Michael Duerr: Practical Monetary Reform Experience and the Insights for a Possible Greek Solution

Practical Monetary Reform experience
and insights into a possible Greek solution by Michael Dürr

Conference - „The Future of Money: What does the evidence teach.“
Athens University of Economics and Business - Executive MBA & International MBA, January 24th 2013

© DenkManufaktur AG, Schliersee / Bavaria: Any use of this material is very much appreciated! www.denkman.com

First they ignore you,
then they laugh at you,
then they fight you,
Today´s Discussion then you win.
Describing the stages of a winning strategy of nonviolent activism.

JUST
MONEY The Future of Money and it´s transformation by an activist central bank shareholder

Practical monetary reform experience in South Africa:
transformation through the nationalisation of money - JUST MONEY proposal

Isolated island money reform: transformation in the Seychelles –
JUST MONEY proposal thwarted by the IMF

Insights and a possible transformation in Greece -
nationalised legal tender creation and the freedom of currencies

Alternative (complementary) currency blessing for Greece

One solution: Bank of Greece – takeover or liquidation

Transition agenda to get rid of the Greek odious debt situation and to restore
democracy from debtocracy!

© DenkManufaktur AG, Schliersee / Germany denkmanufaktur.net I 1

JUST
MONEY The Future of Money ...

Although academic results from Irving Fisher et
al. are still valid, those findings had to be
adapted to the 21st century and the necessities of
electronic money. This is one possiblity:

dated March 1935 was the 20th
century guideline for the Future
of Money: safe money, smoothed
business-cycles, controlled
inflation, seignorage in the public
purse, public debt redeemed.

is guaranteed by the nationalisation of the creation of money
Source: DenkManufaktur AG - Research, Analysis, Insights denkmanufaktur.net I 2

JUST ... and the transformation by an activist
MONEY
central bank shareholder – part 1

Own a central bank
and have your say!

Leverage of ownership in a 100% privately owned central bank of a G20 country
Source: DenkManufaktur AG – Vorsprung durch Denken denkmanufaktur.net I 3

JUST ... and the transformation by an activist
MONEY
central bank shareholder – part 2

Shareholders should ideally enhance the independence of the Reserve Bank

Source: DenkManufaktur AG – Your Global Think Authority denkmanufaktur.net I 4

JUST
MONEY ... and the transformation by nationalisation

History and future of phasing out privately issued money in favour of public money

19th century: 20th century: 21st century:
nationalisation nationalisation nationalisation of
of coins of banknotes electronic money

Bundesbank Act (latest version as amended on December 22 nd
2011)

Systematic risk today:
only banknotes are
sole unrestricted legal
tender

Declare Money Supply M1 (means-of-payment) as sole legal tender

Today´s Discussion

JUST






„The Government should create, issue, and circulate all the currency and credits needed to satisfy the
spending power of the Government and the buying power of consumers. By the adoption of these
principles, the taxpayer will be saved immense sums of interest. Money will cease to be master and
become the servant of humanity.“ (Abraham Lincoln)
© DenkManufaktur AG - Vorsprung durch Denken denkmanufaktur.net I 6


Two shareholders of the South
African Reserve Bank meet the
President: he wants to understand
and change (December 1st 2009)

Transformation through an instant 100% minimum reserve requirement

… and the subsequent problems in the transformation

The banking lobby (oligopoly) defends its turf and hits back: through the media, the Treasury and the
Reserve Bank – even an agreement with the President gets vaporised

The lessons learnt from this 6 year fight are helpful for a Greek solution

Today´s Discussion

JUST






„The issue of currency should be lodged with the government and be protected from domination by Wall
Street“ (Theodore Roosevelt)

© DenkManufaktur AG, Schliersee / Germany denkmanufaktur.net I 9

The isolated island money reform
transformation in the Seychelles

JUST MONEY in competition to a Paris Club Agreement and the IMF
Source: DenkManufaktur AG - Research, Analysis, Insights denkmanufaktur.net I
10

… JUST MONEY proposal thwarted by the IMF

The banking lobby (IMF) defends its turf and hits back: the lessons the IMF learnt due to the monetary
reform evolution worldwide and the proposals presented in various countries

Now the Club (IMF, BIS, IIF, etc.) allows false flag operations to see the light of day
Source: DenkManufaktur AG - Vorsprung durch Denken denkmanufaktur.net I 11

Today´s Discussion

JUST






„If Congress has the right under the Constitution to issue paper money, it was given to be used by
themselves, not to be delegated to individuals or corporations“ (Andrew Jackson)

© DenkManufaktur AG, Schliersee / Germany denkmanufaktur.net I
12

Insights and a possible transformation in Greece

> 2 million
viewers

2012: www.catastroika.com

2011: www.debtocracy.gr
?
The next documentary in 2013: 100% Money (aka Vollgeld,
Just Money, Positive Money, The Chicago Plan Revisited, etc.)

The basis for a Greek monetary reform revolution is present and well informed
13

… a possible transformation: The Bank Run

Problems of the current and faulty fractional-reserve banking system
Minimum Reserve Requirements only 1%
Deposit Insurance systems are a myth
Self-fulfilling prophecy when a bank run starts
Current proposal by MoF to reduce cash payments to Euro 500 maximum
MoF plans to incentivise electronic payments in 2013

Banknotes in circulation (31.12.2012): Euro 23.576 billion
Contingency banknotes per
Greek population: 11.3 million
Euro banknotes per Greek citizen: Euro 2,086 Greek citizen (using Bundesbank data):
Contingency cash available at any given time
calculated by Bundesbank figures: 10-15% Euro 210 to 315 per person
http://www.bundesbank.de/Redaktion/EN/Downloads/Publications/Monthly_Report/2011/2011_01_monthly_report.pdf?__blob=publicationFile
(Monthly Report January 2011 - pages 29 to 41: Foreign demand for euro banknotes issued in Germany)

MORAL
HAZARD
(excerpt: Wikipedia)

A probable bank panic is when many commercial banks suffer runs

… „The only way to stop a eurozone bank run“

„Case for a bloc-wide deposit insurance and bank resolution regime“ – this will not work

„It may not be rational to start a bank run,
but it is rational to participate in one“ (Sir Mervyn King, Governor Bank of England)

… nationalised legal tender creation
and the freedom of new currencies

Nationalisation of toxic / problem assets or bad banks sell-by-date expired!

Nationalisation of the creation of money with a simultaneous introduction
of free alternative / complementary currencies is the only way forward!

Local markets will determine the best solution to fit the Greek society and economy!

Monetary Diversity is the name of the game – variety is healthier and more stable!

Transformation with the support of a Greek version of
100% (Just) Money makes bank runs / panic obsolete
Source: DenkManufaktur AG - Vorsprung durch Denken denkmanufaktur.net I 16

… use the ODIOUS DEBT situation -
copy Correa style or create Venizelism 2.0

Odious Debt in the 21st century: from debtocracy back to democracy

Odious - when it is without knowledge of and benefit to the people plus lender knows about it

Use the illegality and illegitimacy of most of the debt due to the fact that it is odious

Create an audit committee to evaluate what debt is odious and what will be accepted

Use the examples and results from Argentine and Ecuador to learn for Greece

Support a Greek Rafael Correa: „boot the henchmen from the zombie institutions like the IMF“

Use the „Chopper“ as a symbol: Greece most recently got new helicopters anyway – on debt

Stop Merkiavelli, the Hellenic Republic Asset Development Fund and the Reichenbach task force

Give them a run for their debt money created by the MFIs, based on the fractional-reserve scheme

Venizelism 2.0: respect the law and use it against the plutocracy

Transition will be achieved through the right leverage and fulcrum

Today´s Discussion

JUST






„History records that the money-changers have used every form of abuse, intrigue, deceit, and violent
means possible to maintain their control over governments by controlling money and its issuance“
(James Madison)

© DenkManufaktur AG – Your Global Think Authority denkmanufaktur.net I
18


www.wir.ch is only one example of an alternative currency to be copied

Founded in 1934 by 16 people as a cooperative based
on the system developed by JAK in Denmark 1931

Pioneer phase until 1952
Demurrage (Silvio Gesell) until 1958

Growth phase until 1988

Innovation phase until today:

Membership 70,000 companies and
since 1997 open to the public

WIR (since 2004 with ISO 4217 code: CHW)
is not covered by the Swiss Franc (ISO code: CHF)

Immediate implementation by one of the 12 Greek
coop banks (which comprise 40% of Greek banks)

Swiss cooperative WIR Bank as a model case for one electronic barter system
19

Today´s Discussion

JUST






„I am a most unhappy man. I have unwittingly ruined my country. A great industrial nation is controlled by
its system of credit“ (Woodrow Wilson)

© DenkManufaktur AG - Vorsprung durch Denken denkmanufaktur.net I
20


Buy into the system and fight it as a shareholder:
Bank of Greece shares → ISIN: GRS004013009

A takeover or liquidation of the Bank of Greece, listed at the Athens Stock Exchange, is
theoretical, but the leverage and fulcrum of being a central bank shareholder is enormous.

75 shares grant one vote. The „Have a Say“ in your central bank would cost Euro 1,300. The
AGM of BoG owners will be held on February 25th (shares to be registered 5 days before).

This will be a great short term opportunity and contribution for a Greek citizen to change the
course of events, create more awareness and to personally vote for a money reform.

It will be a life-changing practical experience and one would gain first hand insights in the
inner workings of a major puzzle piece in solving the Greek dilemma.

And the best of all, over the last month one would have made a profit of 35%.
(share price at January 22nd 2013: Euro 17.45 compared to Euro 12.9 at December 21st 2012)

One step for a Greek monetary reform revolution is getting a BoG shareholder
21

… this may seem unreal, but there is a logic behind it!

At its meeting on 21 January 2013, the General Council of the Bank of Greece approved
the Bank’s audited Annual Accounts for the financial year ending 31 December 2012.

Takeover by the state or liquidation due to bankruptcy is part of the solution!
22

The End of Today´s Discussion -> Conclusions
100% (Just) Money will replace the fractional-reserve banking system

Alternative & complementary currencies will be allowed unconditional

Nationalisation of means-of-payment is a prerogative like coins and notes

Transformation is the most important issue – the academic base is sound

Greece is ripe for the monetary reform revolution needed for the change

Practical experience has to be used to avoid further ambush by MFIs

Greek transformation through a bank run or a bank panic very likely

Greek transformation through an activist shareholder approach (BoG)
Greek people have to take the pride back they deserve, get rid of the odious debt, free themselves from the
shackle of the current system, create a debt- and interest-free currency, which can flow into the economy
through public expenditure, avoid direct taxation and much more!

„ First they ignore you, then they laugh at you ,
then they fight you, then you
win.“
© DenkManufaktur AG, Schliersee / Germany denkmanufaktur.net I
23

Practical Monetary Reform experience
and insights into a possible Greek solution by Michael Dürr (ceo@dmag.cc)

Thank

you

Conference - „The Future of Money: What does the evidence teach.“
Athens University of Economics and Business - Executive MBA & International MBA, January 24th 2013

© DenkManufaktur AG, Schliersee / Bavaria: Any use of this material is very much appreciated! www.denkman.com

Michael Duerr: Practical Monetary Reform Experience and the Insights for a Possible Greek Solution

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