Archive for the ‘Ukraine’ Category

Anarchist Russian Farmer Lands In Court For Creating Currency.

6 July 2015
Long long ago the modern States monopolised the authority to mint or to print and to issue money. That’s why economists -not the neoclassical or neo-Keynesian varieties like Paul Krugman/ Ben Bernake/ Larry Summers, who consider no role for money or banks in their economic modelling and therefore fail to grasp the working of real economy- call it the Fiat Currency or Sovereign Currency. Central Banks, who are invariably headed by those who subscribe to the mythical fable of Adam Smith created in his magnum opus –Wealth of Nations– that money is merely Unit of MeasureMedium of Exchange and Storage of Value; until recently failed to recognise that money is debt and therefore, creation of money means creation of debt and creation of debt means creation of money. Luckily one central bank moved away from this defining of dogma of neoclassical or neo-Keynesian economists and accepted that creation of debt, which is routinely created by commercial banks in fractional reserve banking system all the time, creates money [Read the Bank of England paper here]. Naturally, the creation of a peer to peer worldwide payment gateway outside the formal financial system with low or zero processing costs called BITCOINS, which has no Central Issuing authority like the Federal Reserve for USA or Bank of England for UK or Reserve Bank for India, nor do central banks have any control over the process like they do in case of commercial banks,  was looked down upon with great suspicions in its early evolution; and later treated with downright hostility when it began to strike healthy roots. When any currency is in a state of grave distress, just as it happened with Rouble at the dissolution of USSR or with Dinar at the Balkanisation of Yugoslavia by Bill Clinton and NATO; the citizens lose faith in the stability of the currency and take recourse to measures such as hoarding essential commodities or buying gold/silver or trade locally using I.O.Us. This may sound like a fairytale, but such things have happened, are happening, and will happen whenever any economy goes into a tailspin.

The easiest way to start a currency is to draw up an I.O.U. system that allows your friends to trade hours of work. Hundreds of shops in Ithaca, NY, accept “Ithaca HOURs,” a local currency backed, not by gold, but by man-hours. I spend an hour mowing an Ithaca lawn and receive a paper note for one HOUR. I walk to the barber’s, hand him the piece of paper, and he cuts my hair. Now my neighbor’s grass is shorter, my hair is kempt, and my barber is one HOUR richer. And it’s all thanks to transactions that might not have happened were it not for a private currency.

Or the way Japanese elders do.

One may soon find that people have created such parallel currencies on a far bigger scale in countries like Ukraine, which is brought to breaking point by coup sponsored by US and NATO there, and Greece, which voluntarily gave up its monetary sovereignty and has been ruined by the bullying of the TROIKA of European Central Bank, International Monetary Fund and European Commission. US and NATO put Russia under economic sanctions by calling it an aggressor in Ukraine when in reality they were the  combined aggressors; but Russia under Putin did much better than the most mild prognosis of doomsayers. But sanctions are hurting Russia, and more specifically the citizens in that country. To get around the difficulties of currency and economic instability, one Russian farmer created a local currency only to fall foul of Russian prosecutor.

Mikhail Shlyapnikov, a farmer in the isolated Russian village of Kolionovo, thought he had found a way to make economic transactions in the cash-strapped settlement easier: He began printing kolions, exchange notes to be used by villagers instead of cash. One kolion equaled 10 kilograms of potatoes. In a village where residents would only get hard cash several times a year — during harvest and sowing — kolions would make the exchange of goods easier. Workers could plow a piece of land for a few kolions and then exchange them for vegetables, fruit or fish. But in his attempt to establish a self-sustaining community with its own system of cashless transactions, Shlyapnikov attracted the attention of the government. On Wednesday, Shlyapnikov will appear in court facing prosecution for creating his own currency. The prosecutor claims that by printing his own money, Shlyapnikov aimed to subvert the economic security of the Russian state. 

Russian Village Prints Its Own Currency:

No State ever likes Citizens who are independent of the State.

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