derStandard.at interview
The Viennese economist Franz Hörmann explains why the financial system is a fraud model, what balance sheets have to do with it and why the ultimate crash is imminent
Daniela Rome
"There is a systemic fraud model of an institution that is granted the monopoly of creating money through loans in our economic system," says Franz Hörmann.
For Franz Hörmann, professor at the Vienna University of Economics and Business, the days of banks and money are over. A paradigm shift, both in economics and in society as a whole, is inevitable for him. In an interview with derStandard.at, he explains why we can safely ignore the banks, why the free markets are “bubble machines for the elite to abuse” and why the collapse of the entire system is threatened within the next three years.
derStandard.at: You assume that society and the economy will change completely in the coming years. Has our current financial and economic system become obsolete?
Franz Hörmann: Definitely in every respect. Because from the perspective of law and economics, we use models that go back to the ancient Romans. The compound interest system dates from the second millennium BC, double-entry bookkeeping from the 15th century. And there is no area of our society and science where methods of this age are still taken seriously. But it serves to keep social elites powerful and wealthy, so nothing changes.
derStandard.at: Did the crisis herald a rethink?
Hörmann: I think so. Today's crisis comes from the banks. Banks invent money in the lending process. But if you invent money out of thin air and what didn't exist before, passes it on with interest and has it secured in rem, then if the business model goes wrong, it's actually an expropriation model. This is also the background of banking secrecy. Banks cannot disclose at all where, for example, the interest for savings accounts, savings contracts or other things come from. Because if they did, they would have to admit that these are all really chained pyramid schemes. This covert money expansion started with double-entry bookkeeping. Because when you buy something with money, the money is actually changing hands. The seller has the money, the buyer has the item. From that moment, the matter can no longer be valued in terms of money from a scientific point of view. Nevertheless, we write these amounts of money into balance sheets.
derStandard.at: So trusting the banks and the financial system is a mistake?
Hörmann: Trust has been systematically abused by the banks in recent years. There is a systemic fraud model of an institution that is granted the monopoly of creating money through loans in our economic system. As long as you go to the bank with equity as security and they generate real money out of thin air that has a means of payment function, we have a problem. Equity is not money, it is an operand. According to some rules, the assets are valued and then the debts are deducted. If I have a three meter board and subtract a two meter board, then I still don't have a one meter board, I have a difference. If I want a one meter long board, then I have to cut the two meters off. Economically, that means I have to liquidate the assets to get the money. When it comes to liquidation proceeds, however, all companies worldwide are bankrupt. In reality, therefore, states cannot go into debt at all. A state, if you understand it as the sum of all cash flows, where should it go into debt? Why at a private bank? A state would actually have to generate its own money, in a grassroots-democratic manner.
derStandard.at: What do you think of a rescue like in the case of Greece?
Hörmann: The European countries didn't necessarily save the Greeks, but their own, primarily the German banks, which granted absurd loans here. The connections are also completely absurd if you think about the following: The state borrows from the banks to pay the interest on the debts it has with the banks or to save the banks to which it has debts itself. Nobody understands anymore who actually owes whom and what debts actually are.
derStandard.at: So the systemic importance of banks and the “too big to fail” argument and the bank bailout packages are purely in your own interest?
Hörmann: The “too big to fail” is a business model. There is a proven intention to make banks bigger and bigger through acquisitions so that they become too big to fail. The links between finance and politics are enormous. In fact, governments made up of active or former employees of the financial system are not to be taken seriously. There was at least one courageous action, namely nationalizing the property of the Oesterreichische Nationalbank and thus making the Nationalbank independent of the banks it was supposed to audit. But monetary policy is not made by the OeNB but by the ECB. The bank bailout packages are insanely funny: the banks were not saved, there is only one plan for the future that we already know today will not work, because the funds first have to be collected from the citizens in the coming "savings packages" by means of tax increases. Banks are broke around the world. So you can safely pretend that they no longer exist.
derStandard.at: But they still exist.
Hörmann: If we look at the loans, we can ignore them. In 1969, an American architect won a lawsuit because he didn't want to pay off his mortgage loan. He referred to the legal principle that in a loan where an object is created that was not previously available, this object does not have to be returned. So since money is created in the creation of credit, there is no reason to repay this credit. There are already civil rights movements in the US that are recommending that Americans unite and stop paying back loans.
derStandard.at: Let's get back to the balance sheets. Do you think the problem starts here?
Hörmann: There is a lack of countability of the variables used in balance sheets. Someone who bought a house for two million instead of a million because they negotiated badly would have a million more net worth? And if he finds someone to buy it for ten million, is that a market price? it's sick The fair value is also a fraud model because it has been proven that it can be misused with money given and straw men. Fair value should finally be abolished. It is nothing other than the so-called common value, which was eliminated from the German Commercial Code at the end of the 19th century because it had already led to mass foundation fraud in public limited companies. It is a rampant scam across corporations and banks in our economic system. But politicians must not admit this, because it comes too close to the formulations used by Marxists in the past. And that would be too embarrassing. Of course, one has to say that state socialism and the planned economy could not work at all, because they were actually terror regimes.
derStandard.at: The voices that the euro will disappear, for example, are currently getting louder. Do we still need money at all?
Hörmann: All currencies will disappear because they can no longer function technically. I guess it will be as far as 2011. But if we want to save ourselves in a new society without money, we need multidimensional money as a transitional phase. We need several independent accounting groups in the form of specialized electronic vouchers. In order to cover the basic needs of the people, such as housing, energy, food, etc., one could take an inventory of all available resources and needs in each country. Then it would be necessary to distribute the available resources per capita in such a way that everyone is provided for the basic standard of living. Everyone has to cooperate here without falling into a profit-oriented exchange concept. The community must receive children, the elderly and the sick without any ifs and buts and without giving anything in return, and everyone must be provided with this basic standard of living, regardless of who they are or whether they perform any work at all.
derStandard.at: So we're talking about an unconditional basic income?
Hörmann: Exactly. But not in money, but in goods and services. In the area of luxury, society can then democratically decide for which individual or group services prices are to be advertised. For great inventions, for example, or particularly difficult or tedious work. That is the incentive in a motivating, performance-oriented incentive system. Everyone is talking about the meritocracy, but income from interest and dividends is not a service, but a reward for property. Since money is a social construction anyway, we don't have to orient ourselves to the dead matter that was the practical manifestation of money in earlier millennia. Money itself only has an information function.
derStandard.at: But we still take money very seriously. Currency wars and currency crises haunt the media.
Hörmann: The real scandal is that our entire monetary system is based on debt. This means that 97 percent of the money is created in the commercial banks. States also take out loans in this way: the central banks do this by extending their balance sheets. However, you cannot generate money by extending your balance sheet. The Chinese State Bank also invents money out of thin air, funnily enough, without incurring any national debt. We should do that too. The Chinese economist Wu said in a lecture at an American university: He is often asked why there have been so many start-ups in China. The Chinese state bank gave start-up loans that bore no interest and did not have to be repaid. Of course, you can only do that as a central bank if you book unilaterally and do not create debt at the same time. And if you then say: For God's sake, then there's inflation! The Chinese controlled this via price regulation and were therefore the smarter ones again. But nobody here wants to hear that, because it goes against the dogma of the free markets, which are bubble machines for the elite to abuse.
derStandard.at: Is China really a role model?
Hörmann: The Chinese are doing it right. They pick the raisins from the two political systems and are apparently flexible enough to say: We will keep what worked well in our old system. And what looks good in the capitalist system, the “banks invent money out of thin air”
we take over. It is a mixed form that is constantly evolving, i.e. subject to evolution. From the point of view of the elite in China, as long as they can control it, it's easy. Whether it is so easy for the whole population, especially for the farm workers, is another question.
derStandard.at: Where do you see our economic system going in the future?
Hörmann: As long as owners produce something so that consumers can buy it for money, in the foreseeable future we will end up in a situation where the public sector, the money makers, will have to pay consumers to go shopping. Only then will the owners still be able to make their profits. After all, no one will be able to earn an income by working in ever more streamlined and automated processes. We know that ten percent of the working population can no longer live on their earned income. In reality, we should burst out in joy about it. At the beginning of industrialization, the economic measure was saved working hours. And that is exactly the only sensible economic variable.
derStandard.at: So you want a new world order?
Hörmann: Understood correctly, globalization means that there is no longer any location policy. There is only one location and that is planet Earth. And there is only one nation, that is humanity. This is of course diverse and must communicate lovingly and empathetically with each other. We also have to pick up the representatives of the so-called elite from where they are today. We must not look for scapegoats. Because we have to take into account their fear of loss and say: you will lose something, but these are only numbers on paper or displays. And if you work with us, then we can create any form of standard of living for a broad population. This also creates security, because there will be no more envy.
derStandard.at: In what time horizon do you think of this new social order?
Hörmann: Three years. The question is, will humanity be able to implement this concept in three years or will it no longer exist at all. We have masses of ecological and social problems, in many countries we are on the verge of revolution.
derStandard.at: So you're talking about the ultimate crash?
Hörmann: Right. How society will or wants to live in the future can only be decided by society itself and according to the majority principle. This happens democratically in networking. From the point of view of information theory, hierarchical structures can never work because the people at the top of the pyramid do not have the knowledge. You are constantly being lied to by the layers below. It is well known how ordinary citizens can defend themselves against surveillance or harassment: they simply lie to the powerful. Therefore, all hierarchical systems, whether they are governments, states, school systems or companies, are currently collapsing and humanity is reconnecting on a level via the Internet, via the "global brain". This is where completely new rules of the game emerge based on the principle of emergence. (Daniela Rom, derStandard.at, October 13.10.2010, XNUMX)
FRANZ HÖRMANN is a professor at the Institute for Auditing, Fiduciary and Accounting at the Vienna University of Economics and Business.
##########################
If you like you can leave us a coffee for the effort and the time invested,
Thank you very much
As a precaution, the editors distance themselves from each article. The articles do not necessarily reflect the opinion of the editors, rather they only serve to free opinion. Nobody is perfect and error is possible. In addition: it is only information and does not necessarily have the attention of the editors.
As an Amazon partner, the blog operator earns qualified sales via the Amazon links inserted in the blog. Almost all of this earnings are converted into animal feed.
To comment on posts or to rate them with stars, you have to registered and logged in be. Not registered yet?
forest power
☘️ Kills all kinds of disease-causing germs through oxidation
☘️ Eliminates and drains heavy metals and environmental toxins
☘️ Increases performance...
"Chlorine dioxide is the most effective bacteria killer known to man."
Follow us on Telegram
