Money for the People: Grillo’s Populist Plan for Italy

Default on the public debt, nationalization of the banks, and a citizen dividend could actually save the Italian economy.

Comedian Beppe Grillo was surprised himself when his Five Star Movement got 8.7 million votes in the Italian general election of February 24-25th. His movement is now the biggest single party in the chamber of deputies, says The Guardian, which makes him “a kingmaker in a hung parliament.”

Grillo’s is the party of “no.” In a candidacy based on satire, he organized an annual “V Day Celebration,” the “V” standing for vaffanculo (“f—k off”). He rejects the status quo—all the existing parties and their monopoly control of politics, jobs, and financing—and seeks a referendum on all international treaties, including NATO membership, free trade agreements and the Euro.

“If we get into parliament,” says Grillo, “we would bring the old system down, not because we would enjoy doing so but because the system is rotten.” Critics fear, and supporters hope, that if his party succeeds, it could break the Euro system.

But being against everything, says Mike Whitney in Counterpunch, is not a platform:

To govern, one needs ideas and a strategy for implementing those ideas. Grillo’s team has neither. They are defined more in terms of the things they are against than things they are for. It’s fine to want to “throw the bums out”, but that won’t put people back to work or boost growth or end the slump. Without a coherent plan to govern, M5S could end up in the political trash heap, along with their right-wing predecessors, the Tea Party.

Steve Colatrella, who lives in Italy and also has an article in Counterpunch on the Grillo phenomenon, has a different take on the surprise win. He says Grillo does have a platform of positive proposals. Besides rejecting all the existing parties and treaties, Grillo’s program includes the following:

• unilateral default on the public debt;
• nationalization of the banks; and
• a guaranteed “citizenship” income of 1000 euros a month.

It is a platform that could actually work. Austerity has been tested for a decade in the Eurozone and has failed, while the proposals in Grillo’s plan have been tested in other countries and have succeeded.

Default: Lessons from Iceland and South America

Default on the public debt has been pulled off quite successfully in Iceland, Argentina, Ecuador, and Russia, among other countries. Whitney cites a clip from Grillo’s blog suggesting that this is also the way out for Italy:

The public debt has not been growing in recent years because of too much expenditure . . . Between 1980 and 2011, spending was lower than the tax revenue by 484 billion (thus we have been really virtuous) but the interest payments (on the debt of 2,141 billion) that we had to pay in that period have made us poor. In the last 20 years, GDP has been growing slowly, while the debt has exploded.

. . . [S]peculators . . . are contributing to price falls so as to bring about higher interest rates. It’s the usurer’s technique. Thus the debt becomes an opportunity to maximize earnings in the market at the expense of the nation. . . . If financial powerbrokers use speculation to increase their earnings and force governments to pay the highest possible interest rates, the result is recession for the State that’s in debt as well as their loss of sovereignty.

. . . There are alternatives. These are being put into effect by some countries in South America and by Iceland. . . . The risk is that we are going to reach default in any case with the devaluation of the debt, and the Nation impoverished and on its knees. [Beppe Grillo blog]

Bank Nationalization: China Shows What Can Be Done

Grillo’s second proposal, nationalizing the banks, has also been tested and proven elsewhere, most notably in China. In an April 2012 article in The American Conservative titled “China’s Rise, America’s Fall,” Ron Unz observes:

During the three decades to 2010, China achieved perhaps the most rapid sustained rate of economic development in the history of the human species, with its real economy growing almost 40-fold between 1978 and 2010. In 1978, America’s economy was 15 times larger, but according to most international estimates, China is now set to surpass America’s total economic output within just another few years.

According to Eamonn Fingleton in In The Jaws of the Dragon (2009), the fountain that feeds this tide is a strong public banking sector:

Capitalism’s triumph in China has been proclaimed in countless books in recent years. . . . But . . . the higher reaches of its economy remain comprehensively controlled in a way that is the antithesis of everything we associate with Western capitalism. The key to this control is the Chinese banking system . . . [which is] not only state-owned but, as in other East Asian miracle economies, functions overtly as a major tool of the central government’s industrial policy.

Guaranteed Basic Income—Not Just Welfare

Grillo’s third proposal, a guaranteed basic income, is not just an off-the-wall, utopian idea either. A national dividend has been urged by the “Social Credit” school of monetary reform for nearly a century, and the U.S. Basic Income Guarantee Network has held a dozen annual conferences. They feel that a guaranteed basic income is the key to keeping modern, highly productive economies humming.

In Europe, the proposal is being pursued not just by Grillo’s southern European party but by the sober Swiss of the north. An initiative to establish a new federal law for an unconditional basic income was formally introduced in Switzerland in April 2012. The idea consists of giving to all citizens a monthly income that is neither means-tested nor work-related. Under the Swiss referendum system of direct democracy, if the initiative gathers more than 100,000 signatures before October 2013, the Federal Assembly is required to look into it.
Colatrella does not say where Grillo plans to get the money for Italy’s guaranteed basic income, but in Social Credit theory, it would simply be issued outright by the government; and Grillo, who has an accounting background, evidently agrees with that approach to funding. He said in a presentation available on YouTube:

The Bank of Italy a private join-stock company, ownership comprises 10 insurance companies, 10 foundations, and 10 banks, that are all joint-stock companies . . . They issue the money out of thin air and lend it to us. It’s the State who is supposed to issue it. We need money to work. The State should say: “There’s scarcity of money? I’ll issue some and put it into circulation. Money is plentiful? I’ll withdraw and burn some of it.” . . . Money is needed to keep prices stable and to let us work.

The Key to a Thriving Economy

Major C.H. Douglas, the thought leader of the Social Credit movement, argued that the economy routinely produces more goods and services than consumers have the money to purchase, because workers collectively do not get paid enough to cover the cost of the things they make. This is true because of external costs such as interest paid to banks, and because some portion of the national income is stashed in savings accounts, investment accounts, and under mattresses rather than spent on the GDP.

To fill what Social Crediters call “the gap,” so that “demand” rises to meet “supply,” additional money needs to be gotten into the circulating money supply. Douglas recommended doing it with a national dividend for everyone, an entitlement by “grace” rather than “works,” something that was necessary just to raise purchasing power enough to cover the products on the market.

In the 1930s and 1940s, critics of Social Credit called it “funny money” and said it would merely inflate the money supply. The critics prevailed, and the Social Credit solution has not had much chance to be tested. But the possibilities were demonstrated in New Zealand during the Great Depression, when a state housing project was funded with credit issued by the Reserve Bank of New Zealand, the nationalized central bank. According to New Zealand commentator Kerry Bolton, this one measure was sufficient to resolve 75% of unemployment in the midst of the Great Depression.

Bolton notes that this was achieved without causing inflation. When new money is used to create new goods and services, supply rises along with demand and prices remain stable; but the “demand” has to come first. No business owner will invest in more capacity or production without first seeing a demand. No demand, no new jobs and no economic expansion.

The Need to Restore Economic Sovereignty

The money for a guaranteed basic income could be created by a nationalized central bank in the same way that the Reserve Bank of New Zealand did it, and that central bank “quantitative easing” (QE) is created out of nothing on a computer screen today. The problem with today’s QE is that it has not gotten money into the pockets of consumers. The money has gotten—and can get—no further than the reserve accounts of banks, as explained here and here. A dividend paid directly to consumers would be “quantitative easing” for the people.
A basic income guarantee paid for with central bank credit would not be “welfare” but would eliminate the need for welfare. It would be social security for all, replacing social security payments, unemployment insurance, and welfare taxes. It could also replace much of the consumer debt that is choking the private economy, growing exponentially at usurious compound interest rates.

As Grillo points out, it is not the cost of government but the cost of money itself that has bankrupted Italy. If the country wishes to free itself from the shackles of debt and restore the prosperity it once had, it will need to take back its monetary sovereignty and issue its own money, either directly or through its own nationalized central bank. If Grillo’s party comes to power and follows through with his platform, those shackles on the Italian economy might actually be released.
___________

Ellen Brown is an attorney and the author of eleven books, including Web of Debt: The Shocking Truth About Our Money System and How We Can Break Free. Her websites are webofdebt.com and ellenbrown.com. She is also chairman of the Public Banking Institute. Details of the June 2013 Public Banking Institute conference are here.

42 Responses

  1. [...] CONTINUE READING HERE! [...]

    • As computers and robots take away more and more jobs, working people lose income and become impoverished, while tax revenues fall and public debt rises and austerity measures are imposed at ironically the point in history when universal prosperity is within grasp. A guaranteed minimum income is a necessity not just for the poor but for all of us.

      • Or: society could mandate a shorter work-week for employees and spread the work load, as well as the benefits, equally among its members. Of course the cultural transition would take time (more than France allowed for it) and a temporary “safety net” of some sort would be necessary.

        Abolishing the income tax and all corporate interference with the machinery of media, education, and monetary policy would give the economy enough latitude to adjust the culture accordingly.

        But before any of that can happen, there needs to be a national discussion on the nature of incorporation in regard to government and the nature of incorporation in regard to business. Neither are inherently evil, but the consequences of their mutual competition are only exceeded by the consequences of their cooperation.

        Our Founders understood the nature of incorporated religion and forbade its interference with government; it’s time we understood the nature of *all* incorporated entities (political parties, banks, industries, unions, news media, schools, etc.) and forbid their interference likewise. There’s only one *special interest* we all hold in common: we people.

  2. “As Grillo points out, it is not the cost of government but the cost of money itself that has bankrupted Italy.(READ: ANY SOVEREIGNTY). If the country wishes to free itself from the shackles of debt and restore the prosperity it once had, it will need to take back its monetary sovereignty and issue its own money, either directly or through its own nationalized central bank.(READ: The SOLUTION).

    For any nation to be a Monetary Sovereignty….
    .. it must be the sole creator of its sovereign currency.
    …it must have the ways and means to control its sovereign currency for quality and quantity.
    …it must under modern money systems be fiat since it money is transferable “thru thin air”.
    …it must understand that it is the guardian of the value of the currency , if it wishes to be capitalistic; otherwise that nation will be totalitarian.
    …it must use that currency knowing that it must also return it back to the community (the rightful owners).
    …all transactions using sovereign currency must be “REAL”, meaning backed by 100% of issued sovereign currency.
    WHAT IF….. The new Italian government were to declare,”Italy as a sovereign nation declares the ‘New Lira’ as its national currency and after due consideration declares that the Central Bank of Italy (CBI) has on deposit 1 TRILLION NEW LIRA that sum being the present value of the entire sovereignty at this time.
    The CBI shall purchase all residential and commercial real estate loans at fair market value and modify these assumable loans at 2% for 36 years.
    There will also be 200 billion New Lira available as loans for any private for profit bank at 2% for 36 years since as of this date all monetary transactions must be 100% capitalized and banks must be solvent or go into receivership.
    Re: Student loans, they are to be purchased at market value as well, however they are modified at 1% for 72 years with a payment condition of annual payments are to be 5% of income until paid off.
    READ MORE: http://bit.ly/MlQWNs

    Play the game in my next comment-“*WHAT IF THE …The Fed Reserve were to become the CENTRAL BANK WORKING FOR THE PEOPLE (CBWFTP) instead of working for the Private For Profit Banks (PFPB) .

  3. As a counterbalance i would like to offer Webster Tarpley’s cautionary assessment of Grillo http://tarpley.net/2013/03/02/roll-back-the-sequester-and-the-entire-satan-sandwich/ He believes Grillo’s policies would have a disastrous affect on Italy. His opposition to infrastructure and job creation investments for the working classes not only casts a dubious light on his proposal to nationalize banking, but also the viability of 1000 social credit handout. Ultimately, even in a debt free monetary system, jobs must come first.

    • Here’s Tarpley’s latest, greatest analysis Beppe Grillo. http://www.presstv.ir/detail/2013/03/27/295349/italian-demagogue-exposed-as-us-tool/

      • I found Ellen Brown’s article on Grillo much more credible and reality based. That Tarpley resorts to so much name-calling shows, I believe, that his case is weak and he is not coming from a good place himself. I see he got his PhD from a Catholic university, perhaps that is a clue as to the reasons behind his vicious reality-ignoring attack against anti-establishment Italian Grillo.

        • You may disagree with his criticism, but nothing in Tarpley’s article is ad hominem. . His article contains a wealth of crucial facts about Grillo that Ellen leaves out: such as Goldman Sach’s and U.S. State Dept. hearty endorsement of Grillo’s canidacy. None of the Italian posters here even mention this !

          Few people have the experience in geopolitical anaysis that Tapley has. He is a polyglot, a soholar of history/ecomomics and has lived in Italy a number of years, authoring his first book there. Whatever you get from him, it definitely won’t be an ill researched, second hand account.

          • Yep, I disagree with Tarpley’s analysis. At any rate, it doesn’t seem likely to me. He claims that Grillo’s rise and the election results in Italy are part of an engineered color revolution. I think it’s genuinely populist. I think Tarpley’s idea that the outcome of Italy’s election is good for predatory financiers is fatuous. Grillo wants to nationalize the banks, and a public rather than private central bank issuing the currency. Tarpley provides a lot of information, but also omits essentials that Ellen Brown provides. Going to the links in Brown’s article provides more and better info than Tarpley did. I found his allegations of State Department and GS influence unconvincing.
            Some of Tarpley’s ad hominem remarks: “a cynical and power-hungry manipulator. . . a purveyor of infantile rage, verbal violence, obscene slander, and the voices of the infantile id. . . Grillo’s megalomaniac strategy. . . Grillo’s insatiable ambition. . . “ Heck, Grillo can’t even run for office because of an arrest record, so how can he be the new Mussolini? He’s simply an activist.

            • if you want to trust a man endorsed by the very institutions plundering Itlay and the globe, and who operates 39+ hedge fund front corps, offshore to nationalize the banks and do any of the wonderful things talked about on this blog, then you go right ahead.

              What Ellen fails to point out is that Grillo advocates the same austerity the IMF wants: savage cuts to pensions, violent opposition to any infrastructure investments or programs to create jobs for working classes. His rehtoric is just alot of populist criticisms devoid of any real solutions.

              Tarpley description of his character as discerned through his public behavior and statemenst are if anything understated. They are not presented as gratutious, empty insults, but descriptions backed up with detailed explanations — you know, the lengthy and substantial parts edited out by your elipsis’.

  4. [...] Ellen Brown Web of Debt [...]

  5. The Switch Game;
    *********************
    *WHAT IF THE …The Fed Reserve were to become the CENTRAL BANK WORKING FOR THE PEOPLE (CBWFTP) instead of working for the Private For Profit Banks (PFPB) .
    The government can not win against ‘compound interest’ on debt for that can be infinite in amount. IF ‘compound interest were eliminated then there would be no “systemic failure”. Or better yet; take that most powerful weapon, use it for the people .
    Let’s try this game: Substitute the words “Central Bank Working For The People” (CBWFTP) where ever” Private For Profit Banks” (PFPB) appears.

    ****PFPB (read CBWFTP) have $100 trillion in assets as mortgages on residential and commercial real property (RE) loans. The average compound interest rate is 4% for a term of 36 years. The PFPB (read CBWFTP) would have created that $100 trillion ‘out of thin air’ (Horizontal Money)(read Vertical Money) which would have an attachment that would require $800 trillion to be paid to the PFPB (read CBWFTP). YES, take away the smoke and mirrors, this is a fact-the Rule of 72. Now we must replace (reduce to zero ) the Horizontal Money by subtracting $100 trillion leaving a profit,income,taxation from ‘somewhere else’ of $700 trillion. This amount goes as profits to the PFPB.(read CBWFTP) Revenue they may use for their own selfish purposes. That’s not the bad news-what the bad news is :That $700 trillion is real money, real currency, sucked up by the PFPB, (CBWFTP) yes Vertical Money !!
    NOW DARE YOU ; READ IT AGAIN,
    BUT THIS TIME REPLACE “PFPB” WITH “CBWFTP”.
    Why would you not want prosperity for yourselves and your children? Why would you not want $700 trillion THAT MUST BE PLACED BACK INTO THE ECONOMY IN ORDER TO PREVENT DEFLATION !
    *********************
    MAYBE,JUST MAYBE, PERHAPS ECONOMIST ARE BEGINNING TO GET IT !!
    ****************

    Maybe,just perhaps you might read and improve : “Justaluckyfool”
    Try to disprove that ” PFPB profit via taxation on their loans not only double but even quadruple the amount of the loans”

    MAYBE,JUST MAYBE, PERHAPS ECONOMIST ARE BEGINNING TO GET IT !!
    ****************
    Amazing that Adair Turner is suggesting Quantitative Easing for the People not for banks.http://t.co/P2o6J8ux9m Copying @ProfSteveKeen?
    Adair Turner recommends Quantitative Easing for the People
    neweconomics.net.nz
    A breakthrough speech on Monetary policy by journalist and financial economist Anatole Kaletsky was published by
    READ “QE 4 The People”
    Read “QE 4 Disaster Relief”
    Discover a path to prosperity.

  6. Ellen brown. I love this woman. If she ever starts a movement watch out. !

  7. The world economy is much like the monopoly game, with one critical exception: in the monopoly game, no one player owns the bank; But in today’s world, a very small number of individuals do own and control the “bank” . These folks are the modern day equivalent of aristocrats even if most of us don’t know who they are. Iceland is a perfect example of what happens when the people in a nation reclaim their sovereignty.

  8. The power of an idea whose time has come. It didn’t have to be this way. Working people would have been happy to slave on, ignoring the powers that be, but TPTB got too greedy.

    We need a new deal, new order, new capitalism, new social contract. Our country was founded on some good ideas, but they didn’t go far enough. Too much privilege of Money was protected, partly rationalized by fear of the people.

    Sovereignty must reside in the people. Fear of the people voting themselves benefits is restrained by the people also being the taxpayers. We haven’t been ruined by people voting themselves benefits, but rather by Money buying more privilege.

    Re-compensation (austerity) for the excess must come from those who benefited. We don’t need to have, and shouldn’t have, billionaires. They are not grateful for their privilege, instead spiteful and petty over earned benefits like social security. Excessive money makes people drunk, and there is no good reason for a society to tolerate these aspiring tyrants.

    When tax money produces research, why shouldn’t ALL citizens enjoy a share of its return? Why do these things get privatized? Especially with concerns over increased robotization, shouldn’t everyone get a dividend from technological advancement as a shareholder in our investment, similar to Alaska’s dividend check to citizens for natural resources?

    The State must regain control of its constitutional obligation to control money. Representatives must regain control of the State on behalf of citizens not corporations. There is so much that can be done, and to that end we need a statement of principles, not left and not right, but common ground for making politics work for us instead of being used to exploit us. We need a Beppe Grillo. And if TPTB don’t like it, they have no one to blame but themselves for making it a necessity.

    • The solution consists of three amazingly simple steps: 1, stop saying it can’t be fixed; 2, sign the petition when it comes around; and 3, vote “Yes” to ratify:

      28th Amendment
      “Corporations are not persons in any sense of the word and shall be granted only those rights and privileges that Congress deems necessary for the well-being of the People. Congress shall provide legislation defining the terms and conditions of corporate charters according to their purpose; which shall include, but are not limited to: 1, prohibitions against any corporation becoming so large its failure would pose a threat to national security or harm the general economy; 2, prohibitions against any form of interference in the affairs of government, education, and news media; and 3, provisions for civil and criminal penalties to be paid by corporate executives for violation of the terms of a corporate charter.”

      • May this 28th Amendment pass quickly! I would suggest that the “civil and criminal penalties to be paid” be reworded slightly. If it says, “civil and criminal penalties to be suffered”, it would allow for the incarceration of the executives who are indeed criminals!

        • Thank you. That’s a subtle but powerful distinction, isn’t it. It will be rewritten accordingly. And congratulations; you’re the first to point out a flaw in my wording. I sincerely hope there will be further revisions (without altering the intent) as any remaining ambiguities are discovered .

  9. Clean slate approaches are useful in forming an “executable plan.”

    However, that plan must include over a century of government+central banks. Coming up with the “new way” is great, but, if none of these ways included the government, what will be achieved beyond debate?

    Populism is nowhere without the existing government, they hold the keys. We have worked on and come up with numerous powerful approaches to alter the central banking system. Suggesting that we have the power to require these changes of our central government is immoral. It is the offering of “false hope” that has kept our current system in power since the beginning. The US is not Iceland.

    If you go to the trouble of studying “political movements” in US history you will discover how our system, co opts them, emasculates and leaves them on the “movement trash heap.” This movement will do the same if it attempts to follow the “populist” route. The machine is designed to eliminate them and is highly efficient.

    Each US state has a state treasurer’s office. This is a de facto bank for the state. They just “farm out’ the actual banking functions to chartered private banks. Using your imminently approachable treasurer and state government get a backer for a bill to charter the treasurer’s office as a “state bank.” The tax revenue daily balance can leverage the necessary billions to create the credit that will achieve the necessary ends discussed here.

    The new treasurer/bank will stop farming out the credit function and stabilize credit facilities for the state itself, business and state residents. No more bubbles, inexpensive credit, a thorough understanding of our monetary system and no more reliance on our ding dong central government.

    The federal government and the fed will do nothing. I make this conclusion based on history. A state government is far smaller, more approachable and more financially desperate that the federal government…why? A state is not permitted to print it’s own money!

    The vacuum exists. This vacuum is created by overwhelming debt created by the “overmonetization” of all forms of social debt driving austerity. Our money supply system demands the “growth” of said supply. It makes sense. It is a debt based system. Now we suggest and implement a state based monetary system that treats currency as a commodity like water or electrical power. Will it be better? Perhaps. Could it be worse? Probably not.

    Our debate is far too broad. Engage with your state treasurer’s to stabilize credit facilities in each of our states by preparing a bill to get a bank charter. With rampant tax growth and today’s post realty bubble deflation, eliminating state taxes, ending bubbles and assuring citizens of stable credit facilities forever should be able to get traction with a state politician looking to make a name for himself. That is how, after all, the system works isn’t it?

  10. Ellen, if you would please stop using the word “credit” when you mean money, it would be much less confusing to those who are not advanced monetary thinkers.

    Money issued from the state, as thin air, is best called seigniorage. There are no compulsions on this type of money to return to a banker’s double entry ledger. The only compulsion of this unit is to recycle to government by taxation. Seigniorage money floats in the money supply, allowing transactions to be consummated at low cost.

    Credit implies hypothecation and double entry banking mechanisms. Hypothecated banker money (BM) disappears when debtor returns BM unit to the double entry ledger. Banker “credit” operates totally different with respect to seigniorage money. The units are different and have different names. Credit is NOT MONEY.

    Seigniorage can be considered credit of the entire nation only by squinting and by the thinnest logic. Maybe it is credit based on the wealth of a country and all it’s people, but nothing is really hypothecated. Money issued as seigniorage will inflate the money supply, thus debasing it. However, it will not debase said supply, if we are in depression. It will add demand as you say. Please, let’s use the term credit only when we speak of double entry banker money. Let’s use the term money when the unit floats and has no “credit” liabilities.

    Let’s do a thought experiment: A Chinese bank issues a “credit” loan. The new bank money (BM) is under compulsion to return to the double entry ledger and then disappear. BUT. BUT. The Chinese bank, via its “state” authority, decides to forgive the loan. What then? The former BM now has its liability function erased, and the money unit becomes floating. A state bank then has morphed their “credit” into seigniorage money. The new floating money is now permanently available (unless government destroys it) in supply to transact at low cost.

    Please stop – money is not credit. In the world of science, if there is contradictory evidence, it blows theories apart. Seigniorage money and its history, as well as today’s China, tell us that money is not credit.

    • Agreed. Our language doesn’t lend itself to the intelligent discussion of economics. I think that works to bankers’ advantage and they’re not likely to change without some logical coercion from folks like you who are “on to their game”. Strip away the ambiguity and doubletalk, and their game is plainly theft and fraud. It’s another of those carnie games that should be outlawed – like three card monty.
      Another example? The creation of money by “shadow banking” should be called counterfeiting. I’m sure the list of deliberately misleading terms could be expanded greatly.

  11. Watch for lone nut or a terrorist shoot Beppe Grillo !

  12. [...] Ellen Brown Featured Writer Dandelion Salad webofdebt.com March 7, [...]

  13. Ms Brown’s usual anti-euro propaganda. The claim that Grillo could “break the Euro system” is totally laughable (he is, after all, a comedian!) and the way in which American anti-euro people have clutched frantically at that particular straw shows just how totally defeated they have been in their attempts to crush Europe under the American jackboot. A propos America, Ms Brown might care to tell us why what currency we use in Europe is the business of any American. What disadvantage do Americans suffer by reason of the euro’s existence? None that I can see. What advantage would accrue to Americans if the euro disappeared tomorrow? None that I can see. So tell us, Ms Brown. What American interest is at stake here?

    • Why do you think I only write on what is in the interest of Americans? My daughter lives in Europe, but I’m not actually writing for her either. I just do research and write it up. I didn’t say I was for the breakup of the Euro but that Grillo’s supporters were. What I’m for is a national dividend and monetary sovereignty for nations generally, wherever they are. I could see a two-tiered system where the Euro was the inter-country exchange currency for Eurozone countries and their own currencies were used domestically for trade.

      (Sorry if I haven’t responded to other comments here. This one was just pointed out to me. I’m scrambling against a deadline to get a book finished.)

      • RE: EllenBrown: ” What I’m for is a national dividend and monetary sovereignty for nations generally, wherever they are. I could see a two-tiered system where the Euro was the inter-country exchange currency for Eurozone countries and their own currencies were used domestically for trade. ”
        Please, does this work for you ?
        “As Grillo points out, it is not the cost of government but the cost of money itself that has bankrupted Italy.(READ: ANY SOVEREIGNTY). If the country wishes to free itself from the shackles of debt and restore the prosperity it once had, it will need to take back its monetary sovereignty and issue its own money, either directly or through its own nationalized central bank.(READ: The SOLUTION).
        For any nation to be a Monetary Sovereignty….
        .. it must be the sole creator of its sovereign currency.
        …it must have the ways and means to control its sovereign currency for quality and quantity.
        …it must under modern money systems be fiat since it money is transferable “thru thin air”.
        …it must understand that it is the guardian of the value of the currency , if it wishes to be capitalistic; otherwise that nation will be totalitarian.
        …it must use that currency knowing that it must also return it back to the community (the rightful owners).
        …all transactions using sovereign currency must be “REAL”, meaning backed by 100% of issued sovereign currency.
        WHAT IF….. The new Italian government were to declare,”Italy as a sovereign nation declares the ‘New Lira’ as its national currency and after due consideration declares that the Central Bank of Italy (CBI) has on deposit 1 TRILLION NEW LIRA that sum being the present value of the entire sovereignty at this time.
        The CBI shall purchase all residential and commercial real estate loans at fair market value and modify these assumable loans at 2% for 36 years.Payment is to be an equal exchange of “New Lira” for Euro. Personal income taxes will be reduced 50% across the board immediately and after 365 days again reduced so as to be zero.
        There will also be 200 billion New Lira available as loans for any private for profit bank at 2% for 36 years since as of this date all monetary transactions must be 100% capitalized by ‘New Lira’ and banks must be solvent or go into receivership.
        Re: Student loans, they are to be purchased at market value as well, however they are modified at 1% for 72 years with a payment condition of annual payments are to be 5% of income until paid off.
        *All banks charted as Italian must record their balances in “New Lira” and transfer in “New Lira”, which shall carry an equal denominated value as the present Euro.
        *All bonds that are listed in Euro shall be deemed in an equal denomination as “New Lira”, and shall NO LONGER pay interest, and shall be paid out to zero in 72 monthly payments by the CBI.

        READ MORE: http://bit.ly/MlQWNs
        Based upon an opinion of the concepts of Frederick Soddy, “The Role Of Money” (1926,1933)

      • Actually, I will say what Ellen doesn’t have time to say. The euro is corrupt beyond belief. And, so is the U.S. Democracy is local self-rule. Not the rule of some unelected toad taking favors from bankers to then administer cruel and inhumane policies deciding who gets what through an artificial form of control called money. And both residing far away from the people who have to eat their gruel. Those are kings in castles of feudal Europe who have returned to enslave the people in fascist corporate capitalism.

        Grillo certainly could break up the euro zone. Italy’s economy is enormous. Without Italy, the euro currency will eventually fail because it will certainly have a domino effect as other countries follow suit. The euro serves absolutely zero purpose other than corporate control. What benefit do I receive by using a currency whose brutal policies are decided upon in Germany or Belgium if I live in Greece?

        You have to be against something to be for something else. Grillo has a populist plan. Those taking jabs at him are simply worried members of the cruel and inhumane status quo. They own the media and will do anything to make him look like an idiot. All who chafe at the corruption and illegitimate power of the status quo are Beppe Grillo.

        I do think one issue in her recent article deserves some constructive criticism. China’s system is wildly corrupt and is part of the neoliberal global system. It has overinvested heavily in production that can and will never be utilized. It’s currency is in the process of failing. Who knows if we will see total failure but citing 30 years of consistent growth could also be applied to the Reagan economic miracle that also led to 30 years of economic growth that made the U.S. the envy of the world. But one now realizes that 30 years was simply achieved through unsustainable policies.

        There are so many issues facing China that they are too numerous to tackle in a comment. That said, Ellen’s basic assumptions about democratic banking and money are sound. They are a large part of the answer to democratic economics. The only issue I have with Ellen’s positions are that they simply don’t go far enough. Capitalism needs to be completely overhauled. This push for a guaranteed basic wage is a big issue. Anyone who wants to participate should be granted that right. And I fully support it.

        • The Euro is weak due to Sovereigns issuing bonds to commercial banks. Any system predicates its output, so the question is “where is the system malfunction?” Said private commercial banks create “credit” Euro’s in exchange for the bond. Unequal trade, i.e. trade imbalance is always balanced somehow, and that somehow is flows of money. For example, Spain buys too many German goods, and exports Euro’s to settle the imbalance. Where do Spain’s extra Euros come from? The bond exchange created new Euros, which is really banker credit, and underlying said credit is the usury mechanism and roll over’s/refinancing of bonds. This mechanism puts populations into debt peonage, hence the PIIGS current reality. A real money system has information feedback that is not corrupted by the credit mechanism just described.

          In a positive interest usury type system, a third circulating currency is required, something like a bancor. An update to the Euro system would have the Euro serve as a bancor to mediate between sovereign currencies. The sovereigns then have the fast information feedback (on their own money) they need in order to adjust their exchange rates relative to the Euro. A superior option is demurrage on currency, which obviates the need for an intermediating (third currency like Euro or Bancor). The problem is always usury and debt accumulations inherent to a system with these design features. Positive interest (usury) and debt money have so many problems they should be scrapped to my mind. But, I understand where others are coming from.

          With regards to China, I’m always hearing economists and other’s predicting imminent collapse. I think they are whistling past the graveyard. In terms of monetary units, allowing money to float without heavy debt or usury compulsion, meaning keeping its cost low and hence adding efficiency is the hidden secret. Read Margrit Kennedy to see the hidden costs, which amount to about 40%. By releasing that 40% cost of money you can have an economy that grows and defies standard economic theory.

          Elen’s state banking money theories can be distilled down to their essence: 1) Control the issuance of credit and hypothecation 2) Release credit obligation on money via grants or erasing loans (as in China). 3) Redistributing the usury accumulations that aggregate into the “state” banking system. These usury capital pools are redistributed via a political superstructure inherent to state banks. See descriptions she uses like “dividend payback.”

          • Bancor is a wildly corrupt mechanism and will not work. Period. That people still propose it shows how little they understand this crisis. It’s no different than why gold or IMF SDRs have never worked and never will work. It’s just another rehash attempting to save corporate capitalism. A Bancor solution would cause Europe to collapse. Or, if implemented globally, would cause the entire global economy to collapse. That people don’t see this shows how little they understand money or this crisis. Don’t worry, that’s coming anyway. Capitalism is dead and bancor is just an attempt to put band-aids on it with rehashed solutions embraced by korporate masters.

            If you don’t know what’s going on in China, give it time. The illusion of sustainability is already collapsing. Hundreds of thousands of factories in China have already shuttered. Electricity usage has imploded. And, a huge amount of their capital production is as the world’s largest counterfeit goods producer that employs millions. This is blessed by the state that takes a cut in that corruption. A vast amount of its capital production is as a slave sweatshop achieved through constant currency devaluation (pegging) or neoliberal capitalism. That is, after devaluing its currency by almost half in the mid 90s to stimulate foreign investment (neoliberalism) after Clinton blessed American companies to loot our nation and send our capital to China. And, there is enough production capacity, as an example, in China’s steel industry, to serve global demand 17 times over. All you needed to open a steel mill was a pliant communist politician to give you the go-ahead. Now, since the capital in capitalism has imploded in China, the entire production of money is going into real estate and consumption. That is why things like housing and auto production have exploded higher. It is a sign of impending doom. Prices have swelled so high that it makes the U.S. bubble look like a pimple. Prices have often gone up 25% in a month in some markets. And this has been going on for years. I met an MBA student recently that said her parents bought a $250,000 condo outside of Shanghai on a $4,000 annual salary. Hahaha.

            People need a deep appreciation for complex systems and how attempts at aborting the natural volatility and natural mechanics of these systems creates extreme future instability and ultimately collapse.

            Globalization is dead, the euro is dead and capitalism is dead. We simply wait for the volatility to re-assert itself after our masters have spent tens of trillions covering up the horrors they have created.

            It’s coming. And there is nothing anyone can do to stop it. It has nothing to do with money at this point. It’s latent instability in the entire system.

            • I just checked one of your “facts”: electricity usage up 7.9 % in China 2012 Q4, the most recent figure (http://www.businessinsider.com/china-electricity-usage-q4-2012-2013-1). That means the Chinese economy is still booming–not the 10% growth of the last 30 years, but booming. It is the largest electricity, concrete, steel, etc., user in the world. It makes the most automobiles, bicycles, etc.–you name it. So, you’re wrong.

              • Umm… no, I’m not wrong. China’s economy is NOT booming. The electricity numbers for 2009, 2010 and 2011 were flat to down at 3.4 trillion kilowatts depending on what quarter we were talking about. I have the data. Everyone outside of China was watching this number over the last four years because it seemed to reflect a different reality that the communist party’s official propagandized GDP numbers. GDP numbers that showed the economy grew at a total rate of 34% over that same period of time that electricity usage imploded.

                Now that four years have gone by and everyone in the west was questioning these electricity numbers, somehow that have magically risen to 4.7 trillion kilowatts for 2012. This during a time when official GDP numbers are slowing well below that of 2009-2011.

                So, official GDP finally slows yet energy production is magically up 37% in a year? LOL. You believe some blogger on Business Insider as a source of how China’s economy is doing? Good for you but the numbers are all suspect and likely fabricated by the Ministry of Information.

                Maybe you’d like to explain those factories closing or all of those empty buildings they have built. Or that massive fleet of merchant ships sitting idle that were once full of Chinese goods. Or, the forests of shipping containers sitting empty throughout China. Or the compounded inflation that shows the bank of China has lost complete control over the money supply. Or, why if the economy is still roaring, why the stock market has literally collapsed over the past five years? Or, or, or.

                You know, during the Berlin Olympics, the Nazis convinced everyone in the west of a false reality too. I’m sure there were plenty of proverbial Business Insiders writing the same schtuff. The truth will reveal itself all in good time.

                • Glad to have got your dander up, Barry. You have the data for Chinese electricity use for the past 4 years? A link would make your claims more credible. 4 years of flat electricity use would be good evidence. Let’s see it.

                  • You didn’t get my dander up. I’m just frankly bored of people taking positions on topics they know nothing about. Reason, science and human decency have been drowned out by ignorance, distortions and lies. I’m not calling you a liar but you run off and Google something you apparently know nothing about (If you did, you would know the Chinese Statistical Yearbook has reported these facts.) and think you are an expert. You find some point in time in a series of distortions reported by a web site that has no idea what it is talking about and now think you are an expert on China or refuting what others, who have done their diligence and understand what they are talking about, have actually said.

                    I pay for my data. Since you are an expert at Google, if nothing else, find it yourself. I’m done here.

                    • If you can’t produce the alleged data, you shouldn’t be basing arguments on it. Nevertheless, I will keep my mind open to your claim.

                • Between 1932 and 1937 Germany went from being the poorest country in Europe to the richest. They used “Federer money” and Mefo Bills. They issued State money related to a unit of labor. Whenever capital benefits labor, it is no longer capitalist in the “Western” sense. In Western Societies usury capital aggregates toward financial centers. This capital then controls society.

                  China’s “State” controls their capital: There are the usual private “debt spreading” western banks, but their reserve ratios are carefully controlled by “China’s” state apparatus. Remember, China’s state banks also forgive loans. This simple fact seems to slip on past Western economists blinded by their “credit” spreading system and Basel accounting rules.

                  China’s game is fairly simple. They lift industries out of the West, thus driving themselves up the wealth and learning curve rapidly. This is done by keeping wages low, so Western captains of industry and Wall Street can take wage arbitrage. The wage arbitrage can be thought of as monetizing past knowledge from the West for the gains of today. Wages are kept low by trading a Yuan for excess dollars won in trade imbalance, then recycling the dollar back to the U.S. to buy a Tbill.

                  TBills appear to be in demand, therefore the dollar is considered strong. Bond price up interest rates down, and the converse; Bond price down and interest rates up. With bond prices high, the dollar remains high. This helps maintain the false exchange rate thus keeping Yuans lower. Also, trading out Yuans for dollars allows new Yuans to enter the economy. This is not inflationary, as it is chasing new economic growth(wealth lifted from the West).

                  During the night, workers moonlight in copy cat factories, stealing know how from the day job in a western run factory, thus creating Chinese institutional knowledge.

                  A better predictor of economic health is private debt ratios. Fundamentally, private debts will not grow in an economy where floating money is allowed to vector into the double entry ledger (of private banks) and cancel out said debts. China’s state bank, private bank model more closely resembles Canada 1938 to 1974, where Canadians were allowed to have high savings rates. Conflating Western Ideas of money/debt onto China is a fatal flaw many if not most people make.

                  Reality keeps defying predictions. How long does it take to wise up? Japan is still paying down their balance sheet recession after a whopping 20 years – so what is it about money that blinds people?

                  Once China is at technological parity, it is just a matter of turning on internal demand. The U.S. did this after WW2, as they converted war time factories for peace time “goods” production.

  14. This article is so hilarious and so full of wisdom. I love the comments posted above.
    That’s what we need. A F!!k You Party – F!!k You – from WetheMany to the privileged 1%. A party that represents US. An FY Party would be a terrific alternative to the supposed two-party (but really one-party) bought and paid for, those dems and repugs passing themselves off as representatives of those who elected them. They don’t work for us. They work for the greedy Midases (lobbyists and career politicians) who put them in office.
    All those countries like Iceland, Argentina, Ecuador, and China who have nationalized their banks, are prospering, while we are being vampirized by the gargantuan private zombie banking system that is the Fed and Wall Street.
    Grillo gets it. It’s not the cost of government, but the cost of money that creates a huge debt, which comes from letting our private banking system run everything. We should follow his lead. Screw the debt, create public banks and give our citizens a monthly income so they can feel like humans again. And we do have the money – we just have to make our elected officials stop giving it away in subsidies to the wealthy, and others who don’t need billions. We are squandering and wasting our money, and it should never be siphoned from the safety nets.
    Bravo, Ellen! Bravo, Beppe Grillo! Bravo The People! Ciao!

  15. When someone is critical of Ms Ellen Brown’s views it is very helpful to me. They automatically get exposed and their true nature revealed.

  16. [...] QE For The People – Comedian Grillo’s Populist Plan For Italy [...]

  17. When someone is critical of Ms Ellen Brown, it is very helpful to me. They automatically get exposed and their true nature is revealed.

  18. Ellen Brown, Elizabeth Warren, Brooksley Born, Sheila Bair!!!!
    Brava!!!!

  19. Excellent post. There are missing links in this sentence you may want to add in
    “The money has gotten—and can get—no further than the reserve accounts of banks, as explained here and here.”

  20. I think there will always be resistance to guaranteed citizen income in the US on moral grounds given our culture. Tho’ a smaller % of the age available workforce is employed than in many years, the belief that one should earn ones living is so deeply engrained in our national culture that going against it would IMO be futile and exacerbate animosities. Ontheotherhand, guaranteeing everyone who applies 20 hours of labor at a liveonable wage meets the need, retains the work ethic and value of labor as doing what another wants done the way they want it in exchange for the means to get ones wants met by others. Jobs creating useful labor others can perform and jobs preventing abuse would be needed. Some people employing others may create profitable businesses. Others non profitable but that raise our general cultural standard of living. Some might even be schools and clinics. Laboring for oneself or others for more than 20 hours for higher return would not be undermined by guaranteeing subsistence wage for guaranteed limited number of hours.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

Follow

Get every new post delivered to your Inbox.

Join 3,964 other followers

%d bloggers like this: