The great challenge for the International Monetary Fund is to build a new Structural Adjustment Program that is truly useful to the countries

Countries that have financial problems due to lack of foreign currency to meet their needs and with difficulties in accessing the international private financial system are forced to resort to the International Monetary Fund to obtain resources.

The Fund imposes a set of conditions known as Structural Adjustment Programs, whose main objective is saving or limiting spending to supposedly clean up the economies of the countries. It is considered that the deficit of public finances due to unproductive or oversized expenditures is mainly responsible for inflation and the recession or stagnation of production and consumption in the economies and is, therefore, the great enemy to overcome. The implicit objective of this spending limitation is to achieve a balance or surplus between income and expenditure and, in the worst case scenario, to achieve a moderate rate of fiscal deficit not exceeding 2% of GDP.

To defeat the fiscal deficit, a series of medicines are prescribed, including reducing public spending on everything that is direct transfers to the population such as pensions, scholarships, social assistance and also reducing high-cost public services such as health and education. for which part of them is passed on to the private sector, that is, part of the health and education services are privatized. The same is done with respect to other public services and public companies that do not generate profits. The Adjustment Programs also contemplates the supposed balance of the financial sector of the countries for which they impose positive interest rates, that is, higher than the level of inflation, the liberalization of trade, that is, of any restriction on imports and exports, the elimination of subsidies and all kinds of price controls in the economy.

The Economic Adjustment Programs supposedly seek the welfare of the countries but in reality they generate totally opposite results: devaluation of the currencies, less production, less consumption, more unemployment, inflation, more poverty in the weakest sectors of the population that receive less pensions, less health, less education and the decrease in credit due to the augment in interest rates, among other serious problems.

Spain, Italy, Portugal and Greece are the countries in Europe where Adjustment Programs have been applied in recent years. In the 90s of the 20th century, these programs were developed in Latin America and, as a consequence, extreme left governments emerged in 10 nations of the Continent: Argentina with Kirchner, Brazil with Lula, Bolivia with Morales, Ecuador with Correa, Paraguay, Uruguay, Honduras, El Salvador and Venezuela with Chavez and the left was strengthened in Mexico by winning Lopez Obrador in Mexico this year 2018.

The great challenge for the International Monetary Fund is to build a new Adjustment Program that is truly useful to the countries and allows global financial equilibrium.

IMF-Supported Programs

https://www.imf.org/external/np/exr/faq/progfaqs.htm

Oil as a real guarantee to sustain the international reserves of nations, an idea different from the traditional conception

1. How the petrodollar was born

Since in 1971 President Richard Nixon dissociated the gold from dollar, that currency was left without any real, material support, and became simply a fiduciary instrument, that is, a currency sustained only in the good faith of the one who issues it. and who accepts it as a value and means of payment. But President Nixon, to compensate for this weakness, reached an agreement with Saudi Arabia so that from that moment all operations derived from the purchase and sale of oil in the world would be made in the currency of the United States, the dollar. Thus arose what in the modern world is known as the petrodollar.

Then, after the first big increase in oil prices in 1974 and as a result of the Arab oil embargo, oil countries began to receive huge amounts of dollars. Impacted by this sudden wealth, the oil countries did not settle for what they obtained at the beginning and start to produce oil in quantities far above the needs of their economies to obtain more money; this led to the surplus of petrodollars. This new mass of money came in the form of new investments in the economy of the United States and other nations, while the physical surplus of oil was distributed in the markets and allowed some countries such as the United States and Japan to create their Strategic Oil Reserves.

2. The petrodollar as an instrument of International Reserves of nations

The instruments of International Reserves recognized by the International Monetary Fund are today gold, Special Drawing Rights of the IMF and the dollar, euro, yen, pound sterling and yuan. But I think that countries with the need to strengthen their international reserves can develop a new international reserve instrument with oil by creating a Strategic Reserve in physical, material form, whose monetary value is exclusively dedicated to strengthening its International Reserves.

It is not, therefore, an oil to enter into the world market of crude oil sales but a real, material guarantee of the International Reserves, a real guarantee that must remain stored in special places as the United States and Japan do, although that Storage has a cost that must be financed. It should be noted that the President of the United States, Donald Trump, has proposed selling half of the Strategic Petroleum Reserve of the United States (1) to strengthen the financial position of his country, a fact that reveals and confirms the double function of the Reserve of Strategic Petroleum of the United States: a) Its condition of material support to the need for energy for any moment of crisis and b) Its capacity as a financial instrument. It is necessary to say, in addition, that the Congress of the United States since 2015 approved a measure that allows to sell part of that Reserve (2)

3. Conclusion

Countries could use the monetary value of oil, stored in physical form, as an instrument to strengthen their International Reserves. (3)

(1)  https://www.bloomberg.com/news/articles/2017-05-23/trump-proposes-selling-off-half-the-u-s-strategic-oil-reserve

(2) https://www.energy.gov/fe/downloads/long-term-strategic-review-ltsr-us-strategic-petroleum-reserve-spr-report-congress

(3) http://pablorafaelgonzalez.blogspot.com/2018/07/where-does-idea-of-using-oil-and.html

(*) The author, Pablo Rafael Gonzalez, is a Latin American writer and researcher in the fields of philosophy, politics and economics

Venezuela does not appears in the financial statistics of the International Monetary Fund

Researching international reserves of different countries, I have found that Venezuela does not appears in the financial statistics of the International Monetary Fund. Indeed, I found, for example, official figures of international reserves for the month of July this year 2016 from other Latin American nations like Argentina that had 32,500 millions of dollars, Brazil 369,340, Chile 39,462, Colombia 46,592, Costa Rica 7,960, and Mexico 179,651 millions.

See the links:

IMF Statistics:

Data Template on International Reserves and Foreign Currency Liquidity (IRFCL)

http://data.imf.org/?sk=1117171F-7E11-4E80-A28E-439E4F3D1EEF&ss=1450382449040

http://data.imf.org/?sk=1117171F-7E11-4E80-A28E-439E4F3D1EEF&ss=1452811319782

The IMF recognizes the failure of neoliberal policies

In an article published in its quarterly magazine in June 2016, the IMF recognizes the mistakes and consequences of neoliberal policy developed by that major international financial institution. Here the full text of the article:

Neoliberalism: Oversold?

http://www.imf.org/external/pubs/ft/fandd/2016/06/ostry.htm

Austerity versus welfare, 20 essays on the world economy in the 21st century

In 2008 the economic crisis erupted in the United States, following the collapse of major financial institutions, crisis immediately reflected on Europe and the rest of the world.

Governments were forced to pick up the tab for bankers, giving them money, but the real solution chosen to remedy the crisis was the adoption of austerity measures that hit, not the bankers or the banks, but the rest of the population by reducing public spending on vital sectors like health, education and public employment. In other words, they took the money for the payment of the services of the population to give the money to the bankers and banks.

Why austerity in public spending and not austerity in banks?

That's the key question; however, has no clear response from politicians.

Banks did not practice healthy financial policies and therefore went to bankruptcy.

The 2008 financial crisis revealed a fact already well known: the public finance deficit of nations.

And, despite the deficit, governments were left with no choice but to give money to failing banks to prevent the collapse of economies, because some institutions had a major role in the overall financial structure of countries.

Instead than focus on how the financial institutions are managed, the attention of institutions like the International Monetary Fund and the European Central Bank, politicians and media shifted to the deficit of public finances, giving rise to programs cut in public spending that have diminished services and caused unemployment to millions of people.

The public finance deficit has basically an origin: the growth of the population, that every day has more material needs. This forces the state to meet those needs.

In the Western, welfare policy inspired in the Keynesian idea was primarily aimed at ensuring citizens social security: pension rights, unemployment insurance, the right to health and education, and ran from the end of World War II until the 80 when the English Prime minister, Margaret Thatcher, adopted the neoliberal model promoted by the Chicago School, seeking, inter alia, the elimination of the deficit of public finances. The model was also adopted by President Ronald Regan of the United States, the International Monetary Fund, the World Bank and governments in Latin America in the 80s and 90s of the twentieth century. But it is necessary to underline that none of the goals of neoliberalism including reducing or eliminating the deficit of public finances was achieved in those years. On the contrary, the deficit in England and the United States during the President Ronald Regan period increased exponentially. The same neoliberal scheme of the 80s and 90s is now imposed on Europe, especially to the southern countries of the continent, Greece, Portugal, Spain and Italy by the International Monetary Fund and the European Central Bank, led by Germany and France.

In the essays I've gathered in this paper, it is demonstrated why austerity is not the appropriate way to achieve the welfare of people.  On the contrary, the way is the expansion of money to meet the needs of the growing population without causing inflation.

Monetary expansion must be related to the growth of the population and its needs and cannot be considered as the main cause of inflation. The main cause of inflation is human selfishness that has no limits to the accumulation of wealth and the trend to the robbery.

The following are links to the essays:

Giving financial assistance direct to the consumers

http://pablorafaelgonzalez.blogspot.com/2008/11/giving-financial-assistance-direct-to.html

How to recover an economy after a financial disaster

http://pablorafaelgonzalez.blogspot.com/2008/11/how-to-recover-economy-after-financial.html

Was the 2008 recession provoked with a deliberate objective?

http://pablorafaelgonzalez.blogspot.com/2008/12/was-2008-recession-provoked-with.html

Banks in bankruptcy but rich bankers, Theory of the coercive deficit

http://pablorafaelgonzalez.blogspot.com/2008/12/banks-in-bankruptcy-but-rich-bankers.html

The mortgages are not the main cause of the financial fallout

http://pablorafaelgonzalez.blogspot.com/2008/12/mortgages-are-not-main-cause-of.html

Effects of the economic crisis on the world stability

http://pablorafaelgonzalez.blogspot.com/2009/11/effects-of-economic-crisis-on-world.html

What true wealth is? The monetary illusion

http://pablorafaelgonzalez.blogspot.com/2009/12/what-true-wealth-is-monetary-illusion.html

Abstract ideas, economic reality and philosophy of science

http://pablorafaelgonzalez.blogspot.com/2010/06/abstract-ideas-economic-reality-and.html

Money is only metal and paper without intrinsic value, philosophy of money

http://pablorafaelgonzalez.blogspot.com/2011/06/money-is-only-metal-and-paper-without.html

Economic crisis 2011: the solution is to realize that the economy operates in a new scale and not reducing the public spending

http://pablorafaelgonzalez.blogspot.com/2011/08/economic-crisis-2011-solution-is-to.html

Fiscal deficit and size of the economy

http://pablorafaelgonzalez.blogspot.com/2011/09/fiscal-deficit-and-size-of-economy_18.html

Financial crisis: the solution is to issue more money and not reducing the public spending

http://pablorafaelgonzalez.blogspot.com/2011/10/financial-crisis-solution-is-to-issue.html

Bank of England recognizes that to issue more money is the solution

http://pablorafaelgonzalez.blogspot.com/2011/10/bank-of-england-recognizes-that-to.html

Austerity generates unemployment, poverty and political instability

http://pablorafaelgonzalez.blogspot.com/2011/11/austerity-generates-unemployment.html

There are not true reasons for the financial crisis in Europe

http://pablorafaelgonzalez.blogspot.com/2012/01/there-are-not-true-reasons-for.html

How rationalist ideas based in the mathematical logic affect the life of millions of people, the European crisis

http://pablorafaelgonzalez.blogspot.com/2012/07/how-rationalist-ideas-based-in.html

Why is it necessary to build a new balanced economic model without ideological prejudices?

http://pablorafaelgonzalez.blogspot.com/2012/08/why-is-it-necessary-to-build-new.html

Is there a limit to the amount of money that an economy can to issue? A reflection on the U.S. fiscal cliff

http://pablorafaelgonzalez.blogspot.com/2012/11/is-there-limit-to-amount-of-money-that.html

The lack of money should not be the cause of the poverty of nations

http://pablorafaelgonzalez.blogspot.com/2013/02/the-lack-of-money-should-not-be-cause.html

The austerity policy is not necessary, a thesis different from traditional concepts of monetary policy

http://pablorafaelgonzalez.blogspot.com/2013/04/the-austerity-policy-is-not-necessary.html

The backing of money

http://pablorafaelgonzalez.blogspot.com/2013/10/the-backing-of-currencies.html

There are not true reasons for the financial crisis in Europe

The explanation is very simple:

It is because the governments have the sovereign faculty to issue all the money that their economies need. There are neither political nor technical limits to issue money. 

There is a big difference between the things that man can decide autonomously and the things that not; for example, man can create money autonomously but man cannot create natural resources like water and petroleum.

Money has not an intrinsic value neither back in gold.

http://pablorafaelgonzalez.blogspot.com/2011_06_01_archive.html

Which is the backrest of the dollar?

Which is the support of the euro?

The unique back of those currencies is the faith of the people that accept them like international mean of payment, nothing else.

All the gold that exists in the world is not sufficient to backing the trillions of dollars, euro and other currencies that circulate in the world. Therefore the back in gold of the currencies is a lie.

There is other key question:

Which is the true value of gold?

The answer is none. You cannot eat neither drink gold.

Gold has a restricted use: a) like instrument of reserve of the central banks of the countries and b) in jewelry and too few industrial processes.

So that the support of the currencies is a fallacy; the currencies do not have any true material support.

In consequence, man, in this case the governments do not have limitations to issuing their own currencies.

Like Germany and France dominate the European Central Bank, they impose fiscal and financial conditions that the rest of the Eurozone countries cannot comply and, moreover, they limit the emission of new money; so they dominate the situation.

But they cannot dominate England because this country keep the sovereign domain of its currency, the sterling pound and can to issue all the money that need. Three months ago the Bank of England recognized that the austerity is a mistake and issued thousands of millions of sterling pounds to increase the liquidity of the country and so avoid the recession.

The other European countries that depend of the euro are prisoners of the European Central Bank, in other words, prisoners of  Germany’s and France’s governments.

The European financial crisis is an artificial crisis provoked by the European Central Bank, the International Monetary Fund and the governments of Germany and France, nothing else.

Austerity generates unemployment, poverty and political instability

Austerity is a big mistake. The big damage is for the middle class and the workers. Austerity leads to recession; orthodox politicians and economists are responsible of that big error. They developed a theorist conception that attributes at money the cause of inflation; but this is not true. The true cause of inflation is the human egoism; the unlimited desire of wealth of speculators.

Money is only metal and paper without intrinsic value. Nations can issue without limitations all the amount of national money ---their own currencies--- that their economies need. Money is only a mean of interchange, nothing else. Observe what happen when people have more money; when people have more money is happy; buy more food, clothes, cars, travel, etc; also observe the opposite phenomenon and you will obtain the right answer about what is good and what no.

If you give more money to people ---by the increase of salaries, pensions, more and best public services--- you improve the quality of life of people, because this stimulate production and the goods and services supply increase. If, on the contrary, you restrict the amount of money in circulation you lead people to poverty and stop the economy.

The economies of Greece, Italy, Spain and Portugal do not need to restrict their public spending; if the governments of those countries insist in imposing the program of austerity, it is very likely a deep political change in those countries, because of the population pressure. Perhaps new actors will appear. New actors that are unknown in this moment but that might provoke a complete political change in those nations. A similar phenomenon happened in Latin America in the 90s years as a consequence of the economic and political impositions of the International Monetary Fund, IMF and the World Bank.

The European Central Bank, the International Monetary Fund, IMF and the authorities of the European Union are the big obstacles for the European recovery.

Soon it might come a moment when Greece, Italy, Portugal and Spain have not other option than to abandon the euro and comeback to their national currencies. It will depend of the European Central Bank, the IMF and EU attitude.

Money is only metal and paper without intrinsic value

http://pablorafaelgonzalez.blogspot.com/2011_06_01_archive.html

The unique solution for Greece, Spain, Portugal and Italy is to abandon the euro

These countries do not have other option if they want to keep their political systems and avoid a social shock. The International Monetary Fund, the European Central Bank and the European Community impose their decisions to the countries members of the Union. Some measures are reducing the pensions and the salaries of the public workers, diminishing the public spending in health and education, the privatization of the public enterprises and the public services and the increase of the public services tariffs.


It is obvious that the world population is beginning a rebellion. The protests worldwide are undoubted evidence. Occupy Wall Street ---which began on September 15 2011--- is already a big movement in the United States. In Spain ---where occurred the first manifestations of the indignant--- the protests are every day most; the same happen in Greece, Italy, Portugal, England and Iceland. For example, on October Saturday 15 2011, big protests also happened in Rome, Madrid, Barcelona, London, Berlin, Frankfurt, Brussels, Sidney, Japan and New Zeeland, among other places.

The protests are against the bankers and their unlimited desires of wealth; also against the indulgent attitude of the politicians and governments that give to the bankers trillions of dollars in bailout but deny basic resources to the majority of the population, by mean of the restriction of the public spending. All the money is for the bankers and the breadcrumbs, the remains for the rest of the people. That is the basic reason because the people are angry worldwide.

1. The solution

For overcoming the current crisis some European nations do not have other option than to abandon the euro and come back to their previous national currencies. The reason is very simple: because when those countries adopted the euro they resigned to its sovereign capacity to decide its monetary policy. In the past, Spain, Portugal, Greece and Italy were able to issue the amount of national currency that they required for their economies, with enough independence. But now no; now they must require the approval of the European Central Bank, the European Community and of the International Monetary Fund. That is the cause of the current crisis, because the first priority for those institutions is to recovery the loans given by the banks to those countries. Therefore they require strict measures of austerity to the nations; they want that the nations employ their resources ---in first instance--- to pay the debt acquired with the banks.

If Greece, Italy, Portugal and Spain abandon the euro and come back to their national currencies, their central banks will be able ---autonomously--- to issue the money for paying the salaries of the police, the teachers, the firefighters, the doctors, the nurses, etc; and will be able of to pay the national public financial commitments. They are industrial societies with an important autarkic capacity; they can survive with their own national resources because they are self-sufficient in agriculture, industry and services. Of course, those countries need to maintain and to increase its international commerce because through it they obtain their international mean of payment; and currently they have a part of that international commerce.

2. What would happen if Greece does not pay? A hypothetical scenario


If Greece abandons the euro the problem for Greece would be how to pay the external debt, in this case, the debt acquired in euro and/or dollars with the banks. An important question is: What would happen, really, in the true practice, if Greece does not pay its debt? Well, in this moment, because of the dependence of the euro it would be a chaos for the population because the government would be not able of paying the salaries to the people and to guarantee the movement of the economy; but if Greece comeback to its national currency the situation would be different, because the government would be able of issuing the necessary money to guarantee the economic movement. If Greece has an adequate level of internal supply of goods and services it might overcome the first stage of the situation and advancing to a best position. The same is applicable to the other countries.

If Greece abandon the euro, at the beginning, the financial international consequences for Greece would be hard; first of all, it would not get, for the moment none loan from the financial system; this mean that the country would not be able of to pay its external debt during a time. But this situation cannot be for much time, for a simple reason: when you are a big debtor of a bank you, in the practice, become in a partner of the bank; if you broke the bank also will broke. That is the big problem for the banks currently: their debtors are, in the practice, their partners.

The unique form that Greece pays its external debt is getting more international means of payment, this mean dollars or euro and for that is necessary that the country increase its participation in the international commerce. The other form is refinancing their debt at a convenient period. A combination of the two solutions might be possible. The international financing system knows that there is not other option than refinancing the Greek debt and giving fresh money because if they do not do this very soon the banks will broke.

3. A big show

All this situation is a big show of the bankers and some politicians for obtaining more benefits: a) more bailouts, b) more interest rates, and c) more benefits regarding the debt, because the sovereign papers that in this moment does not has none value will be sold to a good price in the future.

The sovereign debt never is paid completely; it is an eternal debt and this is the big business of the bankers; they simply change papers by other papers at a new term. For example, Greece will not pay its debt in euro or dollars; Greece only will change their expired papers for new papers to be collected supposedly at mid or long term. Meanwhile, the banks obtain the best part.

4. Conclusion

The international financial system will resolve the problem refinancing the debt of all the countries involved in the situation. The banks will impose their conditions; that is the objective of the current crisis that was provoked by the same banks for obtaining more and more money. That is all. But it is also very likely that some European countries like Greece, Portugal, Spain and Italy will reconsider the benefits and disadvantages of to stay in the euro sphere…The pressure of their populations perhaps will compel to the leaders of these countries to adopt a decision regarding the comeback to their previous national currencies. Germany and France, which obtain the most advantages from the euro, might keep the Union.

The monetary policy is a key element to reduce the poverty and achieving wellbeing

I want to dedicate this reflection to the politician leaders of the countries affected by the scarcity of financial resources.


The lack of money is one of the main causes that impede the wellbeing of many nations.

First of all we must ask which the cause of the lack of money is.

The answer is not complex.

The lack of money has its origin in two facts: a) The misconception about the limitations of the national governments to manage its monetary policy in sovereign form and, b) The scarcity of dollars, which is the fiat currency employed for the international transactions.

It is necessary to say that in the last years the world has accepted a new international currency for the international transactions, the Euro, but this operates in a reduced magnitude. Also we must underline that recently has appeared an economic trend that intend establish a new currency or setting the Chinese currency, the Yuan, like a third international mean of payment. The financial crisis in the Euro zone and the downgrade of the U.S. debt made by Standard and Poor too few weeks ago has contributed to strengthen that trend.

I will explain following, the two mentioned causes:

a) Misconception on the governments limitations

The issue of money in the different countries of the world obeys to a series of economic rules and international duties. Those rules were established in the Post War with the creation of the International Monetary Fund, IMF.

The first rule is that the amount of national money that circulates in an economy must be in relation with the amount of the international reserves of each country. In turn, the parity of the national money regarding the U.S. dollar is the measure that establishes the total amount of national money that should circulates; in other words, is the parity regarding the U.S. dollar the fact that determines the monetary liquidity in the majority of the world countries; this rule act as a limitation that impedes to the national governments of the different countries to increase the monetary liquidity over the limit guaranteed by their international reserves. For example, if you have $ 10,000,000 in your international reserves and the parity regarding the U.S. dollar is 1 per dollar your national liquidity should be also 10,000,000 units of your national currency. If your parity regarding the dollar is 2 per dollar, then your national liquidity should be a maximum of 20,000,000 unities of your national money. This limitation in the capacity of national currency issuing is one of the principal causes of the developing nation’s dependence and indebtedness. The reason is very simple: because when the public spending surpasses the limit of the government capacity to issue money, the governments require loans to the international agencies or the private banking system. This is one of the mechanisms that have caused the developing nations debt.

One first step to resolve the problem of poverty is that the politician leaders of the developing countries realize that their countries have two sovereign capacities: a) to establish in sovereign form and without limitations the parity of their national currencies regarding the U.S. dollar and b) to issue, also in sovereign form and without limitations, the amount of national currencies that their economies require.

You do not need to request loans in dollars or Euros for financing activities in your national (local) currency. You need to request a loan in international means of payments (dollars or Euros) only if you do not have the amount of those currencies and you need to acquire goods or services in the international market. But, for financing activities in your national (local) currency, you can issue the amount of money that you need in sovereign form, and, of course, with the due balance. None foreign government neither none international agency can impede to a country to issue the national money that need for their internal economic activities; so that the issuing of national money is a sovereign decision of each country, do not limited by the amount of their international reserves, like commonly the people think, even like many politicians leaders think.

b. The scarcity of U.S. dollars

One of the most important obstacles for the development is the scarcity or lack of international means of payment (U.S. dollars or Euros).

You can issue in sovereign form the national currency of your country, but you cannot issue the currencies of other countries. Therefore, you cannot issue U.S. dollars neither Euros. Only the U.S. government can issue dollars and the European Union Bank to issue Euros.

Like the U.S. dollar is the most important currency of international interchange, the United States has the dominium of the international economy, because its government is the unique that has the sovereign capacity for issuing U.S. dollars. This is the main cause of the United States economic supremacy.

There are other key facts that contribute to the U.S. economic supremacy: a) that moreover of the gold, the U.S. dollar is the currency employed by the central banks of the world countries to keep their international reserves, b) that the most part of the international loans and debts are denominated in U.S. dollars, c) that the U.S. do not has external debt but internal debt, because the formal concept of external debt is the debt acquired in international means of payments, in other words, in U.S. dollars. Like the U.S. debt is denominated in its own currency, the U.S. dollars, this mean that the U.S. government does not has external debt but internal debt. This fact gives to the U.S. government the capacity of managing its financial situation with absolute liberty and independence.

The rest of the world countries do not have that liberty, independence and autonomy. The reason is very simple: because they depend of the amount of U.S. dollars that obtain and keep as a consequence of their economic transactions; they cannot issue U.S. dollars, in change, the United States can issuing all the amount of U.S. dollars that need.

Conclusions

- The governments can manage its monetary policy in sovereign form; this mean that they than can establish the parity of their currencies and the amount of monetary liquidity according to their internal economies needs, and without limitations regarding their international reserves.

- It is not necessary to request external loans for financing internal commitments, for example, the construction of one highway, school, hospital, etc; they must be financed with national (local) currencies.

- The external debt (in international means of payment) must be acquired only for financing external activities, for example, for acquiring goods or services in the international market, and only if the country does not have those resources.

- The external debt is one of the most obstacles for the countries development; therefore, the countries must make its most effort for avoiding acquiring new debts.

- The managing of the monetary policy is a key element to overcome the poverty.

- These ideas represents a different conception on the traditional monetary policy and are a complement of the basic concepts exposed in the essay entitled Money is only metal and paper without intrinsic value, philosophy of money, available in http://pablorafaelgonzalez.blogspot.com

The ecological employments are an effective road for combating the world poverty

The environment crisis because of the contamination and the overexploitation of the natural resources is a reality. The extreme poverty of the world population majority is the other sad situation.
The environment crisis and the poverty are closely tied. A solution for both situations might be possible. The unique manner of resolving the poverty is by mean of the employment. Without employment and just salaries the welfare is not possible.
But the creation of new jobs require three conditions: a) financial support b) natural resources and c) know how (technology). The modern world has scarcity of the two first mentioned resources and a concentration of the third (know how) in the most developed countries.
Which might be the solution?
I think that the creation of millions of green, ecological new jobs is possible in the world. (In this point it is necessary highlight that for achieving this goal we do not need more petroleum.)
How?
First of all it would be necessary to create a Global Program of Employment and Protection of the Environment. This kind of program only can be developed by the international agencies, the United Nations, World Bank and the IMF.
The first action of a program like this must be:
a) To create and to carry out ---with the support of the national governments--- a Global Program of Reforestation. The benefits for humanity of this activity in terms of employment and protection of nature it does not have limits. The creation of millions of new jobs and a great advance in the control of the global warming would be, among other, the results.
b) In a second stage, the Program of Employment and Protection of the Environment might develop other activities, as the developing of new jobs for protecting the water resources and managing the garbage.

The mentioned programs would generate millions of new jobs worldwide; protect the environment and diminishing the world poverty.
I would like that this idea might be considered as a contribution to the next Copenhagen Climate Change Conference in December 2009.