Information of Denmark

 

On inflation, national debt and of dependence

(for 7th school-class)

By Joern E. Vig

The payment for the result of what is being produced and sold from the businesses (the revenue) can not just be transferred of course to the employees or be used by the owner of the enterprise.

All what have been used to produce, must be covered (costs). It is raw materials, working-hours, wear and tear of the machinery, electricity, heating and many other things.

If you just paid out all of the revenue, it would certainly rise problems with the suppliers. Perhaps no problems with the employees, before some time had gone, and they saw that the business had to closed because nobody would deliver the business the necessary.

It is a similar but also a little different way you have to look upon the total of all values and the money of the community. Currency you use every day is tools to make the trade with goods easy and to make the transportations and the keeping of values convenient. Values are not the currency. Currency can easily be spoiled as we shall see in this reading.

Money is the right that comply with the fact that you has produced/created results, which somebody demands.

Of course there has to be faith in currency and credits. That they are worth what is written upon them. Therefore the selected ones who should rule the country, always have to secure that the amount of currency corresponds exactly to the value of the produced goods. If production is increasing every month the amount of currency and credits can be increased too. This implies of course that no problems with the economy is present. The emission of currency has to be managed by the National Bank. It prints more notes and it bear in mind to book the responsible Government before its members begin to use the money themselves or they let the circulation begin somewhere else. They have to bear in mind that the amount of currency perhaps have to decrease somewhere else at the same time too.

The increase in the amount of currency (and the credits) and the increase in the production and the revenue in real terms always have to correspond. I hope that you are beginning to understand just a little. It will certainly not be more complicated.

Because the financial affairs in Denmark from the mid 1960s to 2000 were out of order, we had to have an attendant among the formal rulers in our country (= just wishful thinking). The creditors requested it. We owed goods or foreign currency, not Danish currency. What we pay back have to be exchanged for goods that are needed.

Is something left of the production when everything has been paid, and the Danish have bought all they want with their money, the rest can be sold to the citizens or the businesses of other countries. That is called export.

If there is too little production of goods compared with the demand, we can import more goods. If we have to borrow the regular currency to pay, because the foreign countries do not accept our currency, we are debit.

The state have to take the responsibility of that account with the foreign countries. An account that makes up the flow of values into and out of the country.

The single citizens or the single business has to take that our currency is noble and can be exchanged for the foreign currency which is required for the foreign goods.

But it is very easy to emit to much money, to increase the credits, and it is even tempting for a government to let it happen. The currency looses its value then like the potatoes, when too many is broad into the market. For this reason there is particular laws in Germany, that has very bad expe-riences with inflation. The German Government could just order the centralbank to emit currency (officially until 1999). Because it really works like hidden taxation on savings. The politicians love hidden taxes. In addition inflation works in the beginning promoting on the revenue. In the long run the rising of the prices works in all parts of the production and sale, and then we are back again, where we started - at a higher pricelevel, no increase in the production -, but poorer with an illusion of higher wage. The phenomenon is called money illusions.

In Denmark the Minister of Finance just called his national bank (the centralbank in Denmark) and the order is given. The corresponding Minister of Finance in Germany had no such possibility. Germany had a more constitutional secured centralbank. With the European Central Bank (ECB) things changed a lot as we will see.

The German Centralbank - Deutsches Bundesbank - was autonomous of the German Government, it was only subject to The German Constitution.

It fortunately occurs no longer in Denmark in 2002, I hoped. The the hope is green like the spring. The reason why it is so tempting for the governments to emit too many notes is that the politicians in the government much easier then is being re-elected. The big amount of money primary have the effect that the citizens or the voters much easier can pay for thing they buy, and they are extra inter-ested in buying more too, because they get a feeling of being in funds. They think they have a good Government, but they have not. It goes wrong, the prices begin to rise, and in this situation that is all the same, if they had a little more notes. Moreover there is a tendency to the prices to rise even more than the most incomes of the voters, because the governments of many countries do the same.

It happens only because the government/governments started the whole process.

In this situation the government is tempted to increase the amount of money more, even if there still is no cover. They did that in Germany too in the 1920s. We shall go in to more details on this subject below.

The taxes and the debt of the people themselves is not felt very much, when false money or bills on the unborn children are made all the time. Which is much the same. There is no guarantee that these unborn children will honour the debt of their parents. They need suddenly not to do so – in morally sense. They have not been asked. Inflation is a breach of the right of treaty, following Hugo Grotius, who is the founder of international law. He formulated the founding rule: 'pacta sunt servanda' that means treaties must be kept.

It is a vicious circle like too much drinking for a long time. At last the abstinences and the pain appear. In this way the rulers have artificially meddled in buying and selling.

The result is always national debt at last, because foreign traders eventually register that our goods has been more expensive every time they buy them again. Perhaps our creditors in foreign countries eventually realize, that we will never be apple to manage to pay the debt that we in long run have contracted. We have to follow the indications of the creditors then. Sweden reached this result in 1992.

We are eventually selling lesser than before, but if we still buy very much in foreign countries - assumed we have no borrowproblems still - this will make the deficit much larger.

To be apple to continue the trade anyhow, we have to be booked again. And it may continue in this way till the creditors say 'Stop' Then the foreign trade is effectuated totally private, the nation's money are substituted for foreign currency (Dollars or DM), and the power of the state is more like the power of a mafia. Just one among the others. That has happened in many countries.

My country, Denmark, is especially vulnerable to this phenomenon called inflation, because the businesses and the consumers in Denmark have to buy so much in foreign countries to keep us go-ing, especially the businesses. The quote of impor-tation (the portion of the income used on import-goods) is very high.

There are more dirty tricks a government can use, when things go wrong in that way. It can alter the rate of exchange on foreign money by announcing that our money from now on is valued lower in proportion to the money of the foreign countries. This is called devaluation. But it is only a short respite with that course too. At the beginning we get lower export-prices measured in terms of money of the foreign countries, and the imported goods get more expensive measured in terms of our money. This should gradually improve the disproportion of the foreign trade, because we buy less and sell more then. The debt is written-up measured in Danish croner.

But because we still import a high proportion of what we need for producing and for consuming, as I mentioned, the risen of the import-prices will soon effect the export-prices. In addition a govern-ment, its authorities and advisers are tempted to increase the printing of more notes to illuminate these bad effects caused by devaluation.

But we can not overcome the truth about money. It is not anything but paper and coins made of some metal. Goods and working-services are something quite different. It carries conviction that you can continue to print more money without covering, but conviction is not truth, I hope you understand now.

The government carries on with having it look like everything is all right, and that it is going even better every day. I would say like our former Minister of Finances Henning Dyremose 'inconceivable good', but I would have to add: 'Especially inconceivably'. Perhaps he did know that he was wrong, wrong indeed. In this case he was a liar. Now our Minister of Finances is called Mogens Lykketoft. He had his 'recovery' from 1993 to 1996, but the Danish did not understand him or did not notice 'the truth in his words'. They still do not. The consent of the Danish to EU was what both of them wanted. The chief of Henning Dyremose the former Prime Minister Poul Schlüter had on a meeting in Maastricht, Holland in December 1991 promised to get the Danish to say Yes. But they did not. They had listened to too many lies within the first twenty years of EEC. In 1986 Schlüter announced, when he visited Munich that the union was stone-dead. We should not hear much about the stone-dead European Union before our referendum, and we should not realize how bad the eco-nomy was, and how they failed to manage the public finances and the national debt. One 'No' to the dead union was not enough. Alone in 1991 Dyremose ordered false money in an amount of about 40 Mia. Kr. or 10.000 Kr. a person in Denmark - 18 years old or older. It happened by ordering it printed in the National Bank. That amount of money just this year can not be used for other purposes, it has to be saved by us or our descendants. But they carried on 'with the same song', when Mo-gens Lykketoft came to power in 1993.

He used nearly the same witchcraft. The difference between the two consists of the things they say. There is no difference in what they do or what they are ordered to do.

It is coining and forgery of banknotes. It hurt almost everybody apart from the politicians, the bureaucrats and the international bankers in the long run - as you will see the long run has been reached now. It is a very slow and painful process to stop and to turn.

It is especially difficult to do this, when the leaders has put all critics to silence, and they have talked untrue to the public about it. The public could not sense, what was happening in secret. The press would not correct, what was told. We should not know.

When all or just many powerful countries is bluffing in this way, it can lead to ex-tensive commercial wars and perhaps physical wars.

The monopolized sector in Denmark is much too large. More than 1 mill. are employed in it. In Spain there are 2 mill. in the monopolized sector, but Spain has 8 time as many citizens. You will find nearly the same proportion regardless, what coun-try you compare with in Europe.

The most of what this sector do can not be sold voluntarily to the consumers, but what the officials consume have to be paid. The cost of that can not be used for other purposes. If you uses it twice anyway, because the governments allow it, without reserving the needed sum of tax, the money has been used twice. When the tax payers feel like hunted cattle, but they still have their possibility the vote, then it is most convenient for politicians that want to stay in power, to print and to borrow.

If the rulers only increase the tax substantially, they will lose the power given by the voters.

Less than 1/3 of all salable production in Denmark, has the authorities not snatched. It was not their task to do so in a democracy - we were taught to believe we had -, and it is a catastrophe, a disaster that it happened.

It has developed especially bad for the last generation, the public has mixed itself up in more and more with 'production-free money' (in contrast to tax-free money). It has wry-wronged the whole Danish economy so that 2/3 is more or less artificially arranged. This is the reason why we can not export enough, and at the same time employ enough manpower. This is the reason why our goods have become to expensive to buy in foreign countries. They are still using an economic theory which is generally fault, and it does not deal with the influence of the public sector. This public sector amounts to about 2/3 of the whole economy, but no theory is dealing with its existence. A theory about the bureaucracy is not needed, as you practically can see how it works. But the theoretical picture they show is drawn from the one third alone which remains. The German hyper-inflation is perhaps one of the biggest thefts in history of the world too. Countless older people who had saved for their old age were brought to begging. This is the perspective.

At this moment they are copying our little-easy-to-grasp country in EU. Read about The Trilateral Commission below. The former mentioned feature writer in the newspaper Information Mars 30th 1995 used the wage-proportion (of the cost in the businesses) to explain the misery.

This was a generally and just traditionally mix together of cause and effect.

The money-wages are too high in Denmark, no discussion about that. By reducing the taxes it will be possible to lower the money-wages, and as a result achieve the same or even higher real-wages by natural resign from the public, monopolized sector.

The final result will be much more foreign demand for Danish goods, and an increase in the demand for Danish labor in Denmark. With the higher production and the higher consumption the revenue from the value added tax will increase too as basis for lowering the income tax even more year after year. The economy will then accelerate considerably in the right direction.

In practice this kind of economic policy had been verified in both New Zealand and in Tjekky for the last few years.

The mentioned feature writer Jesper Jespersen was not included, because he is really interesting. He is just one of those twaddlers who often has the right the write nonsense, latest in a book about EU.

Just before June 2nd 1992 Denmark was over the head and the ears in national debt.

The rulers had only one proposal: Enter The European Union linked to Germany.

The Danes voted No. Later (May 18th 1993) we had to vote once again, the politicians decided.

And for the second time a referendum about the Euro September 28^th 2000.

In 2002 The Constitution of Denmark will be altered (I wish).

The money-emission had to be ruled in a secure way. The highest tax collection was settled in the Constitution.

Rules against monopoly in all markets (anti-trust rules) and several other thing is needed. All the fine declaration of the intentions by politicians, and many of the posi-tive formulated so-called human rights were removed from The Constitution, because they in reality were rights given by God or the Foresight. Clear rules of what the authorities could not do or decide were added to the Constitution. Read below about the priciples of a good constitution.

It was (I wished) in 1998 necessary to explain to the citizens the real prices of the goods and services of all kinds, and to tell them how they till now have paid tax and duties on their whole physical and mental life from the birth-preparation-course to the funeral. They had to know what they had earned to get what they needed for themselves.

Those who produce, those who are out of work, the pensioners and the children (70 p.c. altogether) are cheated all the time. As a politician happened to say in a seldom clear moment: "You can cheat somebody all the time....but you can not cheat everybody all the time". I would add; especially not while they transform their children into animals.