The Philippine Onion

Lies and half-truths shall set you free

Faking our way to the First World and beyond

Posted by commiedyan on December 5, 2007

by e-kunomista

As Christmas nears, banks and the Central Bank have been deluged by reports of fake currency in circulation. According to ANC’s Charo Logarta, the Bangko Sentral ng Pilipinas (BSP) normally receives about P100,000 worth of fake bills from commercial banks each month. But what about the fake bills which have thus far not been detected? No one really knows. Before the congressional elections this year, fake P1000, 500, and 100 bills were reported to have been used to buy votes. But so what?

Detecting counterfeit

According to currency experts at the central bank, there is a simple way to ascertain genuine and legal tender with a cheap magnifying glass. Just look under the name and signature of Gloria Macapagal Arroyo in the bills and you’d see ‘fake president.’ All other bills are fake.

Ask any textbook economist about the impact of fake currency on the overall performance of the economy (in terms of equity and efficiency) and all you’d get would be blank stares. What is even more befuddling is that the so-called ‘progressives’ like Walden Bello and Anna Marie Nemenzo of the Freedom from Debt Coalition (FDC) don’t have any clear answer either, and neither does the more open-minded Filomeno Sta. Ana of Action for Economic Reforms (AER). Why?  Some they must all have a comfortable life supported by sympathetic foreign foundations with genuine euros and dollars. But what about the rest of us who have to sweat for and live with genuine pesos?

Will Mar Roxas listen to the people?

Just before assuming the leadership of the Liberal Party, Senator Mar Roxas was railing against monopolies bleeding our countrymen dry. But does he have the balls to confront the greatest monopoly of all? What gives the BSP the sole and exclusive right to print money to the detriment of those who were born without property for which legal tender is simply the legitimization.

So why not liberalize and deregulate the printing of money for the benefit of all under a real meritocracy? We have studied this question for more than two decades and here are the advantages of liberalizing the printing of currency, not necessarily in the order of impact or importance:

  1. We would all feel better if bribes to governors and congressmen are counterfeit.
  2. Ditto with bribes paid to corrupt cops and bureaucrats.
  3. Ditto if we paid our foreign debt paid with dollars purchased with fake peso bills.
  4. With fake pesos used to buy genuine dollars, we can import more and more and stop the appreciation of the peso, thereby preserving the value of the hard-earned dollars of overseas Filipino workers.
  5. Counterfeiting also restores some balance between buyers and sellers, especially of services and goods which later turn out to be lemons. Now buyers will have their revenge.

Mar Roxas has proposed that the national government should stop borrowing dollars to stem the appreciation of the peso. But that would make pesos scarce and raise interest rates and fuel inflation for hard-working Filipinos. Allowing everyone to print legal tender, in our analysis, is more equitable.

The legal monopoly of a central authority printing money is the most insidious invention of the capitalist class to maintain the status quo, to maintain its hold on private property acquired through thuggery and violence historically. It’s time to break the chains. Sure, our proposals can benefit from some suggestions, but we are certain of the first principles.

References

Arroyo, Gloria Macapagal. “What I Did When Daddy Didn’t Give Me Money.” Lubao Journal of Monetary Economics, Volume 4, No. 23.

Cojuangco, Eduardo Jr.Playing Monopoly with Real (coconut farmers’) Money“. Unpublished Memoirs.

Greenspan, Alan. “Counterfeit: A Printer’s Guide.” Guttenberg Press, 2001. pp 289. NY.

Kasparov, Gary.Strategy and Tactics in Monopoly and Chess.” In and Out of Lubyanka, Progress Publishers, forthcoming.

Gunigundo, Diwa. “Mga Guni-guni ni Diwa Gunigundo; Reflections on Monetary Policy in the Philippines.” BSP Quarterly Journal, Vol. 10, Q4, 2006.

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2 Responses to “Faking our way to the First World and beyond”

  1. taroogs said

    i, myself, would advocate pegging the value of the peso on minerals that are valuable to people – not gold… not silver… drugs 🙂 the value of shabu doesn’t fluctuate that much, no?

  2. BoyUnan said

    from a Jackson Browne tune :

    ” Im going to be a happy idiot
    And struggle for the legal tender
    Where the ads take aim and lay their claim
    To the heart and the soul of the spender
    And believe in whatever may lie
    In those things that money can buy
    Thought true love could have been a contender ”

    also includes philippine elections, immunity from impeachment, NEDA chairs, Sandigan Bayan decisions, former coup plotters now senator, and a whole lot more.

    e-kunomista: Thanks BoyUnan.

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