Wednesday, 25 April 2012

7. Law and money: The private banking monetary system of euro , violates many national European constitutions and the EU fair competition laws. Similarly for the US Dollar

The content and meaning of the fair competition laws either in USA (known as anti-trust law) or in EU (known as fair competition law) is that the society though its laws, politics and institutions should prohibit the formation hidden clusters of common interest (cartels) of small number of private companies of same type of services or products, so that in such hidden alliance act essentially as a monopoly to the society, condemning to failure all other smaller private enterprises, with the same type of services and products. Such a hidden monopoly would create unfair competition and would result not serving the society but only the private interest of the hidden monopoly, or even worse would act destructively to the society. 

The private central banks like FED, and ECB, are 1) Has made the public economy to be non self-sustained, and autonomous 2) has created overwhelming debt for both the private sector and the public economics 3) has deprived vast amounts of money and wealth from both the the private sector and the public economy 4) Is the major source of economic inequalities in the economies. 

Of course this concepts of justice and fairness in the private business and society, and the corresponding specific laws (like the US anti-trust law and EU fair-competition law) applies equally well not only to "cartels" but unique large private enterprises that act as a monopoly like e.g. Microsoft. It is well known that it was decided by the court of law that Microsoft indeed was violating this fairness and laws acting like a monopoly.

Now in the case of central banks , as long as they are private we have an obvious case of monopoly: The monopoly of the privilege to issue (print) money, and do what ever they want with these newly issued (printed) money! 
Money printing is a very critical resource for the public state, to have been deprived from this privilege. It is like giving the ownership of the national army to a couple of private enterprises.
Of course , it is a small group of other private banks that are main owners of the  central banks, therefore we have here also a hidden "cartel" of banks that acts as destructive monopoly to the society, whenever the majority of the printed money by the central bank is lent to these private banks (that are the main owners of the central bank). The same would be if the central bank would lend the majority of the printed money to a selected small group of other private banks, even if these banks are not the main owners of the central bank. No other private bank can compete with them, as only them can monopolise the lending of the newly printed money in lower interest rates. In fact no other private enterprise (neither the public state itself) can compete financially with this small group of private banks (including the central bank) that  has  the majority  of the newly printed money.
For example if the printed US-dollar by the QE1, (quantitative easy one) and QE2 from 2008 till 2012 by the US federal reserve, that doubled the existing M1-money , are lent  ,by the US-federal reserve, to a small group of private banks (that are usually also the owners of FED) then this violates the concept, spirit and meaning of anti-trust law, and initiates creating over-debt. Similarly when during December 2011 the European Central Bank printed 3-4 trillion euros, and lent them to a small group of private banks (mainly German), that most probably are also the owners of ECB, then this violates  the concept, spirit and meaning of fair competition  law, and initiates creating over-debt.

It is shocking to know that e.g. the US government has neither the power or right and has never been able to apply any financial-auditing to the US Federal Reserve (USD central bank).
(See e.g. )

And unfortunately the above cases of violating the fair competition laws is exactly the practise of the central banks! At the same time whenever the fair competition law is violated with the above practise it is exactly when the over-debt is created.
We conclude that prohibiting the central banks to violate the fair competition laws would result in to stopping the over-debt process in the economic system.
And the simplest way of course to stop them violating the fair competition law is by democratising the monetary system. This can be done in two opposite ways
1) Either we give the right to all enterprises (including the households) to print money in amounts according to their size, and under transparent clear rules
2) Or we make the central bank entirely public (only the public sector has the privilege to print money) , and give to a public non-profit organisation the task to distribute the newly printed money in the public and private sector, not through lending by through subsidies for investments.

In such a democratised monetary system, not only the competition of banks and enterprises would be more fair but also  the over-debt would not be the disease that it is now, and would cease to threaten  the entire economic system.

There is another aspect of violation of supreme laws (constitutions) , by the practice of the current banking system. Many National Constitutions have an article which says, that 

"The private enterprise initiative cannot be developed at the cost  of freedom and human dignity, or with damage to the national interests. "

(For example in the Greek Constitution it is the article 106.2. 
In Italian constitution is article 41 
In Portugal's constitution is article 61.1  For the Danish constitution it would be article 74 etc)
Now the way e.g. that the monetary system with its central bank (ECB) functions, is clearly at the cost of the national interest of every country in Europe, that is utilizing euro. Because the automatically issued euro, based on the demand for lending, has not value based on gold, but has value only due to the wealth of the people of the nations, and when ECB, is issuing , it owns it too, and lends it again back to people of the nation!

This is also the main reason that some of the countries of the European Union Like Denmark, Sweden, England UK etc, remain outside the Eur-ozone, and the euro currency of ECB. Because the private interests behind the owners of euro (ECB) violate their constitutions.

Here is how the main owner of the central banks in Europe and USE, confesses that indeed it is at the cost of the national interests of the people.

“Let me issue and control a nation’s money and I care not who writes the laws.” Mayer Amschel Rothschild (1744-1812), founder of the House of Rothschild.

“The few who understand the system will either be so interested in its profits or be so dependent upon its favours that there will be no opposition from that class, while on the other hand, the great body of people, mentally incapable of comprehending the tremendous advantage that capital derives from the system, will bear its burdens without complaint, and perhaps without even suspecting that the system is inimical to their interests.” The Rothschild brothers of London writing to associates in New York, 1863.

See e.g. the euro, at the site of the European Central Bank (ECB)

In the annual report it is recorded that every year the  ECB is issuing new banknotes, that when converted to bank-money (at a fractional reserve rule of 10, that is multiplying them by 10) it gives at least 15% new currency every year. If the ECB would be a non-profit organization, belonging to all the European states of euro, then these money would go directly to the public sectors, without borrowing and interest rates. No over-debt would exist in the societies!

Some relevant links