Imperative 46: I-Congress laws versus high inflation, State profligacy and nationwide over-borrowing
To further help in ending mass poverty, laws that enforce pro-people monetary management by State need to be passed and promulgated by the Philippine I-Congress as follows:
1.0 State Spending Limit Law: Yearly State budget increases must not exceed 5 years' average inflation-adjusted gross domestic production rate increases. Such provision will prevent old-style politicians' excessive expansions of money and credits ostensibly for development but are instead used for unproductive vote-attracting projects with 40-50% arrangers' commission 'on the side'. Economic logic and history consistently point out that unproductive State expenditures lead to unbridled price increases of goods and services (which hurt the masses most), but such history just keeps on repeating itself in the Philippines. Hence our State Spending Limit Law together with other related laws should address the following targets:
1.1 End Philippine politicians' tendency to allocate enormous budgets to finance roads to nowhere, bloated bureaucracies, substandard infrastructures, etc. that are greatly disproportionate to the country's production and world marketing capabilities. These past decades, trillion-peso State budgets had been multiplying circulating pesos ten times or more as banks granted loans to State contractors and their upstream and downstream suppliers. The near-permanent result: constantly rising prices due to excessive money chasing too few goods and services.
1.2 Ensure that State cannot abuse its local and international credit worthiness thru a clear law that has to be followed by all regimes. The absence of such law in the Philippines has resulted to government regimes' constant deficits and over-borrowing to such extent that every succeeding regime found State coffers empty while loan interest and debt balances have piled up due to past regimes' decades of 'spend-spend-spend' policies. The new regime is then forced to further milk the people (impose more taxes) and borrow even more (sell peso and dollar bonds) to pay for amortizations of past loans while financing its own set of show projects. Obviously, risen taxes and ever-rising prices (caused by bloated State expenditures) are most painful for struggling masses.
1.3 Ensure thru a law that all regimes are able to save 10% of yearly tax take (deposited to ASEAN and world Funds) to prepare for emergencies such as wars, economic crises and calamities, something that no past Philippine regime did, as all believed that yearly budgets have to be spent to bare bottom for 'maximum development' purposes.
2.0 Law establishing a dual currency system (debt-based and metals-based) to stabilize peso purchasing power and for other purposes. Said law addresses the following scourges suffered largely by the world's masses especially in the 3rd World: a) Constantly rising prices of goods and services (inflation) over decades; b) Crisis-level inflation (50 to over 100% price rises) and deflation (zero economic growth) that both lead to business bankruptcies, high unemployment, mass hunger, rampant crime, and reversion of middle classes towards grinding poverty; c) Central banks and private banks creating enormous volumes of debt-based currencies (paper and electronic) out of thin air without proportionate production of goods and services from the business sector, a major cause of inflation; d) all countries using voluminous fiat currencies (with no gold backing unlike pre-1971 times) thru mere printing, coinage, and entry in banks' electronic books, a major cause of inter-country inflation; e) The great majority of countries' created currencies ending up in stock market 'gambles' at quadrillion dollar levels, with a mere 6% or so getting invested in production-oriented, job-creating businesses, a factor that perpetuates mass poverty worldwide; f) Long-term savers and pensioners' dreams of comfortable old-age retirement becoming mere wishes due to currency purchasing power depreciating by 70-90% over decades of saving and investment; g) Regional or worldwide economic crises every eight to ten years due to mismatches in production versus monetary volumes, the action of large-scale stock market and currency speculators, and errors made by politicians-appointed Central Bank officials who manage currency volumes. The crises have often led to stock market manipulators and elites buying middle class assets (stocks, residences, businesses) at fire sale prices, thereby worsening wealth gaps; h) Impracticability of countries going back to gold-backed monetary systems (which created price stability during past centuries) due to the present quadrillion-level monetary needs of world economies and the relatively small volumes of gold stocks worldwide; i) Near-zero bank interest for savings deposits and 20-48% interest on bank loans, factors that discourage people from saving and businesses from expanding, thereby extending inflationary and deflationary periods as well as widening wealth gaps further; j) World currencies' international values based on demand, which results to 1st World currencies worth 50-1,000 times 3rd World equivalents, although all such currencies are equally fiat (State-imposed, no gold backing). The implication: 3rd World people have to work 50-1,000 times more to buy what 1st World peoples possess; k) People's taxes rescuing bankrupt financing companies thru State command, thereby further worsening wealth imbalances; l) Tendency of 3rd World politicians to overspend thru billion-level local and international borrowing without targeting proportionate local production levels, with people's needs met largely by imports, a practice that has become a poverty-perpetuating tradition for the Philippines.
What's the all-encompassing solution to end such mass scourges? The most logical and feasible scheme appears to be adoption of a system whereby much of every country's money are held and controlled by productive businesses and the masses instead of by Central banks, government regimes, elite banks and speculative investment companies. Such system requires a dual monetary scheme: the old fiat currency system, and creation of 'true money' in the form of gold and silver coins plus plasticized bearer certificates representing ingots of high-purity industrial metals such as nickel, copper, molybdenum, zinc, tin and chromium, the actual metals all stored in heavily guarded Armed Forces camp vaults.
1.0 State Spending Limit Law: Yearly State budget increases must not exceed 5 years' average inflation-adjusted gross domestic production rate increases. Such provision will prevent old-style politicians' excessive expansions of money and credits ostensibly for development but are instead used for unproductive vote-attracting projects with 40-50% arrangers' commission 'on the side'. Economic logic and history consistently point out that unproductive State expenditures lead to unbridled price increases of goods and services (which hurt the masses most), but such history just keeps on repeating itself in the Philippines. Hence our State Spending Limit Law together with other related laws should address the following targets:
1.1 End Philippine politicians' tendency to allocate enormous budgets to finance roads to nowhere, bloated bureaucracies, substandard infrastructures, etc. that are greatly disproportionate to the country's production and world marketing capabilities. These past decades, trillion-peso State budgets had been multiplying circulating pesos ten times or more as banks granted loans to State contractors and their upstream and downstream suppliers. The near-permanent result: constantly rising prices due to excessive money chasing too few goods and services.
1.2 Ensure that State cannot abuse its local and international credit worthiness thru a clear law that has to be followed by all regimes. The absence of such law in the Philippines has resulted to government regimes' constant deficits and over-borrowing to such extent that every succeeding regime found State coffers empty while loan interest and debt balances have piled up due to past regimes' decades of 'spend-spend-spend' policies. The new regime is then forced to further milk the people (impose more taxes) and borrow even more (sell peso and dollar bonds) to pay for amortizations of past loans while financing its own set of show projects. Obviously, risen taxes and ever-rising prices (caused by bloated State expenditures) are most painful for struggling masses.
1.3 Ensure thru a law that all regimes are able to save 10% of yearly tax take (deposited to ASEAN and world Funds) to prepare for emergencies such as wars, economic crises and calamities, something that no past Philippine regime did, as all believed that yearly budgets have to be spent to bare bottom for 'maximum development' purposes.
2.0 Law establishing a dual currency system (debt-based and metals-based) to stabilize peso purchasing power and for other purposes. Said law addresses the following scourges suffered largely by the world's masses especially in the 3rd World: a) Constantly rising prices of goods and services (inflation) over decades; b) Crisis-level inflation (50 to over 100% price rises) and deflation (zero economic growth) that both lead to business bankruptcies, high unemployment, mass hunger, rampant crime, and reversion of middle classes towards grinding poverty; c) Central banks and private banks creating enormous volumes of debt-based currencies (paper and electronic) out of thin air without proportionate production of goods and services from the business sector, a major cause of inflation; d) all countries using voluminous fiat currencies (with no gold backing unlike pre-1971 times) thru mere printing, coinage, and entry in banks' electronic books, a major cause of inter-country inflation; e) The great majority of countries' created currencies ending up in stock market 'gambles' at quadrillion dollar levels, with a mere 6% or so getting invested in production-oriented, job-creating businesses, a factor that perpetuates mass poverty worldwide; f) Long-term savers and pensioners' dreams of comfortable old-age retirement becoming mere wishes due to currency purchasing power depreciating by 70-90% over decades of saving and investment; g) Regional or worldwide economic crises every eight to ten years due to mismatches in production versus monetary volumes, the action of large-scale stock market and currency speculators, and errors made by politicians-appointed Central Bank officials who manage currency volumes. The crises have often led to stock market manipulators and elites buying middle class assets (stocks, residences, businesses) at fire sale prices, thereby worsening wealth gaps; h) Impracticability of countries going back to gold-backed monetary systems (which created price stability during past centuries) due to the present quadrillion-level monetary needs of world economies and the relatively small volumes of gold stocks worldwide; i) Near-zero bank interest for savings deposits and 20-48% interest on bank loans, factors that discourage people from saving and businesses from expanding, thereby extending inflationary and deflationary periods as well as widening wealth gaps further; j) World currencies' international values based on demand, which results to 1st World currencies worth 50-1,000 times 3rd World equivalents, although all such currencies are equally fiat (State-imposed, no gold backing). The implication: 3rd World people have to work 50-1,000 times more to buy what 1st World peoples possess; k) People's taxes rescuing bankrupt financing companies thru State command, thereby further worsening wealth imbalances; l) Tendency of 3rd World politicians to overspend thru billion-level local and international borrowing without targeting proportionate local production levels, with people's needs met largely by imports, a practice that has become a poverty-perpetuating tradition for the Philippines.
What's the all-encompassing solution to end such mass scourges? The most logical and feasible scheme appears to be adoption of a system whereby much of every country's money are held and controlled by productive businesses and the masses instead of by Central banks, government regimes, elite banks and speculative investment companies. Such system requires a dual monetary scheme: the old fiat currency system, and creation of 'true money' in the form of gold and silver coins plus plasticized bearer certificates representing ingots of high-purity industrial metals such as nickel, copper, molybdenum, zinc, tin and chromium, the actual metals all stored in heavily guarded Armed Forces camp vaults.
Here's how the system should work in the Philippines as 'country example': a) The government and all major companies set up a Monetary Metals Authority (MMA) and contribute much of their foreign exchange holdings (dollars, yen, pounds, etc.) to said Authority as operational capital; b) MMA uses the currencies to buy tons of said metals from mines, processors and international markets. Purchases are made during price dips; c) MMA refines the purchased metals to 99% purity, forms the gold and silver into 50 and 100-gram coins, and the other metals into 5 kg. ingots. All such coins and ingots should be encased in glass with 2 small opposing holes at glass edges for inserting portable electronic probes to show purity and protect the metals from shaving; d) MMA manufactures plasticized bearer certificates indicating title to each 5 kg. ingot. Each certificate should have several security markings and a code that matches the embossed ingot code to prevent faking; e) Concurrently, the government sets up an MMA storage vault building with security provisions in every region. Every vault should have several thousand double-lock mini vaults of various sizes, one lock for MMA personnel, another for lessee. Every vault building has to be guarded by a squad of well-equipped military personnel 24 hours on rotation basis. The government shoulders 100% of building cost and charges minimal storage fees as public service; f) MMA wholesales the monetary metals to banks and pawn shops for retailing to the masses, businesses and institutions; Every ingot buyer receives a plasticized 'bearer' ownership certificate (previously described).
What role will the monetary metals play? The gold and silver coins being tiny may be easily kept, sold or pawned by owners. Ingot stocks being large and heavy have to be stored in the MMA vaults for a small fee, largely for insurance purposes. The metals may serve as savings or investments that rise or fall in value over both short-term and long term periods. Banks must post daily price changes for the monetary metals. As a way of making profits, metal owners may buy or sell specific coins or ingots when their prices rise or fall. The profits will partly offset fiat money purchasing power deterioration over months, years or decades and even serve as additional income when resultant profits are large. In effect, people's money 'saved' as metals will maintain their purchasing power and even earn income during storage, contrary to present fiat systems whereby paper and electronic currencies endlessly depreciate in purchasing power. The system should motivate people and businesses to save/invest in monetary metals for additional income to compensate for constantly rising prices of goods and services. People purchasing precious metals at 25% of income will ensure 25% of their sweat-earned wealth appreciating rather than depreciating in value, while the remaining 75% in paper or electronic money will buy less and less goods as time passes. The great advantage will likely dampen public paper money demand for all goods and services. Less chasing of such items will prevent their prices rising and even precipitate price falls, resulting to very small price changes over the long term.
What role will the monetary metals play? The gold and silver coins being tiny may be easily kept, sold or pawned by owners. Ingot stocks being large and heavy have to be stored in the MMA vaults for a small fee, largely for insurance purposes. The metals may serve as savings or investments that rise or fall in value over both short-term and long term periods. Banks must post daily price changes for the monetary metals. As a way of making profits, metal owners may buy or sell specific coins or ingots when their prices rise or fall. The profits will partly offset fiat money purchasing power deterioration over months, years or decades and even serve as additional income when resultant profits are large. In effect, people's money 'saved' as metals will maintain their purchasing power and even earn income during storage, contrary to present fiat systems whereby paper and electronic currencies endlessly depreciate in purchasing power. The system should motivate people and businesses to save/invest in monetary metals for additional income to compensate for constantly rising prices of goods and services. People purchasing precious metals at 25% of income will ensure 25% of their sweat-earned wealth appreciating rather than depreciating in value, while the remaining 75% in paper or electronic money will buy less and less goods as time passes. The great advantage will likely dampen public paper money demand for all goods and services. Less chasing of such items will prevent their prices rising and even precipitate price falls, resulting to very small price changes over the long term.
What role will the present fiat currency systems play? Since metal stocks are limited and world business needs run up to quadrillions of dollars' worth, the present fiat currency system of pesos, dollars, pounds, yen, etc. have to be retained. This time however, such 'fake moneys' (created out of thin air) should be given some temporary intrinsic value by linking them with monetary gold, silver and industrial metals which serve as 'true money'. In the process, both fiats and monetary metals will create stability in purchasing power for all currencies worldwide.
Here's how it should work, again with the Philippines as 'example': a) The Central Bank may as usual mint coins, print paper pesos and lend billions of 'electronic pesos' to banks by posting entries to its computerized ledgers; b) Concurrently, all banks, including our mass-owned Employees' Bank and its branches, may keep on lending billions of pesos to production-oriented businesses by simply making electronic entries in appropriate books and issuing paper and coin currencies (bought or borrowed from the Central Bank) for use by the borrower businesses in paying for salaries, operational costs, etc.; c) The Central Bank for its part may still serve as 'bank of banks', where all other banks deposit 10% or more of their fiat currencies as reserves in case of an impending monetary crisis; d) Fiat currency volumes for the entire country however will have to be handled not by the Monetary Board and Central Bank whose officials are appointed by politicians but by I-Congress thru its 10,000-member Congressional Monetary Committee (CMC) of top retired economists and corporate directors. Said committee will study and recommend to the 60,000-member body the proper volumes of fiat pesos to be created by the Central Bank and all other banks. All communications, reports of studies, and approvals should be thru Congressional websites.
How will I-Congress manage the fiat currency system? The CMC adopts present systems for determining inflation rates, such as monitoring of currency flows, business production volumes, employment and salary statistics, rises and falls in prices of a 'basket of goods and services', etc. Executive agencies have historically been preparing such data on routine basis. However, as additional tactic to estimate ideal monetary volumes, I-Congress has to pass a law requiring all banks and pawn shops to monitor changes in buying, selling, and pawning rates of monetary metals for reporting to the CMC. A periodic rise in buying of metals will indicate rising prices (inflation) due to excessive fiat money in circulation. People with extra money will tend to save/invest in monetary metals to gain future income rather than hoard 'excess' paper pesos which lose purchasing power. I-Congress should then order the Central Bank and all banks to refrain from granting fiat loans. The resultant restricting of peso volumes countrywide should then reduce demand for goods and services, forcing prices to remain constant or fall due to business competition for scarce buyers.
Conversely, a periodic rise in pawning and public selling of monetary metals will indicate deflation (slow business, falling sales and profits, rising unemployment, less paper pesos in masses' hands, etc.), indicating business and public need for fiat pesos that will revive and expand markets and businesses. I-Congress should then order all banks to grant business loans until the inflation rate has risen to maximum 2%. Once such ideal rate is reached (after months or years of 'mini price rises'), I-Congress should again order total curtailment of all banks' lending. Mere lowering or raising of bank interest rates during inflation or deflation (the current practice) should not be done, for such 'remedies' add to price rises. Practiced over centuries, the new scheme should lead to price rises and falls at zero to maximum 2% level. Historical inflation rates at 3-6% (moderate level), 7-10% (high level), and 50% to over 100% (crisis level) which routinely or occasionally happened especially in 3rd World countries cannot happen if said countries adopted a dual currency system managed by their I-Congresses.
What should be the beneficial effects of such dual monetary system if applied worldwide? a) End of history's system of governments determining monetary volumes thru politicians-appointed Monetary Board and Central Bank officials. Such system fosters endless over-borrowing and over-printing of fiat currencies that lead to perpetual high or even crisis-level inflation and deflation especially in the 3rd World; b) prices of goods and services relatively constant over centuries; c) Restricting of quadrillion dollar level stock and currency market 'gambles' in the 1st World. Under a dual monetary system, public investors will find more profit by investing in metals, mega co-op joint ventures, Employees' Banks and infrastructure projects that yield high dividend and interest incomes; d) Regular flow of trillion-dollar 1st World money towards new 3rd World mining and metals industries, power and water facilities, infrastructures and mega co-op joint venture corporate groups, resulting to billions of jobs created for 3rd World poor; e) Expansion of world business based on voluminous 'true money' (metals certificates) because monetary volumes will not be limited by the relatively small stocks of the world's gold if gold-backed systems are otherwise used; f) The great majority of world fiat currencies and metals-backed 'monetary certificates' getting to be owned and controlled by the masses and production-oriented businesses, not by a few politicians-appointed Monetary Board and Central Bank officials and stock market players as in the past, a factor that historically created monetary and financial crises every 8-10 years that bankrupted businesses and reverted entire 3rd World middle classes back to poverty; g) Stabilization of erratic industrial metals' prices due to buy-sell competition among world monetary authorities and industrial companies' needs for such metals. Such stability will help in further stabilizing the purchasing power of monetary metal certificates over centuries; h) Great chances for the world's masses to multiply the value of their savings thru buying and selling of monetary metals because of multiple metals on offer, each experiencing a price dip or price rise at one time or another. Since industrial needs for metals keep on expanding while world mining production rates are most often low, monetary metals' prices will keep rising, to the benefit of masses who hoard monetary metals over years or decades. Comparatively, prices of consumer goods do not rise as much because they are always produced in volume at comparatively low cost. Thus, an employee who hoards $100,000 worth of monetary metals may upon his retirement be able to buy goods and services worth several million dollars due to perpetual world-scale competition for industrial metals. A metals-based monetary system should hence encourage people to save. This is contrary to present circumstances whereby the world's fiat currencies inevitably deteriorate in purchasing power over the years because they all have no intrinsic value. Thus, an employee saving fiat currency in banks and entitled to a pension plan all worth $100,000 under the present system may find upon retirement that his money and pension benefits worth a few million dollars would however buy a poverty-creating $50,000 worth of goods and services. The present fiat-based monetary system hence encourages people to spend almost all their income before prices rise further, resulting to high inflation due to high demand for goods and services; i) Prevention of old-style currency manipulators from buying large quantities of a type of monetary metal using million-dollar borrowings from banks in the hope of reselling the stocks at much higher prices in the near future due to rising short-term prices created by his restricting of said metal's supply. A dual currency system will yield very small profits from such exercise because people who wish to save/invest will have eight monetary metals to choose from aside from shares in mega co-op corporate groups and the Employees' Bank, thereby restricting demand for a single metal type. Moreover, I-Congress' monetary controls will severely limit fiat lending by banks and capital companies, so funds for large-scale monetary manipulation will be very hard to come by; j) Equalization of currency exchange rates worldwide, since moneys will be based on common international prices of industrial metals; k) Facilitation of international trade thru payments based on metals certificates, not on fiat currencies that have enormous differentials in exchange rates; l) Fiat currencies and metal certificates' monetary volumes almost always matching the needs of business, State and masses, thereby causing price rises and falls at infinitesimal levels (0-2%) over centuries; m) The present generation's descendants to enjoy freedom from the ill effects of past politicians' over-borrowing, all payable by new tax impositions or higher tax rates; n) Shortening of deflationary periods due to massive public and business savings of monetary metals. During such period, people will tend to sell or pawn their metal hoards to get paper currencies for buying needed goods and services, thereby reviving markets which will end the deflation; o) Wealth gaps in the 3rd World gradually narrowing to near-zero levels as trillion-dollar 1st World funds attracted by dividend and interest returns in the form of high value 'true money' (metals) create millions of 'clean and green' mega co-op corporate groups at the very places where some six billion poor endure their daily miseries; p) 3rd World masses' levels of wealth and education constantly rising, enabling such masses to always find ways to prevent repetitions of such historical tragedies as martial law rule and authoritarian governance that brought great misery to both activists and silent majorities; q) Facilitation of exchanges among metals, currencies, goods and services because of the standardization of monetary metals in terms of volume and purity, which creates public trust regarding such moneys' universal acceptability and stability in purchasing power; r) Prevention of regional and worldwide economic crises incident to 1st World banks' creation of voluminous currencies that don't get invested in new production-oriented companies because of saturated 1st World markets. When 1st World investors see little profit in the set up of more production-oriented companies due to market saturation, they prefer to 'gamble' their fiat money herd-like in investment companies to get some returns. 'Herd gambling' ultimately leads to bubbles of prices that everyone can no longer afford, resulting to 'herd selling' at great loss for all. Since stock markets are inter-connected worldwide, such crises end up creating massive depressions planet-wide that impoverish 3rd World middle classes due to widespread business bankruptcies. Such tragedies however cannot happen if great opportunities exist in the 3rd World for profitable investments in production-oriented joint venture businesses such as described in this blog. Moreover, investors will have a choice of bets among eight types of monetary metals, plus direct (no broker) purchase of mega co-op joint venture shares as well as Employees' Banks shares, thereby preventing crisis-creating herd behavior.
What's the global cooling signature? Prudent monetary management by world peoples on perpetual basis will ensure stable prices for all goods and services anywhere, for all time. Stable prices promote business expansions and prevent bankruptcies caused by wild price fluctuations. Mega co-op agro-forests and clean industries worldwide will thereby quickly expand at geometric levels. Massive job creation throughout the 3rd World will naturally follow suit, thereby drawing in billions of newly-employed poor (as new mega co-op stock shares buyers) in the campaigns to set up more clean and green industries.
Here's how it should work, again with the Philippines as 'example': a) The Central Bank may as usual mint coins, print paper pesos and lend billions of 'electronic pesos' to banks by posting entries to its computerized ledgers; b) Concurrently, all banks, including our mass-owned Employees' Bank and its branches, may keep on lending billions of pesos to production-oriented businesses by simply making electronic entries in appropriate books and issuing paper and coin currencies (bought or borrowed from the Central Bank) for use by the borrower businesses in paying for salaries, operational costs, etc.; c) The Central Bank for its part may still serve as 'bank of banks', where all other banks deposit 10% or more of their fiat currencies as reserves in case of an impending monetary crisis; d) Fiat currency volumes for the entire country however will have to be handled not by the Monetary Board and Central Bank whose officials are appointed by politicians but by I-Congress thru its 10,000-member Congressional Monetary Committee (CMC) of top retired economists and corporate directors. Said committee will study and recommend to the 60,000-member body the proper volumes of fiat pesos to be created by the Central Bank and all other banks. All communications, reports of studies, and approvals should be thru Congressional websites.
How will I-Congress manage the fiat currency system? The CMC adopts present systems for determining inflation rates, such as monitoring of currency flows, business production volumes, employment and salary statistics, rises and falls in prices of a 'basket of goods and services', etc. Executive agencies have historically been preparing such data on routine basis. However, as additional tactic to estimate ideal monetary volumes, I-Congress has to pass a law requiring all banks and pawn shops to monitor changes in buying, selling, and pawning rates of monetary metals for reporting to the CMC. A periodic rise in buying of metals will indicate rising prices (inflation) due to excessive fiat money in circulation. People with extra money will tend to save/invest in monetary metals to gain future income rather than hoard 'excess' paper pesos which lose purchasing power. I-Congress should then order the Central Bank and all banks to refrain from granting fiat loans. The resultant restricting of peso volumes countrywide should then reduce demand for goods and services, forcing prices to remain constant or fall due to business competition for scarce buyers.
Conversely, a periodic rise in pawning and public selling of monetary metals will indicate deflation (slow business, falling sales and profits, rising unemployment, less paper pesos in masses' hands, etc.), indicating business and public need for fiat pesos that will revive and expand markets and businesses. I-Congress should then order all banks to grant business loans until the inflation rate has risen to maximum 2%. Once such ideal rate is reached (after months or years of 'mini price rises'), I-Congress should again order total curtailment of all banks' lending. Mere lowering or raising of bank interest rates during inflation or deflation (the current practice) should not be done, for such 'remedies' add to price rises. Practiced over centuries, the new scheme should lead to price rises and falls at zero to maximum 2% level. Historical inflation rates at 3-6% (moderate level), 7-10% (high level), and 50% to over 100% (crisis level) which routinely or occasionally happened especially in 3rd World countries cannot happen if said countries adopted a dual currency system managed by their I-Congresses.
What should be the beneficial effects of such dual monetary system if applied worldwide? a) End of history's system of governments determining monetary volumes thru politicians-appointed Monetary Board and Central Bank officials. Such system fosters endless over-borrowing and over-printing of fiat currencies that lead to perpetual high or even crisis-level inflation and deflation especially in the 3rd World; b) prices of goods and services relatively constant over centuries; c) Restricting of quadrillion dollar level stock and currency market 'gambles' in the 1st World. Under a dual monetary system, public investors will find more profit by investing in metals, mega co-op joint ventures, Employees' Banks and infrastructure projects that yield high dividend and interest incomes; d) Regular flow of trillion-dollar 1st World money towards new 3rd World mining and metals industries, power and water facilities, infrastructures and mega co-op joint venture corporate groups, resulting to billions of jobs created for 3rd World poor; e) Expansion of world business based on voluminous 'true money' (metals certificates) because monetary volumes will not be limited by the relatively small stocks of the world's gold if gold-backed systems are otherwise used; f) The great majority of world fiat currencies and metals-backed 'monetary certificates' getting to be owned and controlled by the masses and production-oriented businesses, not by a few politicians-appointed Monetary Board and Central Bank officials and stock market players as in the past, a factor that historically created monetary and financial crises every 8-10 years that bankrupted businesses and reverted entire 3rd World middle classes back to poverty; g) Stabilization of erratic industrial metals' prices due to buy-sell competition among world monetary authorities and industrial companies' needs for such metals. Such stability will help in further stabilizing the purchasing power of monetary metal certificates over centuries; h) Great chances for the world's masses to multiply the value of their savings thru buying and selling of monetary metals because of multiple metals on offer, each experiencing a price dip or price rise at one time or another. Since industrial needs for metals keep on expanding while world mining production rates are most often low, monetary metals' prices will keep rising, to the benefit of masses who hoard monetary metals over years or decades. Comparatively, prices of consumer goods do not rise as much because they are always produced in volume at comparatively low cost. Thus, an employee who hoards $100,000 worth of monetary metals may upon his retirement be able to buy goods and services worth several million dollars due to perpetual world-scale competition for industrial metals. A metals-based monetary system should hence encourage people to save. This is contrary to present circumstances whereby the world's fiat currencies inevitably deteriorate in purchasing power over the years because they all have no intrinsic value. Thus, an employee saving fiat currency in banks and entitled to a pension plan all worth $100,000 under the present system may find upon retirement that his money and pension benefits worth a few million dollars would however buy a poverty-creating $50,000 worth of goods and services. The present fiat-based monetary system hence encourages people to spend almost all their income before prices rise further, resulting to high inflation due to high demand for goods and services; i) Prevention of old-style currency manipulators from buying large quantities of a type of monetary metal using million-dollar borrowings from banks in the hope of reselling the stocks at much higher prices in the near future due to rising short-term prices created by his restricting of said metal's supply. A dual currency system will yield very small profits from such exercise because people who wish to save/invest will have eight monetary metals to choose from aside from shares in mega co-op corporate groups and the Employees' Bank, thereby restricting demand for a single metal type. Moreover, I-Congress' monetary controls will severely limit fiat lending by banks and capital companies, so funds for large-scale monetary manipulation will be very hard to come by; j) Equalization of currency exchange rates worldwide, since moneys will be based on common international prices of industrial metals; k) Facilitation of international trade thru payments based on metals certificates, not on fiat currencies that have enormous differentials in exchange rates; l) Fiat currencies and metal certificates' monetary volumes almost always matching the needs of business, State and masses, thereby causing price rises and falls at infinitesimal levels (0-2%) over centuries; m) The present generation's descendants to enjoy freedom from the ill effects of past politicians' over-borrowing, all payable by new tax impositions or higher tax rates; n) Shortening of deflationary periods due to massive public and business savings of monetary metals. During such period, people will tend to sell or pawn their metal hoards to get paper currencies for buying needed goods and services, thereby reviving markets which will end the deflation; o) Wealth gaps in the 3rd World gradually narrowing to near-zero levels as trillion-dollar 1st World funds attracted by dividend and interest returns in the form of high value 'true money' (metals) create millions of 'clean and green' mega co-op corporate groups at the very places where some six billion poor endure their daily miseries; p) 3rd World masses' levels of wealth and education constantly rising, enabling such masses to always find ways to prevent repetitions of such historical tragedies as martial law rule and authoritarian governance that brought great misery to both activists and silent majorities; q) Facilitation of exchanges among metals, currencies, goods and services because of the standardization of monetary metals in terms of volume and purity, which creates public trust regarding such moneys' universal acceptability and stability in purchasing power; r) Prevention of regional and worldwide economic crises incident to 1st World banks' creation of voluminous currencies that don't get invested in new production-oriented companies because of saturated 1st World markets. When 1st World investors see little profit in the set up of more production-oriented companies due to market saturation, they prefer to 'gamble' their fiat money herd-like in investment companies to get some returns. 'Herd gambling' ultimately leads to bubbles of prices that everyone can no longer afford, resulting to 'herd selling' at great loss for all. Since stock markets are inter-connected worldwide, such crises end up creating massive depressions planet-wide that impoverish 3rd World middle classes due to widespread business bankruptcies. Such tragedies however cannot happen if great opportunities exist in the 3rd World for profitable investments in production-oriented joint venture businesses such as described in this blog. Moreover, investors will have a choice of bets among eight types of monetary metals, plus direct (no broker) purchase of mega co-op joint venture shares as well as Employees' Banks shares, thereby preventing crisis-creating herd behavior.
What's the global cooling signature? Prudent monetary management by world peoples on perpetual basis will ensure stable prices for all goods and services anywhere, for all time. Stable prices promote business expansions and prevent bankruptcies caused by wild price fluctuations. Mega co-op agro-forests and clean industries worldwide will thereby quickly expand at geometric levels. Massive job creation throughout the 3rd World will naturally follow suit, thereby drawing in billions of newly-employed poor (as new mega co-op stock shares buyers) in the campaigns to set up more clean and green industries.
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