ECB’s Policy, Like the Code of Hammurabi, Does Not Abolish, But Just Regulates Slavery

From “Dividing by Zero” (Global Knowledge, 2016-2017), Ana Nives Radovic 

Last week’s words of the president of the European Central Bank Mario Draghi that have shown his call for insurance on future liquidity made an impact on the price of gold and silver, but have also raised many questions regarding the repeating of economic cycles and situations brought through them.

We live in times when entrepreneurs are looking to finance reasonable projects, while companies with products, customers and profits are looking for savings to grow. There is still an ongoing proces of finding the way to finance these projects of the real economy, garnering capital gains and collecting interests and it is shown as extremely hard during this type of political control of the central banks that will not change a flawed monetary and financial system because of the lack of discipline. Being under pressure of more than 200,000 billion dollars of debt, the announcement of the ECB that it will sstrengthen control of interest rates could happen very soon.

What the history of finance has shown is that the control of the price of credit by the state, such as any control of this kind, will end as a disaster. The state does not have to control the currency, the price of credit or the economy, since the role of the government should be limited to ensuring equal rights between citizens and ensuring that they are respected.

While trying to come out from unusual monetary policies there could be seen numerous examples of multiplying panic-driven measures. The current policies of ECB do not differ a lot from what was prescribed in the Code of Hammurabi, turning the king into a god and leaving numerous people in the class of slaves. The difference is, however, that while adjusting the amount of money in current flows it looks like the ECB does not know what to do with its “Print”, “Rate” and “Delete” buttons. There is a strong need to make a movement in order to prepare for the end of monetary creation in euro, but the mechanisms to do so are not in sight.

This reveals another situation of repetition of numerous times vieved situations which led to the same myths. One of them is that the public money creates more wealth than private money, which is called the Keynesian multiplier. In this situation if the government invests one euro, its return on investment will be higher than that of private persons. According to this belief at the same time the government is not obliged to forcefully stab taxpayers. It can simply borrow because its return on investment will always be positive. While a wretched single entrepreneur, pursuing his guilty selfish interests may be mistaken, since the business may go bankrupt when its return on investment appear to be negative. Keynesians define the multiplier coefficient as the ratio between a change in public expenditure and the consequent change in total income. This explanation justifies the stimulus policies financed by the loan.

The ECB still injects 60 billion euros each a month into the markets in order to keep interest rates low and this trend is lasting, considering the unfortunate state of public finances of of the eurozone countries. The Keynesian multiplier also relies on the strange belief that consumption enriches and the thought that when people do not consume enough, what the government should do is just to distribute them money, created from nothing, taken from others, borrowed, whatever, which will combat economic depression and unemployment. This, however, ruins all hopes of achieving a decent return in the years to come.

Technically, ECB is more autonomous in relations with the governments, though in practice, this independence is completely apocryphical. The decisions of ECB are essentially made in the interests of several eurozone governments. By artificially lowering interest rates, ECB could facilitate public debt and by financing commercial banks lending to the eurozone countries, they guarantee to the latter an almost unlimited source of income, despite their already enormous debt. For Keynesians this situation might seem satisfactory, but its outcome is the credit market that becomes completely distorted. Resources are allocated unproductively, which contributes to slowing economic growth and thus reducing poverty.

The fact is that the large capital gains are no longer on the stock market, where central banks inject thousands of billions to inflate prices, but before the IPO and even in private equity transactions. Since 2012, the money of the insiders drained by venture capital is increasing considerably. The average real return on life insurance was 1.8% in 2016. In today’s markets, listed companies are now too big and too disconnected for their shareholders to be really involved in decision-making. Also, the banking crisis is still threatening and the European system is far from being consolidated. This all leads to a conclusion that the current monetary system, based on unrestricted credit, is a new form of crime against humanity.

There is a strong need to adopt a different approach as the mass of credit is used to protect from bankruptcy the weak links used by the parasitocracy. In these situations banks with doubtful debts, multinationals cooperating in ruinous public projects, and expensive social spendings in southern eurozone countries.

If we return to the comparisson of current situation with the ancient one we will see that it was not the king or the emperor who decided that gold or silver was the best suited to trade and exchange, but it was crowd of individuals, now fallen into dust, who have come to this conclusion. In their situation gold was imposed in a pragmatic and democratic way simply because it worked best, while the so called added value of a centralized system imposed by a ruler was limited to a seal certifying purity and weight. There should be noted that elites hate gold but have not dared to make the last move since central banks still have a gold reserve. Today central banks still have their treasuries, or at least, that is what is being said, while the people bother to rate precious metals. In current situation dollar and the euro have fallen against gold (and silver), while dollar dropped more than the euro. As it is the case anywhere else, there is value and price. Value is what each one attributes at a given moment to something, that is, the satisfaction that everyone anticipates of possessing something one desires the most — the price is what an infividual agrees to pay according to his own value scale.

There are three key problems that became more visible under these circumstances. The first one is that zero interest rates and generous liquidity kept the dying business alive, which inflated supply. In all sectors there is an oversupply of everything, where marginal companies have been able to continue to function even though they are fading, generating just enough income to borrow more money and to postpone the repayment of their debts. The second problem is that the income was carried by a steady growth in social security contributions instead of sallaries. The third problem is that the majority of employers is unable to afford to pay higher wages without considering the labor market as they are faced with ever higher costs, while their power over prices is zero because of the surplus supply. Confronted with a total lack of power over prices and higher costs, employers can either increase the working hours of their current employees or hire part-time workers without contractual benefit.

These three problems represent the most visible effects of monetary measures implemented by the ECB. By market capitalization with the money achieved by borrowing, instead of balancing the market, ECB creates an even greater problem of social stratification, making part of the  companies and therefore huge part of population literally slaves and as it was prescribed by the Code of Hammurabi, anyone who attempts to counter financial movements to these flows in order to facilitate the position of slaves receives a fatal outcome.

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Encouranging the Growth of Indebtedness Is the Crime Against Humanity

From “Dividing by Zero” (Global Knowledge, 2016-2017), Ana Nives Radovic 

The years of recovery from the global financial crisis are characterized by the phenomenon of negative effects that point to the detrimentalities of the overall concept on which the monetary policy of the leading central banks in the world is based, with the European Central Bank leading in flaws.

All the shortcomings of the ECB’s movements are noticeable on their results and under the mask of public goods funding, public money instead of funding public goods is diverted to corporate giants, with particular reference to certain industries where the level of risk is extremely high, whose costs grow exponentially, and whose earnings reinforce the position of these lobbies in the creation of public policies of EU member states in partnership with their governments that hire them to carry out public projects.

In the history of the economy, there are innumerable examples of exploiting the poor for the needs of the rich, and now it is systemically, strategically and with the institutional help of the common central bank for 19 countries. As has been the case ever since the money began to dominate human beings, the story is being based on the belief that bad money is supposed to be transformed into good money, where th bad one is private money, acquired by exploiting the weak and the poor, and it is being fictiously transformed in good public money. In the eye of taxpayers this creates the image how the private money is purified when it is taken by the authorities and becomes public money distributed by the government.

In these circumstances public money is without doubt good since it is being spent in order to finance the common interest. The minds of the people are guided by this myth and it is actually the one of the most rewarding undermining of our power to understand how money circles. In the eye of citizens private money is perceived as dirty result of dishonest actions, while the public money relieves, as, according to what governments are trying to explain, it creates more wealth than private money.

The whole theory is based on the idea that the return on the investment made by the state will be higher than that of private persons, adding that the state can do it by borrowing instead of violently exploiting its taxpayers, basing it on the hope that its return on investment will always be positive. The image of private sector is completely different, starting from the fact that the ideas of an entrepreneur are always being described as selfish, as well as that any business may go bankrupt and therefore the return on those investment may be negative.

The current situation in the Eurozone shows how a change in public expenditure and the consequent change in total income is being used to falsely justify each and every stimulus policy financed by the loan. This is also one of the most harmful misinterpretations of the overall benefits of the increase of the level of consumption, since the money that is supposed to be spent is actually created from nothing, borrowed or redistributed creating drawback on some other budget item, which results in the creation of economic depression and an increase in unemployment. The key problem is the decision to keep Quantitative Easing program unchanged, despite strong growth data in Eurozone countries.

The ECB still injects 60 billion euros monthly into the markets to maintain interest rates low, destroying any anticipation of achieving visible return in the years to come. Besides that the banking crisis is still menacing, the level of indecisiveness is too high and the European system is far from being restored. Considering the situation on the markets, it is very obvious how listed companies are now too big and too incoherent for their shareholders to be really concerned in decision-making, so a huge stock market bubble has formed.

Also, big capital gains are no longer on the stock market where central banks inject thousands of billions to boost prices, but before the IPO and even property in private equity transactions. This increases the wealth of the insiders whose money shattered by venture capital is increasing significantly over the past five years, explaining how QE program actually enriches a narrow circle of the powerful elite, leaving the rest of the population deeply in debt. Therefore, the monetary system is currently being based on free credit and literally forcing the citizens to use those credits is actually the crime against humanity.

Thanks to the QE program of the ECB the mass of credit is used to protect the system from bankruptcy, where the weakest link is the banking sector with dubious debts. When this is being combined with multinational corporations that are working on harmful projects supported by the governments, i.e. financed by the public money and the costly social spending in almost half of the Eurozone countries it is not hard to the imagine how hard the situation will be by the end of this decade.

What should be kept in mind is the logical fact that the debt cannot be unlimited since the remuneration capacities of people are limited and since their ability to work fades over time. If the ECB continues to base its activities on an infinite debt, the European population will be enslaved by their credits, and creating any type of slavery that is contrary to human rights means being involved in committing a new kind of crime against humanity.

The proces of making decisions in the ECB is oftenly perceived as a democratic, though it will not change an inconsistent monetary and financial system because of its lack of the regulation and being in command of the price of credit by the authorities will end in devastation. In a system as such under the ECB the member states do not have to have power over the currency, the price of credit, or the control of the economy, while at the same time its goal is to protect human rights of its citizens.

National central banks under the system of the ECB are percieved as more self-directed, while in practice, this autonomy is completely fabricated. Their decisions are essentially made in the interests of governments. By artificially lowering interest rates, central banks smooth the progress of public debt and by financing commercial banks lending to their governments, they pledge to the latter an almost unlimited source of income, despite their already oversize debt. Despite the changes that occur during this process and despite how much growth occurs, this progress is pervasive, since the only long-term outcome of this policy is the creation of debt slavery.

The Latest Rise in the Price of Gold – a New Cause for Concern

From “Dividing by Zero” (Global Knowledge, 2016-2017), Ana Nives Radovic 

While the price of gold continues to rise it is a sign that financial resources should be turned into gold, opening the question about the latest causes of this phenomenon and whether gold really still has the status of “safe heaven” investment.

The article is part of academic publication “Dividing by Zero” and will be available online after October 21st 2017, after e-book distribution to scientific research units.

Rematerializing the Upper Limit of the Debt In Order to Be Renegotiated

From “Dividing by Zero” (Global Knowledge, 2016-2017), Ana Nives Radovic 

American central financial institution Federal Reserve had a goal to stimulate economic growth after the crisis of 2008 by issuing assets ready to be sold on capital market with Quantitative Easing program. Released in three series, QE programs were far from boosting growth, on the contrary, it made economy weaker and more dependable on artificial measures.

The article is part of academic publication “Dividing by Zero” and will be available online after October 21st 2017, after e-book distribution to scientific research units.

ECB Is Hiding Public Debt Instead of Stimulating Growth

From “Dividing by Zero” (Global Knowledge, 2016-2017), Ana Nives Radovic 

The European Central Bank has injected huge amounts of assets into the economy over the past two years in the course of rediscounting public debt of the Eurozone countries, which represents an exceptional monetary measure, referred to as quantitative easing is intended to bring back the rise of the inflation rate, which is itself supposed to neutralize the deflationary and recessionary forces that are affecting development.

The article is part of academic publication “Dividing by Zero” and will be available online after October 21st 2017, after e-book distribution to scientific research units.

Medium of Exchange Rather than the Tool for Value Accumulation

From “Dividing by Zero” (Global Knowledge, 2016-2017), Ana Nives Radovic 

Explaining the meaning and the purpose of the digital currency bitcoin has lead to defining its level of soveregnty in comparison with the existing monetary system or the position of leading central banks, where many people think that a country is sovereign and that if it has contracted a debt in a currency, it is free to reimburse it in another country it chooses.

The article is part of academic publication “Dividing by Zero” and will be available online after October 21st 2017, after e-book distribution to scientific research units.

When a Rescue Plan is an Obstacle to Recovery

From “Dividing by Zero” (Global Knowledge, 2016-2017), Ana Nives Radovic 

The central financial institution of the United States, the Federal Reserve, directs global finance, as well as the big part of the global economy, and that is the reason why financial markets worldwide apparently replicate unreservedly qualified prices, since they are entirely under the Fed’s control.

The article is part of academic publication “Dividing by Zero” and will be available online after October 21st 2017, after e-book distribution to scientific research units.