WO1995019614A2 - Central bank's issue of new or created money to fund federal budget deficits, programs and projects using engineering judgment - Google Patents

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TITLE OF INVENTION: Central Bank's issue of new or created money to fund federal budget deficits, programs and projects using engineering judgment

2. MONEY IS NOT CREATED WHEN IT CHANGES HANDS

The Central Banks and commercial banks hold the view that money is created as it changes hands in buy-sell transactions; this is termed ^■velocity of money'. Suppose I pick a 10$ bill, identify with my PE (Professional Engineer) stamp and let it circulate or change hands several times in a specified period. First I go to the supermarket and buy 5 Polaner fruit-spread bottles. The bill next goes to the 'jam & jelley' distributor who passes it on to the business that makes fruit preservatives. The bill keeps moving to the fruit grower, to the fruit picker and to the grocery where he buys bread, cheese and milk. The grocery buys its stocks of foods with the same bill. In this chain of 'buy-sell' transactions only one 10$ bill and that originated from me moved across. I have lost my bill as soon as I acguired 5 Polaner fruit bottles. I donot have that money with me anymore. Similarly all buyers spent their 10$ to get the merchandise or services they wanted. I donot ever believe that money has been created in this chain of buy-sell events. I earned the 10$ long ago when I had my job; by spending it I am depleted of my reserve money and who pays for my living (maintenance) expenses ?

The Central Bank is expanding 'money-in-circulation' every year. It is not the replacement money when soiled and torn bills are destroyed. Central Bank may be using its earned money to expand money in circula¬ tion. Some central banks may be issuing new money to the extent 'money-in-circulation' is expanded each year. In the prevailing economic scenario where every business establishment, big and small, kept on increasing prices of consumable items, capital goods, manu¬ factured tools and eguipment, wages and salaries of skilled and semi¬ skilled (workers and employees) it is stupidity to think in terms of keeping the monetary base constant because each nation contains a private sector that is far more enormous than the government sector. As honorary President of the Central Bank I would issue "NEW MONEY" to those who have been deprived of their regular earnings. When they spend this new money for their living, it goes into circulation as mentioned in my 10$ example which if increased to 20,000$, my annual expenses, would help in selling goods and merchandise, growing more foods, more dairy products, more household items, etc.

The velocity of money increases in a over-active economy; when inven¬ tories are full the velocity slows down. If I fill up my refrigerator with foods purchased at economical prices, I donot go to the super¬ market for a week. The velocity of money is ZERO as far as I am con¬ cerned. Each nation's central bank must be run as carefully as I maintain my refrigerator contents. If foods are kept for excessively long periods of time in the refrigerator they are spoiled. One must mend his/her buying habits to correct this situation. It is so with goods and articles stored at home; if you run out of space, either you bought unnecessary items or you are not giving away 'used stuff' . Let me tell all managers of central banks that money must be created in high and very high denominations and all methods must be employed to circulate it into the mainstream economy. This includes free giveaways of cars, furniture, appliances, clothing, shoes, TV sets, bicycles, scooters, lamps, type-writers, kitchen appliances, pillows, bedsheets, bedding rolls, pyjamas, brief-cases, coffee-makers, watches, calculators, books, etc.

It is too risky to health if canned foods are not sold guickly; canned pineapple must be sold when it is fresh. The date of production must be clearly imprinted on the can and shelf life must be conservative. All foods smell 'foul' even if they are vacuum packed if they are not sold within a few weeks. Thus I am propagating free food giveaways at nation's supermarkets; even if prices are slashed excess stocks are not cleared.

I will be amazed if any of the central banks are in a debt situation to maintain a semblance of austerity with regard to 'money supply'. The relationship between Treasury and Central Bank must be clearly understood with flexibility as a paramount consideration in nation's interest. The Central Bank's name must be known to all citizens. It is an autonomous body with powers to act independently of the legisla¬ tures. It must be recognized as the foremost institution to run nation's economy by fresh supplies of money, as aged structures are levelled and aged people disappear.

3. CENTRAL BANK IS THE ONLY BANK AUTHORIZED TO ISSUE (PAPER) MONEY

Central Bank is enpowered to create money whether it be currency in high denominations in limited amounts or checks in unlimited numbers, as the situation warrants. Central Bank is placed in a highly admira¬ ble position in so far as the nation's finances are to be improved. It must always watch for the deficiencies that are plaguing the unfortunate population that have lost jobs by the introduction of automation and adoptation of millions of computers in factories and service industries. Robots are performing many tasks on assembly lines and employees are terminated as 'unwanted'. The power of robotics, automation and computerization in each manufacturing industry must be understood as high-precision and high-production inventions to relieve man from 'routine drudgery' day-in and day-out. People without jobs need money for living expenses and no central bank allows its citizens to starve for money that is printed or hand-written on a check. Keynesian theory on federal borrowings to pay for federal deficit expenditures has no foundation in modern times when GNPs of nations have ballooned to 100s of billions dollars and trillions of dollars either by increased productions or by increased populations or both and increased prices of goods and services. Old economic theories have been adopted for too long without basically understanding the grave dangers to domestic peace and security. The 'so-called' fiscal discipline is making every federal government bankrupt and unresponsive to people's necessities that are basic to daily living. Look at the slums, ghettos, dilapidated buildings in numerous cities in Europe, Asia and Canada. How do we set right this ugly spectacle that is spreading so fast in neglected cross sections of every nation's populace? Federal government, thru the nation's central bank, has the unigue privilege to fund its programs by created money. It must make use of its unigue position to convince the central bank (of which the ENGINEER is supreme) of its obligations on a priority basis. Bankers must bow their heads to Engineers of which Industrial Engineers are uppermost in my mind to balance a nation's monetary resources with its manpower, both employed and idled.

In the long run every one has now come to believe that federal debt has soared to monstrous proportions and there is no way out! It is wreckless to indulge in 'bonds offerings' and place the federal government in a precarious position with regard to 'money availability' in subseguent years, as debt servicing assumes a burden as big as defence expendi¬ tures. "PUBLIC WORKS" programs have always a place in nation's history and they are never to be 'written-off' as unimportant in keeping the economy with full employment. US Congress has championed FULL EMPLOYMENT for several decades now and let it be so in the 20 PCT countries selected here. In the worst depression years of 1930s FDR championed public works projects rather than leaving the fate of unemployed to private enterprises.

Central banks must take initiatives to correct situations of poverty and joblessness. The monetary policies are as important as fiscal poli¬ cies. I am developing monetary policies that are commensurate to the needs of every nation that is enjoying 'PRICE and WAGE STABILITY', meaning thereby inflation is under control, productions are on the up¬ swing, population is increasing slowly, expor -import trade volume is increasing and the greed for 'guick-money' has subsided.

The difference between indebtedness, deep debt and permanent debt must be made clear to the central banks officials who kept watching with indifference as public debts at federal, states and local levels increased in the past 20 years. 4. MV MOHAN'S (APPLICANT) INVENTION ON MONEY CREATION IN VERY LARGE AMOUNTS

Each nation's central bank must be authorized to issue new money when¬ ever found necessary, by the Constitution. It may be that several central banks in Europe, Canada, Japan, Australia are allowed this privilege even now. At times the constitutional provision could be in the form of an advisory, leaving the option wide open to the legislative and administrative branches of government to demand funds from the central bank.

The new money that will be originated by central banks could also be called 'created money' or 'Government source money'. This new money should not be confused with 'created money' in the private sector and banking institutions. We have to keep post-depression and post-WW II economics behind us and chart a new monetary system where "we are the MASTERS and money is our obedient servant". If GOD exists in the form of a person, he would damn those bankers and economists who made money the master and people its slaves!

Government's source money will be in Billions as often as each year; in C$, in Pounds sterling, in Deutsche Marks, in French Francs, Australian $, NZ $, Danish Kroner, Swedish Krona, Swiss Francs, Dutch Guilder, Austrian Schillings, Chinese Yuan;

Government's source money will be in Trillions; in Japanese yen, in Italian lire, Spanish peseta, South Korean won etc.;

Government's source money will be in 100s of millions in Irish Pounds, Finnish Markkas, Belgium Francs, Norwegian Kroner as often as each year.

The French budgets have been surplus in the recent past but new federal money must flow to eradicate poverty and create job opportunities to 13.5% French unemployed. Belgium's 473,000 unemployed must find work, at least 6 to 9 months in a year. New work programs and public/private projects must be designed with optimum investment to employ the idled workforce. As to how a nation's Central Bank proceeds to create NEW MONEY, let us consider USA's example which has not been placed into reality as yet:

USA's Federal Reserve System (FRS) was established 23.12.1913. It so happened I initiated my 'disclosure documents' on this INVENTION with USPTO and WIPO on 23.12.1993. The FRS in Washington and its 12 regional branches have been more active in Open Market Operations and regulating the money supply by varying the discount rates. FRS issued new money (as I believe) only to the extent it was needed for circulation as businesses multiplied, population grew and economy expanded. It is always known Central Bank is the banker's bank. If FRS is not enpowered by US Constitutional Amendments or Public Laws to create new money to pay for budget deficit expenditures until now, it must aggressively seek such powers from US Congress. There is no time to waste on this score and every central bank in PCT countries I have chosen must act expeditiously, as soon as this patent is issued to me. New money shall flow after meeting the royalty obligations to the PATENTEE which will be negotiated on a percent basis for the life of the license agreement.

FRS will issue new money in checks of several denominations from 1 million to 500 million dollars.

1 million $ 50 million $

2 million $ 100 million $ 5 million $ 200 million $

10 million $ 500 million $

20 million $

If $100 Billions new money, as voted by Congress, is appropriated to the federal departments/agencies as source money, FRS delivers:

200 checks each $500 million OR 1000 checks each $100 million OR a mix of checks varying in value from 1 million to 500 million dollars each. Any amount less than $1000 millions can be issued in one check by FRS to make the 'issuing process' accurate. Engineering judgment must support Congress authorizations on CREATED MONEY. Each nation's monetary unit's purchasing power reigns supreme in allocating government's source money to various programs, projects and expenditures. The short term and long term implications must be carefully evaluated.

It may be desirable to allow the Central Bank (and its Engineering Consultant) veto powers to limit the issue of new money if the Congress indulges in excessive spending towards an inappropriate program that is without merit and causes inflation in the region. Central Bank's creative endeavors should be directed towards enhancing nation's real assets (movable and immovable properties) instead of nuclear armaments and arsenals that are endangering the environments in which we are all living. It is suggested defense budgets be left to normal funding channels, namely revenues from taxation because too often the defense departments are demanding money on the 'jobs creation' plea. Russia is now facing the immense task of converting the former defence factories into civilian production units.

ALWAYS SUGGEST ALTERNATIVE EXPENDITURES THAT ARE MORE PRODUCTIVE, MORE EFFICIENT IN STRENGTHENING THE NATI0N"S MONETARY UNIT.

TO safeguard from excessive money supply in people's hands, the Treasury will continue to borrow (or collect) their excess money and return it over 3 years, 5 years, 7 years, 10 years with interest and 100% federal guarantees. The long term bonds are never ruled out as they have their own unigue way of safeguarding people's interests and aspirations. Many people including intellectuals would live to see their 30-years bond mature to a hefty sum of one million dollars eguivalent in national currencies. Treasury bonds must be made more and more attractive with a view 'to serve the people rather than abandon them' in a short while to the mercy of commercial banks and thrift institutions. We cannot believe that a certain central bank allowed 70% of the federal debt to fall due in 5 years. A rescheduling may be a possibility but the elements of risk must be minimized. The 'unobvious nature of money creation in high volumes' has been explained here without jeopardizing its sacred purchasing power and prestige.

5. FEDERAL BUDGET DEFICITS IN INDUSTRIALIZED NATIONS

1. UK 1992 28 Bi Pounds sterling

93 35

94 50 (estimated)

2. GERMANY 1991 53 Bi DM

92 46

3. FRANCE 1990 104 Bi francs

91 + 323

92 + 364

4. ITALY 1987 159 Tri lire

88 161

89 118

5. SPAIN 1992 2.74 Tri p

6. CANADA 1989-90 29 Bi C$

90-91 30.6

91-92 31.4

7. AUSTRALIA 1990-91 + 2 Bi $A

91-92 4.5

8. NEW ZEALAND 1991 + 1.4 Bi NZ$

92 2.5

+ indicates surplus SMALL EUROPEAN NATIONS

1. AUSTRIA 1989 63 Bi Schillings

90 63

91 64

2. BELGIUM 1989 130 Mi BFs

90 34

91 + 35

3. DENMARK 1990 23 Bi Kroner

91 38

92 28

93 34

4. FINLAND 1990 2.3 Bi Markka

91 4.5

92 & 93 shown balanced

5. IRELAND 1991 300 Mi IR Pounds

92 400

6. NETHERLANDS 1989 24 Bi Guilder

90 23

91 17

7. NORWAY 1989 + 19 Bi Kroner

90 + 23

91 + 13

8. SWEDEN 1990- -91 34 Bi Krona

91- ■92 68

92- ■93 100

9. SWITZERLAND 1990 + 1.1 Bi SF.

91 2

92 1.3 ASIAN COUNTRIES

1. JAPAN FY ending 3-31 1--9933 7.28 Tri yen

2. SOUTH KOREA 1992 840 Bi won

93 1300

3. CHINA 1989 9 Bi Yuan

90 14 Bi Yuan

Reference for the above information on federal budget deficits: Statesman Yearbook 1993-94 S. earlier editions.

Budget deficits in several nations have been most glaring, as could be seen from the following tabulation " Deficit as a % of Receipts " on next pages. Obviously they are following the US course where the situation has been on the decline for the past 10 years. In several nations the federal debt could be mounting to unacceptable levels, thereby inferring the interest payments are taking a big bite of the revenues. Federal public debt of 20 PCT countries has been recorded in the ensuing pages; so also 12 years cumulative increases in consumer prices and the magnitude of unemployed workforce in recent times.

All this information is pertinent to the descriptive portion of this patent application. The prior art or existing art is federal government borrowings by issuing 'Treasury securities' short and long term. Central Bank's new or created money does not always pay for the entire deficit in a fiscal year. There could be several guidelines for issue of new money. In such nations as Greece, Portugal and Turkey the tax rate has been increased enormously and revenue collections increased 7 times in 10 years. In Turkey which is not a member of EC, revenues increased 82 times from 1980-90. This may or may not be true but it is too dangerous to think of NEW MONEY when the economy is so volatile with regard to prices, salaries and taxes. Please see the tabulation " Percent increase in total tax revenues 1980-90 in national currency " of 19 nations in the following pages. This tabulation offers a guideline as to how much created money could be made available to pay for the deficits; but an engineering analysis and judgment is crucial to make the system work without long-term ill-effects.

Balancing the budget by increasing taxation is not always desirable. Taxes on low-income families are not to be increased. If possible low income groups are to be left free of taxes. There is no moral ground to tax the poor as the Government itself is a rich source of "Unlimited Funds" as being revealed in this dissertation on how best to make use of paper currency and under what circumstances fresh supplies can be injected to meet the need of unemployed, underemployed and ignored families and households who could be in millions.

The maximum federal tax bracket could not be more than 40% as state and local taxes, social security, medicare and property taxes add up to a big burden that cannot be tolerated. All families must be allowed to keep sufficient money in savings for emergency expenses and unforeseen circumstances. If people are allowed to save, millions of personal bankruptcies could be avoided in West Europe.

6. DEFICITS AS PERCENT OF RECEIPTS

1. Italy 34.1% 1989

2. Sweden 26.2 1992-93

3. Canada 25.3 1991-92

4. Spain 21.6 1992

5. UK 16.1 1993

6. Germany 12.1 1992

7. Austria 11.9 1991

8. Japan 11.3 1992

9. Denmark 11.1 1993

10. Netherlands 9.9 1991

11. New Zealand 9.5 1992

12. Australia 4.6 1991-92

13. Ireland 4.3 1992

14. China 4.2 1990

15. Switzerland 3.6 1992

16. South Korea 3.5 1993

USA 290/1092 = 26. 6% F FYY 1992 (1991-92)

Central Bank must let new money flow in all above situations if the expenditures are justified and inescapable, provided inflation is under control.

Canada has been showing high deficit-to-receipts ratio for a long time.

1983-84 50.4% 1984-85 54.02% 1985-86 44.79% 19886-87 35.66%

Canada built-up a massive federal debt of C$ 388.6 Billions as on 3-31-91 (Statesman Yearbook). This includes a foreign debt ofmore than C$240 Billions. Many economists are computing federal debt as a percent of GDP. Such computations donot reveal the grave danger to federal Treasury's capability to pay back on government bonds. Federal guarantees must always be implied in repayments at maturity date. An early recall of either short term or long term bonds for repayment is not in the best interests of a nation's reputation as the leading financial power.

7. FEDERAL PUBLIC DEBT OF PCT COUNTRIES

1. UK 3-88 203 Bi Pounds i

Interest on debt 1993-94 19.4 Bi Pounds :

2.GERMANY (WEST) 1990 504 Bi DM

3. FRANCE 1988 988.8 Bi Francs

Interest on debt 1992 167 Bi Francs

4. ITALY 12-31-91 1313.5 Tri lire

5. SPAIN 1989 16.8 Tri peseta

6. CANADA 3-31-91 388.6 Bi C$

7. AUSTRALIA Interest on debt 1991-92 6.3 Bi $A

8. NEW ZEALAND 6-30-92 48 Bi NZ$ Interest on debt 1992 4.2 Bi NZ$ (estimated) SMALL EUROPEAN NATIONS

1. AUSTRIA 1988 748 Bi Sch

2. BELGIUM 8-31-92 5 Bi BFs

3. DENMARK 3-31-91 547 Bi Kr

4. FINLAND 92 Bi Mks

5. IRELAND 12-31-91 25.4 Bi IR Poui

6. NETHERLANDS 12-31-91 339 Bi Guilder

7. NORWAY 1988 23.3 Bi in US$

8. SWEDEN 12-31-91 659 Bi Kr

9. SWITZERLAND 1987 27.6 Bi Sf

ASIAN COUNTRIES

1. JAPAN 3-1991 168 Tri yen

2. South Korea

Interest on debt 1992 600 Bi won

3. CHINA

Interest on debt 1990 19 Bi Yuan

There is no publication that gives current data on federal public debt. Apparently Statesman Yearbook 1993-94 was not successful in obtaining latest figures on national debt. We will never know what these figures are and how each nation's federal debt is being calculated; but it must be known that each nation is bent upon increasing it, instead of attempting to erase it. 8. TWELVE YEARS CUMULATIVE INCREASE IN CONSUMER PRICES (1979-90)

1. Japan 1.365 times

2. Netherlands 1.412

3. Germany 1.423

4. Switzerland 1.504

5. Austria 1.557

6. Belgium 1.729

7. USA 2.00

8. Canada 2.139

9. Denmark 2.185

10. Finland , 2.303

11. Norway 2.425

12. France 2.451

13. Great Britain 2.526

14. Sweden 2.534

15. Australia 2.623

16. Ireland 2.806

17. Spain 3.251

18. Italy 3.521

19. New Zealand 3.676

Germany (1986), Netherlands δ, Japan (1987) registered decreases in prices. Prices must fall by increased supplies, increased housing and hotel accommodation. If prices go up, they donot remain that way; they must decline as we are charting a course for the next 30 years and if we are alive, for the next 100 years upto year 2100 A.D.

STABILITY IN PRICES IS MOST IMPORTANT FOR THE CENTRAL BANKS TO FUNNEL MORE FUNDS FOR MODERNIZATION, CONSTRUCTION AND FARMING. -15-

It is not out of place to record here that Scandinavia (5 countries including Iceland) could have a CENTRAL BANK to issue Scandinavian currency, in addition to the national currencies.

It is also recommended that Great Britain integrates with Spain, Portugal and Ireland into a monetary union with headguarters in Spain. EC's Central Bank will continue to function as usual with all 12 member countries and EFTA also.

Western Europe will have regional Central Banks as mentioned above in addition to EC's Central Bank.

(INTELLECTUAL PROPERTY OF MR MV MUKKAMALA, CHARLOTTE, NC USA 16.03.94)

9. UNEMPLOYED WORKFORCE IN PCT COUNTRIES

1. Belgium 473,000 1992

2. Finland 328,000 92

3. Netherlands 319,000 91

4. Denmark 315,000 92

5. Ireland 254,000 91

6. Austria 193,000 92

7. Sweden 122,000 91

8. Norway 116,000 91

9. Switzerland 39,000 91

1. France 2.993 millions 1-31* -93

2. Italy 2.7 millions 92

3. UK 2.678 millions 92

4. Germany 2.45 millions 91

5. Spain 2.36 millions 92 1. USA 8.426 millions 91

2. Canada 1.556 millions 92

1. Australia 933,000 92

2. New Zealand 195,000 91

1. Japan 1.36 millions 91

2. South Korea 436,000 91

China 75 millions 91

Retirement age in Japan is 60 and many are retiring before 60. Japan's unemployed may be lowest at 2.14%; Are the unemployed paid at 50% of their former wages until age 60?

It doesnot matter if France shows 13.5% unemployment if it compensates them at 50% of their former earnings. It is most difficult to reduce unemployment rate without reducing workhours per week of all employed population.

It is better we stop announcing the unemployment rates at 15.5% for Spain and 6.3% for Germany. The hardships of almost 2.5 millions unemployed in each country are to be recognized and if there is a

'secure plan' to take care of their living expenses as long as they donot find suitable jobs.China's 75 million unemployed may be lacking skills, but it is a formidable number to tackle. China must embrace

'universal friendship' with all nations to solve its critical unemployment problem. 10. WHAT IS THE PURCHASE POWER OF 5000 FFs, 1000 POUNDS STERLING AND 2000 DM BANK NOTES ?

These amounts are made available in single Central Bank notes and I as National Professional Engineer could procure them 'to feed 100 homeless people' for one day. Could you purchase 1000 lbs good guality bread or 500 gallons regular milk or 300 lbs regular cheese or 2000 lbs fresh vegetables and fruits?

The absolute value of a monetary unit with respect to its purchasing power is most important. Great Britain and Ireland have this unigue advantage. Italy, Spain, South Korea and Japan have very small monetary units and they must change to bigger monetary units based on my inventions in national currencies of advanced nations.

The population of France and Britain are about the same at 58 millions and Germany's population at 81 millions giving it more flexibility to bring in "NEW MONEY". Given these 3 nations are egually industrialized and diversified in production of goods and merchandise useful to man, woman and child the volume of NEW MONEY that can be created each year will be substantial and this helps in reducing indebtedness at national and individual levels. Germany could have enormous provision to supply 2000 DM bills or notes to its small businesses (entrepreneurs) free and loans without interest so that the products and services of these small firms are made available at acceptable prices. Germany has shown consistently low increases in consumer prices; the rise in wholesale prices could be half of retail prices. If Germany's factories are modern and highly automated and its fields and farms are highly productive, it is bound to be a prosperous nation in so far its population are considered by making minor/major adjustments in financial control and new financing as proposed here.

In 1980 Britain recorded 18% inflation and a series of high inflation figures are adversely affecting its POUND. It is impossible to erase the high prices already admitted into the British economy. It is hard work with respect to checking all production levels, modernizing factories and industries, importing items that promote competition in the retail market. If Britain does this, it will register negative inflation on a continuuing basis. In 1936 British Pound was egual to 5 US Dollars; in 1949 it was $3.70, in 1950 $2.80; now it is about $1.50 despite dollar's slide against Japanese yen. The British wheat farms may be highly productive, in terms of yield per hectare, but what is the price of bread in groceries? Britain's dairy farms may be having high-yielding cows, but what is the price of milk and cheese in supermarkets? Britain may have excellent trade relationships with numerous developing countries, but are its supermarkets filled with fresh produce at cheap prices? The integration of EC countries should help in containing inflation in these foods which are most essential to health. India is producing numerous varieties of legumes/dais which are better than beans and lentils sold in US supermarkets. It is time EC countries import these excellent foods from India for their unigue taste and protein content.

The above analysis and discussion may look elementary but its practical application is far too difficult in this age when desk-top computers and software are invading the newspapers and magazines. Introduction of high denomination bank notes for circulation in daily living may not be necessary.

11. INCREASES IN MINIMUM PAY OF THE FRENCH

On 01.07.1991 the minimum wage was 32.66 francs/hour = 5520/month. In one year it increased to 34.06/hour = 5756/month. The Socialist Government of President Mitterand allowed such high minimum wages, almost egual to 70,000 francs/year. In USA minimum wage is $4.25/hour and it is less at many places. It is obvious FRANC lost its purchasing power as a monetary unit of France. In peace-time economies no nation allows its monetary unit's purchasing power erode so fast! France's currency was so badly hurt, possibly during WW II that in 1949, one US$ was egual to 331 francs. Beginning 1960, the new FRANC was introduced at 1 NF = 100 old Fs. I had personally experienced the wort ^• of NFs in 1961 in Paris.

The guestion now asked: Is France's currency so diluted that a new franc egual to 10 OFs is imminent? France's public debt in 1988 was a staggering 989 Billions francs. In 1992 the budget expenditures included a sum of 167 Billions towards interest payments. The component of VAT (Value-added tax) in budget receipts was 41.7%. VAT collections were a staggering 709 Bi francs. The sales tax to the amount of 15 to 20% in European countries has the crippling effect of 'escalated prices' though they are helping in reducing deficits and in balancing the budgets. In the 50 states of USA the sales tax is usually at 4%. It is too dangerous to drive the purchasing power of national currency down to a low of 10 to 1. Nobody has demonetized at a ratio of 10 to 1 because it is not seemingly excessive considering the Latin countries that are dropping their monetary units from 1000 to 1. Every nation must attempt to strengthen its monetary unit in the home market, irrespective of its exchange rate with US $. Many European currencies are strong relative to US Dollar. It is high time Italy changes to a unit that is egual to 1000 lire.

Cumulative consumer price increase in 30 years cannot be more than 4 times. There is no reason why gasoline is so expensive in Europe. A high gas tax of $2.60 per gallon in Netherlands may be prohibitive as all prices are increased relative to prevailing gasoline prices. In USA gasoline tax in 1993 is computed at 33 per gallon. France's $2.41 gasoline tax is unacceptable; so also Italy's $2.37 per gallon. These are inflationary!

12. VALUE-ADDED TAXES & GASOLINE PRICES

In 1988 Britain rejected my offer to make it rich only if it employed me for an year or so. I applied for steel mill jobs (either engineering or operation) in Germany, France and Italy in view of my great expanse of knowledge in steel industry of India, USA and Japan. AS usual job opportunities were rare and they declined. Even in USA nobody could accommodate me in 1972; Only White Motor Corp of Cleveland, a large truck manufacturing operation offered me Industrial Engg job after transferring an existing employee to pilot operations. Let it not be understood that re-employment, even at age 37 would be easy in either advanced or developing countries. -?1-

Italy is almost at the bottom of 19 countries (See next pages) in regard to tax increases over a decade. Italy increased tax revenues 340% during 1980-90, while the best-managed nation Netherlands increased only 49.1%. In 10 years the population increase is not much but the workforce might have increased substantially. It is not known why Italy and Spain kept on increasing prices, wages and taxes though their monetary units are small. It is too risky to allow these countries to embark on a program of 'created money funding for budget deficits' unless extensive engineering studies are performed on the whole economy. The budget expenditures earmarked for created money utilization must be very carefully picked after detailed scrutiny of the budget documents. The difference between 2% inflation and 5% inflation in one year and a number of years successively could be enormous and this the national governments failed to recognize! Italy is too great a country with immense production capability; its scooters are excellent; its continuous casting capacity could be 75% of total steel production. Its wines production and olive oil supplies are too great to be set aside. Spain has shown remarkable improvement in 'foreign currencies holdings'.

VAT Gasoline price/liter

1. Denmark 29% 6.8 kr

2. Austria 20 9 to 10 sch

3. Netherlands 18.5 1.73 guilder

4. Great Britain 17.5 2 pounds/Gallon

5. France 13 S. 23% 5.7 fs

6. Norway 16.7 7 kr

7. Germany 14 1.5 dm

8. Spain 6 & 13% 81 ptas

9. Switzerland 6.2% 1 sf

USA 1 $ US gallon

(Info source: Fodor's 93 EUROPE)

Great Britain and NOrway developed North Sea petroleum reserves and they boosted their export earnings. Nature has not blessed European countries with crude oil deposits and all reguirements are imported by the continental countries. The prices of crude oil are likely to fall to $12/barrel when Irag is allowed to resume its production after UN sanctions are lifted. Under these circumstances it may be wise to withdraw a part of gasoline taxes to reduce consumer expenses on transportation. Germany has the capability to build high MPG automo¬ biles. Japanese auto factories in Europe could do the same as Europe's air cleanliness standards are as important as its auto manufacturing capacity. Nuclear power production in 12 nations selected has been spectacular with Sweden topping the list.

Per capita nuclear power production of 12 nations in 1988

kwh kwh

1. Sweden 7450 7. Germany 1910

2. France 4680 8. Japan 1370

3. Belgium 4100 9. Spain 1240

4. Finland 3760 10. UK 980

5. Switzerland 3260 11. South Korea 950

6. Canada 3020

USA 2160 kwh

Nuclear power generation in Europe played an important role in reducing fossil fuels useage including petroleum. Created money will be made available for construction of commercial power reactors. Surplus power always helps in railroad electrification, home heating with subsidized electricity.

Reverting to the value-added taxes which are very high in some countries the situation must be corrected. It may be the income taxes are low compared to USA. All kinds of merchandise must be sold; even without the taxes they are expensive. If goods and consumer items are too expen¬ sive people keep on using the same for long and longer periods. The recession and increasing unemployment in Europe are the result of high consumption taxes. -23-

13. PERCENT INCREASES IN TOTAL TAX REVENUES (1980-90) IN NATIONAL CURRENCIES

1. Netherlands 49.1%

2. W Germany (FRG) 61.5

3. Austria 81.6

4. Belgium 88.2

5. Switzerland 88.9

6. USA 106.5

7. Japan 117.7

8. Norway 128.1

9. Denmark 129

10. France 142.1

11. UK 146.6

12. Canada 147.3

13. Australia 190.9

14. Sweden 196.2

15. Ireland 200.3

16. Finland 214 i

17. New Zealand 259.1

18. Italy 338.8

19. Sϋain 370.1

Tax revenues increase as working people increase and when taxation is increased.

In top 6 countries, 100% deficit could be financed by created money. -24-

Created money financing drops to 90% of the deficit in countries 7,8,9; Created money financing drops to 80% of the deficit in countries 10,11,12; Created money financing drops to 70% of the deficit in countries 13,14,15,16;

Created money financing drops to 60% of the deficit in New Zealand; Created money financing drops to 50% of the deficit in Italy and Spain.

The performance of other EC countries has been dismal:

Greece 658.2%

Portugal 717.3%

Turkey 8287 % (not a member of EC)

ON 12-31-93 all barriers between EC nations have been withdrawn. Austria, Finland, Norway, Sweden and Switzerland applied for membership.

The tabulated data furnished by OECD, Paris shall be considered as most interesting as it refers to the national currencies, instead of 'converted US$' .

Both federal and local taxes are included in the computations.

More created money will be released in top 5 countries as they are showing enough restraint in taxation, in prices and salaries. 14. SWEDEN APPEARS TO BE A COUNTRY WITH EXCESSIVE TAXATION

Tax revenues* as % of GDP

1990

1. Sweden 56.9%

2. Denmark 48.6

3. Norway 46.3

4. Netherlands 45.2

5. Belgium 44.9

6. France 43.7

7. Austria 41.6

8. UK 36.7

USA 29.9%

* Federal + Local + Social Security Contributions

FRANCE'S INDIVIDUAL INCOME TAXES AS % OF TAX RECEIPTS LOWEST

1. France 11.8%

2. Sweden 37.9

USA 35.8

CREATED MONEY STRATEGY (VOLUME & APPLICATION) IN SCANDINAVIAN COUNTRIES WILL BE DIFFERENT. Created money absorption without disturbing the existing prices is too important and it is not easily revealed. 15. MV MOHAN (THE APPLICANT) DOES NOT HESITATE TO OPEN " VILLAGE CURRENCIES "

The village in which I grew in India (1935 to 1954) with a population of 5000 is eligible to run its own currency. Its Revenue Officer and Administrator assign work to those who are unemployed and pay them in local currency, which is affiliated to Krishna District currency. The benefits that accrue to village living can be increased by letting skilled people learn more about trades by hand and by machine as ulti¬ mately this determines 'how a nation of 1000s of villages progresses'. New huts and dwellings could be built instead of old thatched huts in congested areas. In general the housing looks better and streets are likely to improve. Thousands of villages have been electrified and street lighting and irrigation from wells are a normal sight.

Vegetables could be sold in village market and packed foods could be made for marketing across the country. Eg. Gud (brown sugar in solid slabs with enzymes intact from brown cane). Dairying will expand as more high-yielding buffalos are brought in. Two to three crops are grown each year in the same farm as tropical weather is a blessing by its warmth. Labor supply will be plentiful as payments are made in local currency. Village currency exchange helps in further expansion of foods and dairy production.

All towns and villages in West Europe with population 5000 and more are gualified to issue their individual currencies, affiliated to county/city currencies and central banks. This is not theatrics; it is a practical necessity when federal central banks are managed by officials who are dumbfounded at the enormous growth in money supply of big countries. Villages will not progress without money-creating authority and village folks should not attempt to go to cities in search of work. MV Mohan is advocating the village central banks to supply free labor to support food production, to build new homes, to build roads and canals, to build backyard wells, to build brick kilns, to grow palmyrah and tamirand groves. Carpenter shops must be opened to make portable nawar (about 2" wide thick tape) cots not seen in any of the western nations. Economic picture at village level must be envisioned. Taxation by state governments is not allowed as prices of electricity and fertilizers are already high.

In 1968 price of gasoline at Ranchi, India was Rs 1.10 per liter; now it is Rs 19.11 an increase of almost 18 times in 26 years! In USA prices go up only 4 times in 30 years. Gasoline price has gone up only 3 times in 33 years. It is outrageous the governments are resorting to taxation on most essential items in living.

16. CONTINUOUS CASTING OF STEEL IN ADVANCED COUNTRIES

Continuous casting is an efficient process in steel mill metallurgical processes as it eliminates huge capital expenditures for primary mills and the in-process metal losses are minimized. CC production as a % of total raw steel production is an indication how advanced a nation is in its industries. Central Bank's NEW MONEY will be made available to those who are contemplating a change to Continuous Casting from conventional ingot making and rolling in primary mills. The following tabulated information pertains to year 1984 but it is indicative as to how each nation is progressing in process technology and engineering design in very high production industries.

A 1984 Raw steel production, million tonnes

B 1984 Continuous Cast steel production, million tonnes

C Percent of CC Production

(See next page for tabulated data) B

1. Japan 105.6 94.1 89.1%

2. Germany (W+E) 47 32.2 68.5

3. Italy 24.1 17.6 73

4. France 19 12.7 66.8

5. UK 15.1 7.9 60.8

6. Canada 14.7 5.6 38.1

7. Spain 13.5 6.6 48.9

8. South Korea 13 7.9 60.8

9. Belgium 11.3 5.6 49.6

10. Australia 6.3 1.7 27

11. Netherlands 5.7 2.2 38.6

12. Austria 4.9 4.3 87.7

13. Sweden 4.7 3.7 78.7

14. Finland 2.65 2.5 94.4

15. Norway .88 .3 34.1

16. Switzerland .87

17. Denmark .503 .5

18. New Zealand .41

19. Ireland

China's raw steel production in 1988 was 58.1 million tonnes. USA produced 83.9 million tonnes in 1984; its CC production was 33.3 million tonnes and the ratio 39.7%. Japan did a spectacular job in changing over to CC by 1984. 17. ECONOMIC DATA USED HERE IS ILLUSTRATIVE OF RECENT HISTORIES OF NATIONS

The budget deficits (pages 8,9,10) indicated of each nation are approximate and could be in error in some instances; so also the public debt figures (pages 13,14) at federal level. It is not this applicant's desire to record or guote accurate budgetary figures in the recitation. On the long run, the educative and informative value is to be empha¬ sized. The magnitude of the deficit problem is to be understood 'in gut real life' than blindly following the theories and advice of Michigan scholars and those of London School of Economics. Cumulative increases in consumer prices of 19 nations (page 15) are only indicative or representative in the period 1979-90. Relative positions are shown and one must visit each country to grasp the current situation in retail market.

Unemployment figures in each nation (pages 16,17) keep on changing. The current figures, of concern to us, may be higher or lower. If CENTRAL BANKS take the lead in compensating all unemployed, part-time under-employed, the statistics are most important in dispensing moral and social justice. Unemployment compensation is so valuable a topic that I could prepare a philosophical treatise in book form, while all those responsible in government ignore it as without solution. There could be several methods in presenting 'population increases' of each nation that must be analysed using absolute increases and availability of resources in materials, technology, production, education, experi¬ ence, skills, health services, natural surroundings and topography. China may be as large as USA but 2/3 rds of its land is mountainous and desert. Switzerland's revenues and expenditures may be nice to look at with 1992 deficit-to-receipts ratio at 3.6% (page 12); Bankruptcies in 1993 were more than 10,000 (Businesses 6014 and Individuals 4499) . In 1991 Great Britain's budget was balanced at 217 Billion pounds revenues collected but in 1994 it may borrow 50 billion pounds which is far excessive than 36 billions borrowed in 1993. The production figures presented on Continuous Casting in steel industries (page 28) were believed to be authentic as individual nation transmitted its data to "World Steel Industry" publication in Britain. "Payroll/employee, all industries in USA" is a valuable indicator (Table not included in this descriptive portion) to all advanced nations in Europe, Japan, Australia that USA is not all riches and all employed labor are compensated at reasonably calculated wages and salaries. The disparities in incomes are not substantial to complain, further the incomes will be 'evened out' by reducing workhours of those with high hourly wages.

18. WHAT IS PROPER DETERRENT AGAINST SOCIAL AND ECONOMIC CRIME?

For about 15 years or more than 20 years this applicant has been advancing the example of Japan for developing nations to adopt. The globalization process allows intellectuals to freely express their opinions on any nation's administrative/economic apparatus. Social crime in USA is increasing without bound as handguns and rifles are sold without restrictions. More and more prisons are being built, despite heavy expenditures to state governments' account. Prisons are crowded without ventilation and without a deterrent to repeated offenders and criminals. We may go to the extent of 'cutting of the limbs' in public places. There could be chemical poisons that are injected, but donot kill the villians spontaneously. USA's defence expenditures soared and the voices of pacifists drowned. Those who demonstrated against missile bases were pushed aside and jailed. The build-up of conventional armaments, bombers and missiles with multiple warheads continued as imaginery provocations surfaced now and then. In the recent Irag-Kuwait conflict that escalated into a war, the allied forces refused to use nuclear weapons to subdue Saddam Hussein; but Baghdad was bombed incessantly. Irag's bridges were put out of service and its missile bases destroyed. Kuwait's oil wells, refineries and storage depots were burned by Saddam's forces. Nuclear weapons are so destructive to earth's environment they are never used. A weapon that cannot be used is not a deterrent. Saddam Hussein could have opted peace even after invading and capturing Kuwait. Now Irag's monetary system is in shambles; so also that of former Yugoslavian countries and former Soviet Republics. The military build-up of Irag and former Soviet Union ended with economic ruin. The military build-up of USA ended with soaring federal debt and inflated prices across the nation.

All those who dissociated with my philosophy of social and economic justice in running each nation whether big or small must not toy with the ideas and principles I am making public thru the patenting process that is likely to make me known as Premier international economist and a reformer of economic theories. Politicians in national office who neglected my proposals and communications must not attempt to get benefitted by my inventions in national and international monetary systems. The personal greed for media attention and publicity, without merit and without understanding, must stop. In USA the Clintons are pretending to be reformers of 1990s without caring for my 'work-sharing ideas in employment' and my 'created- oney applications' at local, regional and national levels. Nobody has acknowledged my invention on a world currency known as UN dollar, I discovered more than 5 years ago. Any delay on this score proves they havenot understood or they are conspiring against 'my moves'. India's population problem is colossal and the politicians are keeping silent on this issue, just to serve another term in office. Nuclear weapons are being manufactured now, if I am not incorrect. Who will impose a ban on current production of nuclear warheads? Who knows if chemical weapons are being made in Russia, in Germany and USA and who is financing the production? The so-called leaders we are seeing on Television donot answer these guestions as they are prisoners in a bureaucratic administrative apparatus run by military establishments. Central bank's new money must be denied to produce and propagate above weapons that are more versatile in destructive power. Civilian properties must not be

destroyed in regional conflicts as the fate of Yugoslavian dinar is incapable of solution.

19. IN VERY HIGH DENOMINATIONS, CHECKS ARE PREFERRED TO BANK NOTES

Again considering the US example: 100$ federal reserve notes (currency bills) are very much in circulation rather than 500$ and 1000$ notes -which are safety risk to the person carrying them. It makes no sense printing 1,000,000$ bills as they represent enormous purchasing power. Eguivalent Central Bank CHEQUES will be prepared with more than one official signature and the name of payee clearly written. Central Bank may be allowed to make direct payments, on behalf of US Treasury to departments of federal and state governments, city governments and banking institutions. Federal Reserve cheques in high denominations look similar to greenbacks, but bigger in size. The recommendation of legislative parliaments is a prereguisite to prepare and issue checks of high and highest monetary value for non-plan expenditures that arise in emergency situations.

As of April 1994, Federal Reserve Notes (printed paper money also known as greenbacks) being circulated in all businesses and people is $367.5 Billions. The money aggregates Ml, M2, M3 and L (Liquid Assets) are not to be confused with currency in circulation.These are total sums of money (all kinds of deposits and short-term bonds and securi¬ ties) held by banking institutions.

3.1994 Ml $1143 Bi M2 $3586 Bi

M3 $4217 Bi LA $5131 Bi

It is Federal Reserve's job to understand these figures that keep moving up each year with increased savings and add-on interest. The Liguid Assets of individual businesses and individual households are to be compiled and the statistics will reveal as to how America's financial and monetary policies are to be adjusted to strengthen the economy and increase savings from generation to generation which is not to be disputed.

A communication addressed to US Senate Finance Committee Chairman, as early as 17.06.1993, to solve the problem of federal deficits using principles of ENGINEERING ECONOMICS has gone without an acknowledge¬ ment and this nation's precious time has been lost without creating new money that is urgently needed by millions of unemployed citizens, both young and old. Unemployed elder citizens have been left without monthly incomes on their savings as interest rates plunged across-the- board. It is abundantly clear the central banks are not doing what they are expected to do in many directions as each nation's economy is so complex to understand and so complex to correct without an experi¬ enced "ENGINEERING CONSULTANT" at the top!

20. GUIDELINES FOR ISSUE OF CREATED MONEY

THe CLAIMS portion of this document furnishes numerous guidelines to make the created money work. Purchasing power of monetary unit must be very strong. In the market place, money must command respect. People must use money selectively and be very careful in spending habits. Most of the time people go to any extent to save on food dollars but they are forced to spend excessively on housing, on rentals, on automobiles, on utilities, on gasoline, on insurance, on medical bills. There are millions without health insurance because it is too expensive. The federal government is facing a dilemma as to how to solve this crisis in health care. In USA medical billings could soar to $1000 Billions which are far too excessive. The government medicare and medicaid programs could not pay even 50% of the billings. The central bank must be extremely cautious to lend NEW MONEY to the Department of Health and Human Services as its expenditures are ballooning far more than defense budget. All sectors of the economy that proved to be disres¬ pectful to US DOLLAR (British pound, Germany's Mark, French Franc, Italy's lire, Canadian dollar, Australian dollar, Japan's yen, China's yuan, Swedish krona, Norway's kroner, Belgium's francs, Dutch guilder, Spain's peseta. South Korean won, Irish pound, Swiss Francs, Austrian schllings) must not be encouraged to expect NEW MONEY or Created Money. The purpose of new money, among others, is to pay for work done at a high productivity level. Thus it encourages all new inventions and methods and processes that ensure high quality in workmanship and performance guarantee over a number of years. Obsolete factories and industries receive new money for modernization. Housing developments are qualified to receive new money.

21. DOWN PAYMENT, ROYALTIES AND LICENSE AGREEMENT

Besides paying for federal deficits, many opportunities have been shown here where central bank's new money 'works' with 100% value and efficiency. The built-in inflation in prices may hurt the prospects of new funding. In some cases new money does not pay for all the 'deficit portion' in federal budgets. It matters little to this discoverer if volumes of money to be spent are in 100s of billions because the yen, the lira, the peseta, the won are too small; he will recommend spending money for useful purposes and causes. Inflation problems are to be attacked at specific industry and business level rather than by-passing with indifference. THe imports are helping contain the greed for money by increasing prices. Normally prices drop as productivity of a machine and an operator increases. We had seen this abundantly in prices of hand calculators, type-writers, TVs, VCRs, cameras, furniture and 100s of items in general merchandise. Despite enormous gasoline useage in USA's road transportation, the price per gallon is holding at about one dollar. Defence factories are trimming employment and service industries are hiring. The retail sales person's salary is lowest and the workhours are variable. It is because the sales are not where they should be! People must keep on 'dumping used articles' and buy new. Value-added taxes are not the answer to promote sales. Created money will be delivered to grow more trees of hardwoods and exotic varieties because trees are grown again from seedlings and saplings. The agricultural crops arrive fresh each year and funds will flow to support 'food sale'; the maintenance of farm soils cannot be ignored. THe engineer determines what industries and items deserve grants and interest-free loans to roll-back prices. Technological advances in 20th century must be appreciated relative to the centuries that were left behind. It is time the people are made free from money- shortage. The engineer's inventions in money creation are not ordinary; they make the administrators independent instead of pleading 'lack of resources or tax money' .

DOWN PAYMENT: A lumpsum down payment is normal based on the size of economy, upon signing the license agreement.

ROYALTIES: A percent of new or created money drawn will be negotiated as royalty payment every six months. Payments are made for using the invention and also for 'know-how'.

The immense benefits to the licensees must be understood without prejudice to the inventor's claims for compensation. All European currencies and their central banks shall remain and the inventor will seek a license agreement with EC Central Bank also. There will be intense competition for engineers and architects.

Claims

-?R-22. CLAIMS

1. This invention claims central banks could be authorized to issue new money (or created money or Government Source money) to pay for all or part of federal budget deficit expenditures.

2. Created money helps in reducing taxation that is not justified.

3. It is claimed that the volume of created money has engineering limits set by experience and state of the economy.

4. It is claimed that cumulative new money funding could increase to equivalent US$ 100 Billions in 10 years in large nations like Germany, Japan, UK and Canada.

5. Created money allows the unemployment benefits to flow for indefinite periods and the amount of benefits could be increased without hurting the purchasing power of national monetary units.

6. It is claimed created money helps TREASURY build its reserve assets.

7. Created money has the quality to be given free or without interest to start new businesses.

8. Created money helps modernize factories and build new ones.

9. Created money is claimed to have the flexibility to provide compatibility in prices of basic necessities.

10. Created money helps in giving tax reliefs to the poor and low- income families.

11. It is claimed extensive engineering studies and evaluation determine how much created money can be made available.