Use Cash for Freedom

I had a gruesome first hand experience on how governments disdains the use of cash.

Sadly this has not been an isolated experience, but a deepening troublesome political trend around the world, particularly in developed economies.

Governments would like to confiscate more of the public’s resources to finance their lavish ways. So the compulsion to transact through their institutional accomplices, the politically endowed banking system.

Through stricter unilateral regulations or immoral laws, governments through the banking system place the public’s hard earned savings under intense scrutiny, and criminalize the actions of the innocent, whom have been uninformed by the rapid pace of changes in manifold regulations covering a wide swath of social activities through the banking system.

Private transactions which does not conform with the goals and the interests of the political authorities risks confiscation. Worst is the trauma of being labeled a criminal. Increasingly desperate governments have wantonly been in violation of the property rights of their citizenry.

A vote against government is to use cash transactions, that’s because cash, according to Charles Goyette at the LewRockwell.com, represents freedom

Mr. Goyette writes, (bold emphasis mine)

Governments hate that cash gives you anonymity. And they are often very anxious to track it and to control your use of it. They often attempt to criminalize the use of cash or at least criminalize having too much of it around.

Right now, 7% of the U.S. economy is cash-based. Across the Eurozone, it's a little bit higher, 9%, but in Sweden cash transactions are falling by the wayside. You can't use cash for buses there. A growing number of businesses are going entirely cashless. In fact, only 3% of all purchases in Sweden are transacted in cash. And some people think that 3% is too much.

Now, there are things you give up when you go cashless, and privacy is only one of them. Because you also give up a piece of every transaction to the facilitating financial institution, a state-approved financial institution that is going to take a cut one way or another of every purchase that it processes. And that cut will be paid by you.

In the United States, the government has implemented increasingly punitive and burdensome measures for those who use cash. Banks, for example, are required to file reports on the use of cash in certain circumstances, including suspicious persons reports for some cash activities. In fact, if you seem to be trying to transact in cash below the reporting threshold, that alone can trigger a suspicious persons report on you. Like a lot of the states' heavy-handed measures, this was all targeted at getting those drug dealers.

As earlier pointed out, governments has used all sorts of "noble" excuses like money laundering, tax evasion, the war on drugs and etc… to justify their confiscatory actions which in reality represents no more than financial repression.

And as governments tighten the noose on the public, people will intuitively look for ingenious alternatives to outflank such oppressive policies.

In the US, the liquid detergent Tide appears to have emerged even as an alternative to cash.

Writes Professor Joseph Salerno at the Mises Institute.

As has been widely reported recently, an unlikely crime wave has rapidly spread throughout the United States and has taken local law-enforcement officials by surprise. The theft of Tide liquid laundry detergent is pandemic throughout cities in the United States. One individual alone stole $25,000 worth of Tide detergent during a 15-month crime spree, and large retailers are taking special security measures to protect their inventories of Tide. For example, CVS is locking down Tide alongside commonly stolen items like flu medications. Liquid Tide retails for $10–$20 per bottle and sells on the black market for $5–$10. Individual bottles of Tide bear no serial numbers, making them impossible to track. So some enterprising thieves operate as arbitrageurs buying at the black-market price and reselling to the stores, presumably at the wholesale price. Even more puzzling is the fact that no other brand of detergent has been targeted.

What gives here? This is just another confirmation of Menger's insight that the market responds to the absence of sound money by monetizing highly salable commodities. It is clear that Tide has emerged as a subsidiary local currency for black-market, especially drug, transactions — but for legal transactions in low-income areas as well. Indeed police report that Tide is being exchanged for heroin and methamphetamine and that drug dealers possess inventories of the commodity that they are also willing to sell.

As governments stifle people’s social and commercial activities through tyrannical laws, expect the use of more cash, local currencies or commodities (such as Tide) as alternative medium of exchanges, as the informal or shadow economies grow.

Most importantly, real assets will become more valuable and may become an integral part of money, as sustained policies of inflationism, as Voltaire once said, will bring fiat money back to its intrinsic value—zero.

Money which emerges from the markets will be emblematic of freedom.

Paper Money’s Usefulness

In Zimbabwe, the former Zimbabwe dollar was used as toilet paper or for mural décor.

Hungary’s Central Bank discovers a new use.

From the Telegraph (hat tip Professor Robert Murphy)

Hungary's central bank is burning old monetary notes to help the needy in Europe's deadly cold snap.

The bank is pulping wads of old notes into briquettes to help heat humanitarian organisations.

"It's a very useful charitable act, a vital aid for our foundation because we can save part of our heating costs," said Krisztina Haraszti, the head of a centre for autistic children in the impoverished northeastern town of Miskolc.

It helped the centre, which also provides aid to autistic adults, save between 50,000 and 60,000 forints (£200) a month, which is a "considerable sum in this time of crisis," she told AFP.

Since the briquettes have a high calorific value, "one only needs to add a few bits of wood and the rooms are really warm," said Haraszti.

As Voltaire once said "Paper money returns to its intrinsic value—zero."

Ron Paul: Europe’s Bailout Threatens the US Dollar

Congressman Ron Paul shows us why paper money is about to meet its cataclysmic destiny: Voltaire’s curse. (bold highlights mine)

The global economic situation is becoming more dire every day. Approximately half of all US banks have significant exposure to the debt crisis in Europe. Much more dangerous for the US taxpayer is the dollar's status as reserve currency for the world, and the US Federal Reserve's status as the lender of last resort. As we've learned in recent disclosures, this has not only benefitted companies like AIG, the auto industry and various US banks, but multiple foreign central banks as they have run into trouble. Nothing has been solved, however, by offering up the productivity of Americans as a sacrificial lamb. Greece is set to be the first domino to fall in the string of European economies at risk. Rather than learning from Greece's terrible example of an over-consuming public sector and drowning private sector, what is more likely from our politicians is an eventual bailout of European investors.

The US has a relatively small exposure to overwhelmed Greek banks, but much larger economies in Europe are set to follow and that will have serious implications for US banks. Greece is technically small enough to bail out. Italy is not. Germany is not. France is not. It is estimated that US banks have over a trillion dollars tied up in at-risk German and French banks. Because the urge to paper over the debt with more credit is so strong, the collapse of the Euro is imminent. Will the Fed be held responsible if the Euro brings the US dollar down with it?

The most disingenuous aspect of the narrative about the European sovereign debt crisis is that entire economies will collapse if more resources are not bilked from productive people around the world. This is untrue. Tough times are coming for the banks, to be sure, but free people always find a way back to prosperity if the politicians leave them alone. Communities within Greece are coming together and forming barter systems because they know the Euro is becoming unstable. Greeks are learning how to engage in commerce with each other, without the use of fiat currency controlled by central banks. In other words, they are rediscovering what money really is, and they are trading with each other in ways that cannot be controlled, manipulated, squandered, inflated away and generally ruined by corrupt bankers and the politicians that enable them. Farmers will still grow food, mechanics will still fix cars, people will still make things and exchange them with each other. No banker, no politician can stop that by destroying one medium of exchange. People will find or create another medium of exchange.

Unfortunately when politicians try to monopolize currency with legal tender laws, the people find it harder and harder to survive the inflation and taxation to which they are subjected. Bankers should take their dreaded haircut rather than making innocent people pay for their mistakes. The losses should be limited and liquidated, rather than perpetuated and rewarded. This is the only way we can recover.

Government debt is often considered rock solid because it is backed by a government's ability to forcibly extract interest payments out of the public. The public is increasingly unwilling to be bilked to make bankers whole. The riots and the violence in Greece should tell us something about the sustainability of this system.

If we continue to bail out banks and bankers so they can continue to lose money, if we cavalierly put this burden on the taxpayer, it is all too predictable what will happen here.

Evidence where Greece has been seguing into a barter society (real news reporter)

As the Greek economy succumbs to the debt crisis and individual Greeks are made poorer each day through austerity measures and job cuts, many have begun resorting to traditional bartering as a way to make ends meet and at the same time increase their involvement with neighbors and their general community…

As we’ve suggested on previous occasions, when a country goes through a monetary crisis, depression or recession, traditional methods of income disappear, sometimes overnight. As a result, those who are aware that the paradigm has or is shifting and are willing to accept their new reality will prosper.

Greece, referred to by many as the canary in the coal mine of the ever-worsening global economic crisis, is a perfect example of how communities will respond during monetary, fiscal and political chaos. Use their example to your benefit, because similar circumstances will take place in the U.S. and other industrialized Western nations in due time.

Read New York Times’ coverage of the emerging Greek barter economy here

As one would note in the above table from Danske Bank, Greece’s welfare state and heavy regulatory regime has resulted to the stifling of entrepreneurship and the overdependence of bank-financed government which has resulted to this crisis. Greece ranks at the bottom of ease of doing business list.

The new reality of Greece's collapsing welfare state has been changing this dynamic, as people shift activities towards trade in the informal or underground economy.

Yet this serves as proof that inflationism (to save the bankers and the political class) isn’t the solution. Neither is mainstream's favorite proposed panacea: political or fiscal union. The answer lies in unleashing economic freedom.

Why Capital Standard Regulations Will Fail

Global regulators have been arguing over the kind of regulations required for crisis prevention.

From Bloomberg,

Capital standards designed to fortify the global financial system are eroding as European officials, beset by a debt crisis, rewrite the regulations and U.S. rulemaking stalls.

The 27 member-states of the Basel Committee on Banking Supervision fought over the new regime, known as Basel III, for more than a year before agreeing in December to require banks to bolster capital and reduce reliance on borrowing. Now, as they put the standards into effect in their own countries, European Union lawmakers are revising definitions of capital, while the U.S. is struggling to reconcile the Basel mandates with financial reforms imposed by the Dodd-Frank Act.

“The game on the ground has changed in Europe and the U.S.,” said V. Gerard Comizio, a former Treasury Department lawyer who is now a senior partner at Paul Hastings Janofsky & Walker LLP in Washington. “The realists in Europe realized that their banks cannot raise the capital they’d need to comply. U.S. banks have reversed course and are more assertively fighting against it. The future of Basel III looks less certain now than it did when it was agreed to.”

The Basel committee revised its capital standards and outlined new rules on liquidity and leverage after the 2008 crisis exposed the vulnerability of the banking system. Credit markets froze following the collapse of Lehman Brothers Holdings Inc., sending the world economy into its first recession since World War II. Basel III was meant to create “a much stronger banking and financial system that is much more resilient to financial crises,” said Mario Draghi, who will take over as president of the European Central Bank in November.

Not Binding

Basel standards aren’t binding, so each country needs to write its own rules putting the agreed-upon principles into effect. The European Commission proposed regulations to parliament last month that would translate Basel III into law. A majority of EU governments also must endorse them. U.S. regulators led by the Federal Reserve have to come up with their own version, though they don’t need legislative approval.

The proposed EU rules, submitted by financial services commissioner Michel Barnier, omitted a ratio designed to improve banks’ cash positions, deferred decision on a rule to limit borrowing, revised capital definitions and extended some compliance dates. In the U.S., regulators are stymied because the 2010 Dodd-Frank Act bars the use in banking rules of credit ratings, which Basel III relies on to determine risk.

First, regulators have been squabbling over proposed elixirs, when in reality they are arguing about treatments to the symptom rather than the disease itself.

All these web of proposed regulations, on top of existing maze, won’t stop the banking financed boom bust cycle. This is because the current central banking based monetary system has been engineered for bubbles.

As the great Murray N. Rothbard wrote

for it is the establishment of central banking that makes long-term bank credit expansion possible, since the expansion of Central Bank notes provides added cash reserves for the entire banking system and permits all the commercial banks to expand their credit together. Central banking works like a cozy compulsory bank cartel to expand the banks' liabilities; and the banks are now able to expand on a larger base of cash in the form of central bank notes as well as gold.

Two, regulators think that the action of bankers can be restrained by virtue of fiat. They are delusional. They forget that as humans, regulator-banker relationship will be subject to various conflict of interests relationships such as the agency problems, time consistency dilemma, regulatory arbitrage and regulatory capture aspects.

In reality, more politicization of the banking-central banking amplifies systemic fragility.

Yet amidst the publicized noble intentions, we can’t discount that the implicit desire by regulators for these laws have been to expand control over the marketplace and to protect the interests of certain groups (regulatory favored groups).

Three, as shown above opposing interests leads to conflicting design of regulations.

In a world of complexity, centralization is bound for failure.

Let me add that while many see capital adequacy laws as one way of restraining bubbles, such perspective do not account for the unseen or unintended consequences.

Expanding capital adequacy regulations or laws can have lethal effects on the economy: they destroy money.

As Professor Steve Hanke explains, (bold emphasis mine)

The oracles have erupted in cheers at the increased capital-asset ratios. They assert that more capital has made the banks stronger and safer. While at first glance that might strike one as a reasonable conclusion, it is not the end of the story.

For a bank, its assets (cash, loans and securities) must equal its liabilities (capital, bonds and liabilities which the bank owes to its shareholders and customers). In most countries, the bulk of a bank’s liabilities (roughly 90%) are deposits. Since deposits can be used to make payments, they are “money.” Accordingly, most bank liabilities are money.

To increase their capital-asset ratios, banks can either boost capital or shrink assets. If banks shrink their assets, their deposit liabilities will decline. In consequence, money balances will be destroyed. So, paradoxically, the drive to deleverage banks and to shrink their balance sheets, in the name of making banks safer, destroys money balances. This, in turn, dents company liquidity and asset prices. It also reduces spending relative to where it would have been without higher capital-asset ratios.

The other way to increase a bank’s capital-asset ratio is by raising new capital. This, too, destroys money. When an investor purchases newly-issued bank equity, the investor exchanges funds from a bank deposit for new shares. This reduces deposit liabilities in the banking system and wipes out money.

By pushing banks to increase their capital-asset ratios to allegedly make banks stronger, the oracles have made their economies (and perhaps their banks) weaker.

Prof. Tim Congdon convincingly demonstrates in Central Banking in a Free Society that the ratcheting up of banks’ capital-asset ratios ratchets down the growth in broad measures of the money supply. And, since money dominates, it follows that economic growth will take a hit, if banks are forced to increase their capital-asset ratios.

Professor Hanke goes to show how these regulations have impacted the Eurozone which has resulted to declining money supplies that has led to the recent market turbulence. Read the rest here

To add, adherence to math or algorithm based models has been one of the principal weakness of such regulations, writes Philip Maymin, (bold emphasis mine)

One might think that the ideal regulations would be those that find the right numbers for these portfolios, not too small and not too large—the Goldilocks of risk.

Surprisingly enough, it is not possible. It turns out that no algorithm for calculating the required risk capital for given portfolios results in lower systemic risk.

In Maymin and Maymin (2010), we prove why this is so, both mathematically and empirically. First, the math. Imagine that there are 1,000 securities whose returns are each independently distributed according to the standard bell curve of a normal distribution. Simulate five years of monthly returns for each security, and then calculate the volatility that each one actually realized. Because there are only sixty data points for each security, some securities will appear to have a little higher volatility than they truly do, and some will appear to have a little less. Out of the one thousand securities, how many would you guess exhibit less than 80 percent of their true volatility?

The answer is ten, and we show this with a formula in the paper. If we make the situation more realistic by relaxing the assumption about normality, the problem is exacerbated, and the ten securities with the lowest realized volatilities would deviate even further from their true volatility.

We also show empirically that the securities with historically low volatility tended to have almost twice as much subsequent risk, while those with historically high volatility tended to have almost half as much subsequent risk. For both the riskiest and least risky securities, therefore, historical risk is a statistical illusion.

Here's where the problem of objective regulations comes in. To see it, consider the perspective of a bank deciding what to invest in. It can invest in any of the 1,000 securities, but if it invests in the special ten that exhibit less than 80 percent of their true volatility, it will have to put up one-fifth less capital than otherwise. At least to some extent, those ten securities will be more favored than the others. What's worse, every bank will favor the same ten securities because the objective regulations are the same for everyone.

If those securities continue to rise, then no problem will be apparent. But if they should fall, then, suddenly, all banks will need to liquidate the exact same positions at a time when those positions are falling anyway. This sets the stage for systemic failure. Consider sub-prime mortgages as an illustration. These assets appeared to be historically low-risk and were, therefore, regulatorily favored. Banks invested more in them than they perhaps should have. For a while, as real estate prices continued their ascent, no problems surfaced. But once the market turned, banks began experiencing more losses on their sub-prime mortgage holdings than their regulatorily-mandated risk calculations had planned for. Banks needed to raise capital quickly and began doing two things: selling the sub-prime mortgages, dropping the prices even lower; and selling other assets. Because the banks all acted nearly simultaneously, and all in the same direction, the impact on the markets was both broad and deep, and systemic collapse became a real threat.

Bottom line: whack-a-mole stop-gap regulations meant to preserve the current fragile, broken and unsustainable paper money system founded on the cartelized system of welfare government-central banking-politically privileged "Too big to fail" banks will ultimately fail.

Paper money will return to its intrinsic value-ZERO.

ECB Expands QE: Will Buy Italian and Spanish Bonds

So I am right, the ECB will expand her version of Quantitative Easing (QE) operations

From Bloomberg,

Stocks erased losses after Reuters said the European Central Bank is pressuring Italy to make further reforms in return for buying Italian and Spanish bonds. Italy’s government will announce plans to speed up state-asset sales, liberalize the labor market and introduce a balanced-budget amendment into the country’s constitution, Sky TG24 reported today, citing unidentified officials.

European leaders are hunting for solutions to the debt crisis, helping Italy and Spain gain a respite from the market turbulence after the resumption of the ECB bond-buying program.

The ECB would be willing to buy more bonds of deficit-hit countries once they take “concrete” steps to stabilize their finances, European Central Bank council member Luc Coene said.

Today’s paper money system founded on the welfare based tripartite banking-central bank-government architecture seems bound for disintegration.

Japan Intervenes to Curb Rising Yen

From one currency intervention to another, yesterday the Swiss Franc, today the Japanese Yen (the BoJ finally made good their earlier broadcasted plan)

From Bloomberg

Japan intervened in the foreign- exchange market to sell yen, Finance Minister Yoshihiko Noda told reporters today in Tokyo.

The nation acted alone, and was in touch with other countries, Noda said. The Bank of Japan separately said in a statement that it will end its policy meeting today, one day early. Noda said that he hopes the central bank will take appropriate action.

All these money being printed will flow somewhere.

Bottom line: Paper money, as Voltaire said, will eventually return to its intrinsic value: ZERO

Graphic: Dead Currencies

Below is a deck of pictures, courtesy of Casey Research, showing various currencies from different parts of the world that have expired or have been abandoned.

It is foolish or naïve, for some, to believe that political actors willed or deliberately engineered the demise of these currencies, or that these have been the responsibility of the private sector.

Instead, the spate of currency extinction overtime signifies as the outcome of a series of actions undertaken by political leaders which essentially collided with economic reality and failed.

In other words, hyperinflation or war, which had been mainly responsible for the demise of most of these currencies, represents as the unintended effects from the desire to preserve or expand of political power by incumbent political leaders during their era.

As the great Ludwig von Mises reminds us, (bold emphasis mine)

But then, finally, the masses wake up. They become suddenly aware of the fact that inflation is a deliberate policy and will go on endlessly. A breakdown occurs. The crack-up boom appears. Everybody is anxious to swap his money against "real" goods, no matter whether he needs them or not, no matter how much money he has to pay for them.

Within a very short time, within a few weeks or even days, the things which were used as money are no longer used as media of exchange. They become scrap paper. Nobody wants to give away anything against them.

It was this that happened with the Continental currency in America in 1781, with the French mandats territoriaux in 1796, and with the German Mark in 1923. It will happen again whenever the same conditions appear. If a thing has to be used as a medium of exchange, public opinion must not believe that the quantity of this thing will increase beyond all bounds. Inflation is a policy that cannot last forever.

Surging Gold Prices Reveals Strain In The US Dollar Standard-Paper Money System

Tocqueville Asset Management LP’s John Hathaway poignantly writes:

The world’s monetary system is in the process of melting down. We have entered the endgame for the dollar as the dominant reserve currency, but most investors and policy makers are unaware of the implications.

The only questions are how long the denouement of the dollar reserve system will last, and how much more damage will be inflicted by new rounds of quantitative easing or more radical monetary measures to prop up the system.

Whether prolonged or sudden, the transition to a stable monetary system will become possible only when the shortcomings of the status quo become unbearable. Such a transition is, by definition, nonlinear. So central-bank soothsaying based on the extrapolation of historical data and the repetition of conventional wisdom offers no guidance on what lies ahead.

History has shown that paper money system don’t last long.

The only exception is that of the medieval Chinese experience which reportedly lasted 600 years. But the historical account of this isn’t certain: wikipedia says it was during the Song Dynasty, the Buttonwood’s Blog at the Economist says it was during Emperor Tsung while Dollardaze.org’s Mike Hewitt says this was during the Tang dynasty.

Meanwhile Murray Rothbard argued that the first paper money in the US was issued by the colonial government of Massachusetts in 1690.

Nevertheless Dollardaze’s Mike Hewitt examined 775 world currencies which includes the 176 in circulation (as of 2009) and 599 not in circulation, and found that

-the “median age for all existing currencies in circulation is only 39 years” and

-that the extinction of currencies had primarily been through acts of war and hyperinflation.

Incidentally and ironically, the US dollar standard since 1971 is 39 years old and seems to feel the same strain from old political habits.

Yet the attraction of the paper money system is that it allows government to pursue its political agenda via unsustainable free lunch policies.

As Murray Rothbard wrote in Mystery of Banking,

The inventions of paper and printing gave enterprising governments, always looking for new sources of revenue, an “Open Sesame” to previously unimagined sources of wealth. The kings had long since granted to themselves the monopoly of minting coins in their kingdoms, calling such a monopoly crucial to their “sovereignty,” and then charging high seigniorage prices for coining gold or silver bullion. But this was piddling, and occasional debasements were not fast enough for the kings’ insatiable need for revenue. But if the kings could obtain a monopoly right to print paper tickets, and call them the equivalent of gold coins, then there was an unlimited potential for acquiring wealth. In short, if the king could become a legalized monopoly counterfeiter, and simply issue “gold coins” by printing paper tickets with the same names on them, the king could inflate the money supply
indefinitely and pay for his unlimited needs.

Eventually, as always, monetary debasement gets abused and suffers from rampant inflation or at worst hyperinflation. And this will require either massive reform or a new currency system.

The current US dollar standard paper money system seems to be in a no different path from its forbears, as free lunch and mercantilist policies are being subtly pursued through global currency debasement.

Some call this the “currency wars”. I call this cycle the Mises moment.

And rampaging gold prices priced in every major currency (US dollar, Euro, Yen, Pounds, Canadian Loonie, Aussie Dollar, Indian Rupee, South African Rand and Gold in G5 index) seems to be saying this for quite sometime—the endgame could be near.

Charts from Gold.org (as of October 25, 2010)

For the “gold is barbaric metal” camp, paper money will reign forever even when unsupported by history and economic laws for the simple reason of dogmatic belief over free lunch politics.

But as Professor Ludwig von Mises once wrote,

The return to gold does not depend on the fulfillment of some material condition. It is an ideological problem. It presupposes only one thing: the abandonment of the illusion that increasing the quantity of money creates prosperity.

Unfortunately, anything unsustainable won’t last. And Voltaire would be validated anew, paper money eventually returns to its intrinsic value—zero.

Malicious Propaganda- "Shocking News From The World BANK"

Many Filipinos simply adore political rubbish.

Since this is the 3rd time that I received this silly propaganda called the "Shocking News From The World BANK - MUST read by all Filipinos" might as well expose it for its fraud.

Yes, google search reveals of 7,900+ related post, which means many have thought this as pertinent to unfortunately publish it (how nonsense can be so pervasive).

The message goes:

The Financial Analyst of World Bank would like to inform each and everyone of you that the present currency exchange rate of US Dollar to Peso is actually $1 = P52. Your government is manipulating the exchange rate for some years now. It is very much improbable and impossible that the Philippine Peso is appreciating compare to Euro, British Pound, Rials, and any other foreign currency. Even your ASEAN neighboring countries are suffering from the Global Crisis. Singapore , a developed country is affected by depreciation of their currency what more of your country?

We admire you for your hard work but we also pity you for having such a very corrupt government that is taking advantage of your hard earned money.

The ARROYO ADMINISTRATION is blatantly milking each and every OFW's all over the world of billions of pesos for its own greedy, selfish ends. Investigations reveal that this milked money from OFWs will be spent to BRIBE not only PGMA's pet CROCODILES in CONGRESS but some in the SENATE as well for her to PERPETUATE IN POWER BEYOND 2010. The rest would be deposited to the family's SECRET ACCOUNT in Switzerland .

Another money-making scheme is the LOTTERY DRAWS. Filipinos should be aware that all LOTTO DRAWS are orchestrated, and big money goes to the two sons of the lady president. Recent example is the SUPER LOTTO 6/49 draw, where supposedly two individuals from Luzon won. Do you know WHO these individuals are? It's Mikey and Datu, who else? One might ask how can the draw be rigged when it is being televised in front of millions of viewers. The answer is simple. As you all know, all bet combinations are being entered into PCSO's main data base as it is on-line, therefore, it is easy to determine which combinations were NOT betted upon. If they want to raise big money, no winners will be declared until the JACKPOT reaches sky-high because they could dictate the outcome at will. When it's "HARVEST TIME", viola, there would be "winner or winners" and the process repeats all over again. One might ask how this is being done. One insider told our investigators that actually the "DRAWN BALLS", six balls to be exact, are the only set which could fit into the transparent tube which sucks the balls up. All others are slightly bigger than the diameter of the tube which could not be distinguished by the viewers, therefore, there's no way they could be drawn! You Filipinos are being skinned alive, fried in your own fat and lard by your own government.

Outside the toxicity of personality based politics (or the vile focus on the past administration), the disinformation campaign represents a menagerie of fallacies.

We will just deal with the allegation of the Peso and Lotto.

1. like all markets, currency pricing is subject to demand and supply

2. all governments have been "intervening" in the currency markets (directly or indirectly-e.g. fiscal policies). Remember supply or currency issuance is monopolized by governments.

3. on intervention: currencies are being manipulated to "depreciate" and NOT to appreciate.

Around the world, mainstream thinking and politicians abhor 'strong' currencies. The main reasons are that weak currencies reflect on the continued financing of political activities, unsupported by the laws of economics (inflationism), by the political leaders.

Second, but of lesser importance is "export competitiveness"-the mistaken notion that the only way to grow an economy is by exports. We call this "mercantilism".

4. By appreciation, you'll have to unduly restrict supply of money in the markets. And this would create artificial mayhem or what is known as deflation (confiscatory deflation or government confiscating private property to collapse money supply). By doing so, such translates to a deliberate restriction in government expenditures, which ironically, would only cause an uproar among politicians and their cohorts.

Hence what is improbable and impossible is not for the Peso to appreciate, instead it is for politicians to refrain from inordinate spending!

5. Meanwhile, a currency is depreciated by means of printing money or increasing government financial liabilities relative to goods and services.

6. Peso appreciation is largely a global phenomenon-as the US dollar, the world's currency standard, is being debased- from quantitative easing, massive bailouts and deficit spending.

7. Since currencies are valued in pairs, or in terms of the other currencies, the strengthening of the Peso vis-a-vis the US dollar, suggest that the US government is manipulating their currency more than the Peso, by engaging in more printing money (inflationism).

8. For the paper money system, as history would show, is a race to oblivion. And we go by what I would call the Voltaire rule: Paper money eventually returns to its intrinsic value-ZERO.

9. Lotto has little (or insignificant) relevance to the strengthening of the Peso. Pagcor earns about $29 million a year a smidgen compared to the Philippine economy is $324 billion (PPP) or $160 billion (official exchange rate) according to the CIA.

From Pagcor's annual report

Therefore, Pagcor is a "state" business, whose income is derived from monopolistic revenues of gambling and gambling related activities less liabilities due to the winners (minus other related charges) --regardless of the personality/ies involved.

If there has been any shenanigans in the operations they are too minute to influence the Peso's activities.

10. Obviously, such unintelligent highly disoriented message isn't from a qualified financial analyst or importantly from the World Bank.

Beware of misleading mendacious politically colored missives like this.