Public Money vs Debt Money -Accounting System Dynamics Approach-

Transcription

1 Public Money vs Debt Money -Accounting System Dynamics Approach- Invited Talk at the Statistical, Economic and Social Research and Training Center for Islamic Countries (SESRIC) Ankara, Turkey Oct. 5, 05 (4:00 6:00) Kaoru Yamaguchi, Ph.D. Director Japan Futures Research Center, Japan

2 Classical Theory Neutral Money Market Liberals Great Depression, Oct.9, 99 (Black Tuesday) Banking Act of 9 (Glass Steagall Act) Stagflation 970s Debt Money System Neoclassical Theory Market & Financial Liberals Globalization nd Great Depression, Sept. 5, 008 (Lehman Shock) 008 It is necessary to provide an alternative to the zombie economics of market liberalism (00, p. 40) Debt Crisis

3 Public Debt-GDP Ratio(%) of OECD Countries in 0 (Wikipedia: CIA s World Factbook) of annual gross domestic product. Country Ratio(%) Country Ratio(%) Japan 4. Canada 84. Greece 58. Germany 8.7 Italy 6. Hungary 78.6 Portugal.6 Austria 74.6 Iceland 8.9 Israel 74.4 Ireland 8.0 United States 7.6 Belgium 99.6 Netherlands 68.7 France 89.9 Poland 5.8 United Kingdom 88.7 OECD (8) 00.7 (9.7) Spain 85. World 64 (58.) (Figures in 00) 8 Countries out of OECD countries > 50%!

4 Monetary and Financial Stability - Systemic Failures of QE - Japan United Kingdom M0 M0 M M4 Figures by Richard Koo at the Nomura Securities Co. Ltd. Seminar, Tokyo, May 4, 0

5 Monetary and Financial Stability - Systemic Failures of QE - Figures by Richard Koo at the Nomura Securities Co. Ltd. Seminar, Tokyo, May 4, 0 USA EU M0 M0 M M

6 Pilot s Failures? Debt Money System Works (Airplane) Great Depressions 99, 008 System Design Failures? Public Money System (New System Design: Monetary Reform)

7 Limitation of Neoclassical DSGE and Keynesian Econometric Analyses Money is Exogenously created, not Endogenously Hand-on Introduction to System Dynamics (Fixprice, Monetary and Fiscal Policies)

8 Debt Money: Fractional Reserve Banking System - Money out of Nothing (Thin Air) - What is Debt Money? Money Stock (Supply).Currency in Circulation (Bank Notes and Coins) +.Bank Deposits (Credits) Money Supply M (585.0) (Japan, 04/08, trillion yen) Coins % Bank Notes % Deposits % (Reserves 5.) Who create Debt Money?.Government.Bank Notes by Privately-Owned Central Bank.Credits Created by Commercial Banks (A Fractional Reserve System)

9 Fractional Reserve Banking System Fractional Reserves

10 Accounting System Dynamics How to construct a model in which money endogenously created Accounting System + System Dynamics

11 ASD Macroeconomic Model of Japan (ASD = Accounting System Dynamics) Overview ASD Macroeconomic Model of Japan (c) Kaoru Yamaguchi, Ph.D. & Yokei Yamaguchi List of Sectors on Japan's Flow of Funds Accounts Population and Workers Money Stock Demand Deposits (All sectors) Central Bank -. Central Bank GDP Interest, Price & Wage The Flow of Funds Accounts Monetary Base Reserves -- Banks Producers Government Postal Savings Securities Investment Trusts Households Social Security Funds Insurance Companies Nonbanks Banks Central Bank Pension Funds (Private) Fiscal Loan Fund (Special Account) Interest Payments Deposit Insurance & Pension Banks (Credit Creation) Financial Intermediaries Wages & Dividends (Factor Income) Repayment (Credit Crunch) Loan (Deposit Creation) Interest Payments. Financial Institutions -. Depository Corporations - Insurance and Pension Funds -- Postal Savings --. Insurance --. Pension Funds -4-. Securities Investment Trusts Government Financial Institutions Flow of Funds (Producers) Flow of Funds (Insurance Companies) Financial Dealers & Brokers Flow of Funds (Households) Flow of Funds (Pension Funds) Overseas Flow of Funds (Banks) Flow of Funds (Financial Dealers & Brokers) Consumers (Households) Consumption Gross Domestic Products (GDP) Production Producers (Firms) -4 Other Financial Intermediaries -4-. Nonbanks -4-. Public Financial Institutions -4-4 Financial Dealers and Brokers Fiscal Loan Fund Government Financial Institutions Securities Companies Flow of Funds (Government) Flow of Funds (Central Bank) Flow of Funds (Overseas) Labor & Capital. Producers Produceres (Sim. Panel) Insurance Companies (Sim. Panel) Central Bank (Sim. Panel) Households (Sim. Panel) Pension Funds (Sim. Panel) Government (Sim. Panel) Banks (Sim. Panel) Financial Dealers & Brokers (Sim. Panel) Ratio Analysis Income tax Investment (Housing) Public Services National Wealth (Capital) Accumulation Investment (Public Facilities) Investment (PP&E) Public Services Corporate tax. General Governmen t Government -. Central Government -. Local Governments -. Social Security Funds GDP Simulation Monetary Policy Fiscal Policy Government 4. Household F/F Check B/S Check Optimize Model Check Population/Labor Force GDP Components

12 ASD Macroeconomic Model of Japan ASD Macroeconomic Model of Japan List of Sectors on Japan's Flow of Funds Accounts (c) Kaoru Yamaguchi, Ph.D. & Yokei Yamaguchi Central Bank -. Central Bank Monetary Base Reserves -- Banks Interest Payments Deposit Insurance & Pension Banks (Credit Creation) Financial Intermediaries Wages & Dividends (Factor Income) Repayment (Credit Crunch) Loan (Deposit Creation) Interest Payments. Financial Institutions -. Depository Corporations - Insurance and Pension Funds -- Postal Savings --. Insurance --. Pension Funds -4-. Securities Investment Trusts -4-. Nonbanks Consumers (Households) Consumption Gross Domestic Products (GDP) Production Producers (Firms) -4 Other Financial Intermediaries -4-. Public Financial Institutions -4-4 Financial Dealers and Brokers Fiscal Loan Fund Government Financial Institutions Securities Companies. Producers Labor & Capital Investment (Housing) National Wealth (Capital) Accumulation Investment (PP&E) Government -. Central Government Income tax Public Services Investment (Public Facilities) Public Services Corporate tax. General Government -. Local Governments -. Social Security Funds Government 4. Household Population/Labor Force Original 5 Sectors 0 More Sectors are added

13 ASD Macroeconomic Model of Japan : Bank of Japan Asset Liability <Wages (Central Bank)> <Total government deposit> Income from Central Banks (Households) <Open Market T-Securities Purchase (Central Bank)> Total Reserves (Central Bank) Cash-in (Central Bank) Cash (Central Bank) Cash-out (Central Bank) <Open Market T-Bill Purchase (Central Bank)> <Lendings to Banks (Central Bank)> <Fiscal Loan Fund Bonds Newly Issued (Fiscal Loan Fund)> <Lendings to Fiscal Loan Fund (Postal Savings)> <Savings to Time Deposits with Postal Savings (Households)> Reserves Transfer (Postal-Fiscal Loan Fund) <Public Money Newly Issued> Public Money Assets Deposits by Postal Savings (Central Bank) Reserve Transfer (Banks-Fiscal Loan Fund) <Interest Payment (Fiscal Loan Fund)> <Fiscal Loan Bond Investment after 008 (Banks)> Deposits by Fiscal Loan Fund (Central Bank) Reserves Transfer (Social Security Funds-Fiscal Loan Funds) <Lendings to Fiscal Loan Fund (Social Security Funds)> switch (Loans: Central Bank) Loans (Central Bank) Data <Banks Debt Period> Currency Outstanding <Cashing (Banks)> Reserves Deposits (Central Bank) <Investment in Public Corporation Securities (Insurance Companies)> <Debt Repayment to Government Financial Institutions (Producers)> Reserves Transfer (Banks-Gov. Financial Institutions) <Mortgage Debt Repayment to Government Financial Institutions (Households)> <Debt Repayment to Government Financial Institutions (Households)> <Interest Payment (Government Financial Institutions)> <Lendings to Government Financial Institutions (Fiscal Loan Fund)> <Investment in Public Corporation Securities (Social Security Funds)> Lending Amount (Central Bank) Lendings to Banks (Central Bank) Loans Time (Central Bank) Loans (Central Bank) <Debt Repayment (Banks)> <Open Market T-Securities Sale (Central Bank)> <Debt Repayment (Banks)> <Open Market T-bill Sale (Central Bank)> <Investment in Public Corporation Securities (Banks)> Reserves Transfer (Gov. Financial Institutions-Banks) <Housing Loan from Government Financial Institutions (Households)> <Loans from Government Financial Institutions (Households)> <Loans from Government Financial Institutions (Producers)> Deposits by Government Financial Instituions (Central Bank) Reserves Transfer (Social Security Fund-Gov. Financial Institutions) Treasury Bills (Central Bank) Data switch (T-Bills: Central Bank) T-Bills Time (Central Bank) T-Bills bought by Central Bank T-Bills Purchase Amount (Central Bank) Treasury Bills (Central Bank) <T-Bill Debt Redemption (Government)> <Total T-Bills> T-Bills matured (Central Bank) <Income from Banks (Central Bank)> <Depositing to Central Bank (Security Companies)> <T-Securities Investment (Households)> <T-Securities Investment (Insurance Companies)> Reserves Transfer (Banks-Dealers & Brokers) <Social Insurance Revenues> Reserves Transfer (Government-Banks) Reserves Transfer (Banks-Government) <T-Securities Investment (Banks)> <T-Bills Investment (Banks)> <Tax Revenues> <Interest Income from Government <Public Investment (Households)> (Government)> <Interest Income from Government <Government (Banks)> Consumption> <Interest Income from Government (Securities Companies)> <Interest Income from Government (Insurance Companies)> Reserves Transfer Items (Government-Banks) <Interest Income from Government (Pension Funds)> <Government Debt Redemption : Banks> <Social Insurance <Government Debt Redemption : Payments> Insurance Companies> Open Market T-Bill Purchase (Central Bank) Open Market T-Bill Purchase Operation (Temporary) Purchase Year (Bills) Open Market T-bill Sale (Central Bank) Open Market T-Bill Sale Operation (Temporary) Sales Year (Bills) <T-Securities Investment (Pension Funds)> <Government Debt Redemption : Securities Companies> Reserves Transfer (Government-Dealers & Brokers) Reserves Transfer (Dealers & Brokers-Government) Government Deposits (Central Bank) <Expenditues (Central Bank)> <Government Debt Redemption : Pension Funds> <Government Debt Redemption : Households> Sales Period (Bills) Purchase Period (Bills) <T-Securities purchased by Financial Dealers & Brokers> <T-Bills purchased by Financial Dealers & Brokers> <Public Money Newly Issued> Treasury Securities (Central Bank) Data Reserves: Financial Dealers & Brokers (Central Bank) Reserves Transfer (Gov.-Dealers & Brokers) T-Securities Time (Cental Bank) T-Securities bought by Central Bank Data T-Securities bought by Central Bank T-Securities matured (Central Bank) <T-Bills bought by Central Bank> <T-Securities bought by Central Bank> <Government Debt Redemption : Central Bank> <Foreign Financial Investment (Government)> <Government Debt Redemption : Social Security Funds> <Interest Income from Government (Social Security Funds)> <Pension fund transfer to Social Security Funds> Deposits by Social Security Funds (Central Bank) Open Market T-Securities Purchase Operation (Permanent) switch (T-Securities: Cental Bank) Treasury Securities (Central Bank) <T-Securities Debt Redemption (Government)> <Total T-securities Outstanding> Reserves Transfer (Social Security Funds-Dealers & Brokers) Open Market T-Securities Purchase (Central Bank) Open Market T-Securities Sale (Central Bank) <Stock Investment (Social Security Funds)> <T-Securities Investment (Social Security Funds)> <Foreign Financial Investment (Social Security Funds)> Open Market T-Securities Purchase Operation (Temporary) Purchase Period (T-Securities) Purchase Year (T-Securities) Open Market T-Securities Sale Operation (Temporary) Sale Year (T-Securities) Sales Period (T-Securities) Net Assets Income from Government (Central Bank) Interest Income from Government (Central Government) <T-Bill Interest paid by the Government (Central Bank)> <T-Securities Interest paid by the Government (Central Bank)> Adjustment Asset (Central Bank) <Foreign Financial Investment (Government)> <Foreign Financial Investment (Social Security Funds)> Reimbursement Ratio (Central Bank) Wages (Central Bank) Expenditues (Central Bank) Reimbursement to Government Required Capital Reserves (Central Bank) Revenues (Central Bank) Revenue Income (Central Bank) Income from Banks (Central Bank) <Wages (Central Bank)> <Interest paid by Banks (Central Bank)>

14 ASD macro model has 455 symbols - 79 Levels (Stocks) Auxiliaries (Flows and Variables) - 44 Lookups (Table Functions) - 44 Data (Variables and References) - 76 Constants

15 Five System Design Failures () Bank Loans () Time Deposits Money Stock (M) Quantity Theory of Money: MV = PT (=GDP) (5) GDP () Government Debts (4) QE Policy Monetary Base (M0)

16 Design Failures of the Debt Money System () M needs be supplied by Bank Loans Booms and Depressions (Fisher)

17 Billion Yen/Year ASD Macroeconomic Model of Japan : Data Simulations 800, , ,000 00,000 GDP, M0, M and Debt (Producers & Government) Time (Year) "GDP (Revenues)" : JapanData(Ref) "Monetary Base (M0)" : JapanData(Ref) "Money Stock (M)" : JapanData(Ref) "Loans (Banks)" : JapanData(Ref) "Debt from Banks (Producers)" : JapanData(Ref) "Treasury Securities Debt (Government)" : JapanData(Ref)

18 Phase Diagrams of Bank Loans and Producer Debt vs M

19 Design Failures of the Debt Money System () M was compensated by Time Deposits Decrease in Savings Declines of Middle Classes

20 Monetary Base, Money Stock and Time Deposits

21 Phase Diagrams of Time Deposits and Government Debt vs M

22 Design Failures of the Debt Money System () M needs be supplied by the Government Debt Accumulated Debt (Fisher) Debt Crises

23 National Debt Crisis - US Forecast Accumulation Rate = 9% Doubling Time = 7.7 year Nixon Shock 97 No Convertibility between US dollar and Gold Debt GDP Year 00 Year US Debt Forecast 0 5,674 Mar , ,89 Next Ceiling: 7. trillion 08 6,759 0/7/0 00,98 Ceiling: 6.4 trillion Ceiling: 4. trillion 8//0 US Debt Forecast trillion trillion Debt-GDP Ratio 9 %

24 Billion Yen/Year ASD Macroeconomic Model of Japan : Data Simulations 800, , ,000 00,000 GDP, M0, M and Debt (Producers & Government) Time (Year) "GDP (Revenues)" : JapanData(Ref) "Monetary Base (M0)" : JapanData(Ref) "Money Stock (M)" : JapanData(Ref) "Loans (Banks)" : JapanData(Ref) "Debt from Banks (Producers)" : JapanData(Ref) "Treasury Securities Debt (Government)" : JapanData(Ref)

25 Design Failures of the Debt Money System (4) M0 cannot control M Quantitative Easing (QE) failed

26 Super QE since Q, 0 Monetary Base(M0)=Currency Outstanding + Reserves

27 Monetary Base (trillion yen) 0 April st: 49.5 (+50.8) 05 April st: 00. (+00.8%) Reserves with BOJ (trillion yen) 0 April st: 6.9 (+44.) 05 April st: 06.(+%) Currency in Circulation 94. Bank Notes 89.5 Gov t Coins 4.6 Data obtained from the Bank of Japan Statistics (as of )

28 Non Financial Corporation s Loan (Debt) 0 : 48.5 (+.9) trillion yen 05 : 40.4 (+0.5%) trillion yen Money Stock M 0 : (+57.) 05 : 68. (+0.%) Household s Loan (Debt) 0 : 05.8 (+4.4) 05 : 0. (+.4%) Monetary Base 0 : 49.5 (+50.8) 05 : 00. (+00.8%) Gov t Coins 4.6 Bank Notes 89.5 Data taken from the Bank of Japan Web site (as of )

29 Gov t Bonds and Securities (Debt) 0: 958 (+46.) 05: 004. (+4.8%) Non Financial Corporations Loans 0 : 48.5 (+.9) 05 : 40.4 (+0.5%) Money Stock M 0 : (+57.) 05 : 68. (+0.%) Household s Loan (Debt) 0 : 05.8 (+4.4) 05 : 0. (+.4%) Gov t Coins 4.6 Bank Notes 89.5 Monetary Base 0 : 49.5 (+50.8) 05 : 00. (+00.8%)

30 Money Stock M 0 : (+57.) 05 : 68. (+0.%) If QE (increase in Monetary Base) were done through printing Bank Notes and distributing them equally, Japanese per capita income would have increased at least by 806,000 yen (=$8,000). The economic impact would have been spontaneous and enormous! Why cannot we do this under the current debt money system? Reserves with BOJ 0: 6.9 (+44.) 05 : 06.(+%) Monetary Base 0 : 49.5 (+50.8) 05 : 00. (+00.8%) Gov t Coins 4.6 Bank Notes 86.8 Data taken from the Bank of Japan Web site (as of 04.08)

31 Phase Diagrams of M0 vs M, and M vs GDP

32 Design Failures of the Debt Money System (5) M failed to increase GDP Prolonged Recessions

33 Billion Yen/Year ASD Macroeconomic Model of Japan : Data Simulations 800, , ,000 00,000 GDP, M0, M and Debt (Producers & Government) Time (Year) "GDP (Revenues)" : JapanData(Ref) "Monetary Base (M0)" : JapanData(Ref) "Money Stock (M)" : JapanData(Ref) "Loans (Banks)" : JapanData(Ref) "Debt from Banks (Producers)" : JapanData(Ref) "Treasury Securities Debt (Government)" : JapanData(Ref)

34 Billion Yen/Year Billion Yen/Year ASD Macroeconomic Model of Japan : What if? Simulation in History 400,000 00,000 00,000 00,000 Private Investment Time (Year) Private Investment : Lost Decades Private Investment : JapanData(Ref) Private Investment : Sustained Growth GDP (Revenues) If investment were sustained, GDP would have increased to 900 trillion yen (+80%)! How to Sustain Investment! No possible way under the current Debt Money System 900, , ,000 5, Time (Year) "GDP (Revenues)" : Lost Decades "GDP (Revenues)" : JapanData(Ref) "GDP (Revenues)" : Sustained Growth

35 Billion Yen/Billion YenReal /Year Billion Yen/Year Billion YenReal/Year ASD Macroeconomic Model of Japan : Partial Optimization 600, ,000 50,000 5,000 GDP (Revenues) 600, ,000 50,000 5,000 GDP (real) 00, Time (Year) "GDP (Revenues)" : Current "GDP (Revenues)" : JapanData(Ref) 00, Time (Year) "GDP (real)" : Current "GDP (real)" : JapanData(Ref) Price Prime Rate Time (Year) Price : Current Price : JapanData(Ref) Time (Year) Prime Rate : Current Prime Rate : JapanData(Ref)

36 Thousand Persons Thousand Persons Billion Yen/Year Billion Yen/Year ASD Macroeconomic Model of Japan : Partial Optimization 60,000 Consumption 60,000 Private Investment 70,000 80,000 90, Time (Year) Consumption : Current Consumption : JapanData(Ref) 90,000 80,000 70,000 60,000 4 Population and Employed Labor , Time (Year) 4 Employed Labor : Current Employed Labor : JapanData(Ref) Population 5 To 64 : Current Population 5 To 64 : JapanData(Ref) ,000 80,000 40,000 Structural Change in Structural Change in Time (Year) Private Investment : Current Private Investment : JapanData(Ref) Unemployed Labor Time (Year) Unemployed Labor : Current Unemployed Labor : JapanData(Ref) Structural Change (Government Spending) in

37 ASD Macroeconomic Model 6 Stages of Development. Construction of a model that reflects transactions of real and financial economic sectors.. Incorporation of real economic and financial data.. Partial Optimization of interpolation for real economic behaviors. 4. Construction of detailed interdependent feedback relations among all sectors. 5. Simulation analyses to figure out the structural causes of QE policy failures. 6. Comparative analyses for the workings of debt money and public money systems.

38 Creating a Better System Design of Macroeconomy

39 A PROGRAM FOR MONETARY REFORM (A mimeograph circulated in July 99 by Paul H. Douglas, Irving Fisher, Frank D. Graham Earl J. Hamilton, Willford I. King, and Charles R. Whittlesey) (Fisher at the age of 7) (9) Fractional reserves give our thousands of commercial banks the power to increase or decrease the volume of our circulating medium by increasing or decreasing bank loans and investments. This situation is a most important factor in booms and depressions. (7a) Under the present fractional reserve system, the only way to provide the nation with circulating medium for its growing needs is to add continually to our Government s huge bonded debt

40 Two Lessons from the Great Depression in 90s () Chicago Plan I have come to believe that the plan, properly worked out and applied, is incomparably the best proposal ever offered for speedily and permanently solving the problem of depressions; for it would remove the chief cause of both booms and depressions, namely the instability of demand deposits, tied as they are now, to bank loans. (p.8) Michael Schemmann, ThaiSunset Publications 0 Yale University, March, 95 (Preface to the First Edition) First Edition, Adelphi Company, p.9 (Second Ed. 96, Third Ed. 945)

41 A Monetary Reform: Chicago Plan American Monetary (NEED) Act A Debt Money System - Money out of Nothing - A Public Money System - American Monetary (NEED) Act -. Privately-Owned Central Bank issues Money (Notes). Credit Creation by Commercial Banks (A Fractional Reserve System). Monetary Control by (and for) the International Bankers. Government Issues Money (Nationalization of the Central Bank). 00% Reserve (Abolishment of the Credit Creation). Money as Public Utility for the Economic Growth and Public Welfare

42 Public Money System Classical Theory Neutral Money Market Liberals Great Depression, Oct.9, 99 (Black Tuesday) Banking Act of 9 (Glass Steagall Act) 95 American Monetary Act 999 Stagflation 970s Disequilibrium Analysis Debt Money System Neoclassical Theory Market & Financial Liberals Globalization nd Great Depression, Sept. 5, 008 (Lehman Shock) 008 It is necessary to provide an alternative to the zombie economics of market liberalism (00, p. 40) 0 Debt Crisis

43 Contents I. Accounting System Dynamics Edition.0 II. Macroeconomic Systems of Debt Money III. Open Macroeconomic Systems of Debt Money IV. Macroeconomic Systems of Public Money 50 pages To be Published in 05 by The Japan Futures Research Center, Japan (available: Chap. Designing A Public Money System AMI Conf. 00 Chap. Workings of A Public Money System AMI Conf. 0 Chap. 4 Monetary and Financial Stability AMI Conf. 0 Chap. 5 Public Money and Sustainability AMI Conf. 0 Chap. 6 A Transition to the Public Money System AMI Conf. 04

44 Public Money Act of Japan (Bank Deposits) Fractional Reserves

45 Public Money Act of Japan (Bank Deposits) 00% Reserves

46 Public Money vs Debt Money System Structures Money Issuer Its Owner Public Money System (New System Design) Public Money Administration Government Debt Money System (System Design Failure) Central Bank Private Banks and Financiers Bank Reserves 00% Reserve Fractional Reserves Money Supply Public Money directly put into Circulation as Economy Grows Private Banking unaffected Base Money: by Central Bank Deposits: by Bank Loans Money in Circulation: by Public Interest Interest-free Interest-bearing Debt Economic Policies Public Money Policy (Public Money Financing) Monetary Policy: Central Bank Fiscal Policy: Government Chapter 5: Table 5. (available at

47 Public Money vs Debt Money System Behaviors Public Money System (New System Design) Monetary Stability Stable Money Supply Stable Price Level Debt Money System (System Design Failure) Bubbles and Credit Crunches Inflation & Deflation Financial Stability No Bank-runs Business Cycles (Booms and Busts) Employment Full Employment is Possible Involuntary Unemployment Government Debt No Government Debt Built-in Debt Accumulation Recession & Unemployment Inequality Income Inequality between Workers and Capitalists Income Inequality between Financiers and Non-financiers Sustainability Sustainability is Possible Accumulated Debt Forced Growth Environmental Destruction Chapter 5: Table 5. (available at

48 P U B L I C M O N E Y Published on Sept. 0, 05 by Toyo Keizai, Tokyo, 5 pp. Money and Macroeconomic Dynamics (488 pages), one of the most innovative macroeconomic books, was published in 0. PUBLIC MONEY is its simplified Japanese version (5 pages) to introduce the concept of the Monetary Reform to the Japanese readers. Public money economy is a new economic system in place of the finished Capitalism which was proved to have built-in system design failures. This new Japanese book focuses on the liquidation of national debts which Japanese economy as well as US and EU economies such as Greece are seriously facing now.

49 P U B L I C M O N E Y Part : Debt Money system What is economics? What is money? Do we need the Bank of Japan? 4 Why is money created out of nothing? 5 Why does money become means of control? 6 Why do national debts continue to increase? 7 Our debt money system is Debt-end! Published on Sept. 0, 05 by Toyo Keizai, Tokyo, 5 pp. Part II: Public Money System 8 What is the Chicago Plan? 9 Birth of the Public Money System 0 We can liquidate national debts Public money system creates happy futures to All Part III: A Transition Modeling a transition to the Public Money System The Public Money Act of Japan

50 Public Money Act of Japan (Ch.)

51 Global Monetary Reform in Action USA: NEED Act (National Emergency Employment Defense Act) HR990, Sept., 0. UK: House of Commons Debate, Nov. 0, 04 Money Creation and Society since 844 (70 years ago) Netherlands: Dutch Parliament Monetary Reform Debate Switzerland: Monetary Modernization (MoMo) Initiative Iceland: Commissioned by the Prime Minister of Iceland March 05 Monetary Reform A better Monetary System for Iceland Canada: Committee on Monetary and Economic Reform (COMER) The Case against the Bank of Canada by Rocco Galati Bank of Canada Act (94), Nationalized 98 ~ 974 (National Money) Japan: Public Money Act of Japan (proposed by Yamaguchi in his book on Public Money, Sept. 05)

52 Thank You for your Attention!