The world is experiencing a monetary exuberance and an abnormal
benchmark interest rate. More than 150 countries have monetary identity
problems. At the end of 2023, the FED and the European Central Bank had to
support the Central Bank of Sweden to prevent the collapse of the Swedish
Krown.
For five hundred years man has been intensively trying to design an
impeccable monetary issue system that determines the optimal amount of
money in circulation, but he has not succeeded. A monetary system is optimal
when it is neutral, in capillary and sequential supply, with a store of value
(with endorsement) and under the needs of the market.
Thanks to the Interest Pattern, discovered in Madrid in the year 2013, man
will be able to inject money according to the needs of the market so that the
four fundamental variables of the economy (4FV pág.7)evolve proportionally
because the healthiest economies are not those that grow the most but those
that best harmonize the growthof 1) its capital goods, 2) its public goods, 3) the
monetary mass or money supply, 4) according to the evolution of its human
resources.
This paper 1) will describe the Interest Pattern foundations, 2) the new
money distribution way, and finally, 3) it will show the empirical data that
supports the Interest Pattern.
Many economists continue to think that man cannot know the amount of
money the economy needs. That is precisely his Achilles Heel and the spine
from which he developed all of his economic thinking. That is why many
economists adore Keynes, the Gold Standard or, the most skeptical and
childish, the free issuance of money.
In the future, thanks to the Interest Pattern, economic depressions will
disappear and the greatest engine of social differences in the history of
humanity also will go away: the crazy emission of money.

Синопсис

Мир переживает денежное изобилие и ненормальную контрольную процентную ставку. Более 150 стран имеют проблемы денежной идентичности. В конце 2023 года ФРС и Европейский центральный банк пришлось поддержите центральный банк Швеции, чтобы предотвратить крах шведской Кроны.

В течение пятисот лет человек интенсивно пытался спроектировать безупречная система монетарных проблем, которая определяет оптимальное количество денег в обращении, но он не преуспел. Денежно -кредитная система оптимальна, когда она нейтральна в капиллярном и последовательном поставке, с запасом стоимости (с одобрением) и в соответствии с потребностями рынка. (Непонятно!)

Благодаря схеме интереса, обнаруженной в Мадриде в 2013 году, человек сможет вносить деньги в соответствии с потребностями рынка, чтобы четыре фундаментальных переменных экономики (4FVPág.7) развивались пропорционально, потому что самые здоровые экономики - это не те, которые растут больше всего, а те, которые лучше всего гармонизируют рост1) его капитальных товаров, (ВЕЩИ!) 2) его общественных благ, (ИНФОРМАЦИЯ!) 3) монетарная масса или поставка денег (ОРГАНИЗАЦИЯ!), 4) в соответствии с эволюцией его человеческих ресурсов (ЛЮДИ!). Коммент. По сути, названы интуитивно четыре сферных ресурса ЛИОВ, развиваемых в сферной, холистической Науке Мира!!! Контактировать с автором!!!

Эта статья 1) будет описать основы схемы интереса, 2) Новый Путь распределения денег, и, наконец, 3) покажет эмпирические данные, которые поддерживает схему интереса. Многие экономисты продолжают думать, что человек не может знать количество денег, которые нужны экономике. Это именно его ахиллова пята и позвоночник от которого он развил все свое экономическое мышление. Вот почему многие экономисты обожают Кейнса, золотой стандарт или самую скептическую и ребяческую — бесплатную выдачу денег. (ЧТО в ней плохо? – Инфляция??)

В будущем, благодаря схеме интереса, экономические депрессии исчезнут и величайший двигатель социальных различий в истории человечества также уйдет: сумасшедшие выбросы денег.

--------------------

Index

Synopsis .................................................................................................................................... 1

1. In search of the lost monetary anchor......................................................................... 2

2. The eternal question: What’s the exact amount of money? ....................................... 3

3. Ideal issuance monetary system.................................................................................. 4

4. The Interest Pattern foundations................................................................................ 5

5. The four fundamental variables.................................................................................. 7

6. How to distribute the new money? ............................................................................. 8

7. Empirical verification of the Principle. ......................................................................... 9

8. Consequences that the Principle will have ................................................................ 10

9. Implementation of these ideas in some countries ..................................................... 11

10. How capitalism will work........................................................................................... 12

1. In search of the lost monetary anchor

We spent more than twenty centuries of monetary childhood, with different

metallic standards, such as the Gold Standard or the Bimetallic Standard. In

all industrialized countries, during the 18th and 19th centuries, sequential bank

runs were observed approximately every ten years, preceded by a sustained

deflationary process. The conclusions obtained from the use of these

primitive monetary tools and the needs of the market made us evolve

towards the current fiduciary system. This step was taken intuitively, since

we did not have a monetary theory that, ex-ante, would tell us the exact

amount of money to print. The decision we had to make was also not

supported by empirical evidence. Keynes´ General Theory promoted the leap

into the void, which took place definitively and officially in 1971.

We naively thought that the economy would function better by limiting or

anchoring the issuance of currency to certain indices. All economists thought

3

that if the Central Bank observed the evolution of inflation and monetary

aggregates, operating ex-post, corrective measures could be adopted to

stabilize prices and thereby allow the correct functioning of the industrial

market. After the Second World War, an overwhelming majority of

economists around the world were convinced that the Central Bank and the

Government, using the discount interest rate, the fractional reserve banking

ratio, asset purchases, fiscal measures, etc., could manage to keep inflation

under control and the value of the currency certainly stable.

But history has taught us (i) that politicians often use the Central Bank and

monetary substitutes to benefit their political interests or, worse still, their

interests; (ii) Secondly, we have also learned that the inflation index is not a

reliable tool, since its effects are observed with a delay of 18 to 24 months.

Entering the 21st century, we have realized that the leap into the void we took

creates a feeling of apparent well-being and avoids banking crises every ten

years but, o­n the contrary, causes massive global crises every thirty or forty

years. We are also belatedly aware that the fiduciary system leads the market

towards business concentration (oligopolies), forces the technological cycle

(man vs. machine fight), causes forced unemployment, abnormally widens

social differences, encourages an abnormal drop in birth rates, etc.

All economists are astonished to observe how economic cycles continue to

happen and that there is no way that, at any given moment, we will lose

control of inflation or that a crisis will be inevitable that will trigger a severe

adjustment of the economy. There is something in the fiduciary system that

makes noise, that does not work well, but we do not know how to precisely

prescribe the problem. Never in the history of humanity have there been

more economists, more statistical data and more available media at play than

in the last 50 years, but “we can´t find the key.” In truth, we have made very

little progress in monetary theory. The measures we have been adopting over

the last fifty years are nothing more than monetary and banking patches, like

the Basel banking reforms.

2. The eternal question: What’s the exact amount of money?

Then, how to know the exact amount of money to inject into the market? How

to overcome fiat monetary puberty? What monetary anchor should we use?

For five hundred years man has been intensively trying to design a monetary

system that supplies money to the market according to its needs, to maintain

the purchasing power of money; in other words, so that the monetary unit of

account is stable.

4

Economists were and are aware that by knowing the exact amount of new

money to issue, major economic crises would be avoided. But the frustration

of knowing the long-awaited data was passed from generation to generation,

from crisis to crisis, because the optimal monetary mass depends not o­nly o­n

the amount of money in circulation but also o­n the speed with which it moves,

the volume of products available o­n the market, the population involved,

investments of capital and public goods, etc. The utility of the Quantity Theory

of Money is proof of frustration.

Faced with so much impotence, many economists innocently mythologize

monetary infancy, extolling the benefits of the Gold Standard and cornering its

great defects. Other economists, even more dangerous and unconscious,

mythologize the free issuance of money (which encompasses free banking),

ignoring the history of the United States and Europe. Murray Rothbard, o­ne of

the Argentine President Javier Milei´s economic myths, in his book The Myth of

Free Banking in Scotland, provides a series of arguments that demystify this

issuance system, the reason why private central banks emerge, which will

later be nationalized in almost every country.

It is paradoxical to observe how the economist and President Milei consider

historical figures who held the exact opposite of what he defends as myths,

such as Juan Bautista Alberdi (anti-dollarization) or Murray Rothbard (anti-

free banking). Curious, very curious.

Many of these unconscious economists also forget that in the United States, in

the mid-19th century, the period known as the American Free Banking

degenerated into such monetary chaos that it slowed down commercial traffic.

The existence of more than 8,000 different types of banknotes (denominated in

dollars) issued by private banks, insurance companies, railroads, etc. each

with its own deposits and backup system criteria, generated such noise and

monetary confusion that it stopped the good progress of economic activity, all

despite being referenced in dollars and being considered legal tender

currencies. Even barbers and tavern keepers competed with banks in issuing

banknotes. Almost all citizens considered the issuance of money as a

constitutional right.

3. Ideal issuance monetary system

Analyzing history I concluded that a fair issuance monetary system, the

optimal system, would allow the issuance of money:

1) In a capillary way, so that the money reaches the real economy as soon as

possible and avoids the distortion of relative prices. The false purifying

banking sieve or banking filter should disappear.

5

2) Sequentially, to avoid monetary stress processes. The Gold Standard was a

system whose supply depended o­n the whims of nature and commerce,

absurdly creating moments of shortage or abundance (Hume’s Price

Specie Flow Mechanism).

3) With a store of value. Money is used, in essence, for the exchange of work;

therefore, must represent a prior and effective value (work). Austrians are

afraid to use the word “work” because they consider it a term close to

socialist ideas, an enemy of subjectivism. Observe, it is not a minor detail,

that in the conference before Argentine businessmen in September 2023,

President Milei avoided using the word “work” to define what money is.

Thus he says “Money is an indirect medium of exchange”.1 It would be

more understandable to say “It is a medium of labour exchange”. We

liberals have to overcome this taboo.

4) In a neutral way. Money must be the neutral arbiter of the market arena.

In other words, o­ne that cannot be manipulated politically or financially.

A fair monetary system must respect the monetary needs of the market,

that is, o­nly supply the amount that the market itself demands. Central

Banks are to blame for the current scenery, for having allowed extremely

low interest rates for years and, now, being forced to hastily raise the

interest rate. In 1962, Milton Freedman opened the debate o­n the

independence of the Central Bank, which we are now moving to close

with this paper.

5) Finally, you must revere the synchronicity of the four fundamental

variables (4FV). The better economy is not the o­ne that grows the most,

but rather the o­ne that grows respecting the synchrony of the four

variables, the o­ne that grows proportionally. Obvious cases that

corroborate this theory were the Spanish desynchronized growth at the

beginning of the century and that of China today, which will spend the

next 10 years in restructuring due to abnormal economic growth. Today

India or Mexico is industrially more competitive and commercially more

transparent than China.

4. The Interest Pattern foundations

Having reached this deadlock, living in this monetary alley, where the world monetary theory has been for five hundred years, where no Economic School and no economist has been able to articulate a solid monetary theory, in despair, we can o­nly ask: given that money is o­ne more product of the (1 Milei stood up to all the businessmen and gave a furious presidential speech (Buenos Aires: Youtube, 2023) September 6

6

market, how do other industries to determine the quantity of products to offer?

Let us see! No authority ever considered creating the European Central Bank of Tomatoes, to plan the amount of tomatoes with which the Europeans live, and much less setting a reference price for tomatoes than to condition all market prices.

Nevertheless, this is exactly what happens with money. Crazy, right? Therefore, what is the magic formula, what is the algorithm, and what is the computer system used by the food industry to determine the amount of tomatoes to offer? Easy. It handles an old economic golden rule: past consumption determines future production. So, the farmers will try to produce a quantity similar to that sold in the last harvest. If they achieve this goal, the price of tomatoes will be stable

But how can we know the amount of capital consumed by the market? Just as a pear is the fruit of the pear tree, the interest generated by the market (ΣI) is the fruit of capital, of money in circulation. Therefore, if we grow pears or print money based o­n the number of pears consumed or capital consumed (ΣI), the amount of interest generated by some and consumed by others, the price of pears will be stable and so will the price of money (interest rate). (2) The amount of interest generated by the market (ΣI) (3) is precisely the amount of new money that we need to print, for the monetary policy to be neutral in the market arena.

Thus, in 2013, a historical event occurred in Madrid that changed the history of the economy, such as the definition of The Progressive Growth of the Money Supply Principle, which determines the exact amount of money that must be issued so that prices are stable under normal economic and political circumstances.(4) This principle was stated in the following way:

«Any monetary system, whichever o­ne we select, past or future, requires continued growth of the money supply in an amount equal to the aggregate interest (ΣI) created by capital loaned (financial and industrial) during the preceding period.» (5)

(Сноски: 2 Some of you will think that capital is not consumed, it circulates. However, capital is like the pear-tree, which is also not

consumed. What the market consumes are its fruits, that is, the aggregate interest (ΣI).

3 Added amount of interest or aggregated amount of interest (ΣI)

4 Wars, pandemics and natural disasters are not normal conditions.

5 Pedro Gómez Martín-Romo, The Wealth of Nations in the 21st Century (Almería: Editorial Círculo Rojo, 2019), p.92)

4. (СФЕРНЫЕ! SPHERAL!) Основы процентной модели

Достигнув этого тупика, живя в этом денежном переулке, где мировая денежная теория находится уже пятьсот лет, где ни одна экономическая школа и ни один экономист не смогли сформулировать прочную денежную теорию, в отчаянии мы можем только спросить: учитывая, что деньги являются еще одним продуктом (1 Милей выступил против всех бизнесменов и произнес яростную президентскую речь (Буэнос-Айрес: YouTube, 2023) 6 сентября) рынка, как другие отрасли определяют количество предлагаемой продукции?

Давайте посмотрим! Ни один орган власти никогда не рассматривал возможность создания Европейского центрального банка томатов, чтобы планировать количество томатов, с которыми живут европейцы, и тем более устанавливать справочную цену на томаты, чем обуславливать все рыночные цены.

Однако именно это и происходит с деньгами. Безумие, правда?Поэтому, какова волшебная формула, каков алгоритм и какая компьютерная система используется пищевой промышленностью для определения количества предлагаемых томатов? Легко. Она обрабатывает старое экономическое золотое правило: прошлое потребление определяет будущее производство. Итак, фермеры попытаются произвести количество, аналогичное проданному в прошлом урожае. Если они достигнут этой цели, цена на помидоры будет стабильной

Но как мы можем узнать объем капитала, потребляемого рынком? Так же, как груша является плодом грушевого дерева, процент, генерируемый рынком (ΣI), является плодом капитала, денег в обращении. Поэтому, если мы выращиваем груши или печатаем деньги на основе количества потребляемых груш или потребляемого капитала (ΣI), суммы процентов, генерируемых одними и потребляемых другими, цена груш будет стабильной, как и цена денег (процентная ставка). (2) Сумма процентов, генерируемых рынком (ΣI) (3) — это как раз то количество новых денег, которое нам нужно напечатать, чтобы денежно-кредитная политика была нейтральной на рыночной арене.

Таким образом, в 2013 году в Мадриде произошло историческое событие, изменившее историю экономики, например, определение принципа прогрессивного роста денежной массы, который определяет точную сумму денег, которая должна выпускаться таким образом, чтобы цены были стабильными при нормальных экономических и политических обстоятельствах.(4) Этот принцип был сформулирован следующим образом:

«Любая денежная система, какую бы мы ни выбрали, прошлую или будущую, требует постоянного роста денежной массы в размере, равном совокупному проценту (ΣI), созданному ссудным капиталом (финансовым и промышленным) в течение предшествующего периода». (5)

(Сноски: 2 Некоторые из вас подумают, что капитал не потребляется, он циркулирует. Однако капитал подобен груше, которая также не потребляется. То, что потребляет рынок, — это его плоды, то есть совокупный процент (ΣI).

3 Добавленная сумма процентов или совокупная сумма процентов (ΣI)

4 Войны, пандемии и стихийные бедствия не являются нормальными условиями.

5 Педро Гомес Мартин-Ромо, Богатство наций в 21 веке (Альмерия: EditorialCirculoRojo, 2019), стр. 92)

7

5. The four fundamental variables

Seen from another point of view, basically this theory states that if the population or its purchasing power increases, public goods (6), private production goods and the money supply have to increase in identical proportions. And the natural and main driving force that should tell us how many goods and services we need is the population through the market.

It would not make sense that if the population increases no more sewage treatment plants, more roads or more airports were built; and vice versa, it would be absurd to build more airports, more sewage treatment plants or more roads if the population stayed the same.

Scheme 4 FV

With private production goods, the same thing happens; it is absurd that if the population increases or its purchasing power lets us not increase industrial production and services; and vice versa, it is equally nonsense.

Something similar happens with the monetary mass. If the money supply does not grow in the same proportion, there will be less money for more people, for more activity and, therefore, prices will suffer a compression or reduction. And to this economic phenomenon we call it deflation. If the quantity of money grows above what society needs, just the opposite effect occurs: inflation.

And the o­nly instrument that can coordinate these growths correctly is the interest rate. The concept of the 4FV is an economic conceptual revolution that the Austrian School of Economics (ASE) is formally unaware of. The ASE

(6. Even admitting that all goods can be supplied and managed by private companies, which is a lot to assume, public goods are those whose legal ownership is common (air, water, justice, etc.). My concept of public good is jurist, not Anglo-saxon or economist.)

8

The ASE intuits these concepts but has never defined them with the clarity and precision the Interest Pattern does.

With the satisfaction of having discovered The Progressive Growth of the Money Supply Principle, in 2013 there were three no-small challenges ahead. 1) The first was to describe how the new money was distributed. 2) The second empirically demonstrates this principle. 3) Third, some countries in the world would try to implement these ideas.

5. Четыре фундаментальные (СФЕРНЫЕ! SPHERAL!) переменные (4ФП)

С другой точки зрения, в основном эта теория утверждает, что если население или его покупательная способность увеличиваются, общественные блага (6), товары частного производства и денежная масса должны увеличиваться в одинаковых пропорциях. И естественной и главной движущей силой, которая должна сообщать нам, сколько товаров и услуг нам нужно, является население через рынок.

Было бы бессмысленно, если бы при увеличении населения не строилось больше очистных сооружений, дорог или аэропортов; и наоборот, было бы абсурдно строить больше аэропортов, очистных сооружений или дорог, если бы население оставалось прежним.

СХЕМА 4 ФП

С товарами частного производства происходит то же самое; абсурдно, что если население увеличивается или его покупательная способность позволяет нам не увеличивать промышленное производство и услуги; и наоборот, это в равной степени бессмыслица.

Нечто подобное происходит и с денежной массой. Если денежная масса не растет в той же пропорции, денег будет меньше для большего количества людей, для большей активности и, следовательно, цены будут испытывать сжатие или снижение. И это экономическое явление мы называем дефляцией. Если количество денег растет сверх того, что нужно обществу, происходит как раз противоположный эффект: инфляция.

И единственный инструмент, который может правильно координировать этот рост, — это процентная ставка. Концепция 4FV — это экономическая концептуальная революция, о которой Австрийская школа экономики (ASE) формально не знает.

(6. Даже признавая, что все товары могут поставляться и управляться частными компаниями, что само по себе является большим предположением, общественные блага — это те, чья юридическая собственность является общей (воздух, вода, правосудие и т. д.). Моя концепция общественного блага — юридическая, а не англосаксонская или экономистская.)

8

ASEинтуитивно понимает эти концепции, но никогда не определяла их с такой ясностью и точностью, как это делает модель процента.

С удовлетворением от открытия принципа прогрессивного роста денежной массы в 2013 году передо мной стояли три немалые задачи. 1) Первая — описать, как распределяются новые деньги. 2) Второе - эмпирически демонстрировать этот принцип. 3) Третье, некоторые страны мира попытаются реализовать эти идеи.

6. How to distribute the new money?

To achieve the five monetary issuance objectives (page #4), the new money

issued by the Central Bank will be distributed as follows:

a) Monthly, the Central Bank will issue money in an identical amount to

the aggregate interest generated by the entire system (industrial and

financial).

b) The new money will be distributed among public administrations

depending o­n their level of activity, for the payment of public

investments (ports, roads, hospitals, etc.): capillarity.

c) The money will enter the accounts of private companies,

d) and the banks, negotiating with private companies, will use this money

to grant new loans.

e) The new credits will generate interest and the interest aggregate (ΣI)

will cause the issuance of new money the following month, restarting

the monetary cycle.

We are facing a circular monetary process, as demonstrated by the following

image:

9

With this simple circular mechanism, we will have achieved several goals:

1) First, the industrial and financial markets will be perfect and automatically

coordinated by the interest rate.

2) Second, the four fundamental variables (4FV) will evolve proportionally.

3) In this way, savings and investment will always have the same sign, o­ne

of the essential pillars of liberal economic policy.

4) The Interest Pattern, regarding The Modern Monetary Theory, has another

advantage. He has a mathematical emission ceiling to avoid monetary

inflation.

The interest rate becomes the director and driving force of the financial and

industrial system, overthrowing the four current failed directors, who are:

a) The Government, with the public debt

b) The Central Bank, by issuing money

c) Entrepreneurs through monetary substitutes: promissory notes, bills of

exchange, etc.

d) And private banks using the fractional reserve banking system.

Such a simple mechanism of issuing and distributing money I called the

Interest Pattern or Interest Standard.

We are facing the greatest evolutionary economic conceptual framework of the

last five hundred years, since the end of the Middle Ages. But this theory,

which was taking shape, had to be demonstrated empirically. It would be

necessary to verify that this logic was supported by reality.

7. Empirical verification of the Principle.

According to this monetary theory, in a healthy economy, interest aggregate

(ΣI) should be equal to public investment, since the new money will be used to

pay for public goods built by private companies. In this way, money will

always represent previous and effective work (public good). But is this

monetary phenomenon observable in reality?

After many efforts in locating the data, it was a great surprise to see how

empirical evidence confirmed this theory. Thus in Spain, the data o­n public

investment and the net aggregate of interest generated in the financial system

have been:

10

But in the future, these figures will not be similar, but the same, given that

both columns will be located in the assets and liabilities of the future National

Balance of Money Supply.

8. Consequences that the Principle will have

The Progressive Growth of the Money Supply Principle is the monetary anchor that

would limit the debauchery of different monetary actors, for the money value

is stable. With the Interest Pattern you can, in o­ne fell swoop, eliminate:

- The monetary dominance that the Central Bank exerts in the market

when issuing money. The Progressive Growth of the Money Supply Principle

is the lost monetary anchor.

- Except in extreme situations, public debt will be prohibited, so there will

be no fiscal dominance. All public investment will be monetized up to

11

the limit set by the Principle. The primary deficit must be zero (see more

details in the book o­n Tax-Flat and extraordinary monetizations).

- Banking dominance will also disappear with the prohibition of

fractional reserve banking systems. See more details in the book about

the Myth of the Monolithic Monetary Block that would generate this

ban.

From a doctrinal point of view, the reader has just witnessed two crucial

events in the history of economics: 1) In the first place, the interest rate staged a

coup d'état and overthrew the failed and hackneyed coordinators of the four

fundamental variables, crowning himself the sole director of the monetary

orchestra. The interest rate is the o­nly reliable tool that gives us a precise and

real value of the new money that an economic zone needs to maintain the

purchasing power of money. In the future, the Central Bank will limit itself to

issuing money according to the aggregate interest (ΣI) of the preceding period

and will not intervene, directly or indirectly, in the formation of the interest

rate. 2) Likewise, the reader has witnessed the unveiling of o­ne of the greatest

enigmas of the economy during the last five hundred years: determining the

mathematical amount of new money that the market needs.

9. Implementation of these ideas in some countries

No country in the world issues money according to the Interest Pattern. It is

the first monetary theory that ex-ante allows us to know with certainty the

amount of money to be issued to maintain its purchasing power.

We are working o­n the dissemination of these ideas since more than 150

countries have monetary identity problems.

With the knowledge we have today:

1) Inflation has ceased to be a monetary phenomenon and has become

a political phenomenon. If politicians want to put an end to monetary

inflation, today we have enough knowledge (Interest Pattern) to be

able to control it.

2) It is absurd that Argentina or any country is dollarized. The Austrian

School of Economics (ASE) is really strong in everything except

monetary theory. That is why many Austrians long for the Gold

Standard and others for free issuance of currency. Precisely because

the ASE does not have a cutting-edge monetary theory, Austrian

economists defenders, such as Javier Milei, leave all doors open. The

American Plan (ISBN 9788409557349) is against dollarization for 17

technical reasons and other comparative economic reasons. The more

12

Argentina embraced the dollar, the worse things got. For all these

reasons, o­ne of the objectives of the American Plan is to expel the

dollar from the minds of Argentines in the first term. Exactly the

opposite of what many Argentine economists defend.

Argentina is in an extreme situation, but it can turn this situation if it

transforms its fiduciary economy into an economy with a store of value

through the Interest Pattern. Few countries in the world could adopt the

Interest Pattern. Few countries in the world have the characteristics of

Argentina: rich, cultured, democratic, independent of blocs and... they are up

to their necks in water.

10. How capitalism will work.

In two centuries the economy will work as follows:

1) The Central Bank will have automatically established the exact amount of

money to be issued (ΣI). It will be a constitutional rule; the breach of which

will be criminal and severely punished.

2) In the future, public administrations will not be able to issue public debt,

since the Central Bank will deliver to them, month after month, the money

that, in pure economic logic and mathematical rationality, the market needs;

therefore, waste and megalomaniacal works will be difficult to execute.7

All public services will be covered by fees. (i) When a fee cannot be applied to

a public service, for example, the expense of the State security forces and

bodies, their expense will be met through taxes. But taxes should be an

exception to the system and not the general rule. (ii) In extraordinary

circumstances Parliament will authorize ad hoc issues of money (see more

details in the book)

3) o­n the other hand, the banks will lose the privilege of the Fractional

Reserve Banking System (scriptural money), since this privilege encourages

economic cycles and weakens the balance sheet structure of any bank entity:

negative working capital. See more details in the book Pattern Interest the

chapter regarding the myth of the monolithic monetary block that this ban would

create, a myth that all defenders of the fractional reserve fall into.

4) All payments between industrial and commercial companies will be made

in cash. In the same way that we pay in cash when we go to buy a baguette

7 In Spain, during the euphoria of the bubble at the beginning of the century, politicians even built two airports (in

Ciudad Real and Castellón Province) that were closed for years, as they were not profitable due to the low air traffic in the area.

13

or when we go to have a beer, the operations between industrial or

commercial entrepreneurs will be carried out in cash. If a company wishes to

grant loans to its clients, it will have to establish a financial company that

will be governed by criteria very similar to that of deposit institutions

(banks). The financial company will give a credit to the client, which will be

used to pay the invoice of the group's commercial or industrial company.

Therefore, industrial and commercial activity will be separated from

financial activity. With this measure, we will achieve:

- The prohibition of monetary substitutes, which have historically

distorted the logical monetary block in circulation. For the Interest

Pattern to carry out its work, we cannot allow back doors to circumvent

the entire monetary coordination mechanism. If a private company

wishes to make a large issue of bonds, promissory notes, etc., it must

request special authorization from the Central Bank. If the amount is

small, it will o­nly have to notify its printing and issuance conditions (see

more comments in the book)

- This measure will favour trade and increase GDP due to the certainty of

operations. This is so because, as capitalism matures and new economic

activities appear, the weight of services in industrial and agricultural

activity is increasing; In other words, the added value that, year after

year, man adds to the products of the land is higher. Service companies

(SMEs), by collecting their invoices in cash, will be able to reach cruising

speed faster and more robustly than with the current model.

- By separating the industrial and financial activity of the companies, we

will ensure that all companies present greater solidity and clarity in

their financial statements. More than 80% of European companies do not

exceed two years of life due to financial problems. The economy will be

more robust.

The Interest Pattern will eliminate two great viruses that have plagued

society for as long as we have a solid record, since classical Greece:

1) The virus of economic cycles. In the future, there will be economic

fluctuations, but economic depressions will disappear.

2) Finally we will destroy the biggest engine of social differences in

history: the crazy printing of money.

The Interest Pattern will be the tool that economists will use in a few years to

issue money, for being a solution that cannot be manipulated, robust, logical

and seamless due to the simplicity that defines it. Let us remember what

14

Leonardo Da Vinci said about the simplicity of solutions: “Simplicity is absolute sophistication”. As that today it is difficult for us to understand how England could become

the first world power at the end of the 18th century, with more than 700 monopolies managing its economy (of pins, bricks, tobacco, cotton, etc.) it will be difficult for the 24th century economists to understand how our economy works: the pre-capitalist economy.

A more serious economy, with a store of value, is possible.

Pedro Gomez

Abogado & Profesor, Valencia

Master de Finanzas y Seguros

Universidad Politécnica de Valencia - Spain

pedgom.madrid@gmail.com

pgomez@monetarydefenseandpeoplewelfare.com

Леонардо да Винчи сказал о простоте решений: «Простота – это абсолютная изощренность». Как сегодня нам трудно понять, как могла стать Англия первой мировой властью в конце 18 -го века, с более чем 700 монополиями, управляющей своей экономикой (из булавок, кирпичей, табака, хлопка и т. д.) это будет трудно понять экономистам 24 -го века, как наша экономика работает: докапиталистическая экономика.

Возможна Более серьезная экономика, (с ценным магазином – плохой перевод!), возможна.

Педро Гомес

Abogado & Profesor

Master de Finanzas y Seguros

Universidad Politécnica de Valencia - Испания

pedgom.madrid@gmail.com

pgomez@monetarydefenseandpeoplewelfare.com

Books:

- The Wealth of Nations in the 21st Century (ISBN9788413385976) k3s.editor@gmail.com

- El Plan América. (ISBN: 9788409557349) k3s.editor@gmail.com

- The Interest Pattern

o (Second edition ISBN 978-84-09-70447-7 English)

o (Segunda edición ISBN 978-84-09-70448-4 Spanish)

k3s.editor@gmail.com

- Normative Institutional Competition

o (Segunda edición ISBN 978-84-09-70452-1 Spanish)

k3s.editor@gmail.com

- El Derecho de Secesión (Español ISBN: 9788411370905)

- La Riqueza de las Naciones en el Siglo XXI (ISBN: 9788413385983)

==================

Dear colleagues,

          This is the first occasion o­n which I have contributed to this group. It is a privilege to address you.

          I would like to present two avant-garde concepts that are transforming economic and social thought in Spanish-speaking countries.

 The central idea is as follows:  For markets and societies to function perfectly, creative destruction (Schumpeter) must operate alongside  with the "normative destruction" (my own term).  When morality is not reflected in the law justice becomes unjust, and we judicialise externalities.

          For the system to function effectively, it is essential that price formation (economic calculation)  is free from any undue influence from privileged groups. It is also essential that we implement social calculus or a permanent plebiscite of professionals. This is known as "normative destruction" or Normative Institutional Competition.  Social calculus or legal microsurgery, is the antithesis of social planning.

          Power is neither limited nor balanced: power is competed for. In order to proceed, it is necessary to introduce a new legal concept: the concurrent majority.

          The Interest Pattern facilitates economic calculation with a high degree of efficiency, while Normative Institutional Competition enables social calculus to occur freely.

 Please find attached a summary of my two books, which outlines how these two ideas work.

          I hereby challenge you to organise an international conference in 2026 to discuss both ideas.

 Best Regards,

 Pedro Gómez

Madrid.

Professor Tech. Univ. València.

https://peacefromharmony.org/?cat=en_c&key=1276

30-04-25

Уважаемые коллеги,

         Это первый случай, когда я вношу свой вклад в эту группу. Для меня большая честь обратиться к вам.

         Я хотел бы представить две авангардные концепции, которые трансформируют экономическую и социальную мысль в испаноязычных странах.

         Центральная идея такова: для того, чтобы рынки и общества функционировали идеально, творческое разрушение (Шумпетер) должно работать вместе с «нормативным разрушением» (мой собственный термин). Когда мораль не отражена в законе, справедливость становится несправедливой, и мы судим внешние эффекты.

         Для того, чтобы система функционировала эффективно, важно, чтобы ценообразование (экономический расчет) было свободно от любого неправомерного влияния привилегированных групп. Также важно, чтобы мы внедрили социальный расчет или постоянный плебисцит профессионалов. Это известно как «нормативное разрушение» или нормативная институциональная конкуренция. Социальный расчет или юридическая микрохирургия являются антитезой социального планирования.

         Власть не ограничена и не сбалансирована: за власть ведется борьба. Для продолжения необходимо ввести новую правовую концепцию: совпадающее большинство.

         Модель интересов облегчает экономический расчет с высокой степенью эффективности, в то время как нормативная институциональная конкуренцияпозволяет свободно проводить социальный расчет.

Прилагаю резюме моих двух книг, в котором описывается, как работают эти две идеи.

         Настоящим я бросаю вам вызов организовать международную конференцию в 2026 году для обсуждения обеих идей.

С наилучшими пожеланиями,

Педро Гомес

Мадрид.

Профессор Технического университета Валенсии.

https://peacefromharmony.org/?cat=en_c&key=1276

30-04-25

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