in Italy felt offended by bad publicity in the for example the British media. The incident with the Muhammed-drawings threw a bright lightening on what was coming up in the EU-law-complex.

    The proposal that had to be altered now also implied that Danish courts would have to judge according to Pakistani law, because the country of harm in the proposal did not just include the member states, but generally all countries of the world.Even the media proposal of law has provisionally been removed. The responsible Italian Commissioner Franco Frattini did actually report recently that a common EU-legislation about offences in media is need.

    Euro and Economics, for example in Spain:

    Since 1997 (to 1996) the prices on houses have increased by 300 p.c. It has naturally implied the begin of a mega demand, and increased the building activity substantially in the country. In the first 11 months of 2005 the deficit on the balance of payments amounted 7.3 p.c. of GNP, and the deficit was expected (late 2005) to increase even further. The deficit could easily be forecasted to more than 8 p.c. in 2006, and even more than 9 p.c. in 2007. Spain has (officially) low unemployment and high artificial growth – founded on what? The inflation is higher than in the other Euro-countries, and the competition prevent Spain from reach balance. Everything is just fine…, in about 7 years not a single Spanish export industry is left, if the development is allowed to continue.

    The development looks a great deal like the development in USA ”and another small country in the North”, but USA has the possibility to reduce the value of the US-dollar and spin itself into a web of security with investments of US-papers in areas of low wages. This is not possible to any comparable degree for Spain “and for the small country in the North”.

    Read about and compare this report with another newspaper report (for fun and to note the inconsistency) Spain needs lots of immigrants, the growth is “almost” extreme:

    http://danmark.wordpress.com/2006/06/09/europa-500000-600000-indvandrere-pr-aar-fremover/ (in Danish)

    A propos:

    EU’s hidden file Of Economics: Of the member states. There is a good reason why the file has been hidden, when you read fragments of it. It is funny to look at some of figures of indication in the Danish period Notat no 1166 of 10 Marsh 2006, and then compare those figures with what we read in the mainstream press.

    It is maintained that the employment, defined as “the number 15-64 years old in jobs divided with the total number in this group”, should be the highest in Denmark 75,6 p.c. – that implies officially that 24,3 p.c. must be unemployed, expelled, under education, on early retirement and so on – “they call their child almost everthing”. There is a long distance down to Holland with degree of employment of 73.1 – and let exposure that the referred Danish figure is a little overestimated or directly false reported probably from Denmark. Germany and France are to found far below on the file as respectively 11 and 13, and Spain, as you just read should be placed pretty high on the file/the score take the place no 18. On place no 25 you find Polan with a degree of employment of 51.7 p.c., that implies that just the half of the population between 15 and 64 years old are unemployed in Polan with 48,3 mill. inhabitants. It looks like this fact that we have divide with them in the years to come. If we for a moment turn to the investments; we read that Denmark take place no 13 – if financial investments (lending in the widest meaning of the word) are included is not easy to say. And here you find Spain in place no 3 (financial investments ditto).

    We could guess on Tjekkia and Ireland with lowest taxation in Europe perhaps take the places 1 and 2. We cannot use more room for a highly questionable EU-file that has been hidden for good reasons – perhaps to be used to instruct the professional politicians. It is difficult to imagine another use. The impacts from Euro has been qualified describe before EU-referendum in Denmark in 1997 – qualified means the results matched our diagnosis/prognosis/forcast:


    How the so-called hard Euro devastate the remains of the European real economics in an actually weak Europe:

    http://danmark.wordpress.com/2006/06/05/usa-arabien-eu-i-dilemma/ (in Danish)


    http://danmark.wordpress.com/2006/05/25/euro-float-in-oil/ (in English)

    European workforce (corrected):


    Real Welfare And Real Globalization:



    New International Monetary System (Monetary Globalization):


    2. juli 2006

    Joern E. Vig, M. Sc. (Economics)

    Real Welfare and Real Globalization

    From ideology to reality

    An obstinate and persistent propaganda about an idea from 1930s bore fruit. Very well, a better system of hospital-treatment and new schools did not seem to be the worst. But it certainly did not stop here. The ideology had got off the ground, and ideologies always continue towards the clouds, from where you perhaps are aware of that it is not easy to listen to and to look at the Earth.

    The system of welfare in Denmark built on services and transfers as private right, but arranged with collective financing, so that the originators of the project imagined that individuals of the society should receive a little more from the society than they actually paid in taxes. This was of course nonsense, because the public cannot give you anything, before it has collected it via taxes[1], printed too many notes or borrowed the money.

    Welfare and Globalization in an European context

    In Ireland the export income was 7.5 times larger than the public transfers to unemployed, expelled and pensioners in 2004. In Denmark 1.95 times.

    Welfare + Globalization – Ideology = Future

    Denmark as an example: Population 5,427,459 – a little smaller than Berlin or Paris distributed on a larger area

    The chairman of the headmasters’ union Peter Kuhlmann confirmed April 9 2006:

    ”… that the new reform of the gymnasium has not tempted more in the gymnasium to choose the scientific subjects. That is caused by lack of well-qualified scientific education in the Folkeschool…”

    Welfare and globalization are closely connected problems, the gained sources of finance from globalization is the basis of welfare. An overall solution of the two parts in the Danish reality is the presumption to get any of them solved.

    Welfare is almost totally tax-financed transfers and public services in Denmark, i.e. the payments and the services are private rights but the finance is collective.

    In other European countries nations the principle of insurance is much more dominating, i.e. also individual financing. Globalization is a new smart word for the international competition. Even where the principle of insurance is leading the development there is heavy considerations of what to do to secure the home front.

    Shifting Danish governments have built up the welfare system over a period of 40 years, developed the society further or chosen to dismantle it. By this the country has come in a situation, where we will hit natural stops of financing the welfare a few years from now. Taxation yield cannot finance the welfare, and the rate of taxation, the prices on the export goods and the state debt stops the development also via globalization.

    To increase the share on the labour market in order to increase the yield from taxation is one strong side; and strong interests try to make us believe in this one-sided solution. That a much bigger production is needed is simply totally ignored.

    It is central to make it attractive to establish new businesses and to extend the part of the existing that are fit for the development with strong international competition and welfare.

    The welfare in Denmark cannot be financed, if the country as the country has been structured has to continue to export to get enough income of which the welfare must be financed.

    From this starting point the way must be found, regardless what you may have learnt of or misused of John Maynard Keynes’s works and apart from this have learnt of welfare-ideological assumption-logic. There are a few possibilities of choise to adapt, but not a lot, and it is certainly an urgent matter. Export-incomes simply have to be gained. At the same time the total consumption has to be reduced, simply to because there is too little capital in the sector of production.

    It has become advantageous to invest the capital outside the production in Denmark or invest it abroad. This implies that more than 594,112 (in 2004) or more than 22 p.c. are unemployed or expelled, cf. table 2 and table 1 respectively below.

    Globalization means that the countries outside Western Europe actually have become more able to take over a lot the productions that earlier had been in clover here. Outside Western Europe and USA you do not have a fully developed industrial society, and even enriched or loaded with a welfare system.

    The development of globalization has been active since the early 1980s, where outsourcing began from USA. The businesses reflag, establish new firms in Eastern European and Asian areas, where the cost level is substantial lower than here, or the foreign countries start businesses that as time goes by easily drive out the most wage-heavy Western businesses of competition.

    The respective governments in the Europe must try to adapt to this reality, even though it perhaps might be regarded as substantial deviation from at least one ideological project, when you look carefully at the welfare and also at EU.

    It is not possible to fight against the globalization with other means than bloc and import policy that just postpone the pain for the time being or end up in regimes fare from democracy. EU is such an experiment to restrain the competition from outside. And as EU is an ideological project it obvious continues its rather hopeless battle against the development. The same for all the other ideological conscious. They imagine they fight globalization, that they have completely misunderstood, and they believe the governments in the rich countries have started globalization as an ideological project, if not it must – in their imagination – be the result entirely of the liberalistic way of thinking. It is not. While the economic summit of the world are at a meeting indoor the demonstrations are active outdoor. That the participants in the summit-meeting try to find protection against the worst effects of globalization that developing and the less developed countries actually benefit from is far from understood among the demonstrators in the streets outside. You can also say that the countries that take up the challenge have not yet reached a level of development or dismantling as the situation in most the Western countries.

    The fact is however that the swing of the pendulum leads the development to the countries that from their own points of view need development, and away from the West that will develope or dismantle, if no big changes are to take place in the way the responsible think and act in the West. All ideology still harms here.

    Farewell to the ideologies – or collapse
    Immigration to Western Europe built on an ideology or view of the world: by moving the many poor and oppressed in the Third world to the Western world the problems world wide would be solved, they imagine. That figures, numbers of births uncover the dimensions of the project, and it’s impossible success does not enter the brains of ideologists, because figures and logic is realism – idealism attend to moods, feelings including false sentimentality as the subject to be directed from.

    A lot of businesses were/are very much interested in getting cheap labour force in to press the wages to a more tolerable level, the money wages had been forced through by strong unions – often monopolies – while the taxes as never before rose at the same time to make it possible for the welfare-elite to develop its project towards the clouds.

    The business interest of lower rates of wage was no ideology, even though the ideological liberal way of thinking rather has to be blamed in another connection as we shall see.

    It appeared however that chiefly immigrants without the needed qualifications went to Western Europe from the Middle East, South Asia and Africa. A few coped with the labour market, but the big majority were let in, and just draw extra from the welfare that has been built up without any demand from the ordinary citizens by the Danish ambitious ideologists.

    The Danish Welfare Commission has in the May-report 2005 shown that immigrants consume more than three times more of the public budget compared with the Danish relatively to their percentage part of the population. [compare with the Welfare Commission in Boersen December 1 th 2005].

    That distribution of ages influences this fact is in a realistic analysis without any relevance to the problem. Even the government has proven this in Denmark (in it’s thinktank the Rockwool-foundation). Much of what was expected from this project has not been fulfilled, compare with: http://www.lilliput-information.com/six.html eller http://www.lilliput-information.com (in Danish)

    Immigrants draw 40 p.c. of the social welfare, the earlier Minister of Social Affaires Henriette Kjaer was referred to have reported May 1th 2005: http://www.filtrat.dk. And Aarhus municipality: “58 p.c. of the immigrants on social welfare and alike are unfitted for work – the politicians are upset”.

    The liberal wing cannot reject that the imagination about the free movement of the labour force was tried in EF/EU (read details below). It was an ideological miss, an imbalance that has to be rectified, if it is possible. It was however easy to reach agreement with other in the ideological family about this theme. The International has sung the song about people that could settle down, where they were pleased in order finally to hear the trumpets of Jerico or Judgments Day.

    But there is always mistakes in the ideological problems. After the collapse of the Eastern Bloc it ought to be obvious to anyone what ideology – every ideology – leads to. But no, now almost incredible numbers of civil servants were employed and a whole so-called industry of refugees grew up. And this automatically lead to tax-payment to all those who had built up the welfare system, to those acting in the welfare system, and to those protecting the unworried continuing of the system from the beginning of the 1980s with a Danish Foreigners’ Law with a jurisdiction extended to whole world and with turned up burden of proof.

    In the period 1960-2001: Tax-payments more than doubled, and the state debt was multiplied 9.7 times accounted in fixed prices, the number of helpers doubled while the number that needed help was multiplied with three, and the original population decreased every year from 1968. Documentation: http://www.lilliput-information.com/engvelg.html

    In spite of these facts the song sounded that the immigration created employment, and this was what was needed, the ideology-mislead leaders maintained. Latest the song has changed to that we need the workforce, and that is the reason why we have to have more immigrants. Perhaps it should be well-qualified immigrants this time, but the question still is: Where are they expected to come from? We certain do not need employment that further limits the saleable production and the export is my answer.

    It was income from export to pay our very expensive welfare system that was needed.

    Already from 1968 there was a birth-deficit among the Danes every year[2]. This will succeed in the long run when you have a system, where payments and finance are arranged in a way that they should equalized between the citizens in a lifetime. In the first decade of the 21st century big shares of older people appear because of this birth-deficit, and this big share of elderly come at the same time as the workforce decreases caused by decreased accession. Additionally we have the problem of globalization that actually has become a much bigger hurdle to overcome caused by the many ideological mistakes.

    Competing ideologies created a fateful arrangement
    In the period while the economy-consideration still were debated publicly among the political selected (until about the midd 1980s) you could frequently hear about e.g. import and export rates as respectively the share of GNP that the import respectively the export accounted for of the total disposal amount.

    This worried the responsible, because especially in Denmark we had to import so much to create the necessary export using our skills. Denmark was/is very vulnerable towards inflation. And it came, and it became unpopular at last even among its earlier strongest spokesmen. It was caused by – inspired by John Maynard Keynes’s theory bits – a public surplus-consumption that rised its share from 14 p.c. to 28 p.c. of GNP that was even tripled in the period.[3] Reality showed itself.

    We also were expected to understand that the vulnerability of the country has disappeared since we entered EU, that ideological was thought of as an almost self-sufficient bloc a la USA.

    The Danish national account is defective caused by ideological fragments, primery originating from John Maynard Keynes’ works, that was built into the Danish national account by Viggo Kampmann. That is the reason why we will not use this account very much. The defective fragments were built in while Viggo Kampmann was a civil servant. Later on he became Prime Minister from 1960 to 1962.

    Denmark is a country that from the course of nature has not given us much more to supply than agriculture production in newer times. Relatively late there was however created an industrial establishment that gradually took the lead in the foreign trade and the income after WW2. An effective system of schools and education was just the condition of that to happen.

    Then the abrupt radical change came (but put into plans long before) to the total system of education in the 1960, because the task was to built up a tax-financed and ideology-ruled system of welfare and a massive public sector belonging together. A public sector to solve a lot of problems that almost nobody outside the leading welfare-elite had understood they had[4].

    An obstinate and persistent propaganda about an idea from 1930s bore fruit. Very well, a better system of hospital-treatment and new schools did not seem the worst. But it certainly did not stop here. The ideology had got off the ground, and ideologies always continue towards the clouds, from where you a aware of that it is not easy to listen to and to look at the Earth.

    A small supplement:

    The economic reality is that it is the producers in every society who drive the economy forwards, savings is regarded as the fuel of this process.

    What the consumers – private and public – give out does not start the economy, but perhaps it maintains the plant. The other thing has never happened, and will never happen. Sometimes we hear economy-commentators report that the expenditures spend on private consumption amounts to a certain percent of the entire demand. We also hear a lot of nonsense about consumer-expectations. To give the reader an impression that almost the opposite is deciding the following is mentioned: In the end the 1920s the private consumption in USA amounted to just 8.5 p.c. of the producers’ total expenditures. I.e. consumption of factors for production was 12 times bigger than the private consumption.

    The process of production consists of a lot of complex stages – a lot more today. It is a necessary implication of this that total combined expenditures at all those stages/levels have to substantial exceed the expenditures of consumption. As an illustration you might imagine that total capital apparatus gradually transformed to final consumption; this could just happen in a period of several years (here 12). What has been paid on consumption – private as well as public – originate from production, while production originate from capital included expenditures on factors for production, of which wage-pay is a central factor-pay, that in the first link originate from savings. Therefore, the more savings the more real capital is created and accumulated in order to produce and consume more.

    You could accept the following fact:Government expenditures and private consumption do not stimulate, but drain the economy. That is true regardless if you find these expenditures fair or you do not. This is deciding to understand.

    The results of changing ideologic treatement can be read
    Table 1

    Not working outside the working ages in 2004

    [The workforce that supply themselves on labour market: 2,867,000]

    Outside the labour market
    Early retirement pensioners[5]: 269,135
    In between early retirement and Folk-pensioners: 205,761
    Total: 1,224,331

    Source : New from Denmark’s Statistics: No 326, 29 July 2005

    Table 2 Not working in the working ages (16-66 years) in 2004In the working ages 16-66 years
    Registred unemployed: 335,000
    Clients of social security: 144,000
    Revalidents: 26,748
    Municipal activated: 49,268
    Job center-activated: 19,269
    On leave: 7,535
    On yield of unemployment: 12.302

    Total: 594,142

    Source : New from Denmark’s Statistics: No 326, 29 July 2005 [6]

    Total tabel 1 og Tabel 2 : 1,818,473

    Table 3 Other receivers of public transfers and public civil servants in 2004:Receivers of sickness- and childbirth benefits: 423,858
    Public employed: 874,500
    Total: 1,298,358

    Total of table 1, table 2 and table 3 number of receivers of transfers as basis of living and public employed: 3,116,831 of a population of 5,427,459

    To reach the total number of the population the number of healthy employed in saleable production and about 1 mio. children and young ones less than 18 years have to be added, and the number of receivers of sickness- and childbirth benefits in the public sector have to be subtracted, some of the last mentioned and some of young ones less than 18 years are obviously included in number mentioned above.

    Public running costs: 771.6 bill. dkr. in 2004 and 801,6 bill. dkr. (budget 2006)
    Of this transfers: 336.7 bill. dkr. in 2004 and 375,4 bill. dkr. (budget 2006)
    Export income totally: 656.6 bill. dkr. in 2004 and 663.1 bill. dkr. (budget 2006)

    Source : New from Denmark’s Statistics: No 30, 24 January 2006
    Source : New from Denmark’s Statistics: No 131, 29 March 2006

    Just one comparing example:

    In Ireland the export income was 7.5 times larger than the public transfers to unemployed, expelled and pensioners in 2004. In Denmark the factor was 1.95. Source: http://www.cso.ie/statistics/expend_social_welfare.htm and http://www.cso.ie/statistics/botrade.htm

    Denmark has larger public running costs than export income. Of every dkr of export income 0.51 dkr. is used on transfers, and of every dkr. of export income 0.66 dkr. is used on public running costs, mostly transfers and public wages.

    Without further you conclude that the export income that we want to increase in order to make free scope for the financing on home front, is not officially expected to increase in the same rate as the public running costs and the public transfers.

    The export is just used as an indicator here, and with this comparison it is relatively easy to compare the figures in this reading with the corresponding results in other countries that have done much better, Ireland, Iceland and the Czech Republic.

    With 2,867,000 in the workforce in 2004 distributed on 594,192 unemployed and expelled, 874,500 public employees and about 1,400,000 in saleable production subtracted all in all 423,858 receivers of sickness- and childbirth benefits the society cannot continue to finance the welfare payments and also finance the needed expenditures concerning 1,224,331 pensioners and alike in reality outside the labour market. The last number even increases relatively and not just the intake, but also the workforce itself are expected to drop absolutely.

    The official number in the workforce in period 2001-2005 has been reduced by more than 30,000. The official number outside the workforce has been increased by more than 50,000 in the same period. Even more distance between a smaller workforce and a increasing number in the ages of pension is expected. According to Erhvervsbladet 4 Marsh 2006 10 out of 14 Labour Market Councils estimate that the workforce will fall by 8,000 more in the year 2007. The Danish Welfare Commission prognosticated 350,000 fewer in the workforce and 400,000 more in the group of pensioners in the year 2040, if the parameters of development is maintained as today. This implies a budget deficit of about 100 bill. dkr. a year.

    6 April 2006 Danish union of Employers reports that 50,000 will leave the labour market as pensioners and alike the next 4 years. Assumed their jobs are not filled by others, this implies a lost of income and lost a extra public expenditure of about 15 bill. dkr. a year in 4 years.

    One thing is that the employees are expelled from workforce, another is that the scale of groups of ages is staggered substantial in the future caused by ageing and the lack of intake to the workforce – caused by the low birth rate since 1968, and later on the immigration that demonstrably three times as often as for the Danes leads to receivers of transfers from the young ages in even second and third generation: http://www.lilliput-information.com/six.html#_ftn5 , according to the Danish Welfare Commission in Boersen 1 November 2005, and former Socialminister Henriette Kjær 1 May 2005, read below.

    In the groups early pensioners cf. table 1 and other not-working in the ages 16-66 years cf. table 2 there were 863,277 of which about 100,000 treatment-demanding mentally ill, prostitutes, treatment-demanding alcoholics, drug-misusers and homeless, according to the Danish Welfare Commission, source: Analysis Report, May 2004, chapter 9.Immigrants and their later descendants in all generations are according to the Danish Welfare Commission represented 3 times as often when it comes to draw on the public sector, and the groups on early retirement also have surplus-representation compared with their share of the population.

    The Rockwool Foundation reported in 2001 that 36 p.c. of the non-Western women in Denmark supply themselves on labour market; among the Danish women 72 p.c. supply themselves. I.e. 64 p.c. of the non-Western women are not disposal for the labour market. Of those about 13,000 did not receive public transfers, according to Ritzaus 10 Marsh 2005 (one year later, of course), but the rest received early retirement pension and alike. They are on the other hand underrepresented in the group of Folk-pensioners, and in the receiver group in between, where their share amount to about 10 p.c. against the Danes’ 22.6 p.c.

    If we stick to the correction of foreigner account of 25 years on http://www.lilliput-information.com/uscan.html (most foreign foreigners about 13 p.c.), the share of most foreign immigrants and descendants among the unemployed and the expelled: 3 multiplied with about 13 p.c. equal about 40 p.c. This is their draw on the services and the payments. This figure was confirmed by former Social Minister Henriette Kjaer who reported this concerning the social security (cf. above).

    [In addition third check of our correction to the number of foreigners in Denmark]

    The estimated number of foreign receivers in the working ages, cf. table 1 and table 2: not less than : (594,142 + 269,235)*0.40 = 345,351

    I.e. not less than 345,000 of the receivers of transfers in the working ages were immigrants and their descendants in 2004 [today more like 100,000 more], and 458,000 were Danes.

    Increased saleable production and export – the system of welfare reformed
    If the welfare as we have known it for 40 years, shall be preserved, the country necessary has to be prepared for the reorganization towards the strong international competition globally. The immigration is the liberal and international ideological part of. Therefore substantial changes have to be introduced. These changes must perhaps be bigger than changes from vegetable to animal production in the last half of the 1800s under the European agriculture crisis.

    In reality the crisis then arose caused by the carrying capacity of American rails made possible by the new processes of performing hard steal. The freight rates a ton dropped immense, and lead to an advantage of competition for the American grain coming far away from the Midd West finally to be supplied in Europe at substantial lower prices on both bread grain and feeding grain. This had nothing to do with ideology. It was simply an invention. The PC was also an invention.

    It will be almost impossible to make changes among the politicians as the VKR-government accepted the ideological welfare policy already in 1968, and also because no politician will risk his skin, and everybody knows it might be their turn to take responsibility of necessity after a change of government.

    Therefore all will participate with small bits and aim at that the others to face the music, when the projects as here have long-term impacts. In addition more than 60 p.c. of voters are employed by the public, sent on daily benefits or social security.The system then continues until it dissolves itself – precisely like other ideological projects – or are stopped by the creditors.

    You might expect small adjustments without any real impacts in the political space. And this will with mathematical certainty lead the country directly to the state’s bankruptcy, where the welfaresystem shall being abolished randomly stick by stick, when we assume that the war does not come, before quickly increasing deficits on the public budget are realized. At the same time we will experience falling export incomes, and the outsourcing will increase further caused by the neglected tax-decreased, even quicker wastage from the workforce coming from both the increase in the group of pensioner, the expelling from the workforce, and the lacking intake to the workforce in the other end.

    The ideologists will continuing maintain that peace and no danger are ruling, and the last 20 p.c. will never discover/admit anything has happened, even after the war.

    Nevertheless it must right to point at some ways that could save the system that a lot of people have got used to is ruling, and that among other things decide their rent. Some of it must be suggested dismantled, because the development has shown that it does not have the impacts they used as an argument including the benefits that was assumed when the system was arranged.

    When it is officially maintained that the purpose of the ongoing (May 2006) agreement attempts concerning the welfare-negotiations unbalanced should be to get more individuals into the workforce, then it will just effect the yield of taxation in upward direction, and at the same time even increase the incentives to accept more immigration, i.e. and inflow at a higher speed.

    Well then, the questions of globalization and of welfare has not been linked. This will undoubtedly be fateful. More tax-payments to finance the welfare do not solve any of the problems fundamentally. The complex of problems is even getting worse, as we shall see. Perhaps the catastrophe is being postponed a little, and this is in every case almost the longest engaged professional politicians a prepared to go in the thoughts and actions, when something big has to happen in their world building mostly on party loyalty fare from reality.

    Let us take their words for granted: More to the workforce, i.e. more who supply themselves on the labour market than today. Does this implies more jobs in saleable production, or does it imply more public employed (is to answered below)

    Areas of problems

    1. Childbirths in Denmark:

    a. In average the first child is born about the mother’s 28th years – hereafter we are in difficulties to get more children.

    b. 15-20 p.c. of the women of age 40 in the Western countries have no children – this figure has increased substantially.

    c. The number of abortions has recently risen again to more than 15,000 of a birth cohort of 68,000-70,000.

    As b. concerns it is distinct characterizing for original European being unemployed or expelled from the labour market that they don’t dare to bear children.

    2. Immigrants

    3. European directives and recommendations

    4. Welfare arrangements, generally

    5. Educations and research

    6. Income-tax reductions

    The taxes have to cover the public expenditures. With increasing intake to group of more than 65 years old, and still fewer in the workforce caused by lacking childbirths and the expelling from the labour market it become impossible to get the yield of taxes to cover the public expenditures. Already in 2010 a deficit on budget of 40 bill. dkr.

    If the taxes are increased, the total tax-base of which the taxes are accounted from, and also included in, will be decreased, because the saleable production and the export go down caused by the worsen status of competition.

    This might seem like a problem corresponding to squaring the circle, but it is no, as the circle and the square has nothing to do with ideology.

    The system of welfare in Denmark built on services and transfers as private right, but arranged with collective financing, so that the originators of the project imagined that individuals of the society should receive a little more from the society than they actually paid in taxes. This was of course nonsense, because the public cannot give you anything, before it has collected it via taxes[7], printed too many notes or borrowed the money. But we skip this detail. We look at the impacts of the way of thinking among the political leaders, and we try to give some instruction of where the system must be cleansed from ideology.

    All welfare-ideology, liberalism, internationalism, keynesianism, Europeanism, all ideology must be removed from the ruling Danish welfare-system.

    1. Childbirths:

    It could given a try to effect the age in which the first child is born and effect the the number of women who give birth – “without sending the women anywhere”.

    By the number of children could eventually be increased. The proposal from the government about varying transfers to individual in the education system could perhaps have an effect, even though the proposal in the open was made to increase the number of tax-payers by stimulating the students to finish the education earlier. When we know that a substantial but unknown amount of grants/scholarships are paid to young ones who speculate in these payments, and often change their study with pleasure to maintain the payments, you could say that the arrangement have the same effect as supplementary social security in a number of cases. Some new regulations are not expected to be without effects here, perhaps more is needed (read below).

    One proposal of how the number of childbirths can be increased among unemployed and expelled individuals of more than 30 years of age, is to transfer a public payment according to the difference between their present payment and the lowest wage on the labour market for five years, when they give birth to their first child after the mothers 29th year. The payment is effective for both parents.

    Total expenditures in connection with abortion that does not have medical or criminal indication must be collected from the miscarrying herself or from the father to the child.

    Public measured out and assigned gifts to families with children do increase the incentive to give birth among childless, or gifts to elderly or other marginal groups of voters who could threaten a coming election. This does have any other

    explanation than distribution-political causes. In Turkey and Thailand they distribute kitchen-machines before the election. There is not much difference. All these public assigned gifts must re-arranged to lower taxes, that increases the demand for the workforce in an increasing saleable production.

    2. Immigrants

    When 40 p.c. of the unemployed and expelled in the working ages in Denmark belong to a part-population that amount to 13 p.c. totally, it is difficult even for the Danish Welfare Commission to find solutions to financing-problem for the welfare system by manipulating this very large part of the problem in 2006 after 25 years of mass-immigration to be a central part of the solution to the problem in the future.

    In other of the government’s thinktanks it is much easier to do so.

    The immigration still increased from 11,369 new in 2004 to 12,644 new foreign citizens in 2005, of which 9.730 came from areas outside Western Europe, North America, Israel, Japan, Australia and New Z


    2006 Free immigration:
    No doubt, the liberalism will also have concessions after the international has harvested the most of yield from immigration for the last 25 years:

    Already before the election in 2001 a so-call green-card-arrangement was introduced. It implies a maximum tax rate of 25 p.c. of the earning for the first three years for foreign, high-educated key-employees. With this taxation the concerned get the same rights and the same admission to the public financed Danish welfare as the Danes who of course must pay the full price. Even such a high price that our saleable products cannot be produced and sold in sufficient amount to finance the welfare in the future. So, you see the leading figures certainly do know what is wrong
    Documentation: http://www.workindenmark.dk/ Taxation/0/1/0

    The arrangement has shown itself not to have the intended effects. The reason must be found in the fact that the qualified began immigrating to USA and England in the beginning of the 1980s.

    In the spring of 2006 a new arrangement is being introduced that permits immigrants without further to cross the border to Denmark and look for a job for 6 month, without any formal application. Uncles, cousins, brothers-in-law are already here.

    With Danish voters NO by referendum twice to more EU the Danish politicians compete to secure that Denmark accept the coming EU-rules beforehand:

    3. EU-directives and recommendations

    First step

    Interior market 1986 with four freedoms, where products, services, capital and workforce could move freely between the member states from 1. January 1993. All EU-citizens.

    Second step

    Schengen co-operation was decided in 1985 and lead actual to co-operation with Amsterdam-treaty coming into force 1 May 1999. Every border control inside EU was removed. Citizens from other parts of the world in principle got the same right to move around freely. Common minimum rules and regulation of immigration must secure that one member-state not just transfer its burdens to the other member state.

    Third step:

    25 November 2003 where EU-directive was decided: about status of the third-world-immigrants as residents after five years unbroken and legal stay in EU were given free movement in EU too.

    Next step

    11 January 2005 EU-Commission published a so-called greenbook about the method to manage the economic migration (between member states with e.g. different economic policy) in order to get common rules. A point of view that was strengthened two month later by the publication of another greenbook with the title: ‘Demografic changes – need for a new solidarity between generations’.
    7 November 2005 the Commissioner for Justice and Interior Matters, the Italian Franco Fratinni, a USA inspired Green Card-system that gives high educated from the whole world the possibility to gain access and permission to work in all member states.

    In need of common EU-immigration-policy

    Tammerfors-declaration 1999, point 18:

    The European Union must secure a more justice treatment of third-world-citizens who have taken legal residence in EU. A more effective integration-policy that admits rights and duties that can be compared with those of EU-citizens, and it continues with a Holy Hymn about racism, different treatment, economics, culturel and social relations.

    A directive in the summer 2001: About conditions for third-world-citizens’ entry and stay in connection with employment as employees and practicing independent businesses.

    Marsh 2004: EU-Directive about the conditions for third-world-citizens entry and stay in connection with studies, other education or apprentice, also called the students’ directive.

    A directive: October 2005 the Council decided a directive about special entry-procedure for third-world-citizens in connection with scientific investigation and two other recommendations.

    How to go on:

    A road map with initiatives to be proposed in the period 2006-2009.

    According the refused EU-Constitution (section 51-54) a decided road map meant that the politicians in the member-states practically were not independent as the Danish Constitution strongly presupposes they definitely are in it’s section 56. Practically a road map meant/mean that the politicians were/are bound by this road map declaration, and that they even had/have to work for the realization of the scheduled decisions, and certainly not decide otherwise in their national legislation until the final decision could be made.

    The solution is not difficult to see. It just assumes to overcome the ideological scruples. But this task perhaps cannot be overcome before the light has been turned off over Europe.

    4. Welfare arrangements, generally

    The arrangement for transfer-receivers in between early retirement and Folk-pensioners was introduced with an argument that hard physical worn-out on the labour market created a need for early gradually transition to the a pensioner’s life, and in addition it was maintained that this arrangement would substantial reduce the unemployment/expelling among young ones. The arrangement has especially been used by school teachers, pedagogists and library-employees. With increasing duration of life and an transition in progress to generally lesser physical demanding work, the arrangement has become a general early retirement arrangement that already exists.

    It benefits to increase the age-limit for folk-pensioners corresponding to the projection of the longer life time.

    Public finance of cancellation of debt to unemployed and expelled to make it worth to earn money again will certainly be useful. Especially in country where you are heavily run down, if you loose your job and have debt at the same time.

    Different leave arrangements that e.g. give freedom for parents from work in about a year just make the production more expensive without any other ideological aim/need is satisfied. That small businesses do not dare to hire young women in the birth-giving ages must be understood. They almost have to hire and pay for two to get one.

    5. Educations and research

    are extremely central to get arranged realistic. Ideology has replaced teaching in disciplines of tools and of basic skills. It is quickly becoming a catastrophe.

    In the areas ‘education’, ‘health’, and ’social care’ 630,000 or 22 p.c. of the total workforce employed in 2001 (according to the Danish Welfare Commission). Precisely how many in each of three sectors and the distribution between kinds of institutions and sizes measured by number of clients, pupils, students, patients is not available information to throw light on. Taken into account that the area has more than doubled since 1960, even accounted by the percentage it takes up of the total GNP we have to have this kind of informations, that might make us able to account some measures of productivity (achievement divided with the amount of resources) and measures of effectivity (objectives related to resources).

    Primo April 2005 DR-text-tv reported that education of the children amounts to 30 p.c. of the working hours of Folk-school teachers: This situation has been prepared and created by lots of changed school laws and the union’s agreements of common consent for more decades. It started much higher, not by chance, and was continued for 40 years in Denmark by both liberal and formally more socialistic originators as useful political marionets. It started with basic values of life that had to be changed. The parents was not fit for upbringing, if they did not accepted ideologists’ values. Later on we had to hear the excuse that the pedagogists and the teachers had to take over the upbringer’s role. The parents were actually not fit, if they had not attended a targeting course organized by the knowing masters of mind control: http://www.lilliput-information.com/revo.html (in Danish). The whole history: http://www.lilliput-information.com/engeune.html
    (in English) and http://www.lilliput-information.com/wu.html (in English)

    Now you perhaps better understand why Dutch 9 years old school pupils are educated twice as much at half the costs. Or take some other areas: About 10 p.c. of the students drop out from the higher educations, and the yearly intake on the engineer educations in Denmark has decreased with 50 p.c. from 1985 to 1995[8].

    Without detailed accounts of distributed resources and individuals you cannot exposure the problems. 11 April 2005 TV2-News reported that 57 p.c. of the Folk-school teachers who teaches in the subject ‘Danish’ had not chosen ‘Danish’ in their education on the college of education, and according to this 97 p.c. of those who teaches in the nature subjects and subjects of technology the same. The most demented is that we did not get this information long before the school actually broke down. That pupils learn the ideology is a central part of the basis evaluation to find out which pupils who are doing well, and who are doing unsatisfactory right from the kindergartens and the Folk-school.

    Knowledge and competences must be brought in front:
    If Denmark shall have a chance in these years with reflaging, there have to concentrated whole-hearted and consequently on knowledge and competences that can bring us in front in Western world. The workforce to take care of the growing elderly-part in the population will never become a problem. The second most dangerous development we witnessed for two generations now is the teachers’ – especially in the upper secondary school (gymnasium) – reproduction of their own irrelevant competences that mostly are not business-relevant at all, if we shall survive as civilized nation. It is not better in the Folk-school, but here we have to concentrate on Danish, English, German, mathematic, biology, economics, data and history, because it is not possible to replace large parts of the teachers’ staff here, and at the same time find a development-carrying substitute that will make the pupils fit for a new the upper secondary school.

    The means to rectify the imbalance in 3-5 years are in the comparative advantages that Denmark should have utilized on education area at once in 1960s instead of letting young unknowing people decide, where to go with everything using other people’s money with good help from some of the so-called modern teachers in the upper secondary school. We have to import relevant education systems and textbooks (eventually translated them) from Ireland, Holland, England, Germany and USA, and perhaps hire a few teachers from these nations to key positions here.

    USA began to tackle the questions of globalization action oriented already in the beginning of the 1980s: http://www.lilliput-information.com/curint.htm. England did the same.

    Ireland’s production was half of the Danish production in 1970. Today Ireland’s production per inhabitant is 10 p.c. larger than the Danish.

    Regardless if we shall see the welfare system break gradually down because of impossible finances, perhaps with a last grasp for inflation formally outside the Euro-zone, and just for as long EU has not stopped it, we can expect more cheap import products with an education and research sector, where 2 of 3 educated still turn their eyes towards the public sector in a country where a steady growing part of the population refered to public assigned transfers as their conditions of life. Exchange of products and factors included knowledge with the wage-light areas will be topical for years to come towards the end.

    A long row of the humanities educations must simply have a very low or no intake of students. And if it cannot succeed to break down the ideology on what the free choice of education leads to after years influence from teachers in the upper secondary school, there have to be introduced an education-duty corresponding to the total costs of education and a stop for assigning public grants to education that will not give any employment in the saleable production sector, and just by natural resignation in lot years to come.

    The public financed grants could be removed and replaced by loans, just like a duty might be introduced to cover the total costs. Grants and so-called free education is generous and unequal, partly because a lot of educated do not get employment with their choice of education, partly because those who do not take a higher education actually pay for the education that even pay off a substantial higher wage. You can just give reasons for this by including élite-thinking. At the same time our plants of production are being consumed to it’s own destruction or reflaged away.

    The repay of the private costs of education might follow an annuity loan of 20 years’ duration[9].

    6. Income-tax-reduction

    The wages have to be reduced with 30-35 p.c. [10]. The income tax can be changes to a kind of source taxation, when it come to wage a proportional wage-tax collected directly and finally at the source as an wage sum tax, paid directly by the employers, primery to remove the tax control[11]

    The yield from wage sum tax has to be reduced with an amount corresponding to a available wage increase of about 2-3 p.c. The coporation tax must be reduced at least to the Irish level, and this could be the only tax on businesses. The different contributions on the wage-pay slip apart from pension savings are being gathered after a reduction with 50 p.c. in one contribution to an indiviualized education foundation.

    All daily benefits, transfers, supports and pensions must be paid as tax free amounts.

    This will imply some public budget deficits the first years, but as the arrangement attracts a lot advanced businesses the drop in tax yield will fully be replaced within 10 years, because capital will be injected into production sector, the opposite of what is happening now, where it is drained to the last drop of capital, and therefore clear out looking for cost savings. The result will be a dominating sector of knowledge based production with high educated and well-paid employees.

    A lot new business and an increased production in the existing businesses are the results. This will automatically draw the workforce into employment and create purchacing-power to so-called welfare . Here the turning of world in the universe is followed. That a mental turning of the pole also is needed nobody shall doubt. 40 years with the pyramid turned upside down by ideology.

    “Now back to reality” we might call this project after 40 years in Danish Utopia.

    6 May 2006
    M. Sc. (Economics) Joern E. Vig


    [1] To start with they were operating with a weak deficit-budgetting that citizens experienced the first 10 years, where the inflation gradually increased substantially, and the lending rate rose to about 22 p.c. in 1979. Notice that the welfare system came to the first test in this decade, where two oil-price-chocks hit in 1974 with more than 400 p.c. and in 1979 with less. They were called the reasons to the mass-unemployment from 1973. This definitely was not the truth.

    [2] 2,05 – 2,10 child a woman is needed to overcome the infant mortality and the reproduction to secure a stable population in the Western communities.

    [3] I addition the transfers amounted to 20 p.c. in 1960 and 44 p.c. in 2001 of GNP; the last mentioned percent even accounted on the basis of tripled GNP – the triple is partly unrealistic as the ideology was built into the national account e.g. so that public consumption was artificial transformed to be production instead.

    [4] The number of employees in the public sector rised from 406,000 in 1960 to 844,000, 874,500 or 925,410 in 2004 (of a workforce of 2.87 mill in 2004). The number differs depending on if you look at the different accounts of the state published by http://www.dst.dk or you look at the account of ATP-foundation.

    [5] How large a share of this group that actually is fit for the Danish labour market or rather belongs to another labour market that they have left is not easy to spell out and publish information about via the available public statistics.

    [6] This was the coherent social statistics from mentioned source. In New from Denmark’s Statistics nr. 22 of 2 February 2006 the unemployment is reported converted to fulltime unemployed from 573,100 in 2004 and 543,100 in 2005 that converted allegedly amounts
    to respectively 176,400 and 157,400 fulltime unemployed – here counted as unemployed members of unemployment fund.

    [7] To start with they were operating with a weak deficit-budgetting that citizens experienced the first 10 years, where the inflation gradually increased substantially, and the lending rate rose to about 22 p.c. in 1979. Notice that the welfare system came to the first test in this decenium, where two oil-price-chocks came in 1974 with more than 400 p.c. and in 1979 with less. They were called the reasons to the mass-unemployment from 1973. This definitely was not the whole truth.

    [8] E.g. mathematics of vectors that is the basic of electronics and advanced physics was abolished already in the beginning of the 1980s in the upper secondary school (gymnasium) with reference to that the recruited pupils in the upper secondary schools found the subject too difficult. Now you do not find the Danish word ‘vektor’ in the dictionary when you will try to translate from Danish to English.

    [9] It was fateful from the start to give free entry to the educations, and even do so by letting almost all the costs of education be tax-financed. In UN the answer to the public U-90-report from 1960s: ‘You must be able to afford it’. There is a chance to get rid of this ideology-element now, but it will certainly meet tremendous resistance among the young ones who understand this element as a well-acquired right, almost limited to a nature law, even though it has been ruling just on the cost of the other half of the population that do not take a higher education.

    [10] Not in order to compete with the wage-light areas about the wage-heavy productions, but because our products are too expensive to be sold in sufficient amounts to repay the statedebt and at the same time create new job in the sector of saleable production. This is the task.

    [11] It has been proven more than 25 years ago that all progression in the taxation scale depending on height of income has no meaning. The progression is being fully equalized by larger deductions in the income from which to calculate the tax.

    Six good reasons to count the immigrants correctly

    Information of Denmark collects and forwards politically incorrect information. The menthal-robots don’t want to know it, because the truth disturbs the cyberspace or scrap that the power-brokers feed them with daily.

    Six Good Reasons – why all the most foreign immigrants and their descendants have to be counted correctly:

    Before 1970 Denmark had almost no foreign immigrants.

    Officially 337.243 foreigners[1], and their descendants included the ones with a Danish citizenship or about 6 p. c. of the population stayed in Denmark 1 January 2006. Associated professor Hans Oluf Hansen Copenhagen University reported in the newspaper Berlingske Tidende 20 August 2005 that the original Danes would become a minority before the end of this century, if it continues.[2]

    As on the other hand the official Danish projection of population was presented in the newspaper Jyllands-Posten 29 August 1999 (refered to in JP 21 August 2005[3]), and it showed 13.7 p.c. immigrants and descendants totally in the year 2020, professor P. C. Matthiessen who commented the figures, was almost attacked via the media [4]. The account is even in a worse way:

    Information of Denmark reports:

    There were already more than 690,000 most foreign foreigners, naturalized and their children 1. January 2006 corresponding to more than 13 p.c., and Danes will for certain become a minority between 2035 and 2045, if it continues:

    http://www.lilliput-information.com/uscan.html (corrected official status in English) and

    http://www.lilliput-information.com/edu/index.html (realistic projection in Danish)

    To be able to prove the magnitude of the project might help us to be able to tell where we are, and it might perhaps also tell us how quickly we move towards a rather doubtful future. But was it meant to be(?) When we look at what happens in the community, it seems beyond doubt that the so-called activities of integration do not have much effect, at least definitely not the official expected effect.

    Recently Danish authorities had to admit this:

    Second and third generation of immigrants and their descendants even commit a larger share of the criminal acts relatively to their share of population than their parents – even when the account has been corrected from the defective official account of population that paradoxically overestimate the criminality among immigrants.

    82 p.c. of the crimes among youngster less than 18 years in Copenhagen (2004) were commited by foreigners. And the group of immigrants in those ages amounted 28 p.c. of all in those ages in Copenhagen, compare Denmarks’s Statistics matr. BEF3 mentioned with figures in http://www.lilliput-information.com/domv.html (in Danish).

    Second and third generation gave birth to 10 p.c. more children a woman in average than their parents did, accounted in a period of six years in Copenhagen, compare with the manager of the bureau of statistics Claus Woll, referred to in the newspaper Soendagsavisen 25 January 2004.

    Second and third generation have a weaker connection to the labourmarket than their parents.[6]

    The number of immigrant from the mentioned areas is the only number of visitors that always increases – in periods an exponential increase – for the whole 26 years period from 1979. The immigrants from less developed countries load the Danish public sector three times more than the Danes in average – according to the latest reports from the public established Commission of Welfare, supplemented with a few quotations from the same: “…the immigration from less developed countries to Denmark laod the public finances substantially. The participation in working is low – especially the women. Among those on the labour market the unemployment is high – among other things because a lot of them do not the qualification to get a job at a lowest wages of the market…” “…Immmigrants from less developed countries receive more from the public fonds than they contribute via taxes. The reason is that they have low career participation and as a rule do not leave the country again before they get old. They receive 2.6 mio. dkr. more in a lifetime than they contribute to the public sector…”

    The word integration has been used as a magic formula for 25 years precisely like the remark “Sesam-Sesam open up” in the 1001 Nights’ fairytale. In the fairytale it works, and that is just the way of the Postmodernist – free in the air floating.

    The brief account of the number: – from the number births to the number of foreign immigrants Three most essential reasons of the low number of births among Western women: 1. In average the first cild is born when the mother is about 28 years or more – this mean it become more difficult to get more children thereafter. 2. 15-20 p.c. of the women in the age of 40 in the Western countries has no children – this figure has increased substantially 3.

    Abortions have increased to an amount of more than 15,000 of a birth cohort of 68,000-70,000 in Denmark, compare DR-texttv 20 Mars 2006. Point 2 is characteristic for European unemployed or expelled women from the labour market (20-25 p.c.) who do not dare to give birth to children. The same pattern was retrieved, and is clearly found today in the old Eastbloc. The number of births has been reported in more details on:

    http://www.lilliput-information.com/fertt.html – in the world) (in Danish)

    http://www.lilliput-information.com/ferteu.html – in Europe (in English)

    http://www.lilliput-information.com/fertty.html – in Germany (in Danish)

    http://www.lilliput-information.com/fertfr.html – from number of children to the percentage of foreign immigrants (in Danish)

    There is just one reason why population in Denmark has increased for the last 26 years: The steady increased influx of immigrants and their births. The Danes just give birth to half of what is needed to secure a stable Danish population, when the deaths has been subtracted. In 1979 5.117.000 lived in Denmark.

    1 January 2006 the population amounted 5.427.459. It looks as if the difference must be a little more than 317,000. The number of Danes has decreased (very characteristic) since 1968, when the average number of births a woman got lower than 2.1. The 317,000 is less than half of the story that we proved in quite another too (read below). Since 1979 Folketinget (the Danish parliament) has given Danish citizenship to 189,910 individuals since 1979, compare Danmark’s Statistics Statisticbank, and the children that the naturalized have born after they got the letter from Folketinget is being accounted as if they are Danes.

    1 January 2006 the result is that more than 690,000 with most foreign origin in Denmark from areas outside Western Europe, North America, Israel, Japan, Australia and New Zealand. It has been proved using another method on: http://www.lilliput-information.com/uscan.html I.e. there were 4,737,459 (5,427,459 –690,000) Danes and Westerners (of which about 74,000 other Westerners) in Denmark, and this corresponds to the decrease in the number of children among Westerners, as this has been recognized in the whole Western world. A decreased of about 3.0 – 3.5 per mille a year all over Europe. This results in 4,732,488 for the 26 years period.

    There was 99,796 foreign citizens in Denmark in 1980, compare table 31 in Statistical Yearbook 1987 from Danmark’s Statistics), of which about 47.880 were foreigners from the areas subjects to this reading. This number has more than doubled in the 26 years period. Granted Danish citizenships before 1979 has not included, and the Danish women (as mentioned) gave birth to too few children already from the famous year 1968, so the difference is even bigger. A total going through and prove (by use of quite another method) of the true development for last 26 years has been given on: http://www.lilliput-information.com/uscan.html.

    As for the immigration from Turkey and Pakistan for the last 26 years read: http://www.lilliput-information.com/engtyda.html

    Changing political leaders in Denmark and all over Europe perhaps were worried of their fellow countrymen to die out caused by too few births, and as an nearby result to get lower and lower tax-payments. They got an idea, a splendid idea accompanied with the leading figures of the world:

    The population surplus of some islamic contries

    Years 1998/2050 (in millions)

    Compare: UN World Population Prospects,

    1998 revision:

    Iran: 64 mio./115 mio.

    Tyrkey: 65 mio./101 mio.

    Egypt: 66 mio./115 mio.

    Bangladesh: 123 mio./212 mio.

    Pakistan: 142 mio./345 mio.

    The result remains the same, and the end-result is reached even quicker – about double as quickly. The deciding for the political, so-called professional leaders with their eyes to number one: “It shall not happen before we have gone”. But here we must try to prepare them for the joyful truth that the political effect on stability, and what is worse shall begin long before the Danes have become a minority in their country about 35 to 45 years from now (27 Mars 2006), and obviously longer before the Danes have died out …does it not look like this already?

    Recomment this file




    1) From areas outside Western Europe, North America, Israel, Japan, Australia and New Zealand.

    [2]http://www.berlingske.dk/grid/viden/artikel:aid=616170 (in Danish)

    [3] http://www.jp.dk/arkiv:aid=3213638:ssid=404746 (in Danish)

    [4]In this account all later generations of descendants than the first have got the predicate Danish.

    [5]http://nyhederne.tv2.dk/article.php?id=1700989 (in Danish)

    [6]Documentation of 18 October 2005: ”The Sons of the Immigrants do not get Work” By Martin H. Damsgaard and Christian Friis Hansen http://epaper.jp.dk/18-10-2005/demo/JP_04-01.html (in Danish) “..Sons of immigrants supply the workforce to a still smaller degree on market of labour in the town Aarhus. According to the chairman of the Thinktank for Integration of the government Erik Bonnerup, Aarhus have to take action as quickly as possible. It is a substantial problem that might load the economy of the town seriously, and you ought improve the situation as quickly as possible…” Immigrants on the German and Danish labor market, Rockwool Foundation (another so-called Thinktank), October 2004: ”…Germany has had an decreasing trend in the employment for non-Western immigrants since the midd 1980s, and this is a development that can traced back to the beginning of the 1970s.This development has its parallel in Denmark, where the employment frequency decreased markedly form 1985 to 1994. Even though the employment has increased afterwards not least caused by the economic boom, the employment among non-Western immigrants has never reached its earlier level. Founded on sequence-data from Denmark we can conclude that much of the explanation to the decreasing trend of employment is that the new non-Western immigrants who has arrived in Denmark after the 1970s, have had a much weaker connection to the labour market from earliest beginning until 1999 every year’s of the newcomers have in this way had a lower career participation than the ones from the year before…”

    [7] 5.117.000*(1-0,003)^26 = 4.732.488 ‘if your heart is filled use your brain’—————————

    You cannot get this information anywhere else in Denmark. The work takes place under circumstances that nobody in the politically correct cadre is able to imagine. A contribution to the continuing production and to make it publicly would be welcome on the account in Danske Bank (Danish Bank) Reg. No 3629 account number 3629461213

    Joern E. Vig, M. Sc.(Economics), Denmark

    Europe does certainly not need immigrants

    Does Europe Need Immigrants? Population and Work Force Projections

    David A. Coleman, Professor of Demography in Oxford, October 2002

    International Migration Review, Vol. 26, No. 2, Special Issue: The New Europe and International Migration (Summer, 1992), pp. 413-461 doi:10.2307/2547066

    Abstract: It has been argued that Europe needs more immigrants to restore its age structure and its work force. Even if low European fertility continues, decline in the work force is relatively modest in the medium term and is considerably lower than the potential reserve labor force in Europe. It seems eccentric to propose the resumption of immigration for low-grade labor when there are 15 million unemployed in Europe, most under age 25 and many themselves immigrants, especially since future demand for labor emphasizes high skills. A resumption of general immigration to ensure population stabilization would require inflows much higher even than those previously considered unacceptable. Instead, attention should be given to making it easier for women to combine their desires for children with those for work.

    October 20, 2006

    Preferences of EU policy distributed

    Filed under: migration, perspectives — jensn @ 3:16 pm

    Summit meeting in Finland to decide if EU must have a common immigration policy. 25 EU-member states are represented in Lahti on Friday. EU-parliament demands for a common policy, but what are the opinions among the peoples of Europe?

    Economist, thinktank member and lecturer Hans Kornø Rasmussen has on several occasions like the EU-commissioner Vladimir Spidla proposed and EURO-STAT a multi-doubled (8-14 times the present intake by a gradual accelerated increase) of immigration and also to Denmark (10.000 in 2005). Here we may fear with a good reason that the expressed claims from the labour market once again has to be ignored, because it must be a little difficult not to make the same mistake as the one made for the last 30 years, if the half of the European population is not deported to China and half of Chineese are deported to Europe

    The Liberal will not, but the International will be satisfied further more!

    Mark my words! 

    An investigation was made i 2002 when the number of member countries was 15. Recently Polan, The Baltics and Hungary join the Union, Romania and Bulgaria and others joined the Union next year. Shall we quess that the unwealthy new members hope for common policy.


    The results from 2002 were presented in this paper:




    (ISBN 92-9079-466-6) 



     Available for free downloading from the ENEPRI website (http://www.enepri.org) or the CEPS website (www.ceps.be) 


    October 7, 2006

    Causal-interpretation almost left

    Filed under: Education, perspectives, Statistics — jensn @ 5:56 pm

    Causal-interpretation almost left – except when it fit into the ideology

    that is politically correct

    The big jump in the economic and political science of society happens at the transition from the phase, where you can or can not explain and foresee the behavior of the human being to the managed influence on behavior, watching and control. The corresponding model of the explanation and forecasting of the human being suites the underlying so-called empirism later on positivism, which model-apparatus uses the model of causal-interpretation that needs the past to explain the presence and the future. The experience, the past and also the cause are not acknowledged, and this is perhaps quite legitimately to maintain, when models show themselves not to apply to the outside world, even if you have made an effort with all possible interpretations, especially those in symbols of mathematical language.

    And it is of special interest, when we for a moment concentrate our thinking a little on just another circle of subjects – which has not been discussed anywhere else in this critical light:

    Environment, ecology, stratosphere, menaces to the globe, effects on heath, influence of individual behavior in this connection and the correlation including the influence of businesses on the surroundings and the commissioner’s influence of behavior on the producer. Taken in a random order, which is the custom in this subjects.

    In the treatment of these subjects it is fully correct to show “coherence including causality” between this and that. This is often done by using the so-called statistical, quantitative methods.

    They use phenomenons that can be described using figures. I can assure the reader that two of the used methods, Regression and the Chi-test among others have been used many times to obtain the wanted coherence or the wanted causality from the model. Statistical method of analysis, behind the most ‘so-called investigations’, which is shown to the reader very often on TV as a report, an examination or the like. They all show that something-must-be-done or problem-reaction-solution.

    The methods are very fine mathematics, but when you use them, it is very easy to 1. Interpret the problem wrong, 2. To choose a nonsense-coherence or, 3. To select the wrong method, 4. To use the methods wrong, 5. Interpret the results from the model wrong, 6. To make a wrong conclusion on the basis of the results of model and transmit these results to be results of the real world. Finally you can give the material to an unsuspecting, but “very understanding” journalist at a powerful medium. As you perhaps might understand, there are several possibilities and especially a lot of impossibilities.

    One of these is (read 1. above):

    Because two phenomenons appear at the same time, there do not have to light a clear and imperative coherence between them. If for example the number of couples of storks in Denmark in the summertime has increased from 12 to 25 couples in the last two years, this is not a sure indicator of a so-called boom of babies among the Danes. “Babies are comming with the stork”, small Danish children were told earlier. In the beginning of the 1990s the Danish authorities informed about a boom of Danish babies, although the Danish did not seem to give birth to more children. The number of babies beared by foreigners or their children could be 20,000-25,000 a year – you can not see how many – out of a birth-number of totally about 70.000 a year. It should be mentioned in this connection that the Danish made – and still do – between 17. 000 and 19. 000 abortions a year in the beginning of the 1990s.

    On these stratetic subjects, the fear of the unknown, of the distant, of the unchallenged till now, for the unexamined, where refined methods of measuring often effect the observation, very much can be shown and very much can not be refused – on the other hand to prove is something else. There are plenty of current phenomenons, plenty to undertake.

    Environment, illness, health and the contributions in these connections. And then the career.

    The environment-ecology-consciousness (do not read knowledge) is already profound and solid incorporated in marketing, pedagoy….everything. Perhaps with Al Gore as the next American President from 2001 we shall see the world turn into an environment dictatorship.

    The paradox and dilemma of the prevention – the claimed effect appear in the long run, and it is difficult to reject the effect of prevention a priori – will surely be used the with most explosive effects in the mind of the individuals of the masses.

    It is interesting that the cause very easy can be used here, even though equivalence, unambiguity, func-tionality, really are serious scientific problems, which often are overlooked, even though these problems are rather determining.

    You have to understand: The end justifies the means – especially for many ambiguities ones among the ‘The Jesuits of the Time’ for the salvation of the world. This was just a little disgression, but not without importance.

    A total statement about this theme ought to have a reading of its own.

    If the fourth power or wave (after or at the same time as the third power) should not be found exactly around these new so-called “scientific-like causal-shows”, I should wonder a great deal. The witchcraft at least can contribute to, what David Icke call the “Something-Have-To-Be-Done-Effect”, which precisely matches Hegel’s Tese-Antitese-Syntese planning-model.

    It can happen at the same time that essential facts are totally overlooked – the cause can be used, when needed to reach the politically correct effects.

    An example from Denmark is The Water Environment Plan. Price 17 Mia. DKr. Several facts were completely overlooked in spite of the fact that you could have learnt in Holland, and could have learnt a little more inorganic chemistry too. This was shown in Jyllands-Posten by our famous patriot from World War II Flemming Juncker.

    From causal-models the transition first went towards the philosophical society-thinkers. They describe, interpret and seek understanding. With this starting point causal-models are getting insufficient, because the personality can not objectively analyzed. This has been shown already by the philosopher Emanuel Kant.

    The theory of behavior is powerful, generally also in the Danish (economic) HD-education, and first-rate men lead the arrangement, the lectures, the problems, the seminars and the examination. One of these Professor Flemming Hansen wrote publicly – under the third wave – November 21st 1989 and November 6th 1992 that 15 millions ought to live in Denmark. Of these 15 millions – we have near 5,3 millions inhabitants for the moment on our 43,850 square-kilometers – only half of them need to be individuals which have been born in Denmark.

    The number of professors of this kind is increasing all the time.

    Let me quess, the fourth wave is the environment used in a political correct way on the minds of the first-rate men and women.

    For some practical calculations of relevancy:


    Regression and Correlation

    But power is not just what you fill into the minds of the individuals We have to look at the collapsed monetary system too

    October 3, 2006

    Our future – of interest?

    Filed under: migration, perspectives, Statistics — jensn @ 10:00 pm

    Information of Denmark

    Our future – of interest?


    It is not that we assume you are incapable of simple mathematics, it is only that we are not sure that you recently have done the following calculation.

    You should, however, do it. So, please, do correct and comment ours – i.e., give us the benefit of your views.

    This is based on the newest statistics from EU’s statistical office (figures in bracketts are from other sources, such as Fischer Almanach 2002-2004), supposedly produced in the pauses between the successful embezzlement of our tax payers’ money. This press on their schedule may explain that these data are not free from contradictions, but totally free from any reasonable clues. We have to add conclusions ourselves. Here our humble contribution. (To my (Michael Koch:) knowledge, hitherto only Morten Rasmussen December 1st. 2003, Kristeligt Dagblad in Denmark, and some more Danish population scientists like P. C. Matthiessen and private persons (Ebbe Vig et al.) have taken notice of this issue – for some years – which should be of interest to every European citizen.)



    1.1. 2003 this population increased to

    ca. 379.000.000

    That means an increase of


    Of these were immigrants


    (of these estimated illegal immigrants/asylants 

    ca. 600.000)

    (of these to Northern Europe – DK, N, S, SF, ISL

    ca.   60.000)

    (All the time, however, some Nostradami, all the same, shout:
    ‘We need a major labour force immigration – we are soon extinct!’)

    Thus, immigration is the direct source of 76,6% of the total population increase.

    (So it has been, in rough figures, for many years. Ten years ago, the illegal immigration to the EU was estimated to be around 400.000, to the Northern countries ca. 40.000.)

    That means, only 23,4% of the growth (301.400) are not immigrants, but the outcome of the natural reproduction: births minus death cases, i.e. the resulting nativity excess for the total population – native and newcomers. How are these 301.400 to be distributed into the two latter categories?

    The original (native) European population has for many years had no birth excess at all, but shrinks slowly, more markedly for the last decade. During 2002 this birth deficit was in average – 0,7% (- 2,3 million) for the EU countries, a figure which in my opinion the reactions seem to have been exaggerated . In fact, there is incessantly also a tiny stream of emigrants. Other would say Europe is already overpopulated.

    Immigrants/asylants are throughout the EU between 5% and 12% of the registered population. Together with naturalized immigrants and the next generation of immigrants, this figure increases to about 10-22% (maximun in Switzerland and Sweden). Furthermore, one has to add illegal and hidden immigrants – for Sweden alone another 20.000. The majority of these immigrants come from regions with markedly higher birth rates (e.g. African and Middle East countries) and they continue to show their reproduction characteristics even in Europe.

    It is often said that non-European immigrants rapidly adopt to the birth rates of their new home country, but recent studies have shown that this is a myth. On the contrary, even Third World families increase their birth rates by the order of 1,0, when their living conditions improve. In Northern countries, where the social network of public support is strong (in Sweden, it gives 13 times the financial support of Poland!), a family with many children can live comfortably on this ‘income’. Adopting a changing behaviour is a matter of generations. In general, the immigrants’ reproduction rate is more than the double of the native population. Today, the immigrants and their offspring in Sweden, 10 resp. 22% of the population, produce 25-35% of the younger school children and 15-25% of the conscripts – a situation which presumably is mirrored throughout Western Europe.

    If we assume, that about 12% of Europe’s population today are immigrants or of recent immigrants’ decent (a rather conservative estimate), we can calculate that the birth excess for this subpopulation of  ‘new-Europeans’ (45,3 million) should be about 2,6 million. Only this would explain a growth with 300.000, though the indigenous population produces a deficit of 2,3 million. In this case, however, the immigrants’ birth excess would be 5.7%, which is obviously too much, but we have to consider that younger people are clearly over-representative. Given the basic data are correct, mistakes ought to be looked for in the two parameters ‘birth deficit of native Europeans’ and ‘actual percentage of new-Europeans’ – otherwise the number of illegal and total immigrants must – necessarily – be much higher than assumed (1.29 million). These three figures are, by the way,  interconnected, because they add to certain sums which we can assert. These ‘weak’ figures officially available give us an idea of the vage state of our knowledge – many figures are just educated guesses. As a minimum, however, we must assume that much more than the actual birth excess of 300.000 is of immigrants’ descent.

    That means that not only 76,6%, but considerably more than 200% of EU’s population growth is due to immigration.

    Is that good or bad? We will leave this aside here, but we should be aware of what is going on. We should have a careful look at the world and the cultures they come from. USA’s history shows that they take a lot of their heritage with them.

    The total number of muslims in Europe was recently presumed to be about 32,5 million, not including recent asylum seekers, illegal immigrants, naturalized immigrants and their offspring, but including some non-EU regions on the Balkan and in Russia. Their total could soon approach 40 million, 25 million within the EU, which necessarily is to regard as an important source of population growth.

    It is crucial to transfer these calculations continuously through the next century. Future generations will have no understanding if we let them down by our negligence. They have no chance to repair the outcome of our slow cerebration. (Or, with other words: What do you think turks or jemenites would do, if Norwegians would begin to expand within their countries?) Remember: Japan accepted 3 (three!) of the Vietnamese ‘boat people’, USA some millions and Niedersachsen – in the highly overpopulated Western Germany – some 40.000 of them. And if you want to meet African Indians, by Idi Amin expelled from Uganda, please come to Mariestad, a little Swedish town of 16.000 inhabitants at the Lake Vänern.

    (Stanislaw Lem: Some omissions are followed by a terrible lack of consequences)

    Michael Koch & Joern E. Vig

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