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Open Letter to EU Health Commissioner Tonio Borg – Re: Thalidomide

Posted by Ivo Cerckel on 23rd February 2014

Dear Commissioner Borg,

Most people agree with conclusions reached through immediate inference.
But, if they are already able to find the major and minor premises, most people are afraid of the conclusions reached through syllogisms.

1.
The press is reporting that on Tuesday 25 February 2014 you will meet three persons who claim to be representatives of the UK’s remaining 469 thalidomiders. They will be accompanied by a cross-party selection of British Members of the European Parliament (MEPs) which arranged for the meeting. You will be holding roundtable discussions with them in Strasbourg.

Those three persons want you to mediate between them, Grünenthal GmbH, i.e., the maker of thalidomide, and the German Leviathan, their ultimate goal being a financial settlement from Grünenthal GmbH, known fifty years ago as Chemie Grünenthal GmbH.

One of your main questions after your first meeting on Tuesday 14 January 2014 – without the MEPs – at your Brussels headquarters is why the German Leviathan should be involved.

2.
The three so-called representatives want Grünenthal GmbH, hereafter Grünenthal, which has never paid a penny to UK, Swedish and other European victims of its drug, which the European Leviathans labelled the “wonder drug”, to own up to its “moral” duties and compensate those its product damaged for life.

Grünenthal refused to intervene in the recent Australian New Zealand compensation case which was settled between the plaintiffs and the distributor of thalidomide in Australia and New Zealand.

It appears therefore that it will be impossible to convince Grünenthal to agree to an amicable settlement with the EU as judge – and …  party.

Yes “party”, see the final section 10 of this letter.

3.
One of the representatives’ main arguments is that the German legislator in 1971 created the Conterganstiftung, the Thalidomide Foundation, whose starting capital was provided jointly by the said Leviathan and by Grünenthal.

Payments to thalidomiders born in West Germany would be made, and are still made, through the said Stiftung.

The Act/Statute/Law relating to the Conterganstiftung went on to exonerate Grünenthal from future payments to the Stiftung which provides payments to German-born thalidomiders only. Payments to other thalidomiders cannot possibly have been affected by this Act/Statute/Law. German legislators and courts have indeed no jurisdiction to declare their Diktat(for legislators)/ruling(for courts} in a case involving German parties living/established in Germany applicable outside Germany.

In two judgments of 1976 and 2010, the German constitutional went to great lengths to demonstrate that by doing this the German Leviathan had not recognised its liability for the thalidomide scandal.

If you are interested, I went – to great lengths also – to understand these judgments
(BVerfGE 42, 263. of 08 July 1976 and BVerfG, 1 BvR 1541/09 of 26 February 2010)
and criticise them
by posting, after having posted comment in French under the original post, also English comment on Le Grand Portail Philosophie Thomas d’Aquin under this post:

25e anniversaire : Joseph Wresinski, celui qui remue la vie
Auteur: mandonnaud
Date: 14-02-2013 10:39
http://www.thomas-aquin.net/PHPhorum/read.php?f=6&i=57241&t=57175&v=f

But again, German courts have no jurisdiction to declare their ruling in a case involving German parties living/established in Germany applicable outside Germany.

So thalidomiders born outside Germany (and who never lived in Germany) are not bound by these judgments.
They can therefore invoke the Conterganstiftungsgesetz, the Act/Statute/Law relating to the Conterganstiftung, as West Germany recognising its liability for the thalidomide scandal.

West Germany recognised its liability.
Why do UK thalidomiders continue to attack Grünenthal?

4.
As I said in section 2, the three so-called representatives want Grünenthal to own up to its “moral” duties and compensate those its product, which the Leviathans labelled the “wonder drug”, damaged for life.

My understanding of tort law is that before anybody can be asked, c.q. condemned, to pay damages to somebody else, the latter must prove a tort or negligence on the part of the former.

The representatives seem not even to be bothering about demonstrating a tort or negligence on the part of Grünenthal. Their only argument seems to be that the said private limited company manufactured the product and that it therefore has a “moral”, not legal, duty to compensate the victims of its product. Compensate to what extent and for which damage which would not yet have been compensated – they don’t say.

That’s the first step towards the answer to the question as to the reason of the involvement of the German Leviathan in the roundtable discussions which Grünenthal will not agree to attend.

5.
Next step.

Article 15(1)(b) of the 1985 EC product-liability directive, formally Directive 85/374 of 25 July 1985 of the EC Council on the approximation of the laws, regulations and administrative provisions of the Member States concerning liability for defective products, provides that:
each Member State may by way of derogation … maintain … or provide in [its] legislation that the producer shall be liable even if he proves that the state of scientific and technical knowledge at the time when he put the product into circulation was not such as to enable the existence of a defect to be discovered.

Dr. Herman Cousy, professor emeritus from the law department of the K.U. Leuven, reports in note 28 of his 1996 paper “The Precautionary Principle: A Status Questionis” published in the “Geneva Papers on Risk and Insurance – Issues and Practice”, also available on the website of the Geneva Association, l’Association Internationale pour l’Etude de l’Economie de l’Assurance, the leading international think tank of the insurance industry, that:

“One often cites the Thalidomide (Contergan) case as an example of a development risk situation, although it appears that when thalidomide was brought onto the German market, the product had been banned in France.”

And Professor Cousy goes on to ask in the note:
“Can it be readily upheld, under such circumstances, that the conditions for a “development risk” situation were fulfilled?” (1)

Indeed,
as The Sunday Times said on 08 February 2009
“Grünenthal, the maker of the drug, apparently purchased the trade name of the drug – Contergan – and therefore probably the substance itself, from a French firm, Rhône-Poulenc, which was under Nazi control during the war years.” (2)

Thalidomide which was developed in France had been banned in France.

Why did West Germany nevertheless allow it to its market?
West Germany allowed to its market. Others therefore followed the example.
Fortunately, the example was not followed by East Germany.

Ergo,
as Die Welt, a newspaper, reported on 29 January 2014,
“the (German) Land (state) of North Rhine-Westphalia announced on 28 January 2014 that it will examine its role in the thalidomide scandal.” (3)

By the late 1950s, our enlightened society had indeed already entrusted Leviathan with the task of ensuring that only safe medicines are marketed.
That is what is called “government control of medicines”, “staatliche Arzneimittelkontrolle”.
Section 23 of the quoted 2010 judgment of the German constitutional court speaks about “mangelnde staatliche Arzneimittelkontrolle” which I would translate as “failing government control of medicines”. (4)

It is possible that in those days the control requirements or control criteria were less stringent than today, the fact is that they existed. A product whose teratogenic effects were known had to be refused access to the market by the competent bureaucrats. If not, why does Leviathan extract currency from its subjects through taxation in order to pay those bureaucrats?

6.
Third step towards the answer to the question as to the reason of the involvement of the German Leviathan in the roundtable discussions which Grünenthal will not agree to attend.

Thalidomide was first marketed in 1957, the same year that the European Economic Community (EEC)-Treaty was signed at Rome.

European law has become the corner stone (“la pièce maîtresse”) of national legislations concerning consumers.
(Jean-Sylvestre Bergé and Sophie Robin-Olivier, “Introduction au droit européen”, Presses Universitaires de France, 2008, 1st ed., section 377)

In order not to make it too obvious that thalidomide was necessary to achieve this,
the then-EEC waited until 25 July 1985 to adopt its Product-Liability Directive 85/374 EEC,
n’est-ce pas Jacques H. Herbots?

7.
The first step towards the answer to the question as to the reason of the involvement of the German Leviathan in the roundtable discussions is that the representatives of the UK thalidomiders seem not even to be bothering about demonstrating a tort or negligence on the part of Grünenthal GmbH. Their only argument seems to be that the said private limited company manufactured the product.

The second step is that when thalidomide was brought onto the German market, the product had been banned in France.

The third step towards the answer to the question as to the reason of the involvement of the German Leviathan in the roundtable discussions is that in order not to make it too obvious that thalidomide was necessary to achieving that European law became the corner stone (“la pièce maîtresse”) of national legislations concerning consumers, the then-EEC waited until 25 July 1985 to adopt its Product-Liability Directive 85/374 EEC.

These two latter steps should each serve as the minor premise of two different syllogisms.

In section 8, I will therefore try to explain what is a syllogism, what are its premises and what is an immediate inference.

Once I have done that, my argument that if most people agree with conclusions reached through immediate inference, but that, if they are already able to find the major and minor premises, most people are afraid of the conclusions reached through syllogisms, becomes understandable I think.

In sections 9 and 10, I will construct two syllogisms. As most people refuse to accept the conclusions of these syllogisms, the validity of my argument that most people, if they are already able to find the major and minor premises, are afraid of the conclusions reached through syllogisms will thereby have been demonstrated.

Mr Commissioner, you are not “most people” and should thus accept these conclusions – although, I agree, they are somewhat unpleasant for your employer.

Before moving to section 8, I will quote Josef Pieper:

“What is self-evident is not discussed. It is taken for granted, “it goes without saying”. “Cela va sans dire.” One only has to ask: what exactly is it that is taken for granted and so many remain unexpressed?”

(Josef Pieper, “The Negative Element in the Philosophy of Saint Thomas Aquinas”, in: Josef Pieper, “The Silence of Saint Thomas – Three Essays”, translated by John Murray, S.J., and Daniel O’Connor, South Bend, Indiana, USA : Saint Augustine’s Press, 1999, 43, p. 45)

8.
I do thus now give the definition of syllogism, premise and immediate inference and I differentiate the immediate inference from the syllogism.

Andrew H. Bachhuber, S.J., “Logic”, New York, Appleton-Century-Crofts, 1957, p. 87
Syllogism = any argumentation in which from two propositions, called the premises, we infer a third proposition, called the conclusion, which is so related to the premises taken jointly, that if they are true, it must also be true.

François Chenique, “Éléments de Logique Classique – L’art de penser, de juger et de raisonner”, Paris, L’Harmattan, 2006, 2nd ed., p. 204
In order to constitute a reasoning, there must be a passing from one truth to another and the second truth must not be only a re-formulation of the same truth.
(Pour constituer un raisonnement, il faut qu’il y ait passage d’une vérité à une autre et qu’il ne s’agisse pas d’une autre reformulation de la même vérité.)

Chenique, op. cit, loc. cit.
Reasoning is a discourse, i.e., a movement.
Reasoning implies a movement and a causal relationship.
(Le raisonnement est un discours, c.à.d. un mouvement.
Le raisonnement implique un mouvement et une relation causale.)

Ivo: movement must be initiated, must have a cause,
reasoning implies a causal relationship, said Chenique.

The principle of causality says that nothing can be the cause of itself.
(Alvira, Clavell and Melendo, “Metaphysics”, Manila, Sinag-Tala Publishers, 1991, p. 181)

Bachhuber, op. cit., p. 51
An immediate inference consists in passing directly, (i.e., without the intermediacy of a middle and second proposition) from one proposition to another that is a partial or complete reformulation of the very same truth expressed in the original proposition.

Chenique, op. cit., p. 195
For some authors, immediate inference is a mode of reasoning by which one passes from the truth (or falsity) of one proposition to the truth (or falsity) of another proposition without middle term (ergo the name immediate).
Chenique, on the contrary, argues that if there is no middle term, there is no reasoning.
(Pour certains auteurs, l’inférence immédiate est un mode de raisonnement qui n’exige pas de moyen terme (d’où sa qualification d’immédiate), et dans lequel on passe directement de la vérité (ou de la fausseté) d’une proposition à la vérité (ou à la fausseté) d’une autre proposition.
[…]
Nous maintenons cependant que si le moyen terme est absent, il n’y a pas de raisonnement.)

Ivo agrees with Chenique on this point.

Juan Jose Sanguineti, “Logic”, Manila, Sinag-Tala Publishers, (first published in 1982 in Spanish by the Ediciones Universidad de Navarra in Pamplona), 1992, p. 50
Speech is “the manifestation of the interior word conceived in the mind”, it is the external expression of concepts
(Saint Thomas Aquinas, “Quaestiones Disputatae De Veritate” (“Disputed Questions on the Truth”), question 9, article 4 and question 5, article 1)

Let me again remind you that if most people agree with conclusions reached through immediate inference,
but that, if they are already able to find the major and minor premises, most people are afraid of the conclusions reached through syllogisms.

9.
I will now construct the (first) syllogism with as minor premise the second step towards the answer to the question as to the reason of the involvement of the German Leviathan in the roundtable discussions.

This second step was, and thus the minor premise of the (first) syllogism is,
“when thalidomide was brought onto the German market, the product had been banned in France”.

MAJOR PREMISE
No dangerous drug can be brought onto the market.

MINOR PREMISE
The banning in France of thalidomide demonstrated in the open – to the West Germany – that thalidomide was a dangerous, c.q., teratogenic, drug.

CONCLUSION
West Germany could not bring thalidomide onto “its” market.

“What is self-evident is not discussed. It is taken for granted, “it goes without saying”. “cela va sans dire.” One only has to ask; what exactly is it that is taken for granted and so many remain unexpressed?”, said Pieper.

Yes, in this syllogism there is “something” which “goes without saying”, i.e., the very fact, mentioned in section 23 of the quoted 2010 German constitutional court (“Bundesverfassungsgericht”) judgment, and referred to in section 5 of this letter, that our enlightened society had entrusted – already before 1957 – guv’mint, a.k.a. Leviathan, with the task of ensuring that only safe medicines are marketed.

Of course, this conclusion was not a reformulation of a existing truth through immediate inference, but resulted from a syllogism and most people, if they are already able to find the major and minor premises, are afraid of the conclusions reached through syllogisms.

Philosophising about who’s better qualified to include “something” which “goes without saying” into her reasoning or immediate inference would require going into such questions as whether toddler- and child-thalidomiders should be forced to wear a prosthesis on their shortened limbs (see my “Témoignage thalidomide – Les Monstres de Heidelberg” on top of this page) and this would be outside the ambit of this letter.

10.
Now I come to the interesting part of this letter.

I must construct a syllogism whereby I use as minor premise:
“in order not to make it too obvious that thalidomide was necessary to achieving that European law became the corner stone (“la pièce maîtresse”) of national legislations concerning consumers,
the then-EEC, whose founding treaty was signed at Rome in the same year as thalidomide was first marketed, waited until 25 July 1985 to adopt its Product-Liability Directive 85/374 EEC”.

Let me rephrase this minor premise as:
“the EEC tried to hide that the bringing onto the market of a dangerous, i.e. teratogenic, drug was necessary for European law becoming the corner stone (“la pièce maîtresse”) of national legislations concerning consumers”.

Let me choose as major premise, the same one I used in section 9 for the first syllogism.
i.e., that
“no dangerous drug can be brought onto the market”.

I prefer not to be too explicit about the conclusion of the syllogism I should construct with those two premises.
I hope however that even some eurocrats retain some semblance of rationality and can construct it for themselves and that you will not, like the three so-called representatives of the UK thalidomiders, deduce liability from the manufacturing of a product which, after having been banned in France, was sent to the common market minus France to promote the interests of some French (future – they would only become it on 01 January 1958, when the comic market entered into force) eurocrats.

Still waiting
(Belgian Leviathan didn’t take steps to prosecute my father, an M.D., upon my birth 20 months after the 30 April – 1 May 1960 Düsseldorf alarm (5)),
now since 13 years in South-East Asia where life is cheaper,
before that 38 years in Europe,
for my first belgian franc of compensation,

Sincerely Yours,

Ivo Cerckel
ivocerckel@siquijor.ws

NOTES

(1)
Herman Cousy,
“The Precautionary Principle: A Status Questionis”, in:
“The Geneva Papers on Risk and Insurance – Issues and Practice”,
1996, 158
https://www.genevaassociation.org/media/231494/ga1996_gp21%2879%29-cousy.pdf
p. 163, footnote 28

(2)
From The Sunday Times
February 8, 2009
Thalidomide ‘was created by the Nazis’
http://www.timesonline.co.uk/tol/life_and_style/health/article5683577.ece
Link does no more work
copied here
http://www.fourwinds10.net/siterun_data/health/harmful_products/news.php?q=1234215547

(3)
29.01.14
NRW Kompakt
Contergan-Skandal wird untersucht
http://www.welt.de/print/welt_kompakt/koeln/article124325513/NRW-Kompakt.html

(4)
Re: 25e anniversaire : Joseph Wresinski, celui qui remue la vie
Auteur: Ivo Cerckel
Date: 03-10-2013 01:40
http://www.thomas-aquin.net/PHPhorum/read.php?f=6&i=57732&t=57175&v=t

(5)
Chronik des Contergan-Skandals – Contergan – WDR.de
Chronik des Conterganfalls
Tragödie – Katastrophe – Skandal?
http://www1.wdr.de/themen/archiv/sp_contergan/contergan176.html
SNIPS
30. April/1. Mai 1960:
Auf einem Neurologen-Kongress in Düsseldorf berichtet der Neurologe Ralf
Voss über die Nervenschädigungen, die seinen Beobachtungen zufolge durch
Thalidomid verursacht werden. Die Forschungsabteilung von Grünenthal
versucht daraufhin, die Nervenschädigungen an Ratten zu reproduzieren – ohne Erfolg. Grünenthal-Forschungsleiter Mückter schließt daraus, dass es sich um besondere Situationen handelt, für die Contergan nur selten als Ursache infrage kommt.
+
27. November 1961:
Die Firma Grünenthal kündigt in einem Telegramm an das Düsseldorfer Innenministerium an, ihre Thalidomid-Präparate im In- und Ausland sofort aus dem Handel zu nehmen.

Posted in Uncategorized | 4 Comments »

euthanasie softenon dierenwelzijn

Posted by Ivo Cerckel on 14th February 2014

Medelijden is een dubbelzinnig begrip.
Bestaan van echoscopie (ultrasound) 50 jaar geleden had tot abortus van alle softenonfoetussen geleid.

Juist op de dag dat de katholieke partij in het federale parlement van het Koninkrijk België tegen de euthanasiewet, die onze Heersers toelaat om te beslissen om kinderen te vermoorden, stemde (1)
kwam de Vlaamse minister-president Kris Peeters, die nochtans deel uitmaakt van de Vlaamse katholieke partij CD&V, af met een voorstel om een Vlaamse minister voor dierenwelzijn op te voeren in de politieke poppenkast.(2)

Dit is het gevolg van het verdict van het Luikse hof van assisen van 1962 waarin gedreceteerd werd dat softenonmonsters bij geboorte mogen (neen: dienen) vermoord.

En dan verschiet men, neen dat is normaal zegt men, dat is mijn (Ivo’s) schuld, dat ik, die nog steeds wacht op mijn eerste centiem vergoeding voor mijn sinds-andropause-met-de-dag-verergerende softenonschade, 13 jaar geleden heb dienen te vluchten om te proberen te overleven op een eilandje waar de levenskost geringer is dan in het Vaderland.

Alhoewel René Descartes en Immanuel Kant, en niet langer Sint Thomas van Aquino, in Leuven en Nieuw Leuven – zoals aan de ULB en VUB – op de “handen” worden gedragen,
hoop ik dat de stem van Mgr Michel Schooyans, prof emeritus van de UCL, (3) (4) toch niet helemaal onderdrukt zal worden in het Vlaamse parlement noch in de senaat van het federale parlement (of zijn er in het federale parlement geen twee kamers meer?).

Het dubbelzinnige begrip “medelijden” leidde het Belgische Volk ertoe, en de Luikse assisenjury volgde haar in 1962 hierin, om de moordenaars van een pasgeboren softenonmonster vrij te spreken.

Pseudo-medelijden wordt dikwijls aangevoerd ten gunste van daders van daden die inherent verkeerd zijn, zoals abortus, en leidt dus tot schandaal, besluit Mgr Schooyans.

De schijn-heilige, en dus schandalige, CD&V kiest voor een Monsterplaneet – waaruit softenonmonsters dienen verbannen. (5)
Softenmonsters zijn immers (zelfs?) geen dieren, niewaar?

Indien echoscopie (ultrasound) 50 jaar geleden had bestaan waren alle softenonfoetussen dan ook geaborteerd geweest.

Menselijke foetussen heeft geen recht op welzijn – laat staan dat softenonmonsters dat hebben in Vlaanderen.
Dieren hebben wel recht op welzijn, zegt Meneer Peeters.

Ivo Cerckel
Caipilan
Siquijor, Siquijor 6225
Philippines

ivocerckel@siquijor.ws

NOTEN

(1)
Kamer keurt uitbreiding euthanasiewet goed
13 februari 2014 om 18:30 door Eveline Vergauwen
http://www.standaard.be/cnt/dmf20140213_00977927

(2)
Kris Peeters wil Vlaamse minister van Dierenwelzijn
13 februari 2014 om 11:05 door llo | Bron: Belga
http://www.standaard.be/cnt/dmf20140213_00977495

(3)
Mgr Michel Schooyans
Professor Emeritus at UC Louvain
The pitfalls of compassion
http://www.lifesitenews.com/ldn/2010_docs/Compassion.pdf
UITREKSELS
In 1962 the Assizes Court in Liège (Belgium) was called upon to judge a mother who, “out of compassion”, had killed her child. During the pregnancy, the mother ad taken Softenon, today known as Thalidomide. The child was born with serious malformations. The mother decided to terminate the life of her child; which in fact she did. After a trial which attracted extensive media coverage, the woman was acquitted. She left the court a free woman, to hearty applause from the public.
+
Pseudo-compassion, frequently invoked in favour of the perpetrators of acts which are inherently wrong, such as abortion, hence leads to scandal; it invites others into grave sin. Scandal is the first thing to be avoided.25

(4)
Tempêtes au Vatican.
[scroll down]
LES PIÈGES DE LA COMPASSION
Michel Schooyans
http://chiesa.espresso.repubblica.it/articolo/1342048?fr=y

(5)
Voor meer kritiek op de katholieke partij in 1962 en van de Brusselse – niet Aalsterse – loge in 1962
zie – ook de voetnoten van – mijn
Re: 25e anniversaire : Joseph Wresinski, celui qui remue la vie
Auteur: Ivo Cerckel
Date: 09-03-2013 02:05
http://www.thomas-aquin.net/PHPhorum/read.php?f=6&i=57241&t=57175&v=t

Posted in Uncategorized | 5 Comments »

Spanish Thalidomide Victims obtain Judgment against Innocent Party

Posted by Ivo Cerckel on 22nd November 2013

The culprits for the thalidomide scandal are the guv’mints which allowed it on their territories despite its having been banned on the territory of the French republic, not the maker of thalidomide.

First payout for Spanish thalidomide victims
Published: 21 Nov 2013 08:38 GMT+01:00
Updated: 21 Nov 2013 08:38 GMT+01:00
http://www.thelocal.de/20131121/spanish-thalidomide-victims-get-german-money
SNIP
A court ordered the German maker of the banned pregnancy drug thalidomide to compensate Spanish victims on Wednesday who suffered birth defects from it in the 1960s.
UNSNIP

1.
Article 15(1)(b) of the 1985 EC product-liability directive, formally Directive 85/374 of 25 July 1985 of the EC Council on the approximation of the laws, regulations and administrative provisions of the Member States concerning liability for defective products, provides that:
each Member State may by way of derogation … maintain … or provide in [its] legislation that the producer shall be liable even if he proves that the state of scientific and technical knowledge at the time when he put the product into circulation was not such as to enable the existence of a defect to be discovered.

Dr. Herman Cousy, professor emeritus from the law department of the K.U. Leuven, reports in note 28 of his 1996 paper “The Precautionary Principle: A Status Questionis” published in the “Geneva Papers on Risk and Insurance – Issues and Practice”, also available on the website of the Geneva Association, l’Association Internationale pour l’Etude de l’Economie de l’Assurance, the leading international think tank of the insurance industry, that:

“One often cites the Thalidomide (Contergan) case as an example of a development risk situation, although it appears that when thalidomide was brought onto the German market, the product had been banned in France.”

And Professor Cousy goes on to ask in the note:
“Can it be readily upheld, under such circumstances, that the conditions for a “development risk” situation were fulfilled?” (1)

Indeed,
as The (London, England) Sunday Times said on 08 February 2009
” Grünenthal, the maker of the drug, apparently purchased the trade name of the drug – Contergan – and therefore probably the substance itself, from a French firm, Rhône-Poulenc, which was under Nazi control during the war years,” (2)

The judge nevertheless rules that thalidomide had not been properly tested by its manufacturer, the company, then known as Chemie Grünenthal GmbH, now known as Grünenthal GmbH, says El Pais, a newspaper. (3)

If,
as Deutsche Welle or DW, a broadcaster, says,
the court ruled that Grünenthal has been “negligent” in permitting thalidomide to be further prescribed in Spain despite the risks of birth defects (4),
was General Franco’s (Spanish) guv’mint not negligent in granting a licence for thalidomide to be marketed on its territory even though thalidomide had been banned in France?

Guv’mints – in Spain and elsewhere – should never have allowed thalidomide to “their” markets.

2.
When were the claimants born?

The whistle on thalidomide was blown on 30 April – 1 May 1960
at a Düsseldorf congress of neurologists
where neurologist Dr. Ralf Voss warned that it attacked the nervous system of the … mother. (5)

Nobody born more than 9 months later, that’s after 01 February 1961, can claim that her birth defect has been caused by the maker of thalidomide.

Guv’mints, which should never have allowed thalidomide to “their” markets in the first place, should have withdrawn their licence in May 1960.

Ivo Cerckel
ivocerckel@siquijor.ws

NOTES

(1)
Herman Cousy,
The Precautionary Principle: A Status Questionis,
The Geneva Papers on Risk and Insurance – Issues and Practice,
1996, 158
https://www.genevaassociation.org/media/231494/ga1996_gp21%2879%29-cousy.pdf
p. 163, footnote 28

(2)
From The Sunday Times
February 8, 2009
Thalidomide ‘was created by the Nazis’
http://www.timesonline.co.uk/tol/life_and_style/health/article5683577.ece
Link does no more work
copied here
http://www.fourwinds10.net/siterun_data/health/harmful_products/news.php?q=1234215547

(3)
Thalidomide pharmaceutical firm ordered to pay compensation to victims
Drug was not properly tested by German company, judge rules, causing serious disabilities in Spanish babies
20 NOV 2013 – 19:25 CET
http://elpais.com/elpais/2013/11/20/inenglish/1384971811_107975.html

(4)
Spanish birth defect victims win damages from German drug maker
Date 20.11.2013
http://www.dw.de/spanish-birth-defect-victims-win-damages-from-german-drug-maker/a-17242253?maca=en-rss-en-all-1573-rdf

(5)
Chronik des Contergan-Skandals – Contergan – WDR.de
Tragödie – Katastrophe – Skandal?
http://www1.wdr.de/themen/archiv/sp_contergan/contergan176.html

Posted in Uncategorized | 4 Comments »

What is the renminbi? – 14 March 2013 FT Standard Chartered Taiwan Economic Summit

Posted by Ivo Cerckel on 1st March 2013

Last updated Thursday 07 March 2013 10h50 GMT+8

Currency hegemony is the imposition of a currency, even gold (at a stated currency price, of course), on the population. Such an imposition is in fact precisely the opposite of allowing the parties to a sales contract to freely determine the contents of the contract.

Although article 4 of the 1999 Contract Law of the People’s Republic of China provides that “a party is entitled to enter into a contract voluntarily under the law and no entity or individual may unlawfully interfere with such right”,

the programme of the 14 March 2013 FT Standard Chartered Taiwan Economic Summit says that currently only a tiny amount of the USD 120 billion in trade between China and Taiwan is settled in renminbi.(1)

The programme continues by saying that a major opportunity for Taiwan may be generated by the further internationalisation of the said renminbi.
http://www.ft-live.com/fttaiwan

Notice immediately that the debate at the Summit concerns renminbi “internationalisation”, not renminbi “convertibility” – into pieces of scrap, a.k.a. USA dollars.

MENG-TZE

What is money? And what is [the renminbi as] a currency?

As Mencius (Meng-Tze) (372 – 289 B.C.), who studied with the great-grandson of Confucius (2) and became the foremost follower and greatest developer of the orthodox teaching of Confucius (3), taught: “wherever there are things and affairs, there must be their principles.” (4)

Aristotle (384 – 322 B.C.), who like the elder Plato (429 – 347 B.C.) was a contemporary of Mencius, saw “substance” as the root of the intelligibility of the world and went on to define the “substance” of a thing as its “essence” by which the thing is differentiated from other things due to its nature which “specifies” it. (5)

For “essence”, Aristotle gave the “what-it-was-to-be-that-thing” as definition. (5, again)
By using a phrase in this way in the grammatical role of a noun, this definition is as unnatural in Greek as it in English.
The definition suggests the idea of what something was all along going to, destined to, become. (6)

Could it be that money [as opposed to currency] is a good readily acceptable in exchange by everyone in a given geographical area and is sought for the purpose of being re-exchanged (7) and that gold was all along going to, destined to, become money?

Could it also be that when English speakers say that something has “currency”, they mean that it is in the state of being current; that it is in the state of being in general acceptance or … “recognition”?

Xinhua reported on 22 February 2013 that according to Peng Xingyun, a researcher and financial specialist at the Chinese Academy of Social Sciences, the developments in renminbi internationalisation may indicate a rising “recognition” of the currency worldwide. (8)

This seems to indicate that before the renminbi can be recognised as an “international” currency, it must be recognised as a “currency”.

MONETARY ANCHOR

Money must have an anchor, an anchor in reality, not in the mind. Not a nominal anchor, not an anchor in name only. Money cannot be itself the anchor if it has no reality. Money cannot be itself the anchor if it exists only in the (digital) mind. The reason why money needs an anchor is not to evoke, not to bring into the mind, the gold standard, but to anchor money by providing for a Wealth Asset that stands Beside Money, yet has no official connection to money, hereafter a WABM. Calling this process “anchoring” relates to the way that ships down anchor to keep themselves in a specific place to avoid drifting way.

The last remnant of the gold standard disappeared on 15 August 1971 when USA president Richard Nixon broke the 1944 Bretton Woods Agreement. This Agreement, which established the International Monetary Fund (IMF), said that the IMF’s only task was to maintain the Agreement. As the Agreement did no longer exist, the IMF should have been repealed in August 1971.

The Agreement linked the USA dollar at fixed parity to the price of gold and all other currencies to the said dollar. On 15 August 1971, Nixon broke the Agreement. Since then, the value of the USA dollar is determined by … nothing. The USA of course never (dare to make explicit that it) severed the link of the USA dollar to gold. Nay, after making sure that article IV, section 2, (b), of the IMF Articles of Agreement does prohibit members from linking their currencies to gold, the USA managed to give new tasks to the IMF so that it could be kept in existence.

Middle East oil producers could therefore obtain less gold than before with the USA dollars received for their oil. Out of love for gold, they were thus forced to increase their prices which caused the first oil crisis in 1973.

China doesn’t declare its gold purchases, but it is an open secret that its People’s Bank is buying on every dip, as they have to do merely to keep the proportion stable at 2 percent of their USA dollar 3.3 trillion reserves, said a London newspaper on 21 February 2013. (9)

The old “fixed” gold-standard could not change human nature which dictates that no ruler can withstand the pressure to print more receipts than he has gold in reserve. (10)
The old “fixed” gold-standard was faced with the problem of matching the amount of gold in the treasury to the “fix”. To make the money stronger, one had to bring in gold, as it took twice as many ounces to back a currency “in circulation” at USD 10 as it did at USD 20. The reverse is true when lowering the money value to USD 40. Then, one half the gold backing had to be removed as only half was now needed to back the USA dollar. (11)
Its chief weakness was however that it could be repealed by the politicians. (10, again)

Since, on the one hand, a monetary system must have an anchor, but since, on the other hand, a fixed gold-standard, is affected by many weaknesses, the only way a monetary system can work is if anyone, anywhere, be able to exchange the currency for gold, not at a fixed rate, but at a floating rate.

This is “Freegold”, the free exchangeability “at will” of a (any?) currency into gold. I say free exchangeability “at will” into gold. I don’t say free exchangeability “on demand” into gold, as “on demand” would imply that somebody – most likely the issuer of the currency – can be forced to exchange his gold for currency.

FREEGOLD

On 01 January 1999 a fresh form of currency, the euro, was introduced.

In his 09 May 2002 Acceptance speech of the International Charlemagne Prize of Aachen for 2002, European Central Bank (ECB) president, the late Dr Willem F. Duisenberg said:
“The euro probably more than any other currency, represents the mutual confidence at the heart of our community. It is the first currency that has not only severed its link to gold, but also its link to the nation-state.” (12)

Dr Duisenberg was here saying that the euro, the new medium of exchange, is to co-exist with Freegold, as a store of value. Freegold will be a gold-based currency valuation system where the currency is not tied to a fixed amount of gold. This will entail a free-floating price of gold whereby gold will not be money, but a physical wealth consolidator, a WABM into which you can transform your wealth in order to maintain its purchasing power and to prevent it from vanishing into thin air.
Remember that a WABM has no official connection to money.

By the same token, Duisenberg challenged USA-dollar hegemony, confirming to the planet that not only had the currency of which the ECB is the guardian severed the link to the nation-state but that the ECB was also prepared to utilise gold as a “currency without a country” to act as a reserve for interventions if required — a breakthrough. (13)

The euro has a gold component and a paper component and puts a “firewall” between both so that gold’s valuation as a wealth-preserving asset cannot be pulled lower by the inevitable inflation of the paper component of circulating currencies. It is the (quarterly) marking to market (MTM) of the gold reserves of the Eurosystem (the European System of Central Banks) not to the model of USD 42.2 like the USA (originally, in 1944, when Bretton Woods came into force, USD 35), by the Eurosystem which provides that wall. Gold is an item not related to euro monetary policy operations.

By trading behind the MTM firewall, not behind a fiat-monetary firewall, the euro is trying to achieve Freegold and return gold to its status as a WABM, an asset itself, not a claim on assets.
Remember that a WABM has no official connection to money and that a WABM is a Wealth Asset that stands Beside Money.

Once Freegold will have been achieved, the gold reserves in the strong-rooms of the Eurosystem will fulfil the same role as the Mona Lisa in the Louvre museum in Paris, a wealth reserve, a WABM, in the strong-room (the Louvre) of a monetary union.

That’s a model which the People’s Bank of China could be following.

Whether the Bank is following the model, I don’t know.

CONTRACT VOLUNTARINESS

If money needs an anchor, so does contract law.

Freedom of contract became the “anchor” of modern contract law after the French Civil Code was adopted in 1804. (14)

Article 1134 of the said Code provides that the agreement entered into between parties is the law governing the relationship between the parties [...].

Does Chinese contract law allow for the inclusion in an international trade contract of a clause stipulating that payment shall be made in Another currency than the USA dollar – the currency imposed by trade usages?

I said at the outset that article 4 of the 1999 Contract Law of (the People’s Republic of) China (CLC) provides that “a party is entitled to enter into a contract voluntarily under the law and no entity or individual may unlawfully interfere with such right”.

Dr Junwei Fu of the Beijing Institute of Technology School of Law says that it is often believed by Chinese academic circles that “contract voluntariness” of the CLC is the same as “freedom of contract”. (15)

In order to understand what the Chinese legislator meant with this article 4, the drafting history or drafting process of this article 4 may contain some indications – as to the meaning. And this history or process reveals that “freedom of contract” which was stated as a general principle in a 1995 bill which finally led to the 1999 CLC was already revised in a 1997 bill and was finally rejected and replaced in the final 1998 bill by “contract voluntariness”, says Dr Fu. (16)

This seems to indicate that “contract voluntariness” is NOT the same as “freedom of contract”.

While European “freedom of contract” acknowledges, among other things, the freedom to choose the other contractual party and to conclude and determine the contents of a contract (17), Chinese “contract voluntariness” is much narrower and essentially limited to the autonomy to enter into a contract. (18)
Conversely, the exceptions to European “freedom of contract” are much narrower than the exceptions to Chinese “contract voluntariness”.

When European legal systems say that contracts must respect “public order” and “good morals”, those two concepts are always defined in a narrow way in order to respect the will and freedom of the parties. (19)

In China due to the influence of Confucianism and a historically planned economy, it is necessary for the state to exercise intervention measures to ensure that contracts are not disturbing the “socio-economic order”. (20)

“Disturbance of the “socio-economic order” or disruption of the State economic plan by any organisation or individual is prohibited”, says article 7 of the amendment to the Constitution of the People’s Republic of China (Adopted at the First Session of the Eighth National People’s Congress and promulgated for implementation by the Announcement of the National People’s Congress on March 29, 1993).

Is the USA dollar regime a constitutive part of the Chinese socio-economic order?

TRADE USA-GES

Chinese law of contracts consists of default rules and mandatory rules. The first ones can be excluded by the parties whereas mandatory rules are widely accepted to be a limitation to the freedom of contract since contractual parties cannot avoid them in the agreement. (21)
Since China has signed “numerous” international treaties impacting the parties concluding the contract, the mandatory rules in those international treaties cannot be violated by the individuals. These treaties are given priority over national law. (22)

China has signed the 1980 Vienna Convention on the International Sale of Goods.
This Convention is not mandatory in character and article 6 provides that parties may exclude its application altogether. (23)

Trade usages and trade terms play however an important role in international commercial law, and for a convention to be successful it needs to be sympathetic them. [... At the negotiations leading to Vienna Convention,] Socialist countries were wary of trade usages since they preferred the contract to be secure and certain so that the parties are not taken by surprise, especially where local usages are adopted. [...] This does not mean that Socialist countries did not recognise trade usages. By and large they do, provided they are widely “recognised” – that is, internationally well-known – clear and certain. (24)

Does payment in USA dollar, not in Zimbabwe dollar, the official currency of Zimbabwe from 1980 to 12 April 2009, make the contract secure and certain?

Payment in USA dollar is deemed to be payment in a known – should I say “recognised”? – “hard” currency, which currency is not subject to surprises – such as being reduced to its intrinsic value, the paper it is printed on and the green ink, of course – that’s the way to test whether the USA dollar is a “hard” currency.

And what about the payment for the shipping of the goods to and from Taiwan and China? Also in USA dollars?

In international law concerning carriage of goods by sea, there are standard forms of contract which include “freight clauses”, that is, additional clauses which will normally make provision for the currency in which the freight is to be paid. In a period of fluctuating exchange-rates [such as in 2013] this is a matter of particular importance to the ship-owner, especially where the expenses of the voyage are likely to be incurred in a different currency. (25)

Will the carrier also have to accept USA dollars?

This becomes hilarious.

Moreover, if Taiwan and China do a good job of manufacturing and run a balance of trade surplus they are receiving more USA dollars than they are spending.
What can or should they do with those excess USA dollars they are receiving in their trade exchanges with the planet?

If Taiwan and China allow those USA dollars to flow back into the world markets (actively buying Taiwan dollars c.q., renminbi with those USA dollars) this would raise the NTD c.q. RMB exchange-rate and penalise the international pricing structure of their goods. Their goods would cost more and slow down their exports.

Yet, since Taiwan’s and China’s currency management is strong (like that of euroland) and their people (read that economy) work better than their foreign competitors (including those from euroland) the exchange-rate system shouldn’t hurt the price of Taiwan’s and China’s goods. But, it does.

You see, selling these extra USA dollars today has the effect of hurting a competitive producer that has good money management.

The only alternative for Taiwan and China is to save those USA dollars, thereby supporting the USA dollar regime. (26)

Is that the way (the original 1944 or) the post-1971 Bretton Woods regime was supposed to work?

Or is that the result of machinations by the USA dollar regime?

See also my
Freegold ?????
Posted by Ivo Cerckel on August 8th, 2012
http://bphouse.com/honest_money/2012/08/08/freegold-%E5%92%8C%E5%9B%9E%E5%BD%92%E5%AE%9A%E7%90%86/

Ivo Cerckel
ivocerckel@yahoo.com
https://twitter.com/IvoCerckel

NOTES

(1)
FT Standard Chartered Taiwan Economic Summit 14 March 2013
https://www.etouches.com/ehome/52414/98778/
SNIP
4:05 pm – 5:05 pm
Moderator: Gideon Rachman, Chief Foreign Affairs Commentator, Financial Times
Panel Discussion: Financial Market Innovation – Taiwan as the next offshore Renminbi Centre and the impact on Taiwan’s businesses
SNIP
Currently only a tiny amount of the U.S.$120 billion in trade between China and Taiwan is settled in renminbi.

(2)
Alfredo P. Co, “The Blooming of a Hundred Flowers -Philosophy of Ancient China”, Manila University of Santo Tomas, 1992, p. 303

(3)
Dr Charles McGruder, professor of philosophy, Mt. San Antonio College, Los Angeles, California, USA, “Mencius”, handout (to students), without date,
http://faculty.mtsac.edu/cmcgruder/mencius.html

(4)
Mencius, “Book of Mencius”, Book VI, Chapter 1, point 6

(5)
Aristotle, “Metaphysics”, Book VII, Chapter 4

(6)
Hugh Lawson-Tancred. “Introduction”, in: Aristotle, “Metaphysics”, Penguin Books, 1998, updated bibliography 2004, xi, p. xxx
http://bphouse.com/honest_money/2009/10/15/the-substance-of-the-gcc-single-currency-reserves/

(7)
George Reisman, “Capitalism – A Treatise on Economics”, Ottawa, Illinois, USA, Jameson books, 1998, 3rd ed., p. 142

(8)
Currency expands its reach
English.news.cn 2013-02-22 10:28:09
By Wang Xiaotian in Beijing and Cecily Liu in London
http://news.xinhuanet.com/english/china/2013-02/22/c_132184771.htm

(9)
Gold’s Death Cross is a buy signal for China
By Ambrose Evans-Pritchard
Last updated: February 21st, 2013
http://blogs.telegraph.co.uk/finance/ambroseevans-pritchard/100022953/golds-death-cross-is-a-buy-signal-for-china/

(10)
Roland Leuschel and Claus Vogt, “Das Greenspan Dossier, Wie die US-Notenbank das Weltwährungssystem gefährdet. Oder: Inflation um jeden Preis”, finanzbuchverlag.de, 2006, 3rd ed., pp. 300 and 304

(11)
ANOTHER (THOUGHTS!) ID#60253:
The Management of Gold, A Simple Tool for the 90s
(ANOTHER (THOUGHTS!)
Foundational Gold Trail Commentary
The Inside Story on the Gold-for-Oil Deal that could Rock the World’s Financial Centers
– Page Three -
Mar ’98 – Apr ’98
Date: Sat Mar 07 1998 13:08
http://www.usagold.com/goldtrail/archives/another3.html

(12)
International Charlemagne Prize of Aachen for 2002
Acceptance speech by Dr Willem F. Duisenberg,
President of the European Central Bank,
Aachen, 9 May 2002
http://www.ecb.int/press/key/date/2002/html/sp020509.en.html

(13)
FOA (05/08/01; 09:59:55MT – USAgold.com msg#70)
A Tree in the Making #02
(The Gold Trail:- The Message of an Evolving Market – Walking the Gold Trail Using the “Thoughts! ” of ANOTHER. “Nearing the Great Divide…?”, the Fourth Archive for “Walking the Gold Trail”
http://www.USAgold.com/goldtrail/archives/goldtrailfour.html

(14)
Junwei Fu, “Modern European and Chinese Contract Law: A Comparative Study of Party Autonomy”, Alphen aan den Rijn (The Netherlands), Wolters Kluwer – Law and Business, Kluwer Law International, 2011, p. 134

(15)
Fu, op. cit., p. 40

(16)
Fu, op. cit., p. 41

(17)
Fu, op. cit., p. 67

(18)
Fu, op. cit., p. 40

(19)
Fu, op. cit., p. 47

(20)
Fu, op. cit., p. 41

(21)
Fu, op. cit., p. 152

(22)
Fu, op. cit., p. 151

(23)
Indira Carr, “International Trade Law”, London & New York, Routledge-Cavendish, 2010, 4th ed., p. 68

(24)
Carr, op. cit., p. 70

(25)
John F. Wilson, “Carriage of Goods by Sea”, Pearson Education, 2010, 7th ed., p. 50

(26)
FOA (09/16/00; 15:11:26MD – usagold.com msg#38)
After six miles we arrive at the burial tree!
(The Gold Trail:- The Message of an Evolving Market – Walking the Gold Trail Using the “Thoughts! ” of ANOTHER, “The Long and Winding Road…” the Second Archive for “Walking the Gold Trail”
http://www.usagold.com/goldtrail/archives/goldtrailtwo.html

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Open Letter to Christine Lagarde and Wim Dejonghe

Posted by Ivo Cerckel on 17th October 2012

Madame la Directrice générale du Fonds Monétaire International,
Mijnheer de Worldwide Managing Partner of Allen&Overy, international law firm with global reach,

On 29 October 2012, the KU Leuven, the Catholic University of Leuven, Belgium, is conferring a doctorate “honoris causa” to Christine. You will accept the honorary doctorate at a ceremony at KU Leuven’s Kulak campus on the said date. (1)

One week later, on 06 November 2012, Wim will address the alumni of said University, with a lecture “The worldwide financial crisis: the point of view of a lawyer (“advocaat”)”. (2)

The University is conferring the “honoris causa” degree on Christine in recognition of your strong leadership, your exceptional legal and macroeconomic vision, and your lucid analyses and straightforward proposals for understanding and addressing the current global financial crisis.

Legal vision? Yes, Christine used to be a lawyer at Baker&McKenzie, another international law firm with global reach, which like Wim’s Allen&Overy was originally founded in London, England.

Early last week, Christine was calling, at a moment when practically all of the western countries are running massive fiscal deficits, for the need of the world economy to balance austerity with growth, i.e., – in her interpretation – with more fiscal deficits, if it is to recover fully from the global financial crisis. (3)

Wolfgang Schäuble, the finance minister of the president of the German federal republic, went on to accuse Christine of backpedalling on an earlier commitment to fiscal consolidation, but the BBC, the British guv’mint broadcaster, hastily organised a debate in which Christine and Wolfgang (plus two others) participated and which was meant to save appearances. (4)

Later last week, the International Monetary Fund (IMF), of which Christine is thus the director general or managing director, held its annual meeting in Tokyo.

On Saturday, 13 October 2012, Christine won the day with your call for the need of the world economy to balance austerity with growth,
when a key IMF committee, the International Monetary and Financial Committee, said in a communiqué that:
“Fiscal policy should be appropriately calibrated to be as growth-friendly as possible”.(5)

To repeat: you, Christine, want to calibrate fiscal policy with growth, i.e., – in your interpretation – with more fiscal deficits, at a moment when practically all of the western countries are running huge fiscal deficits.

MONEY

Money, as opposed to currency (6), is a good readily acceptable in exchange by everyone in a given geographical area and is sought for the purpose of being re-exchanged. (7)

The gold standard collapsed during the First World War.
At the end of the Second World War, some bureaucrats met in 1944 in Bretton Woods, New Hampshire, USA, with John Maynard Keynes and they devised a system whereby the value of the USA dollar was linked at fixed parity to the price of gold and all other currencies were linked to the said dollar.
By the same token, the IMF was instituted.
The IMF’s only function was to maintain the Bretton Woods Agreement.

The IMF’s only function was thus to maintain the value of money in exchange – money being a good readily acceptable in exchange by everyone.

On 15 August 1971, USA president Richard Nixon unilaterally broke the Bretton Woods Agreement linking the USA dollar at fixed parity to the price of gold.
The said Agreement thus ceased to exist or ceased to be an Agreement.
At that moment, the IMF had no more reason to exist.
At that moment, the IMF should have been repealed.

Since then, the value of the USA dollar is determined by … nothing.

The USA did of course never dare to make explicit that it severed the link of its dollar to gold.
Nay, the USA managed to change the IMF rules in such a way that current IMF rules (article IV, section 2, (b), of the IMF Articles of Agreement) do prohibit, members from linking their currency to money, from linking their currency to gold.

If the IMF continues to exist, this is in order to support the bankrupt USA-dollar regime.

THE LAWYER

Wim, what could a lawyer (“advocaat”) say about this?

If you allow me to simplify to the extreme, I will say that Aristotle opposed commutative justice to distributive justice. (Yes, I know, commutative justice is a division of remedial justice, the other division of remedial justice being criminal law.)

Distributive Justice is about Leviathan dividing goods among “its” citizens according to geometrical proportions, i.e., according to merit, viz., according to the place of the citizen in the whole.

Commutative Justice deals with voluntary transactions between or among individuals
It proceeds according to arithmetical proportion.

Commutative Justice says that
when person A is voluntarily exchanging goods or services with person B
and that person A receives goods or services from person B
she, person A, should return to person B “some-thing” (of the same value) in exchange for what she, person A, has received from her, person B.

Whereas before 15 August 1971, the IMF dealt with money in commutative justice, i.e., money as a good readily acceptable in exchange by everyone in a given geographical area and sought for the purpose of being re-exchanged,
Christine’s call for the balancing of austerity with growth is a giant leap into distributive justice.

Distributive justice produces a kind of society which in all essential respects would be the opposite of a free society – a society in which authority decided what the individual has to do and how he has to do it, says Nobel laureate Friedrich A. von Hayek. (8)

With her distributive justice, Christine wants to play Santa Claus and freely distribute loans granted out of money created out of thin air.

The recipients of these loans will then be able to acquire goods and services with these loans.

As voluntary transactions, these acquisitions should respect commutative justice.

One of the parties in these transactions, person B in the example above,
will however have to work to (produce and then) provide a good of value or a service of value to the other, person A in the example above.
The other party, the recipient of the loans granted out of Christine’s distributive justice, person A in the example above,
will provide person B, not with some good or services for which person A had to work,
but with something that is not only created out of thin air by central banksters,
but that is also comparable to manna fallen out of the IMF-heaven. (9)

Is this worldwide system of fiat money compatible with a lawyer (“advocaat”)’s notion of responsibility, liability, and … Justice?

Perhaps an “advocaat” could demonstrate that those demanding more regulations are dogs barking up the wrong tree. (10)

Perhaps we just need to return to the general principles of the law on property, on contract, and on … tort and on … crimes.

Fiat money issued by guv’mint and fractional-reserve banksterism by banksters are fraudulent.
Our tort law defines these violations of our contract law and property law as torts.
Our criminal law defines them as crimes.

And is the repeal of the IMF taboo for lawyers?

Subjecting banksters to the general principles of the law on property, contract, and tort will harm the banksters, some of the largest of whom are Wim’s largest customers – it’s no coincidence that some of the largest parasites on fractional-reserve banksterism are Wim’s “largest” customers also.

If those parasites disappear, so will perhaps global law-firms like Wim’s.
So don’t expect Wim to advocate the solution.

Your firm is benefiting from criminals proceeding to issuing fiat money and from (other) criminals proceeding to fractional-reserve banksterism.

Without the latter your firm wouldn’t indeed be “global”.

Yours in Honest Money,

Ivo Cerckel

ivocerckel@siquijor.ws

NOTES

(1)
KU Leuven awards honorary doctorate to Christine Lagarde, IMF chief
SNIPS
The university is recognising Ms. Lagarde, the current Managing Director of the International Monetary Fund (IMF), for her outstanding and internationally recognised leadership during times of financial crisis. She will accept the honorary doctorate at a ceremony at KU Leuven’s Kulak campus on 29 October 2012.
+
The university is conferring the honoris causa degree on Ms. Lagarde in recognition of her strong leadership, her exceptional legal and macroeconomic vision, and her lucid analyses and straightforward proposals for understanding and addressing the current global financial crisis.
https://www.kuleuven.be/english/news/ku-leuven-awards-honorary-doctorate-to-christine-lagarde-imf-chief

(2)
Kennis en Maatschappij
Alumni Lovanienses vzw organiseert causeriën rond belangrijke maatschappelijke thema’s met gerenommeerde sprekers. Deze lezingen staan open voor alumni van alle disciplines en generaties. De lezingen gaan door in de promotiezaal van de KU Leuven en worden telkens afgesloten met een korte receptie.
Aanvang 19u15 – einde 22u00
Programma lezingen academiejaar 2012-2013
SNIP
Dinsdag 6 november 2012
Dhr. Wim Dejonghe, topman worldwide van Allen&Overy
De wereldwijde financiële crisis : de visie van een advocaat
http://alum.kuleuven.be/Kennis.htm

(3)
Last updated: October 11, 2012 2:15 pm
Lagarde calls for caution on austerity
By Claire Jones in Tokyo
©AFP
SNIP
The head of the International Monetary Fund said debt-stricken Greece should be given more time to implement its austerity programme and European countries should refrain from fresh budget cuts or tax rises if growth weakens.
http://www.ft.com/intl/cms/s/0/dca55090-135a-11e2-bca6-00144feabdc0.html#axzz28rQ16mV3

(4)
14 octobre 2012
Assemblée du FMI à Tokyo : éviter une récession mondiale
http://finance.blog.lemonde.fr/2012/10/14/assemblee-du-fmi-a-tokyo-eviter-une-recession-mondiale//

(5)
Communiqué of the Twenty-Sixth Meeting of the International Financial and Monetary Committee
Chaired by Mr. Tharman Shanmugaratnam, Deputy Prime Minister of Singapore and Minister for Finance
Press Release No. 12/391
October 13, 2012
http://www.imf.org/external/np/sec/pr/2012/pr12391.htm

(6)
The etymology of currency is the French “monnaie courante”,
and not, as John Locke argues, the Latin “currentia”.

(7)
George Reisman, “Capitalism – A Treatise on Economics”, Ottawa, Illinois: Jameson books, 1998, 3rd ed., p. 142

(8)
Friedrich A. von Hayek, “The Constitution of Liberty”, Chicago University Press, 1960, p.100

(9)
Or are these two characteristics “created out of thin air” and “manna fallen out of (IMF) heaven” only one and the same?

(10)
Frank Van Dun, “Crash en Depressie”, Doetinchem, Kritische Nederlandse Ondernemers (KNO), 1988, pp. 3 and 4

 

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Freegold 和回归定理

Posted by Ivo Cerckel on 8th August 2012

上海奥地利经济峰会
2012 年 7 月 20-23日
希尔顿 DoubleTree 酒店,华侨/昆山

Freegold 和回归定理
Ivo Cerckel 撰写
ivocerckel@siquijor.ws

像苏格拉底一样,孔子的哲学都是由其门徒编写成书的。
“子贡问曰:‘有一言而可以终身行之者乎?’子(孔子)曰:‘其恕乎,己所不欲,勿施于人。’”(《论语》篇 15 章 23 )

世界上的许多哲学和宗教体系均主张对待他人如同对待自己的道德原则,称之为“黄金法则”,并将其作为主要道德教义。

此“黄金法则”假设人具备此类本性,而孔子正是在这一假设的基础上构建起其道德原则。(Alfredo P. Co,《古代中国哲学》,马尼拉,圣托马斯大学出版社,1992,2002 年再版,107 页)

正如人具备本性一样,货币也有其本性。

1999 年《中华人民共和国合同法》第 130 条规定,“买卖合同是出卖人转移标的物所有权于买受人,买受人支付价款的合同。”。

卖方给予买方具有价值的标的物时,如果买方支付卖方没有价值的物品,则买方对卖方的给予进行了交换吗?买方是否因此违背了“黄金法则”,即,对待卖方如同自己——即买方本人——己所不欲勿施于人,换言之,以无价换有价?

为了避免交易一方以无价换有价,货币必须有一个锚定价值,这个价值须是实际的,而非虚构的。不是标称价值,即,不仅仅是票面价值。货币如果没有实 际价值,就失去了自身的意义。货币如果仅有虚构(数字)价值,则其自身不能成为该锚定价值。货币需要锚定价值的原因与不是为了唤起(为了让人意识到)金本 位,而是通过提供“货币之外”的财富价值来确定货币的价值,而且与货币之间没有现代标签或官方联系,以下称为 WABM。

称这一定价过程为“锚定”,是因为其与轮船停泊时在某一地点抛锚,以避免漂移相似。

门格和孟子

奥地利经济学派的创始人卡尔•门格 (1840 – 1921) 认为,人是每次交易的参与者,因此,也是交易中使用何种货币的决策者。这不是由政府规定的,而是市场决定的。在门格看来,货币不是由法律规定的。其根源在于社会,而非国家机构。

而根据 Ludwig von Mises(路德维希•冯•米塞斯,1881 – 1973)的观点,货币是在实物交易经济中产生货币商品需求之后产生的。因此,货币的根源是实用的、有价值的商品,而非政府可创造的物品,而且是货币自己赢得了人们的信任。

孟夫子(孟子),是与亚里士多德同时代的人,曾向孔子的曾孙学习,后成为孔子最著名的门徒,同时也是孔子正统教义最伟大的发展者,他曾说道“不以规矩,不成方圆。”(《孟子》,篇 VI,章 1,点 6 )

“黄金”是货币事务最原始和最适当的标准。和谐的经济体系必须通过货币凭证来运作。这种凭证起源于人们为了避免携带大量金银去付款或还债,而提供并接受的仓库贵金属量证明。因为每个仓库凭证均可认领特定金属块,因此,是货币的最佳替代品。

这种古老的金本位不能改变人的本性,使统治者不能违背原则地印制超过黄金储备价值的货币凭证(法定通货),既不仅发行仓库凭证,也发行信托流通券,还为仓库中没有的黄金发行凭证。

奥地利经济学派公认的原则之一即是,货币本身并非体系(不是清偿债务体系),而是在特定地理区域内人人可接受的恰当交换手段,货币用于重复交换目的。对于奥地利经济学派来说,货币仅是实现交换的媒介,而非清偿债务的媒介。

布雷顿森林体系 (BRETTON WOODS) 和尼克松 (NIXON)

1971 年 8 月 15 日金本位制度消亡,当时,美国总统尼克松打破了 1944 年的布雷顿森林协议。该协议创建了“国际货币基金组织 (IMF)”,主张 IMF 的唯一责任是维护协议体系。当协议不复存在时,IMF 在 1971 年 8 月就已应被撤销。

该协议把美元以固定平价与黄金挂钩,所有其它货币与美元挂钩。1971 年 8 月 15 日,尼克松总统打破了协议。从此,美元的价值就…乱了套。当然,美国从未敢公开表示其美元脱离了金本位。在确保 IMF 协议条款的新第七款,第 2 章 (b) 确实禁止成员国货币采用金本位之后,美国成功地为 IMF 赋予了新责任,使其得以继续存在。

从此,所有 IMF 成员国的货币都成为了法定通货。法定通货是指不通过任何公式与某种商品,如黄金挂钩的通货。但是,这种通货可以某种公式与原有通货挂钩。如果不与原有通货挂钩,人们就不能确定新法定货币的购买力,也就不能接受其作为交易媒介。

法定货币可能源于纸币和硬商品之间的兑换延期或由于引进了新的货币形式。

1999 年 1 月 1 日引进了一种新的货币形式,欧元。欧元区的人们对这种货币很有信心,因为欧元与仍在流通的现有货币之间存在明确关联。新货币形式(欧元)的纸币和硬币,在 其后 3 年才正式引入。欧元不仅与德国马克、法国法郎等货币挂钩,而且马克和法郎在 1971 年 8 月 15 日之前也与黄金挂钩。因此,法定货币(欧元)得以被欧元区(以及其它地区)需要交易媒介的人们所接受。根植于某种商品或某种旧有货币体系(该体系自身植根 于某种商品)的法定通货会仍然具备价值,即使其来源已经随着时间而变得模糊不清。

如果禁止 IMF 成员国将其货币与黄金挂钩,而又没有任何法规禁止国际贸易中各方使用黄金作为国际贸易结算的交易工具,那么黄金将因此而恢复其在作为 WABM 之前孟子和孔子时代的交易地位。

杜伊森伯格 (DUISENBERG) 和蒙娜丽莎

2002 年 5 月 9 日,欧洲中央银行行长威廉•杜伊森伯格 (Willem Duisenberg) 在接受“2002 年国际查理曼奖 (International Charlemagne Prize of Aachen)”的演讲上说:
“欧元 [1999 年 1 月 1 日引入的新货币形式],可能超越其它任何货币,代表我们社会核心的相互信任。这是首个不仅与黄金挂钩,而且与国家政府挂钩的货币。”
(英语名词“信任 (confidence)”的词源包含与我前文中使用的“信托流通券 (fiduciary media)”中的形容词“fiduciary(信托的)”相同的拉丁词 “fides”、”trust”。)

杜伊森伯格在此说明,新的交易媒介(欧元)将与 Freegold 并存。Freegold 将是一种通货不与固定量黄金捆绑的金本位通货价值体系。这将必然要求黄金价格自由浮动,因此黄金将不是货币,而是实际财富的承载体,是一种你可以将自己财 富换算为的 WABM,以便保持其购买力并预防贬值。

欧元具备黄金成分和票面成分,并在两者之间插入“防火墙”,以便作为保值资产的黄金价值不会因流通货币票面价值的必然通胀而贬值。这是提供防火墙 的欧元体系(欧洲中央银行系统)黄金储备的(季度)盯市制度 (MTM),而非像美国(原来 $35)的 $42.2 模式。黄金不与欧元货币政策运作相联系。

通过在 MTM 防火墙后交易,而非法定货币防火墙后交易,欧元正努力实现 Freegold,并恢复黄金作为 WAMB 的地位,本身是资产,而非资产主张。

一旦实现 Freegold,欧洲体系保险库内的黄金储备将如同巴黎卢浮宫的名画《蒙娜丽莎》一样,成为欧洲货币联盟(卢浮宫)中的财富储备。

奥地利经济学派和回归

如上文所述,米塞斯表明了货币的绝对市场根源。根据米塞斯的观点,货币是在实物交易经济中产生货币商品需求之后产生的。人们接受什么样的货币(交易媒介)、为其附加何种价值皆因个人价值判断各异。

下一个问题是人们希望持有多少货币。奥地利经济学派认为,人们会看哪种货币可以当前价格交易,或更准确地说,可以当时刚刚过去的主导价格交易。人 们以刚才什么价格决定希望持有的货币数量?以当时刚刚过去的当前价格交易?奥地利经济学派很容易被反对者们抨击他们的无限回溯。批评奥地利经济学派推理陷 入循环非常容易,这种批评即是著名的“奥地利圈”。

为了回应“奥地利圈”,米塞斯引进了“回归定理”,即,将货币的价值追溯到货币(一种商品)未成为货币而仅是实用的交易商品时。

我们今天给作为交易媒介的货币赋予的价值,米塞斯说,反映了昨天它能够购买的商品量。同样,其价值反映了货币前天的购买力——以此类推。最终,无论我们使用什么作为货币,我们必然回归到货币不是交易媒介而是具有自身实用性的物品(因而可与其它物品进行交易)的那一天。

那时,货币这种商品不是货币,而是实用的交易商品。

那时有孔子提出的“互惠互利”。

米塞斯回归至货币这种商品不是货币而是实用的交易商品的时刻,然后再返回现行货币.

如果我们不返回现行货币体系又会如何呢?

如果我们停留在真正的孔子互惠互利的状态呢?

当 Freegold 支持者提出回归定理,货币回归至不再是货币,而是实用的交易商品,
这些支持者停留在那一阶段,防止货币从商品变为可以使用的货币,而非作为偿债机制,而是在国际贸易结算中的双边交易品。

换言之,一旦 Freegold 支持者回归至货币不再是货币,而是实用的交易商品阶段,即,一旦 Freegold 支持者证明了米塞斯的“回归定理”:所有货币(甚至政府法定通货)最终都必须根据其在历史上易货状态时的商品价值来确定其购买力,Freegold 支持者停留在此,并视黄金为交易工具(对于石油,因此免除了石油生产商转换其石油美元为黄金的必须性,正如美元本身,没有任何价值)。

自愿和仁

如果货币需要锚定价值,合同法也同样。

在 1804 年通过了《法国民法典》之后,合同自由成为现代合同法的“锚”。(付俊伟(音译),“现代欧洲和中国合同法:双方自治之比较分析”,Kluwer Law International,2011 年,第 40 页)

上述法典第 1134 条规定,双方签订的协议是规范双方之间关系的法律,[而且该协议...]应本着“诚信”的原则执行。

1999 年《中华人民共和国合同法》第 4 条规定,“当事人依法享有自愿订立合同的权利,任何单位和个人不得非法干预”。

《中国合同法》中是否提及“诚信”?

的确,欧洲的“合同自由”承认选择合同交易方、执行和决定合同内容的自由,而中国的“合同自愿”仅赋予选择合同交易方并履行合同的自由。但是,一般来说,“诚信”是限定中国和欧洲合同法中合同各方权利的最基本原则之一。(付,前引用书,第 67 页)

而且,在《中华人民共和国合同法》中有明确条款要求,合同双方应彼此尊重,以负责任的方式履行职责,避免滥用权利,遵守法律和通用商业惯例。这一原则可追溯至孔子的主张“仁”,仁爱。(付,前引用书,第 44 页)

孔子认为,“仁”表示尊重他人。(孔子,前引用书,第 107 页)

孟子认为,“仁”意味着合乎道德的行为。(孔子,前引用书,第 312 页)

一位比利时学者甚至认为,当《德国民法典》第 242 章规定“债务人必须根据诚信原则履行责任,并考虑通用惯例,”这个“根据诚信原则履约”(“Leistung nach Treu und Glauben”) 的责任,逐渐发展成为合同或侵权行为中产生的所有义务的基础,甚至是关键,与传统中国思想不谋而合。(Jacques H. Herbots, “Contracteren in China”, Ghent (比利时),Larcier, 2008, 第 30 章)

当然,德国是 Freegold 的创始国之一。

当欧洲中央银行主席杜伊森伯格在其旁征博引的“查理曼授奖仪式”演讲中说道:
“[...] 每天,我们使用货币作为交易手段 [自愿] 参与商品和服务交易;我们用劳动来交易货币,而货币本身,没有价值。我们同意如此仅仅是因为,我们相信,我们能够用货币来换取更多的商品和服务。这一事实 告诉我们,我们对货币的信任有多么重要 [confidence(信任)的词源含拉丁名词 fides,信任或信心]。这一事实也告诉我们,我们对于彼此的信任更为重要。”

杜伊森伯格将自愿与诚信挂钩。

这与感情用事无关,这意味着,现实或存在,决定是否能够实现互惠互利。“货币”机构所用的词汇或用于其通货的词汇,与是否能够实现互惠互利无关。

Ivo Cerckel
ivocerckel@siquijor.ws

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Freegold and the Regression Theorem

Posted by Ivo Cerckel on 7th August 2012

This is an edited version of the paper (*) I presented at the
Shanghai Austrian Economics Summit
held 20-23 July 2012
at DoubleTree by Hilton, in Huaqiao/Kunshan, China

Confucius’s philosophy was like Socrates’s compiled and written down by his followers.
“Tzu Kung asked: ‘Is there any one word that can serve as a principle for the conduct of life?’; Kong Zi (Confucius) said: ‘Perhaps the word ‘reciprocity’ ; Do not do to others what you would not want others to do to you’”. (1)

Many philosophical systems and religions on this planet endorse this ethical principle of treating others as you want to be treated, which they call the “Golden Rule”, to summarise their ethical teachings.

This Golden Rule presupposes that there is such thing as human nature and on this assumption Confucius tried to build his moral imperative. (2)

Just like there is human nature, so there is monetary nature.

Article 130 of the 1999 Contract Law of the People’s Republic of China (PRC) provides that a sales contract is a contract whereby the seller transfers title to the subject matter to the buyer, who pays the price.

When the seller gives a subject matter of value, is the buyer reciprocating this gift if he’s paying the seller with something, in this case a paper subject-matter, of no value? Is the buyer in that case not rather doing what the Golden Rule prohibits, i.e., doing to the seller what he – as buyer – would not want the seller to do to him, i.e., giving nothing in exchange for something?

Keep in mind that for the Austrians, value is not a property of things, like their size or weight. That different people value different goods differently at different times and places. And that the Austrians therefore argue that value exists only in the minds of the individuals concerned. (3)

To prevent one party giving nothing for something, money must have an anchor, an anchor in reality, not in the mind. Not a nominal anchor, not an anchor in name only. Money cannot be itself the anchor if it has no reality. Money cannot be itself the anchor if it exists only in the (digital) mind. The reason why money needs an anchor is not to evoke, not to bring into the mind, the gold standard, but to anchor money by providing for a Wealth Asset that stands Beside Money, yet has no modern label or official connection to money, hereafter a WABM.

Calling this process “anchoring” relates to the way that ships down anchor to keep themselves in a specific place to avoid drifting way.

BRETTON WOODS and NIXON

Gold is the original and proper standard in monetary affairs. An harmonious economy must however function with money certificates.

Such certificates originated when people offered and accepted warehouse certificates for certain amounts of precious metals rather than having to physically carry around large quantities of gold and silver to pay their debts. Because each warehouse certificate was a claim to a specific piece of the metal, they were perfect substitutes for money. (4)

The old gold-standard could not change human nature which dictates that no ruler can withstand the pressure to print more certificates than he has gold in reserve, i.e., not only issuing warehouse certificates but also issuing fiduciary media, also issuing certificates for which no gold is available in the warehouse.

One of the principles which the Austrians recognise is that money is not an institution (not the institution for debt settlement), but a good readily acceptable in exchange by everyone in a given geographical area and that money is sought for the purpose of being re-exchanged. (5) For the Austrians, money is a medium which makes exchange possible, not a medium to settle debts.

The last remnant of the gold standard disappeared on 15 August 1971 when USA president Nixon broke the 1944 Bretton Woods Agreement. This Agreement, which established the International Monetary Fund (IMF), said that the IMF’s only task was to maintain the Agreement. As the Agreement did no longer exist, the IMF should have been repealed in August 1971.

The Bretton Woods Agreement linked the US dollar at fixed parity to the price of gold and all other currencies to the said dollar. On 15 August 1971, Nixon broke the Agreement. Since then, the value of the US dollar is determined by … nothing. The USA of course never (dare to make explicit that it) severed the link of the US dollar to gold. Nay, after making sure that article IV, section 2, (b), of the IMF Articles of Agreement does prohibit members from linking their currencies to gold, the USA managed to give new tasks to the IMF so that it could be kept in existence.

Since then, the currencies of all IMF members are fiat currencies. A fiat currency is a currency that is not linked by any formula to some commodity such as gold. Such a currency can however be linked by some formula to the old currency. Without that link, people could never establish the purchasing power of the new fiat-paper and so could not accept it as a medium of exchange.

Fiat money may come from the suspension of convertibility between paper and hard commodity
or from the introduction of a fresh form of currency.

DUISENBERG and THE MONA LISA

On 01 January 1999 a fresh form of currency, the euro, was introduced. The individuals on euroland had confidence in that currency, because it was clearly linked to their existing currencies which remained in circulation. The notes and coins of the fresh from of currency, the euro, were not being introduced for another three years. Not only was the euro linked to the German mark, French franc, etc., but those marks and francs had, before 15 August 1971, some link to gold. That’s why the fiat currency which the euro is was accepted by the individuals needing a medium of exchange on euroland (and elsewhere).

A fiat currency rooted in some commodity or in some prior currency system that was itself rooted in a commodity can remain valuable even though its origins are clouded by time, says Ludwig von Mises. (6)

If IMF members are prohibited from linking their currencies to gold, nothing prevents however the parties to an international-trade contract to use gold as a barter tool in international-trade settlement, gold thereby reclaiming the status it had for the contemporaries of Confucius as a WABM.

In his 09 May 2002 Acceptance speech of the International Charlemagne Prize of Aachen for 2002, European Central Bank president Willem Duisenberg said:
“The euro [the fresh form of currency introduced on 01 January 1999], probably more than any other currency, represents the mutual confidence at the heart of our community. It is the first currency that has not only severed its link to gold, but also its link to the nation-state.” (7)
(The etymology of the English noun “confidence” contains the same Latin word “fides”, “trust”, like the adjective “fiduciary” used in the expression “fiduciary media” which I used above.)

Duisenberg was here saying that the euro, the new medium of exchange, is to co-exist with Freegold. Freegold will be a gold-based currency valuation system where the currency is not tied to a fixed amount of gold. This will entail a free-floating price of gold whereby gold will not be money, but a physical wealth consolidator, a WABM into which you can transform your wealth in order to maintain its purchasing power and to prevent it from vanishing into thin air.

The euro has a gold component and a paper component and puts a “firewall” between both so that gold’s valuation as a wealth-preserving asset cannot be pulled lower by the inevitable inflation of the paper component of circulating currencies. It is the (quarterly) marking to market (MTM) of the gold reserves of the Eurosystem (the European System of Central Banks) not to the model of $42.2 like the USA (originally $35), by the Eurosystem which provides that wall. Gold is an item not related to euro monetary policy operations.

By trading behind the MTM firewall, not behind a fiat-monetary firewall, the euro is trying to achieve Freegold and return gold to its status as a WABM, an asset itself, not a claim on assets.

Once Freegold will have been achieved, the gold reserves in the strong-rooms of the Eurosystem will fulfil the same role as the Mona Lisa in the Louvre-museum in Paris, a wealth reserve in the strong-room (the Louvre) of a monetary union.

MENGER and MENCIUS

For Mencius (Meng-Tze),
a contemporary of Aristotle, who studied with the great-grandson of Confucius and became the foremost follower and greatest developer of the orthodox teaching of Confucius,
“wherever there are things and affairs, there must be their principles.” (8)

Carl Menger (1840 – 1921), the founder of the Austrian School, showed that man is the beginning and the end of every economy and so it is with deciding what is to be traded as money. It is not government edicts that create money but the market place. For Menger, money emerges spontaneously through the self-interested actions of individuals. Money has not been generated by law. Its origin is a social, not a state institution. (9)

As I said earlier, one of the principles advocated or accepted by the Austrians is however that value is not a property of things, like their size or weight, but that different people value different goods differently at different times and places. The Austrians therefore argue that value exists only in the minds of the individuals concerned. (3)

Menger’s is a theory of the origin of money. The Austrian theory starts from a valuation axiom.

Why do individuals value a certain commodity as money? The Austrian valuation axiom seemed unable to come to terms with Menger’s theory of the origin of money.

No Austrian before Ludwig von Mises (1881 – 1973), or rather before Mises’s 1912 book “The Theory of Money and Credit”, had been able to reconcile Menger’s analysis of money through its origin with the Austrian valuation axiom.
This meant that Mencius’s dictum “wherever there are things and affairs, there must be their principles” would not be applicable in Austrian economics. In Austrian economics, money would be governed by another set of principles than other market phenomena..

THE AUSTRIAN CIRCLE and REGRESSION

With his regression theorem, Mises demonstrated that it was not necessary in the analysis of money to surrender the Austrian axiom that value exists only in the minds of the individuals concerned.

How much money do individuals want to hold? Starting from the Austrian axiom that value exists only in the minds of the individuals concerned, the Austrians before Mises answered that the individuals look [in their minds] at what money can be exchanged for at current prices, or more accurately at the prices which prevailed in the moment just passed. And at what prices looked the individuals in the moment just past to establish the amount of money they wanted to hold then? At the prices in the moment just passed before that moment? It was easy for the opponents of the Austrians to accuse the Austrians of infinite regress. It was easy for them to accuse the Austrians of reasoning in a circle. The accusation became known as the “Austrian Circle”. The earlier Austrians had not been able to reply to this accusation.

In his “The Theory of Money and Credit”, Mises replied to the “Austrian Circle” by introducing the time element with the “regression theorem”. (10) (11)

The theorem traces the value of money back to the time when money the commodity was not money but a useful barter commodity. (12)

The value we put on money as a medium of exchange today, Mises argues, reflects what amount of goods it would in fact purchase yesterday. Likewise, its value then reflected what it would purchase the day before – and so on. Eventually we must get to a day when whatever we use as money was valued, not as a medium of exchange, but as something with a usefulness of its own, so that it could be bartered against other goods.

At this stage we don’t need a medium of exchange because we have arrived backwards at the stage of direct exchange where goods are only valued for their direct use. Once the commodity will, from this stage, in forward movement, start being used as a medium of exchange, the commodity’s value will also be determined by that use as medium of exchange. But here, at this stage, the commodity is not yet being used as a medium of exchange and its value can thus not possibly also derive from that use as a medium of exchange.

Our reasoning therefore does not lead us to infinite regress. The regress ends when we arrive at the stage when money the commodity was not money but useful barter commodity, viz., the stage when the commodity just began to be used as a medium of exchange.

At that stage, what people accept in (direct) exchange and the value they attach to it is a matter of individual valuation.

At that stage, there is Confucian reciprocity.

What if we didn’t make the journey back to present-day money?

What if we stayed in a situation of real Confucian reciprocity?

When Freegold advocates arrive with the regression theorem at the moment when money the commodity was not money but a useful barter commodity,
these advocates stay there and prevent the commodity from becoming money
so that it can be used, not as an institution for debt settlement, but as a WABM in bilateral barter within international trade settlement.

In other words,
once Freegold advocates have regressed to the moment when money the commodity was not money but a useful barter commodity,
i.e., once Freegold advocates have demonstrated with Mises’s “regression theorem” that all money — even government fiat currency — must ultimately derive its purchasing power from a historical tie to a commodity that was valued in a state of barter,
Freegold advocates stay there and view the WABM, which gold is, as a barter tool
(for oil – thereby freeing oil producers of the necessity to convert their petrodollars, which like the US dollar itself are devoid of any value, into gold).

VOLUNTARINESS and REN

If money needs an anchor, so does contract law.

Freedom of contract became the “anchor” of modern contract law after the French Civil Code was adopted in 1804. (13)

Article 1134 of the said Code provides that the agreement entered into between parties is the law governing the relationship between the parties [and that the agreement ...] shall be performed in “good faith”.

Article 4 of the 1999 Contract Law of the PRC provides that a party is entitled to enter into a contract “voluntarily” under the law, and that no entity or individual may unlawfully interfere with such right.

Is there no room for good faith in Chinese contract law?

It is true that whereas European “freedom of contract” acknowledges the freedom to choose contractual parties and to conclude and determine the contents of a contract, Chinese “contract voluntariness” only grants the freedom to choose the contractual parties and conclude the contract. Generally speaking, however, “good faith” is one of the most fundamental principles restricting party autonomy in both Chinese and European Contract Law. (14)

There is, moreover, an express provision in the Contract Law of the PRC which requires the parties to conduct themselves honourably, to perform the duties in a responsible way, to avoid abusing their rights, to follow the law and common business practice. This principle can be traced back to the Confucian notion of “Ren”, benevolence. (15)

For Confucius, “Ren” means consciousness of human others. (16)

For Mencius, “Ren” means moral behaviour. (17)

One Belgian scholar even argues that when Section 242 of the German Civil Code states that “The debtor is bound to effect performance according to the requirements of good faith, giving consideration to common usage”, this duty of “performance in good faith” (“Leistung nach Treu und Glauben”), which has evolved into the basis, or rather the crown, of all obligations arising out of contract or tort, fits completely into traditional Chinese thinking. (18)

And, yes, Germany is one of the architects of Freegold.

As ECB president Duisenberg said in his quoted Charlemagne speech:
“[...] we [voluntarily] engage in an exchange of goods and services everyday by using money as the means of exchange; and we offer our labour in exchange for money, which, in itself, has no value. We only do this because we believe that we will, in turn, be able to exchange that money for more goods or services. This fact tells us much about the confidence
[whose etymology contains the Latin noun "fides", trust or faith]
that we place in money itself. And it tells us much more about the confidence much more about the confidence that we place in each other. ” (7)

Duisenberg linked voluntariness to good faith.

This has nothing to do with sentimentalism. This means that reality, or that which exists, determines whether reciprocity has been achieved. The words used by the “monetary” authorities for, as, or on their currency have no relevance for the answer to the question whether reciprocity has been achieved.

Ivo Cerckel
ivocerckel@siquijor.ws

(*)
In this paper, I discuss the Regression “Theorem”.

In my oral presentation I thought I was very clever by labelling the Austrian argument that value exists only in the minds of the individuals concerned
the Austrian Valuation “Axiom”

and by labelling the Austrian argument that money is not an institution (not the institution for debt settlement), but a good readily acceptable in exchange by everyone in a given geographical area and that money is sought for the purpose of being re-exchanged
(one of) the Austrian Monetary “Axiom(s)”.

An axiom is however a statement for which no proof is required and which, thus, occurs as a premise of many arguments but as the conclusion of none.
(Antony Flew and Stephen Priest, eds., “A Dictionary of Philosophy”, London, Pan Books (Pan Macmillan Ltd,), 2002, verbo “axiom”)

This second so-called “axiom”, (one of) the Austrian Monetary “Axiom(s)”, seems however to be deductable from the premise that one should prevent one party giving something for nothing.
As I said in my paper:
“To prevent one party giving nothing for something, money must have an anchor, an anchor in reality, not in the mind.”
That second so-called “axiom” is thus not an axion,

Whether the Valuation “Axiom” is indeed an axiom, I don’t know.

Aristotle said that the good has been rightly defined as “that at which all things aim” (“Nicomachean Ethics”, at the outset, 1094a3)

Saint Thomas Aquinas says at the outset of the First Part of the Second Part of his “Summa theologiae” in his reply to objection 1 of Article 1 of Question 1 that
“Although the end be last in the order of execution, yet it is first in the order of the agent’s intention. And it is this way that it is a cause,”

Father Leo J. Elders, S.V.D., adds that this article 1 demonstrates that in all its acts, the human will has an object, viz., some good.
And he concludes that Saint Thomas starts from the “AXIOM” that the end is the first thing the agent aims at.
(Leo J. Elders, “The Ethics of St. Thomas Aquinas: Happiness, Natural Law and the Virtues”, Peter Lang, 2005,
translated into French by Véronique Pommeret as
“L’Éthique de St. Thomas d’Aquin – Une lecture de la Secunda Pars de la Somme de théologie”
[but this is not the same title as the English title],
Paris, Presses Universitaires de l’IPC, &, L’Harmattan, 2005, 1st ed.,
p. 39 of the French translation),

Whether the Valuation “Axiom” is an axiom, I don’t yet know.
I need more research.

NOTES

(1)
Lun Yu, “The Book of Lun Yu”, Book 15, Chapter 23

(2)
Alfredo P. Co, “Philosophy of Ancient China”, Manila, University of Santo Tomas Publishing House, 1992, reprinted 2002, p. 107

(3)
Eamonn Butler, “Austrian Economics – A Primer”, London, Adam Smith Institute, 2010, p. 24

(4)
Eamonn Butler, “Ludwig von Mises – Fountainhead of the Modern Microecomics Revolution”, Aldershot (England), Gower, 1988, p. 262

(5)
George Reisman, “Capitalism – A Treatise on Economics”, Ottawa (Illinois), Jameson books, 1998, 3rd ed., p. 142

(6)
Eamonn Butler, “Ludwig von Mises – Fountainhead “, quoted, p. 269

(7)
International Charlemagne Prize of Aachen for 2002
Acceptance speech by Dr. Willem F. Duisenberg, President of the European Central Bank, Aachen, 9 May 2002
http://www.ecb.int/press/key/date/2002/html/sp020509.en.html

(8)
Mencius, “Book of Mencius”, Book VI, Chapter 1, point 6

(9)
Carl Menger, “The Origins of Money”, (article which first appeared in German in 1892), with a November 2009 Foreword by Douglas E. French, Ludwig von Mises Institute, 2009

(10)
The Regression Theorem is being introduced the first sections of Chapter 2 “The Determinants of the Objective Exchange-Value, or Purchasing Power, of Money” of Part Two [Part one has 6 chapters – so this could be Chapter 8 in the edition you are reading] “The value of Money” of Mises’s “The Theory of Money and Credit” (Robert P. Murphy, “Study Guide to The Theory of Money and Credit”, Auburn: Alabama, Ludwig von Mises Institute, 2011, p. 61)

(11)
Although Mises replied with the “regression theorem” in his 1912 book “The Theory of Money and Credit” to the “Austrian Circle”, Hayek seems to have again considered in 1960 money as a loose joint in the otherwise self-steering mechanism of the market, a loose joint that can sufficiently interfere with the adjusting mechanism to cause recurrent misdirections of production unless these efforts are anticipated and deliberately counteracted.
(Friedrich A. Von Hayek, “The Constitution of Liberty”, Chicago University Press, 1960, Chapter 21 “The Monetary Framework”, 324, p. 325)

(12)
Murray N. Rothbard, “The Essential von Mises”, Auburn: Alabama, Ludwig von Mises Institute, 2009, (originally published 1973), pp. 16-17

(13)
Junwei Fu, “Modern European and Chinese Contract Law: A Comparative Study of Party Autonomy”, Alphen aan den Rijn (The Netherlands), Wolters Kluwer – Law and Business, Kluwer Law International, 2011, p. 40

(14)
Fu, op. cit., p. 67

(15)
Fu, op. cit., p. 44

(16)
Co, op. cit., p. 107

(17)
Co, op.. cit., p. 312

(18)
Jacques H. Herbots, “Contracteren in China”, Ghent (Belgium), Larcier, 2008, section 30

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Mario Draghi, James C. Dooge, Wim Duisenberg, & EU 28-29 June Summit

Posted by Ivo Cerckel on 12th June 2012

The 28-29 June 2012 EU Summit should free itself of the bureaucratic intervention by Hollande and Merkel and not lose sight of Freegold, the Union’s Monetary Identity..

The common theme today is said to be “austerity versus growth”. In reality, we’re hearing little about what’s driving the growth side and a great deal about the disasters to come from cutting benefits
http://www.thefiscaltimes.com/Blogs/Age-and-Reason/2012/05/11/Reframe-the-Growth-vs-Austerity-Debate.aspx#page1

The concept of growth is an illegitimate import of biology into human action.
(Murray N. Rothbard, “Man, Economy, and State – A Treatise on Economics”, Auburn, Alabama: Ludwig von Mises Institute, 2001, (originally published 1962), pp 837-838)

Whereas growth is confined to an organism which grows until it reaches maturity and then declines and sooner or later dies, progress can be transmitted.
(George Reisman, “Capitalism – A Treatise on Economics”, Ottawa, Illinois: Jameson Books, 1998. 3rd ed., p. 106)

If you accept this illegitimate import of biology, you should follow the teachings of biology.

Says Thomas Aquinas in section 2 of the “Prologue” to his “Commentary” on Aristotle’s “On Generation and Corruption”;
growth is subsequent to generation, for growth does not take place without a certain particular generation, namely, that by which food is converted into the thing fed. Thus Aristotle says in On the Soul II that food nourishes in so far as it is potentially flesh, but it produces increase inasmuch as potentially it is quantified flesh.
http://josephkenny.joyeurs.com/CDtexts/GenCorrup.pdf

Growth is not always positive, says Saint Thomas.
Tumours and cancers – like bureaucratic intervention – grow, adds Dr Reisman.

At his 06 June 2012 press conference after the meeting of the Governing Council of the European Central Bank (ECB), leaving interest rates unchanged at 1%, ECB president Mario Draghi outlined his vision for the 28-29 June 2012 European Union (EU) Summit.

According to Wolfgang Münchau (“How to save Spain’s banks – and the eurozone”) in the 11 June 2012 edition of The Financial Times, the Summit will have to answer the question whether the eurozone should go it alone in the area of bank regulation and supervision, or whether the European Banking Authority – an EU level institution – should fulfil that role,
http://www.ft.com/intl/cms/s/0/13287830-b08d-11e1-8b36-00144feabdc0.html

But according to the chancellor of the federal republic of Germany, Angela Merkel, and the newly elected president of the French republic, François Hollande,
the Summit should promote EU growth,
Merkel and Hollande advocating contradictory positions to achieve growth (or is it on the relationship between growth and austerity?),
Mario Monti, the prime minister of the president of the Italian republic hoping to be able to mediate between the French and German positions on how to boost growth at a hastily convened 22 June 2012 Rome summit
where the three mentioned politicians will be joined by Mariano Rajoy, prime minister of the King of Spain,
so that the results of this mediation can be formally signed off at the 28-29 June 2012 summit.

What Draghi basically has in mind is a “vision”, a path towards an objective with all the conditions that have to be satisfied in order to achieve this objective,
just like the 1988 Delors report in a sense spelled out a methodology.
There was a road [to European (Monetary) Union] with dates, deadlines and conditions to be satisfied.
Draghi thinks that this is part of the efforts that “our” Masters and we, ourselves, have to draw up today.
http://www.ecb.int/press/pressconf/2012/html/is120606.en.html

In his answer to the two final questions at his 06 June 2012 press conference, Draghi said that
“the [European] integration process has now reached a point where it has to question itself and decide whether it wants to move further or not”.

On 15 August 1971, USA president Richard Nixon broke the 1944 Bretton Woods system which linked all currencies to the USA dollar and the said dollar at fixed parity to gold.

Draghi said that
“after several failures
[starting with the 1972-1979 Monetary Snake aiming at maintaining stable exchange rates by preventing exchange fluctuations of more that 2.25 %,
then the 1979 European Monetary System and its definition of the ECU,
which was replaced in 1998 by the European Monetary Union which created the euro]
in the process TO LINK THE EXCHANGE RATES and to try to co-ordinate monetary movements, the first step was made towards having a common currency. There was a report, the “Delors report”. That was later changed and finally endorsed by the European Council. The important thing as far as we are concerned today is that this report in a sense spelled out a methodology. There was a road with dates, deadlines and conditions to be satisfied. I think that is part of the efforts that our leaders and we, ourselves have to draw up today.”

The euro did not link exchange-rates but is the first currency that has not only severed [DE-LINKED] its link to gold, but also its link to the nation-state, said ECB president Duisenberg upon receiving the International Charlemagne Prize of Aachen for 2002.
http://www.ecb.int/press/key/date/2002/html/sp020509.en.html

The immediate history of the Delors Report was that after the failure of the 14 February 1984 Draft Treaty on European Union which was not approved,
the European Council summit held in June 1984 at Fontainebleau set up two committees:
the Adonnino Committee which was to prepare measures to strengthen and promote the Community’s identity and its image for the rest of the world
and the Dooge committee on institutional affairs.
(Koen Lenaerts and Piet Van Nuffel, (Robert Bray, ed.), “Constitutional Law of the European Union”, Sweet and Maxwell, 2005, 2nd ed., § 4-005)

Just like Belgian politician Paul-Henri Spaak had been tasked in 1955 with achieving the European Economic Community and Euratom whose founding treaties were concluded in 1957 by the six original member states,
so was Irish politician James Clement Dooge tasked by the EC heads of state and government with making suggestions for the improvement of the operation of European co-operation in both the Community field and that of political, or any other, co-operation.
The Dooge Committee’s informal name was therefore “Spaak II”.
(Desmond Dinan, “Ever Closer Union – An Introduction to European Integration”, Macmillan, 1999, 2nd ed., p. 114)

The Dooge Committee wanted to take a qualitative leap towards genuine political entity among European States: i.e. a European Union, thereby finally bringing about the fully integrated internal market envisaged in the Treaty of Rome as an essential step towards the objective of economic and monetary union called for since 1972.
http://aei.pitt.edu/997/1/Dooge_final_report.pdf

Draghi said on 06 June 2012 that the internal market, AKA Single Market, has not yet been completed:
“Competition should be strengthened in product markets, not least by the completion of the Single Market, and wages should adjust in a flexible manner, reflecting labour market conditions and productivity.”

Although the Adonnino Committee had been tasked with promoting the Community’s identity through material symbols, such as – don’t laugh – a Europe-wide “audio-visual area” with a “truly European” multilingual television channel and a European Academy of Science,
it was the Dooge Committee, which to the surprise of many, including the Fontainebleau European Council which had established it, went on to suggest a means to fuse the twin goals of a single market and institutional reform and to lay a political foundation for the 1992 programme, the goal of achieving the single market or internal market by 31 December 1992.
(Desmond Dinan, op. cit.., p. 93)

The Preface to the Dooge Report says that:
“Although the Community decided to complete [the unprecedented] construction
[which was started with setting up firstly the European Coal and Steel Community (ECSC) and then the European Economic Community (EEC)]
as from the summit in the Hague in 1969 and Paris in 1972, it is now in a state of crisis and suffers from serious deficiencies. ”
http://aei.pitt.edu/997/1/Dooge_final_report.pdf

… just like Draghi is saying now to the upcoming European Council summit
“the [European] integration process has now reached a point where it has to question itself and decide whether it wants to move further or not”.

The Dooge Report went on to say under
II. Priority objectives
A. A homogeneous internal economic area
(c) By the strengthening of the European Monetary System (EMS)
that
“The European Monetary System, which was created and set up pending restoration of the conditions for the gradual achievement of Economic and Monetary Union, is one of the achievements of the Community during the last decade. It has enabled the unity of the common market to be preserved, reasonable exchange rates to be maintained and the foundations for the COMMUNITY MONETARY IDENTITY [emphasis mine] to be laid. ”
(Desmond Dinan says on p. 85 of his quoted book that this is point 3.5.1 of the Dooge Report)

compare this Community Monetary Identity to the symbols introduced by the Adonnino Committee – what is the most useful symbol?

compare this Community Monetary Identity also – and again – to Duisenberg’s statement upon receiving the International Charlemagne Prize of Aachen for 2002 that
the euro is the first currency that has not only severed its link to gold, but also its link to the nation-state.

This blogger cannot but conclude that
what is now known as the European Union should stop devising programmes designed at achieving a common market AKA internal market AKA single market.

The European Economic Community started trying this in 1957,
that’s sixty-five (65) years – pension age or retirement age –
ago.

The 28-29 June 2012 EU summit should call a halt to this process of trying to achieve a common market AKA internal market AKA single market and reaffirm the Union’s Monetary Identity as envisaged as the Community’s Monetary Identity by the Dooge Report.

As the Dooge Report said under
III. The Means: Efficient and Democratic Institutions
A. Easier decision-making in the Council:
“which means primarily changes in practice and certain adjustments to existing rules:
(i) less bureaucracy within the institutions, as national authorities have, through their experts, gained too much ground over the last 10 years; in particular, the authority of the Permanent Representatives over the various Working Parties.”

The Report thereby criticised the increasing bureaucratic influence which the national authorities of the member states exercise over the European Council.
(Dominic Lasok & John W. Bridge, “Law and institutions of the European Communities”, London, Butterworths, 1991, 5th ed., p. 235)

Let Merkel, Hollande, (and Rajoy) fight on 22 June 2012 at Monti’s,
the 28-29 June 2012 EU summit should free itself
of the bureaucratic intervention by the XXX
and not lose sight of Freegold, the Union’s Monetary Identity.

Freegold means that the euro has a gold component and a paper component, and puts a “firewall” between both so that gold’s valuation as a wealth-preserving asset cannot be pulled lower by the inevitable inflation of the paper component of circulating currencies. It is the (quarterly) marking to market (MTM) of the gold reserves of the Eurosystem, not to the model of $42.2 like the USA central bank (originally $35), by the Eurosystem which provides that wall.
Gold is an item not related to euro monetary policy operations.

Let gold trade freely behind the real firewall – like it did for the Ancients,
a wealth asset that stands beside money,
yet has no modern label or official connection to money – or to any Pact.

The European integration process has now reached a point where it has to question itself and decide whether it wants to move further or not, said Draghi in his answer to the two final questions at his 06 June 2012 press conference.

Does Draghi think that the journey Freegold can still be stopped?

The euro is the first currency that has not only severed its link to gold, but also its link to the nation-state, said Duisenberg.

By openly talking about Freegold our Masters would remove uncertainty about the euro’s future. Our Masters are telling us that the removal of this uncertainty is the necessary and sufficient condition to put euroland back on the track to … growth.

This is only way to remove the growing tumour of bureaucratic intervention in the affairs of the European Council..

Ivo Cerckel
ivocerckel@siquijor.ws

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Jacques Rueff v. Charles de Gaulle

Posted by Ivo Cerckel on 18th April 2012

French bureaucrat and defender of the gold standard Jacques Rueff (1896 – 1978) quotes French president Charles de Gaulle as saying in 1965 that the agreement which attributed to the dollar an essential value as international currency did no longer rest on, was no longer supported by, its initial basis, i.e., America’s possession of the planet’s major gold stockpile.

The quote is from de Gaulle’s 04 February 1965 press conference
quoted AS Chapter IV ” La Conférence de Presse du Général de Gaulle”
in ; Jacques Rueff, “Le Pêché Monétaire de l’Occident”, Paris, Plon, 1971, 89

p. 91
[De Gaulle speaking :]
C’est dire que la convention qui attribue au dollar une valeur transcendante comme monnaie internationale ne repose plus sur sa base initiale, savoir, la possession par l’Amérique, de la plus grande partie de l’or du monde

But I don’t find the quote here
Conférence de presse du 4 février 1965
http://www.ina.fr/fresques/de-gaulle/fiche-media/Gaulle00105/conference-de-presse-du-4-fevrier-1965.html
click on “Transcription”

Or wait, the transcription at the link contains the following text :
Alors, cette espèce de valeur transcendante qui était reconnue au dollar a perdu sa base initiale qui était la possession par l’Amérique de la plus grande partie de l’or du monde.

It’s Another transcription of the same press conference?

Ivo Cerckel
ivocerckel@siquijor.ws

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Manila ADB Annual Meeting 03 May 2012 Governors’ Seminar – Version 4.2

Posted by Ivo Cerckel on 1st April 2012

Philosophy begins in wonder, said Aristotle at the outset of his book “The Metaphysics” (Book I, Chapter II, line 982b12).

The Asian Development Bank (ADB) Annual Meeting in Manila on 02-05 May 2012 is to discuss a range of issues related to economic and social progress for Asia and the Pacific.

Its Thursday, 03 May 2012 Governors’ Seminar “How Can Asia Respond to Global Economic Crisis and Transformation?” will discuss the needs for readjustment after the Great Recession. It will devise ways to better accommodate global economic change.
http://www.adb.org/annualmeeting/2012/Seminars/GovernorsSeminar.asp

At their 29 March 2012 New Delhi Summit, the heads of state from Brazil, Russia, India, China and South Africa, collectively known as the BRICS, attacked the developed countries for putting the global economy at risk with their easy money policies. Section 8 of their Delhi Declaration therefore called for a honest monetary system. The BRICS went on to agree on a currency swap deal which is aimed at promoting trade and investment in local currencies as well as to cut transaction costs. The deal is seen as a step towards replacing the US dollar as a reserve currency in trade between BRICS.

Even Robert Zoellick, president of the World Bank, the sister organisation of the International Monetary Fund (IMF), applauds China’s will to internationalise the renminbi. This is strange as the IMF is the pimp of the dollar-regime.

We have to discuss the needs for readjustment after the Great Recession and to devise ways to better accommodate global economic change and transformation. Shall we discuss these needs and devise these ways in a vacuum? Shall we limit ourselves of an examination of the term “economic adjustment” and of the term “global economic change”? Or shall we seek an explanation and a solution for the crisis, explanation and solution of such a kind that the rest of the planet will also be able to consider it as ultimate and universal or all-encompassing?

Mencius (Meng-Tze) lived in China from 371 to 289 B.C. He was thus a contemporary of Aristotle who lived in Greece from 384 to 322 B.C.

Mencius studied with the great-grandson of Confucius, but such a temporal distance did not fail to inspire Mencius.
(Alfredo P. Co, “Philosophy of Ancient China”, Manila, University of Santo Tomas Publishing House, 1992, reprinted 2002, p.303)

Mencius demonstrated that:
Wherever there are things and affairs, there must be their principles.
(“Book of Mencius”, Book VI, Chapter 1, point 6)

One of the principles the People’s Bank of China (PBoC) recognises is that gold is the original and proper standard in monetary affairs, but that the old gold-standard could not change human nature which dictates that no ruler can withstand the pressure to print more receipts than he has gold in reserve.

The PBoC therefore recognises that a harmonious economy must function within a fiat system, must function with fiat money or rather with a fiat currency.

A fiat currency is a currency with three minimum characteristics. Two of these characteristics are negative. Fiat currency has no intrinsic value. Fiat currency is neither convertible by law to any other thing, nor fixed in value in terms of any objective standard. The third characteristic of fiat currency is positive. Fiat currency is declared legal tender by government.

DEBT vs. WEALTH

Nothing prevents fiat currency from having other positive characteristics.

The PBoC does not disclose its gold holdings. The World Gold Council said last February that it believed the PBoC made significant gold purchases in the final months of 2011, contributing to a surge in the country’s imports.

This may mean that the PBoC is aware of the fact that a fiat monetary unit equals debt and that the renminbi should, as a fiat unit, therefore be accompanied by a debt compensator or a value guarantor – gold. The value of this debt compensator or value guarantor should therefore be free-floating vis-à-vis the inevitable currency-debt creations. The fact that the gold reserves of the PBoC are free-floating vis-à-vis the renminbi means that even if the PBoC were to inflate the renminbi, the value of its gold reserves would not suffer. The Bank is keeping gold (the Mona Lisa) in its strong rooms (the Louvres) as a wealth reserve.

Money, as opposed to currency, is not just a name (e.g. renminbi, rupee, dinar). Money is a name for “some”-thing which has “some” buying power. It is not the name but that thing and buying power which define money.

Money needs an anchor, an anchor in reality, not in the mind. Not a nominal anchor, not an anchor in name only. Money cannot be itself the anchor if it has no reality. Money cannot be itself the anchor if it exists only in the (digital) mind. The reason why money needs an anchor is not to evoke, not to bring into the mind, the gold standard, but to anchor money by providing for a wealth reserve among the foreign-exchange reserves. Calling this process “anchoring” relates to the way that ships down anchor to keep themselves in a specific place to avoid drifting way.

Freegold may mean for the PBoC that its “super-sovereign” international currency unit has a gold component and a paper component, but that the Bank puts a “firewall” between both so that gold’s valuation as a wealth-preserving asset cannot be pulled lower by the inevitable inflation of the paper component of the circulating currencies. In Euroland it is the (quarterly) marking to market (MTM) of the gold reserves of the Eurosystem, not to the model of $42.2 like the USA central bank (originally $35 at Bretton Woods in 1944 – this was the value to which US president Franklin D. Roosevelt had increased the price of gold in 1934), by the Eurosystem which provides that wall.

Nothing prevents India, the Gulf Co-operation Council (GCC) nor the Association of South-East Asian Nations (ASEAN) from following suit.

The PBoC does not disclose its gold holdings and thus neither its gold accounting, but gold could be for the PBoC, like for the Eurosystem, an item not related to its monetary policy operations. For the PBoC, gold is trading freely behind a real firewall – like it did for the Ancients. The Bank considers gold to be a wealth asset that stands beside money, yet has no modern label or official connection to money.

The readjustment of the Asian economies after the Great Recession and better accommodation of global economic change will not be provided by a hegemonic coalition of peoples and states, but by a polity of persons developing around a currency coexisting with Freegold.

RENMINBI CONVERTIBILITY HAS BEEN ACHIEVED

In an article under the title “Regional role seen feasible for China’s renminbi”, the Manila newspaper BusinessWorld Online quoted on 03 April 2012 Lee Il Houng, the IMF’s senior resident representative in China, as saying that people may want to hold the renminbi not only for trade settlement but ultimate access to the country’s assets, and that is what “we” [the IMF?] call convertibility.
http://www.bworldonline.com/content.php?section=TopStory&title=Regional-role-seen-feasible-for-China%E2%80%99s-renminbi&id=49440]

“Ens et verum convertuntur”, being and truth can be converted said Thomas Aquinas. (“Disputed Question on the Truth”, article 1)

Being is “that which is” (in Latin “Ens est “id quod est”). To define being in the strictest sense, is impossible, since a definition places the subject to be defined within the scope of a broader concept (its genus)
(Tomas Alvira, Luis Clavell, and Tomas Melendo, “Metaphysics”, Manila, Sinag-Tala Publishers, 1991 (first published in 1982 by the Ediciones Universidad de Navarra in Pamplona), p. 17)

Truth is ad-equation between the thing and the intellect, continued Saint Thomas. (“Disputed Question on the Truth”, article 1)

Wherever there are things and affairs there must be their principles, said Mencius (quoted above).

Being and Truth are convertible (St Thomas Aquinas, “Summa theologiae”, First Part, Question 16, Article 3)

But both Being and Truth must be something before they can be converted into each other.

Truth is founded on being. “Veritas supra ens fundatur”, said Thomas. (“Disputed Question on the Truth”, article 10)

If you want to convert your currency into renminbi to buy Chinese assets, your currency must be (backed by) something, say Freegold.

As I said above:
The readjustment of the Asian economies after the Great Recession and better accommodation of global economic change will not be provided by a hegemonic coalition of peoples and states, but by a polity of persons developing around a currency coexisting with Freegold.

In an 04 April 2012 article under the title “ADB opens ‘ASEAN+3 Bond Market Guide’ online”, the Manila television station GMA News said that:
The ASEAN+3 Bond Market Guide, aimed at encouraging more cross-border bond issuance and investment in the region’s local currency bond markets, is now available through the Asian Development Bank (ADB) and AsianBondsOnline website, the band said Wednesday.
http://www.gmanetwork.com/news/story/253796/economy/finance/adb-opens-asean-3-bond-market-guide-online

ASEAN+3 is the Association of South-East Asian Nations plus the People’s Republic of China Japan, and the Republic of Korea.
(ASEAN itself has 10 members; Brunei, Myanmar, Cambodia, Indonesia, Laos, Malaysia, the Philippines, Singapore, Thailand, and Vietnam.)

Does this mean that People’s Republic of China is giving non-nationals access to its bond market?

Renminbi convertibility has been achieved?

I redraft my conclusion;
The readjustment of the Asian economies after the Great Recession and better accommodation of global economic change will not be provided by a hegemonic coalition of peoples and states, but by a polity of persons developing around the RENMINBI coexisting with Freegold.

Nothing prevents India nor the GCC from following suit – Freegold rupee and Freegold dinar.

ASEAN AND THE GMM

The 03-04 April 2012 Phnom Penh ASEAN Summit adopted four documents., the “Phnom Penh Declaration on ASEAN: One Community, One Destiny”, “Phnom Penh Agenda on ASEAN Community Building”, “ASEAN Leaders’ Declaration on Drug-Free ASEAN 2015″, and ‘ASEAN Concept Paper on Global Movement of the Moderates (GMM)”.
http://summit.information.gov.kh/hot_news/PROutPlenaryS_20thAS.pdf

When you open ASEAN’s website, you have “UPDATES” on the opening page.
The three former documents are under the “UPDATES”,
but the “ASEAN Concept Paper on Global Movement of the Moderates (GMM)” cannot be found there.
http://www.aseansec.org/

I am only finding this:
Chairman’s Statement of the 20th ASEAN SummitPhnom Penh, 3 – 4 April 2012
SNIP
http://www.aseansec.org/documents/20th%20summit/FINAL%20Chairman%20Statement1330.pdf
Global Movement of Moderates (GMM)
96. Recognizing that moderation is an important ASEAN value and it has been successfully practiced in ASEAN since its formation in 1967, we adopted the ASEAN Concept Paper on the Global Movement of Moderates. In this regard, we looked forward to concrete activities and programmes to assist in promoting this idea and ensuring its success at the national, regional and global levels, in cooperation with other similar initiatives.  UNSNIP

This “Asean Concept Paper on Global Movement of Moderates” was mooted by Malaysia’s prime minister Datuk Seri Najib Razak.

In his 17 January 2012 keynote address at the inaugural International Conference on the Global Movement of Moderates (ICGMM), Najib said that
moderation is about fighting terrorism and extremism while promoting respect of each other.
Najib continued by saying that moderation is the “FITRAH”, or essence, of humanity’s greatest heights; the solid bedrock on which all of the world’s civilisations have been built – for without it, we would long ago have succumbed to epicurean pleasures and delights! Yet moderation stands not just in the defence of willpower, discipline and restraint but of acceptance, freedom, tolerance, compassion, justice and peace.
http://www.nst.com.my/top-news/datuk-seri-najib-razak-s-full-speech-text-1.33486

Wikipedia says thar “fitra”, or “fitrah” , is an Arabic word meaning “disposition”, “nature”, “constitution”, or “instinct’” that the root is “to split or cleave”, that it implies opening up and coming out, and that the verb means “to bring forth”, “to originate”, “to knead and shape dough”

Freegold means for the PBoC that its “super-sovereign” international currency unit has a gold component and a paper component, but that the Bank puts a “FITRAH” between both so that gold’s valuation as a wealth-preserving asset cannot be pulled lower by the inevitable inflation of the paper component of the circulating currencies.

Whereas the etymology of “fitrah” is to “to split or cleave”, as Wikipedia says,
“fitrah” is the first nature, the natural condition of humanity in harmony with nature.
(Ruqaiyyah Waris Maqsood, “A Basic Dictionary of Islam“, New Delhi, Goodwork Books, 1998, verbo “Fitra”)

The printing presses of western central bankers cannot possibly be moderated.
That’s why we need that Fitrah of Freegold between the presses and the gold reserves.

The readjustment of the Asian economies after the Great Recession and better accommodation of global economic change will not be provided by a hegemonic coalition of peoples and states, but by a polity of persons developing around the renminbi coexisting with Freegold.

Nothing prevents India nor the GCC from following suit – Freegold rupee and Freegold dinar.

Ivo Cerckel
ivocerckel@siquijor.ws

ALL men by nature desire to know. An indication of this is the delight we take in our senses; for even apart from their usefulness they are loved for themselves; and above all others the sense of sight. For not only with a view to action, but even when we are not going to do anything, we prefer seeing (one might say) to everything else. The reason is that this, most of all the senses, makes us know and brings to light many differences between things.
(Aristotle, “The Metaphysics”, Book I, Chapter I, at the outset)

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