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THE NATURE OF MONEY

Money is fundamental  to the exchange of goods and services in modern society and object of virtue and  value and curse everywhere both to accumulate wealth and poverty .Money itself by value hardly depreciates but the exchange of money perpetrated by market forces too  foreign  to it , does change automatically  but imperfectly to reflect this changing value . When money by value declines ,  it is the exchange that declines by value of its flow that is affected .The consequence is that faith-a metaphysical fiduciary  powers  reposed in paper money also declines .It is this faith in paper  money being the original intrinsic and extrinsic value which could be affected by the flow and exchange spiral, leading to inflation and economic crisis . To curb this spiral and contagion affecting the metaphysique of money  and to stabilize the value of money and make inflation positive –the only phenomenon of economic growth , the liberalization of exchange of money , to perfect  SONACA is the only antidote ,  the commodity value can then spread wealth to every consumer in an economy irrespective of economic status . Consumer spending would hardly decline as long as exchange stability[stable money supply ]  is maintained and sustained .Growth in consumer spending would accelerate investment , boost savings in the long run automatically tackle recession and maintain the economic boom until an economy is willing to apply techno-cession  .To understand the stability of the word ‘money ’,we must understand change cycles and its implication on other vital economic cycles and how they reflect on monetary value .

When money changes hands , it is the value that is exchanged .Exchange keeps swinging periodically affecting the monetary value even though this value is stable .How do we preserve the value and spread the value and let it bear on the exchange ? This we already resolved above .The commodity value of money which is gloriously tied to the apron string of human faith is ordinarily stable and a source of real wealth of commodity money that has not been tapped .But the circulation value of money called money supply which abets inflation influenced by unstable exchange often have an unbearing influence on the general value of money and the economy controlled by credit arbitragers .So . in real terms , the commodity value of money hardly or does not  change hands to contribute real value . When this happens , the word money adopts a different and repugnant  nature discouraging real wealth creation , real economic growth in place of nominal wealth and nominal growth that can only be possible if commodity value is restricted in the dunghill.

If encouraged , this boosts the transparent flows of disposable credit money  in a robust credit economy for the  purpose of universal welfare  .

                              Basic Micro financial functions and economic exchange

The essence of microfinance ,not just the exchange of goods and services but basically to redistribute wealth and circulate the commodity value of money through disposable credit income to every needy economic agents .

Basic economy of exchange is sustained by extensive  credit  arrangements albeit haunted by structural and institutional  inadequacy .In determining the value and volume of money exchanges  , the annual credit income per family and annual credit income per capital both determine the quality of annual per capital national income per annum .What is the size of  this disposable national credit income on a sustainable basis that can back up with each man ‘s naira or dollar of gross and net national income ? What is the turnover rate of each naira or dollar of disposable credit income annually ? Is it 5o times or 100 times turnover rate per year  ? It is this ratio upward quality trajectory devoid of distress market and tight credit cycle can ensure sustainability of desired economic growth on the SONACA  Para-macroeconomic indicator  .This is  made possible by channeling savings  into redistributionist investment though not all is invested which is vital to grow standard of living .

                                   Changing Pattern of Investment

In modern society ,we admitted  those who promote creation of wealth do not promote real wealth but rather nominal wealth back up by nominal GDP growth in contrast to redistribution of wealth and circulation of commodity value of money .Real wealth has  been discouraged with possible consequences of boom and burst cycles .Without  real wealth , marginal savings can also take place but not real savings to promote universal wealth based on heavily restricted business opportunities. Promoters of investments  have been able to dip their hands into these savings not owned by them to promote concentration of wealth while original owners of wealth languished in poverty  .

There is constant flow of savings but the exchanges are not vastly different and adequately efficient  in the circulation of commodity value  ranging financial and microfinancial instruments to communicate values to agents .  Consequently , a non-redistributionist society does not parade a uniform credit cycle or egalitarian cycle of credit arbitration in credit assets or credit  evenly contracted and expanded its efficient use  to over every potential needy project .LIBERALISATION OF THE ACESS TO CHEAP CREDIT is a fundamental challenge to redistributionist oriented society than the former in which circular flow of credit and credit money or income is evenly endorsed to  promote capital development .This is a fundamental basis of free market economy .No free market exists without a robust  national credit trade .

A free market economy until now hardly exists a farce an illusion and impossible without a robust credit trade or credit economy with extensive patronage of  financial sovereign intermediation .More than 200 years after Adam Smith free market is yet to exist .This is a shame to western scholars and the pattern of investment must be determined by the nature of this free market economy .Forget about western neoliberalism .The first free market economy model is the neomarxist free market which is represented by everyone an only be endorsed in redistributionist society than a non-redistributionist oriented society that discourage ordinarily even circular flows of funds among its citizens with incentives pummeled by arbitraging bias .This is the very first reflection of free market in mortal history and the 1^st generation of seven free market macro economic models evolved by market redistributionism as we endeavor to exit modern age civilization to golden age civilization under Potage Golden philosophical templates .

 Mobilization of Savings and Multiplier effect .

Loan able funds arise from disposable[net ]  savings [money not needed by savers over a period of times ] excluding gross savings are channeled to safe investment when mobilized by third party .The facility usually regarded as credit has not been well utilized for a long time as an instrument of wealth creation .What is the proportion of  net national disposable savings to back up meaningful  investment per annum in an economy ? The use of disposability is termed as gross credit oriented to promote credit income by the borrowers after a satisfactory repayment .What is the proportion of  credit  income  required whether loans are rolled over or not  to promote  a befitting  standard  of living  for the borrowers  ? If sustainable after repayment , how can credit and credit income be value added enough to continually run a marginal project without recurring recourse to loans on a periodical basis ? It is pertinent to observe as we know  usually  that  a repeated credit purchases is necessary to improved  business performance .Guiding against credit risk even for tested borrowers is a great challenge to microfinancial institutions .

Most importantly , the volumes and value of microfinancial instruments to gulp the existing cumulative savings are a meager lot if not a rarity,  do not exist in the financial systems world wide .The cost of mobilization of savings  is too cumbersome  and the use of savings does not really  have value and very costly in every sector of the economy .In real sense , in modern societies , channels for their effective usage do not exist . channeling  savings and net national savings to where they are most needed at the right time , at the right place , at the mass and at the right price with the least  cost  and satisfactory convenience to necessarily equate the targeted desired level of growth projected  in an economy.

Micro financial  Management in the free market society

The movement of capital credit  and credit income through various grass root acts of exchanging goods and services profiting largely from disposable savings ,with the sole aim of grass root empowerment   and SMEs capacity building funds deployment for optimum informal sector performance can be regarded as Micro financial management .Though can be noted as  a branch of financial management having secured a foothold on its own given some appreciable disciplinary evolution over the last 30 or 40 years is finally charting  its own course with vital autonomy to enable it add more economic value to general economy.

Actually , microfinance is the origin of finance to say the fact ,  in the much same way in which  we enthuse that micro credit  is the origin  of the modern  credit. Likewise , we need observe that informal sector is the projector , the insulator  and cradle of  the formal sector but as human economy grew complicated , the harbinger was left behind and modern man regarded it as too naïve and  a fugitive even in its backyard; and by conniving with  its siblings betrayed its legacy  , this they did  in the much same way as they have regarded freedom a fugitive in our world today . Informal sector was left to rot and die if indeed it can rot and die .The reclassification in the modern times is sequel to change and growth in the finance technology of the age bringing it under the shadow of a new world of civilization .

Microfinance , if fully perfected academically , technically and practically is far more effective , advanced and broader than mainstream finance and should not be grouped under it in any way  whatsoever even though micro[grassroot/unbankable  finance ] is n’t much different from the word ‘finance’ but not  with the same level of expertise especially in developing countries with large informal sector economies .  The larger spectrum of world society  does not have access to it which indicates the study of finance theoretically and practically is still evolving and can only be matured  until microfinance  by usage and spread  has found its final footing  and bearing in the field of credit trade which must be discovered  and thus world economy can now be rebranded and reclassified to have grown from the level of western primitive finance and jungle finance textbook and moribund nature of microfinance into the broadest field of macro finance , thereby giving birth to macro financial system from the present wobbling and fumbling inhuman structure of financial system that Robert Kiyosaki popularly regarded as a large ponzi scheme scattered all over the world to the system  in which every one is represented .This inadequacy we may not know it and  ignore it , is the fundamental basis of world economic crisis .

Potage Golden templates  and its diverse types of macroeconomic and free market economy ’s models is to guide  in the transition from the present stage of  neoliberal age to the final stage (in which macro financial system is fully matured –that is to serve all) .Microfinance though gained renaissance in 1960-70s which originated finance but was denied glory and social status by existing social forces and betrayed by its own seed  through the noted arbitraging  , crumpling its integrity and dignity sunk  for millennia before the rediscovery by Muhammad Yunus , Grameen Bank and Accion in Latin America among others in the new waves of finance technology sweeping the globe. Unfortunately the credit trade arbitragers dominating world financial system were contented to award only face saving Nobel prize to a world hero  compared to Nobel price for economics despite the fact he had more even more than or could be rated in the same category like Adam Smith or Keynes .I really don t know why he had failed  to receive such attention . Being the father of unexplored microfinance macroeconomics ,  he is far more better than these fellows because his policy or technology  touches close  to 80 percent of world population if well exploited .Now that he had been unfairly removed from his position at Grameen did not speak well of the way an hero should be treated .Is that how to make relevant someone who had contributed to world peace than all of western finance and economic professors put together   ? To be candid , it is the greatest discovery in the field of finance and economics and the luminaries deserved noble prize for economics not once but even twice .The rebirth markedly opened a new chapter in finance and economics revolutions and a new dawn bringing finally to an end the lifelong denial by the mutineers  to save world economy from landmines that economic vampires had supplanted and unleashed on its well being for the entire stretch of human history  .

The way in which microfinance is being managed has a great strategic impact and redefining powers  to revamp the characters of our socio-economic system  and a revolutionary to affect its optimum performance in a way to transfer wealth through the disciplines of the market to the marginalized segment of humanity .This  aims at maximizing  the quality and quantity of economic freedom over all , restructuring where possible for the purpose of universal welfare .We shall have to evaluate existing customs and tradition out there from the study of financial institutions to the reflection of the new role and new development and set corporate governance rules for the budding micro financial institutions among us or new ones as is possible and practicable in real  world .

The  Study of Microfinance And Changing Technology Of Finance .

Therefore like finance and economics , Microfinance , micro financial management and micro financial economics and its ilk’s must be studied in virtually every tertiary institution of the world or relevant studies of finance modified so as to promote and broadens technical and professional expertise in the field .This is vital for a field that has more to offer  in real world ,has great potential in spreading real growth ,real wealth and real standard of living among citizenry of  the marginalized societies .We shall have to inquire more and improve ways in which all this dithering models  can impact heavily  on fundamental human rights  and individual empowerment enterprise lagging behind in mainstream finance markets  .

THE ROLE OF MICROFINANCE

Credit trade arbitraging 

Money and finance  are twin face of an economy –a basis of development in modern societies .Not many  knew an economy is subdivided into two based on this  dual purpose category  .This subdivision in the long run  gives birth to dual macroeconomics .This comprises of monetary and credit system .Redistributionism  believed since they play a different role but similar objectives facilitating economic development  , they should each be given their separate autonomy inasmuch as we have recognized their separate but complimentary role strictly for ease of quality discharge of their obligation .

Though money and finance are strategic twin  faces of an economy ,truly speaking they do not reason the same due to the nature of risk transaction involved .The modern societies have not come to term  with it and the least they can do is to virtually reform everything and how viable will they be? A monetary system and a credit  system should operate differently .But because almost every economic agents that are involved in the monetary system have also been caught in the web transaction of credit system buying and selling   debt to either  prosecute or bail out marginal project depending on timely investment decision   .Along the line , due to lack of effective model and poor perusal of change cycle,  this dual purpose or twin faces were complicated  together in modern society as the financial system even though have mingled for millennia .This was instrumental to unprecedented human prosperity and also tussled with  re-emergence of boom and burst cycles in an economy has proved otherwise .

Initially , the dual nature of an economy had long been recognized long before the merging bias by modern economists because credit and money grew slowly with the first civilization in whatever form they might be and the  first generation whose cradle arts and crafts  were instrumental to later development  .This changing motive was dictated by moral precedence of economists and policy habits later disputed by successive rationalist economists .The dual model purpose still today has long been neglected  .It is true that if we subject our financial system in to intensive study perhaps by public commissions seeking to ascertain  the quality in the discharge of their obligation ,we would however found them wanton with this original device. Economic crisis everywhere is a proof   .This requires not regulatory changes really per say since its abets inflation should be deemphasized , without a perusal of its effect on inflation nor does it require a reform really but systemic changes not reforms needed to put back the financial system on track.

The persistent modification in structure and the very objectives of this volume stresses  vital reform not needed but rather systemic changes motivated to reposition the financial system fairly well as the common asset of the public .We have come to believe that the merging bias might not be the problem really but insensitive pawn brokers and the  economic vampires who spill blood of the poor and constitute social threat to economic growth . The inherent inequality of wealth that Marxism admits is the fundamental erosion of social sanity is also the  very primogeniture and everlasting patrimony of business cycles .  Revamping the financial system models and modeling character is central to effective resolution of man ’s greatest economic challenges . Nothing can be compared to efficient financial system in which everyone is represented not one yoked by the repressionists avoiding a large scale operation and undue patronage of ponzi scheme popularly regarded as the financial system being run today is a task that must be done for the problem not to persist and heavily curtailed even beyond the confines of mainstream banking for the good of unsafe  posterity  wherein we are headed .

The primordial role of microfinance is simply to strangulate and possibly eradicate the credit trade arbitraging a worst form of development arbitraging ever noted bud nipping its syndrome and banish this arbitraging noted in modern societies .Those marginalized  from formal sector yoked with high indebtedness need not  have the same mentality as those who profited heavily from the ponzi scheme  .

                                    Merging Bias : Credit Trade Arbitraging ( CETARB)

The dual face of an economy however from the antiquity to the modern times basically shares this linkage .Credit income which is to draw from surplus[savings ]  mobilized is the super structural  linkage of the two faces but the system of national credit income account  (SONACA)  hardly exist and has not been considered even for once in the much same way in which we have recognized system of national  income account  .In America , Simon Kuznets  opened the way and gave us the latter .Who will bail us out of this knowledge theft haunting humanity and humiliating economists worldwide ? Hence all economic crisis can be resolved . This neglected system is the most important resource and the final arbiter to bridge inequality of wealth existing in human society  .That is the original intention of market redistribututionism  .

A sound financial system rests largely on both legs but not so with the whole [dual system]  jumbled together today  .It can not be ignored that both legs occupy the same level of importance to human body .An amputated financial system whose credit economy is strictly cut off to be dominated by inefficient banks can never avoid business cycles .The financial system worldwide is resting on only one pony trick and the capacity of an amputee is at best inadequate to support the level of market activity vital to ensure   desired growth of an economy  protruding from actual growth of a nation ..To boost desired growth not volatile  GDP growth and bridge against this arbitraging which ordinarily occurred as a result of lack of  effective dual macroeconomics model  , we must perfect the  system of national credit income account [SONACA] first and its GAP[GDP] co-efficients bridging Kuznets missing link [KML] , for a sound deregulated  financial system which deals with circular flows of fund in a redistribututionist economy  as opposed to non-redistributionist economy to be harnessed  to serve as the common property of all a sundry .The perfection would give us a robust credit economy and therefore the attainment of dual macroeconomic stability is possible to effectively counter business cycles for universal development not arbitraged development .

At the time the monetary and credit systems were lumped together the pawn brokers and the usurers who have taken over the domains of the fraudulent system  totally failed to accommodate the unbankables and marginal borrowers not because of lack of credit history  or something but due to  poor banking model whereas the marginalized segment that control the  population base which is the real wealth and not the capital base controlled by wealthy class which is the nominal wealth have refused largely to relinquish their hold having  profited largely from the arbitraging trauma that supplanted the system which is the fundamental causes of economic crisis in all of human antecedence .There is no alternative unless those excluded from mainstream white bowl of porridges to be eaten and consumed by all  be fairly accommodated .That both must be capitalists and owners and workers is the sole essence of a neomarxist era  .These porridges provided by nature must be consumed by all humanity not for capitalist prosperity but for  universal or equalitarian prosperity .

To restart free market economy all over again ,  which presently does not exist , we must go back to the basic and create capacity for the two legs of macroeconomic body  each with its own autonomy and ethonomy to walk effectively  and perfectly well and not like an amputee whose life dreams were long truncated by terrible landmines – Then it cannot only crawl but walk , stroll, then  jog and later run like a gazelle or greyhound ,slow down when it pleases and then speed up .Right now has not yet started to crawl let alone adjust to walk  and the entire flexibility isn’t just there and a major reason behind intermittent financial turbulence  that comes not once again every century , with the emergence of the great depression of the 1930s to occur  twice or thrice even in a decade .Rampant economic crisis  shall be a thing of history when every one else  eats from this bowl of porridge .

This remains the fundamental aim of neomarxist era to be maneuvered through the instrumentality of market redistributionism and microfinance .To redistribute wealth in this context , we can crush the arbitraging mendacity that separates indigent men from development market and the inequalities that causes inflation –a fundamental economic problem .This is a new dawn in the history of macroeconomic study and of mankind making the world a safer and a friendlier world to live .Here , we have come ,  the intention of the book is known , let us now begin from the scratch .

Next article - THE  NATURE  OF MONEY