Non-Credit money - rescue for the Worls!

[KingLazar]

Movement for Non-Credit Money

Author: Stojan Nenadović from Serbia

Today money is put into circulation in the form of credits.
Such credit money is always in short supply.
An increase in money in circulation is necessary as much because of increase in production, as because of making up for the money lost due to slow down of velocity of money in circulation.
Required additional quantity of money in circulation is definitive (final), because it is intended to stay in circulation permanently. It cannot be credit money , which is in circulation temporarily, because credits must be returned.
If the rate of increase in quantity of credit money in circulation is such that it creates such an inflation where the rate of increase in quantity of credit money in circulation is greater than the price increase rate, then the difference in these rates is really a non-credit money, which functions as the required additional quantity of money in circulation.
If all the necessary additional quantity of circulation money where immediately emitted as non-credit money, i.e. gift, inflation would disappear.
Movement for non-credit money proposes that the National Parliament issues a Money Law, containing the following:

1. Banks can allow credits only if correct by the amount of collected savings.
2. The creation of new money by allowing credits above the amount of saving is prohibited.
3. Required additional quantity of money in circulation which is printed in the Money Printing Institution, is deposited to the account of the Pension Fund.
4. Money is put into circulation by paying pensions from the account of the Pension Fund.

Such a mode of money emission secures an endless price stability,
without inflation and deflation.
Contributions for pensions are thus cancelled and production is less burdened.
By selling goods to pension beneficiaries, producers secure profits, as pure accumulation for production increase (without having to take credits).

His blog

The Secret of Money

n stagnant society, with no changes in economic rationality, the value of national product (PQ), which represents offer, is equal to demand, which is the product of quantity of money in circulation (M) and velocity of money circulation (V): PQ = MV
Quantity of money in circulation (M) is equal to:

(P = price level = const.; Q = quantity of products)
In a dynamic society, where economic rationality increases, there exist an increase in production (dQ) and offer (PO+PdQ) and a decrease in velocity of money circulation (-dV) and demand (MV+MdV), and that requires an additional quantity of money in circulation (dM), in order to preserve the equilibrium of offer and demand:

Required additional quantity of circulation money (dM) is computed by defining coefficient k:

Coefficient k represents the rate of increase of quantity of money in circulation which is needed to obtain an increased production in the circumstances of retarded velocity of money circulation.
Additional quantity of money in circulation (dM), being a percentage of quantity of money in circulation (kM), must be emitted as non-credit money, i.e. gift , in the form of pensions and children allowances.
Using a portion of this money, the amount being

an increase in production is obtained and this portion ends up as producers profit, while the amount of:

compensates the retarding in velocity of money circulation, and this portion represents consumers surplus, i.e. consumer profit.
The sum of incomes in a society is composed of incomes which are built into expenses, i.e. costs and incomes obtained from the additional quantity of money in circulation, which are then as non-credit money granted to the society, as surplus of utility obtained from the increase in economic rationality.
Sum of costs in a society (NC) is: new national product - profit:

Sum of incomes (NI) is: new national product + consumer surplus:

Today, money is put into circulation in the form of credits.
In credit money system, due to retarding of velocity of money in circulation, a shortage of money is a result, and this shortage causes crises of hyper-production or non-sufficient consumption.
As of mid 20-th century this problem is solved by an endless expansion of credit money and inflation. In the circumstances of credit money inflation at the same time we have a nominal equilibrium of social accounts, which satisfies the dogmas of traditional economic science, and real imbalance (in which the sum of incomes is greater than the sum of costs), which proves the theory of existence of surplus of utility and of non-credit money, because it is really a non-credit money that is emitted, in the form of credits, at least partially.
By establishing a system of emission of non-credit money, the equivalence of nominal and real values is realized, an endless price stability is secured without inflation and deflation, as well as maximum profits and satisfaction of needs of non-productive part of population from non-credit money emission (i.e. without burdening the production). This is a necessary condition of normal reproduction of a society where economic rationality increases. World order should be based upon this foundation.
Milton Friedman has empirically determined that velocity of money circulation is constantly in retarding, but he has not noticed that the cause to this lies in the increase in rationality of consumption. He proposed that monetary policy should be restricted to pouring money into circulation at a constant annual rate, but he did not notice that this money should be non-credit money.

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