And why is it essential?

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Sorry - contents have been withdrawn pending publication in bookshops d maybe Amazon etc. Please read this new page

Your advice is welcome as I am a first time author. 

a word or pdf copy of the final as published is available from the writer
email: eingram@ingramsure.com

Draft Booklet as at 22nd May 2017

By Edward CD Ingram  16th April 2017 Macro-Economic Design & Management

Copyright © IngramSure (UK) Ltd – all rights reserved.

ISBN 978-0-7974-8870-0
Registered May 2017

First Edition: Issued from April 2017

Skype: edwarding2
Email: eingram@ingramsure.com

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To all our Futures

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Economics has overlooked some fundamental principles.

The resulting, unnecessary, and significant financial and social stresses, are putting governents at risk. Governments have a choice if they want to stay in power. They can either:

• Invest in more internal security and political half-truths and worse. But there is no guarantee of avoiding some level of discontent, violent opposition, uprisings, civil war, or trade wars by that route.

Or they can

• Invest in making these changes to harmonize their economies and significantly reduce these problems.

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PEER REVIEWS Most of these reviews, other than those written by R Cloete and T Chowa, were written before the full researches had been documented. The writers cannot be held responsible for parts which they have not read, mostly on detailed currency and management issues.

Riekie Cloete is an experienced macro-economist and past mentor of post graduate students. She has joined our team as chief tutor on the course. She writes, "I have wide experience of many schools of economics. This Ingram School is the first I have ever seen which addresses these critical issues head on and in a sound academic way."

Dr T Chowa, Lecturer (Actuarial Science & GSB), writes: “As Edward explains, when an engineer designs an aircraft the first task is to make sure it is stable in flight. Only then are the management systems put in place. In economics, everything has been done the other way around and the damn thing won’t fly!” There is literally no other person who has looked further and seen further with such clarity as Edward Ingram. 

Dr Rabi N. Mishra, Economist, and a Chief General Manager, Reserve Bank of India writes: “This book will inspire rethinking on the perimeters of economic thought and theory, and their practical use in policy making. A ‘should-read’ for budding researchers in Financial Economics to expand its horizon.”

Dr. Azam Ali ex Senior Economist Bank of Pakistan writes, “Dear Edward, I am following your endeavours of rewriting the economic framework with great interest and am on the same page with you on almost all the issues you raise from time to time.”

Professor Evelyn Chiloane-Tsoka from the University of South Africa, says “These ideas will become prescribed reading at universities.”

Alan Gray, Editor-in-Chief, NewsBlaze, writes, “The Macro-economic Design group’s elegant solution is so simple that it has eluded the big economic thinkers of our time, because everyone was looking for a complex solution to a complex problem.”

Andrew Pampallis, Retired Head of Banking at the University of Johannesburg, mostly referring to lending reforms, wrote, “When people realize what you have done all hell will break loose.”

As a financial adviser arranging mortgages, giving financial advice, and managing investments Edward became outraged by the way that building societies were behaving in the UK, in the 1970s. As inflation took off, interest rates constantly rose, but real interest rates fell, reducing the value owed. But the regulators forced building societies to collect more in repayments rather than less and they went on a spree of repossessing the homes of Edward's clients.

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He decided that something must be done and he set about doing it. That research led to more and more discoveries about what is wrong with the structure of the world’s financial contracts. This then led to further investigations about how the entire economy works. Until that exercise had been completed it was too difficult to demonstrate to skeptics what really needs to be done. Now, after decades of trying to pinpoint the real issues, he has finally established the basic principles which must be followed to create an orderly economy. This has created a whole new school of economics. 

MORE BACKGROUND Ingram was passionately interested in the dynamics of systems after studying electric control systems design in the 1960s. He found that the theory could be applied to many skills in life, not least, macro-economics. He took up a career in financial advice and fund management in 1969/1970. He learned very fast on the job, having first taken interest at the age of around 14 as a young shareholder. 

This led to an outstanding career during which his innovations and publications made headlines across all significant media except live television. He was not interviewed on television until later, but after being invited, he joined the BBC's unit trust panel on CEEFAX. 

What he learned, and what he has already published and presented in lectures to universities, forms the basis of this book and the many lectures and writings which already elaborates upon it. In that regard, a second volume and maybe more volumes are to follow..

Many people lay claim to forecasting the 2008 crisis. Ingram is one of them. He drafted a letter to Alan Greenspan warning him of the dangers of reducing interest rates as early as 2004 but was told by his review committee not to tell the master how to do his job. The letter was never sent. Historians are now saying that Mr. Greenspan knew the risks he was taking but was pres-sured to do otherwise. Today, the low interest rate problem, which Edward has named the LOW INFLATION TRAP, has taken centre stage and by now most economists have some level of understanding of the problem. A central part of this paper is aimed at removing that trap and making everyone become, and feel, more financially secure. 

Edward avidly followed new macro-economic papers and regularly made investment decisions which showed deep insights. These insights were often discussed with a city economist. A day or two later they were frequently being discussed in the media. His flagship investment port-folio benefited significantly. This portfolio never fell in price in a calendar year despite some turbulent times. See FIGS 1 and 2.

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FIG 1 – 11-Year Performance of the lead Ingram Investment Portfolio, Style A – for Steady Growth

The scale used is a log scale which means that compound growth is shown as a straight sloping line.
The two parallel sloping lines show tax-paid portfolio growth at 15% p.a. during the first 11 years.

The stock market index shown was the usual 30 share index used at that time.

This graph was independently verified by the media (Planned Savings Magazine)

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FIG 2 - This 17-year performance graph was internally provided by the company statistician.

What makes this script / course of study different is that Ingram has called upon all his diverse skills and insights to provide a comprehensive list of dynamic principles and practical solutions for the design and management of economies. In the majority of cases these principles have never been implemented despite their being obvious when pointed out.

                                                                             Page 9 of 48

This city economist, FIG 3, was not the one mentioned above.

FIG 3 – Sunday Times Letter

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FIG 4 - BBC CEEFAX cover letter to Ted (Edward) Ingram

There are more cuttings, background, and publications to be found by clicking HERE

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#1.1 This is a major shift in economic theory. It is based upon well-established free market pricing principles dating back to David Hume in the 1770s, and re-stated by Adam Smith. These have not been incorporated into to the design of key parts of the economic framework of nations. Free market pricing:

1. Optimises the use of the resource in question
2. Cuts out a significant amount of financial and political risk
3. Simplifies the behaviour of an economy by orders of magnitude
4. Creates new policy options which need to be explored.

#2.1 The number of problems which the resulting proposed changes can solve, appears at first sight, to be far beyond reasonable expectations. Even when it is clear why this happens many high-ranking economists don't feel comfortable with this. That was the experience of a high-level review panel of just the first part of this overall study in 2004 whose membership is given in the acknowledgements; but they finally agreed that no one could find any fault. It was then accepted. Other economists realise that there are fundamental flaws being addressed, and they get increasingly excited the more they read.

There is a theorem which explains the simplification which is generated. It is called The Com-plex Systems Theorem. “Remove the source of a problem in a complex system, and generations of knock-on effects disappear. Multiple problems which had always appeared to be intractable, simply vanish as if they had never existed.” First identify the source problem, (in this case a lack of free market pricing), and then remove it. Allow free market pricing to operate. The benefits are mind-bending. This analysis, that of the Ingram School, demonstrates that the need to do this is financially, economically, and politically compelling because the cost of doing nothing is too great.

#2.3 Try looking at this the other way around. We allow one thing to be not priced correctly, like the cost of home loan repayments which jump around, and we get all kinds of problems with house prices, home repossessions, collateral security, bank viability, and then we get interventions which draw funds from ‘here’ and put them ‘there’ causing more uncertainty to those who lose out, and the political ramifications go on and on. Then add another wrong pricing mechanism and you get another cascade of confusion and complexity. In this paper, we identify up to five things like this, five wrong forks in the road taken by economics, which can be addressed. How complicated do you want the economy, and the associated human behaviour changes in self-defence, to be?

 #2.3.1 “The difficulty lies not so much in developing new ideas as in escaping from old ones.” - J M Keynes.

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#2.4 The PEER REVIEWS are impressive. This will take Macro-economics, Monetary Policy, and Finance, a significant step forward.

#2.5 This school of economics is essential for the peace of society, and political stability.

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The course content is the same as is outlined herein but it goes into the important practical details needed for any kind of implementation aimed at creating a better performing economy.

Thought leaders including policy makers at the treasury, central bankers, and academics in economics, banking, risk management, finance, and accounting, are invited to join this three-month-long, weekly webinar workshop, with tutorials, homework, opportunities to create new doctoral and other papers, and a university graduation certificate.



#3.2.1 This course lays down and explains the same principles which are outlined here in this document/paper, principles which must be followed in order to achieve a self-adjusting, harmonious, and easily managed economy, for the first time in history.

#3.2.2 You will learn that for almost every financial contract, related regulations, and for some key market sectors involving currencies, interest rates, and monetary policy, major structural changes are needed.

#3.2.3 A lot of work on monetary policy and banking is already being done by others. Those researches are included as a part of this course. The difference is that the other researchers are building upon an unstable financial framework which requires more complex, and by defini-tion, not entirely effective, management solutions.

#3.2.4 As in any paradigm shift, if you want to predict the future, it is better to be a part of it and help to drive the process forward rather than desperately struggling to catch up later.

#3.2.5 Graduates from this course will be needed to steer the process of change at every level.

# In time – which may not be very long - thousands of graduate practitioners and financial consultants, will be needed. They will need to learn and to teach the practical con-sequences of taking even the first steps along this road. They will become essential sources of information for financial institutions, regulators, financial product designers, financial advis-ers, for financial and business planning, for understanding the new currency market operations, and for monetary policy.

Conferences and seminars can also be arranged at your own venue. These can be live events with our team as the presenters or they can be done in the same way that it is done on

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television news: with cameras at both ends transmitting everything to both ends. The software needed is freely available online.

CONTACT: Johan Christiaan Van Der Walt, B. Comm
Emailjcvanderwalt2803@gmail.com Cell: +27 81 718 6449

To register to take the course and become a part of the development process in the workshops, please go to the website and look for ‘Professional Development Courses'. Then select the one called MACRO-ECONOMIC DESIGN AND MANAGEMENT. The website is http://www.nustcce.com/

#3.4.1 DETAILS are given on that site with course modules repeated in #7 hereof. It is a once per week 1 - 2-hour webinar (interactive lesson online), then homework, tutorials on Skype or Google hangouts when requested, or email, when available, and then on to the next weekly webinar over a total of three months starting this May 2017. Exact date to be advised. Total cost $450 including final exam and cer-tificates.

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#4.1 The Ingram School of economics is about optimizing the performance and management of economies by creating free market prices in all key units of the economies of nations where they don’t currently exist.

#4.2 It was J M Keynes who wrote, in his "A tract on Monetary Reform", Macmillan 1923, that if money was to halve in value and everyone got paid twice as much and had assets worth twice as much, and paid twice as much for all assets and all satisfactions, they would be wholly unaffected.

If all the relevant prices, costs, and values were to adjust to offset the falling value of money then it would be as if the entire economy had been placed upon a floating platform – one which floats on the ups and downs of inflation as a ship floats on water. The economics and various transactions taking place on the platform would not be much concerned about how the platform was moving as long as all of the economic activity taking place was doing so on the same platform. All prices concerned with supply and demand and all innovations and so forth would continue to operate and to interact as if the platform was standing still and there was no fall, or change, in the value of money.

Any price which does not rise when the value of money has fallen becomes relatively cheap and so there is an increased demand for that good, service, or asset, which in most cases will adjust the price upwards putting it back on the platform and restoring order. The practical out-come is not perfect – there are delays and not all prices respond in what economists call an elastic manner – that is proportionately and quickly. But enabling this process to take place wherever possible can change the world of economics and make life much easier for everyone.

#4.3 KFPP
Let's call this Keynes' Floating Platform Paradigm, KFPP – A path to take, a pricing plat-form to create by using / liberating / simulating free market forces, an objective to target, but a path which Keynes and various schools of economics have, until now, failed to take.

Would making this change encourage inflation by removing the pain? No. It would remove most of the re-distribution of wealth, the confusion, and the destruction of financial plans and the political fall-out which goes on. Inflation cannot be sustained if new money is not con-stantly created at a sufficiently high rate. There will always be some rate of inflation but it does not have to become hyper-inflation.

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As prices rise a little to absorb any excess money in circulation, the excess money becomes no longer excess money but the money needed to continue economic activity at the then current, higher price, level.

To create this KFPP floating platform, all of the following prices need to be free market prices and able to adjust to the falling value of money, for otherwise people would be affected by it:

#5.1.1 Savings, Pensions, and Lending Contracts - their cost per month and the value of the contracts including annuity payments, bond maturity values, the monthly cost of home loan repayments, and that of commercial debt repayments

#5.1.2 Interest rates – this is the cost (price) of credit and the means to restore the value of savings and loan accounts

#5.1.3 Incomes - the cost (price) of hiring people

#5.1.4 The cost (price) of imports - a free market in the trading currency is needed to balance trade, and thereby to adjust the value of the currency to the falling value of money. This is also needed to optimize the use of the international resources of goods and services.

#5.1.5 The price of international capital - there has to be a balance between the demand by nationals to exchange their local capital currency for foreign capital currency coming from other countries and the demand by foreign entities to exchange their currencies for the local / national currency. The price must adjust to create that balance. This has to be a separate market in currency. There is no such thing as 'one price fits both markets.'

#5.1.6. Currency trading is an issue to discuss to the extent that it has an impact on volatility and liquidity.

#5.2 However difficult it may be to limit arbitrage between the two currency markets, the cost of doing so will be significantly less than the cost of not separating them. Approximately one half of all business prices have an element of the currency price included in them. Allowing instability to continue there has a cost which exceeds any imaginable cost of regulating these two markets to limit arbitrage and maximize the use of resources. In fact, the regulations needed may be relatively cheap and easy to impose without slowing international transactions in the process. This is explored in the interactive workshops in Module 4 of the course.

#5.3 Very little currency gets exported or imported in either of these currency markets. For the most part, each currency would be spent on the output of the nation to which it belongs.

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#6.1 Wherever there is a free market price for any resource, this optimises the use of the re-source in question:

#6.2 It does this by raising the price until only those with the greatest need or the most profitable use for the resource can afford it. This works as a market force because the greater the demand for an output, a good or a service, which gets produced with the help of the resource in question, the more profitable it can be to pay for the use of that resource. If there is a free market pricing mechanism in place, the producers of those outputs which are in greatest demand and which need a particular resource will be the ones best able to afford the price and so acquire the use of that resource.

#6.2.1 As always, if demand rises and the supply does not increase then the free market price rises to choke off excess demand.


#6.3.1 Remember #2.2 – the complex systems theorem. Any part of a complex system which (in this case does not adjust to offset the falling value of money) creates a generation of knock-on effects in other parts of the system. Then:

#6.3.2 Looking at the above list #5.1.1 – #5.1.5 inclusive, where the pricing mechanisms are not operating as they need to, there are too many prices which do not adjust to offset the falling value of money in almost all the key units of the economy. These include:

a) Financial contracts,
b) Interest rates,
c) Asset prices, and
d) Currency pricing.

#6.3.3 It is not only bonds and housing finance, and commercial finance, which are wrongly priced. These wrong prices ruin budgets, they result in the repossession of homes, they destroy businesses, and they re-distribute wealth. In that way, they produce a constant stream of other wrong prices, leading to crises and problems. These prices clearly do not optimise the use of their related resources.

#6.3 Remember, every wrong price creates a cascade of problems in the complex system which is an economy. There are four groups of wrong pricing mechanisms built into the world’s economies as already listed above. How complex do we want our economies to be?

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All of these are to be examined and discussed in the course / workshops.
#7.1 The modules are:
MODULE 1: Basic economic principles, proofs, and the Complex Systems Theorem.
MODULE 2: Safer Savings and Lending contracts paradigm
MODULE 3: The new credit markets conformance framework
MODULE 4: The new currency markets conformance framework
MODULE 5: Treasury and Monetary Policy dynamics
MODULE 6: Comparison with other Schools of Economics.

#7.2 Should it be called a workshop? It is the equivalent of a working paper which is alive with people working on it. Go to www.nustcce.com for registration and more details.

As noted in #2, the number of problems solved by the proposed changes may appear at first sight beyond reasonable expectations, but they are not. By removing the source problems:

#8.1 Wealth re-distribution, financial hazards, confusion, and loss of confidence, all minimize.
#8.2 The practical thesis is that ‘‘Safer' is simpler, less costly, more competitive, builds confidence, and significantly boosts investment, employment, and economic growth.’
#8.3 Generations of economic and financial complexity disappear as if they had never existed.
#8.4 Significant amounts of currently generated social and political turmoil disappear.
#8.5 The use of national resources of every kind, including savings and credit, the construction sector including the provision of housing, employment, and foreign direct investment, all op-timize.
#8.6 Management of Monetary Policy simplifies significantly
#8.7 Economic modelling to predict the future will become relatively simple and significantly more reliable.

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#9.1 As a subject, economics has taken three, maybe four, or even five, wrong forks in the road. This paper, as a summary of the workshops and the course, looks at each of them in turn.

The first wrong fork was taken in 1923 by J M Keynes when he noted that fixed interest bonds re-distribute wealth, but then he did nothing about that. He, and others since then, did not ask what should be done about these failures to adjust prices. The result has been a chaotic response of many key prices to all changes in the value of money. The value and cost of financial con-tracts like savings and loans, currency prices, rates of interest (another price), have all become victims. This has also made Monetary Policy a victim. Monetary policy does not have enough instruments available to address all of the consequences. Nor should it, because every intervention of that kind creates its own unwanted wealth re-distribution effects as resources are taken from ‘here’ and placed ‘there.’

#9.3 Remember, a free market price which can balance supply with demand optimises the use of the resource in question without any need for an intervention. At the market price, given a limited supply, only those with the greatest need, or the most profitable use for the resource in question, willingly pay the price needed to acquire the use of it.

#9.4 Remember, if any one price does not adjust upwards when money falls in value, then it becomes relatively cheap. In most cases this increases demand and restores the market price. It takes time and not all prices adjust easily, so it is important to have a low rate of devaluation of money to minimize these problems.

#9.5 Instead, Keynes and his followers have mostly concentrated on trying to prevent money from falling in value at any significant speed - which is also important. But it is not so important when, contrary to normal expectations, the lower the level of inflation gets, the more unstable the economies of nations become. Inflated, unsafe, and unstable finances and asset values such as bonds, property, and equity prices, become more inflated and more unsafe as inflation falls towards zero. See #9.8 below, and Appendix 1.

#9.6 As just stated, Keynes, and his followers ever since, took the other route and tried to minimise changes in the value of money as best they could whilst ignoring the instability issues and the related wealth re-distribution issues.

#9.7 He (and they) should have taken both routes because:

#9.7.1 A safer financial framework reduces social and political damage to a nation.

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#9.7.2 It optimises the use of all resources.

#9.7.3 What makes changing over to free market pricing an essential exercise now, is that the rate of inflation can then be low without the complications of #9.5 and the LOW INFLATION TRAP.

It should be noted that monetary policy in those developed economies which are facing the greatest difficulties today are those with the lowest rates of inflation. This is not a co-incidence. The cause is not hidden from sight. It is right there in the mathematics of the financial contracts being used, combined with their low rate of incomes growth. After any small rise in interest rates, high incomes growth is needed to restore order and affordability quickly for borrowers and bond investors. Home loan monthly repayment costs would have leaped upwards and bond values and property values would have tumbled. Wrong currency pricing activity also adds complexity. Instinctively, people expect financial stability to increase as the rate of inflation falls. This clearly contrary outcome is explained in more detail in Appendix 1. Those econo-mies with higher rates of inflation and incomes growth have smaller problems of this kind and recover faster. But they have smaller home loans and less access to business finance. Like the advanced economies, they still have significant problems with wrong pricing mechanisms in almost every key unit of their economies.

#9.8.1 If all prices, including the maturity value of bonds, the cost of monthly loan servicing payments, the cost of imports, and the rate of interest, could adjust simultaneously to the changing value of money, the economy and its people would be unaffected by the falling value of money.

#9.8.2 It would be like moving the entire economy onto a moving platform or a ship which rises and falls on the water without the water or lift level having any effect on the activity taking place on board.

#9.8.3 Unfortunately, as things are, there are significant disruptions and distortions being cre-ated in asset prices, costs of finance, interest rates, and currency values. Each disruption has multiple knock-on effects on other prices and, after accounting for the social consequences including unemployment, loss of family homes, and of businesses, there are substantial political costs which we know can affect the outcome of elections and the formation of extremist groups and worse.

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It can be concluded that governments are at risk. They have a choice if they want to stay in power.

They can either:

# Invest in more internal security and political half-truths and worse. But there is no guarantee of avoiding some level of discontent, violent opposition, uprisings, civil war, and trade wars by that route.


# Invest in making changes to remove the problems.

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#10 This was the decision to use banks to create money, as opposed to using the state to create all the money. Banks are allowed to create new money and then lend it. Banks allegedly create around 97% of the money in circulation. The result has been:

#10.1 .1 A lack of precision over the rate at which new money and associated additional spending is created.

#10.1.2 A managed price of credit - centrally managed rates of interest in place of free market rates which would have optimized the use of credit.

#10.1.3 Given the quantity of money which is needed being 97% of all money in circulation, what would we do with less of it? To get it, people must borrow enough from banks. The result is a slave-state type of economy, one which cannot function unless there is an ongoing saturation level of real and latent borrowing appetite and borrowing preference, backed by plenty of ongoing confidence to make it happen. That steady level of confidence, and ongoing saturation level of borrowing preference, whereby people always prefer to borrow as much as possible from the future, is neither sustainable nor natural.

#10.1.4 In order to de-couple the economy from this borrowing dependence, there needs to be a way to create more debt-free money and to make it available to the economy.

# There must be a balance between the amount of debt-based money and the amount of debt-free money in circulation. And the criteria needed to determine that balance needs to be found.

# Identifying the options and discussing the practicalities is a part of the course / work-shops. Work has been done on this by Professor Steve Keen,1 but in a less than wholly holistic context. That is, without the benefit of other reforms being put in place to eliminate most of the other complex instability issues which are listed herein.

# What this means is that all other studies relating to the management of monetary policy, and the general behaviour of the economy, are trying to address too many issues. This begs their innovators to create over-complicated and imperfect intervention solutions.

#10.1.5 This interest rate manipulation method of managing the aggregate level of money, and spending, in the economy, is so loose that it results in asset price bubbles and bursts which are widely held to be responsible for creating many recessions.  

And links here:

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This is the view of the Austrian School and of many recent papers put forth by leading economists such as Claudio Boria of the Bank for International Settlements, BIS.[2]

[2] BIS Working Papers No 395 The financial cycle and macroeconomics: What have we learned? by Claudio Borio Monetary and Economic Department December 2012

                                                                     Page 24 of 48



Modern Monetary Theory, MMT, explains that:

#11,1 Money can be created electronically by the State but when taxes are paid that money goes out of circulation.

#11.2 Money is also created electronically by the commercial banks and is lent into circulation. When that money gets repaid, it too goes out of circulation.

#11.3 All that is required to create money in this way is a keystroke and a spreadsheet.

#11.4 The days when money had to be backed by gold or something else have passed. Today, money must be used to buy up all the national output. It must be backed by production.

#11.5 Given too little money in active circulation, then people cannot find the money in time to buy up the national output.

#11.6 Given too much active money and spending, people start spending more than there is to buy from national production, resulting in inflation, (rising prices), excess imports, and the devaluation of money.


#11.7 There is a growing movement to end money creation by commercial banks and switch to more the precise Sovereign Monetary Creation instruments. More detail on how to do this is a part of the Course/Workshop discussions in Module 4.

#11.8 The Ingram School version of this proposal includes the following free money market framework:

#11.8.1 Banks will become deposit taking institutions and financial intermediaries.

#11.8.2 The State will create deposits and auction them out for lending. The intermediaries will bid for those deposits at interest as well as bidding for deposits from the private sector. The interme-diaries will on-lend both kinds of deposit for profit after adding their own margins for reserves, costs, risk, and profit – resulting in higher rates of interest for end users than the base Money Market Rate, M%, established at auction. See FIG 5.

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FIG 5 – Money Market by Government Auction (above).

#11.8.3 Bearing in mind that the intermediaries need borrowing customers and that borrowers are usually more readily obtainable from their own deposit-making custom-ers, they may bid for private sector deposits and savings at a little higher rate of interest than they would bid at auctions.

#11.8.4 The auction rate, M%, see the centre-line in FIG 5, will contain an element of interest which offsets the falling value of money. This will be created naturally by the market forces at play at auction and the end-user demand when the Ingram-Style (ILS) financial contracts are in use for lending and savings.[3]


In the case when M% does not immediately rise (adjust) to offset a faster rate of devaluation of money this makes borrowing cheaper for the end user. Then the demand for end-user credit increases, forcing the lending intermediaries to bid higher at auction. In this way, market forces can maintain the cost of credit’s place on the KFPP platform.


The ways in which sovereign money creation can be of use is something which needs to be understood. Followers of Modern Monetary Theory, MMT, have done researches on that.

#11.9.1 MMT helps to explain how the German, the Japanese, and the Asian Tiger economic miracles were created based upon creating enough new production to absorb the new money created (lent and invested) to provide that rapid output growth outcome without causing run-away inflation.


[3] ILS stands for Ingram Lending and Savings system /model in which value is repaid per month rather than just money. The cost of repayments gets adjusted for the falling value of money using a proxy index which is dis-cussed in Appendix 2.

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#12.1 Once maximum economic output has been attained, MMT theorists have ideas on how to use new money creation to sustain that level of output without falling into any recession of note, and without needing governments borrow to bridge their revenue gap/shortfall.

#12.2 MMT questions how budget deficits should normally be funded – should there be a place for Sovereign Money Creation to do that? Should that be the norm as opposed to funding the gap with government borrowing? Maybe there are important lessons to be learned here.

#12.3 MMT theorists say that borrowing money to balance the government's budget instead of creating more money for the government to spend could be another wrong fork in the road, making a total of five wrong forks. The third and fourth wrong forks are given below.

#12.4 Another point being made here is that a shortage of money in circulation may occur after a bank lending slowdown as more money gets repaid than is borrowed. This reduction in the stock of money may lead to an intensification of the spending slowdown caused by the reduced level of borrowing and spending of newly created borrowed money.

#12.4.1 Which would be the greater effect – the reduced stock of money in circulation, or the reduced spending caused by

    #12.4.2 Reduced borrowing,

    #12.4.3 More savings (parked spending money),
    #12.4.4 An increase in the stock of spending money put on standby (more parked money) rather         than being spent?
    #12.4.5 An increase in import spending / decrease in export earnings

#12.5 Do we even know? Are there clear data sets to tell us?

#12.6 Whatever the mix of causes of a slowdown, a deficit in the government revenue account will emerge as its revenue falls and its spending on social support rises. This deficit must be dealt with. Governments today have accounts with their central banks which can be topped up either by borrowing or by creating/printing new debt-free money electronically.

#12.7 Given the deficit, the government must either:

    1. Borrow to close its revenue gap (increase the balance in its account by borrowing) or

    2. Create new debt-free money with which to increase the total money in its account for spending,       so that less revenue is needed from taxes.

#12.8 MMT argues that more government borrowing would remove more money from circulation and that by borrowing it would be competing with the private sector for credit, increasing the cost of credit, (the rate of interest), and so crowding out private sector borrowing for the investment needed for the recovery.

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#12.9 The contrary view is that the money taken out of circulation was mostly idle money, not spending money, and that when borrowed for spending by the government it then becomes spending money and becomes revenue for further spending by the recipients of that government spending. This government borrowing method of closing the revenue gap/shortfall and at times of recession or slowdown going further to stimulate spending, is generally known as a Keynes-ian Stimulus.


The MMT / Ingram School alternative idea is that of having the Sovereign State create a mix of:

    # 1 New debt-free money for the government to spend and so bridge the revenue shortfall / gap,         and

    #2 Then to create more debt-free money to give away in the form of price cuts to create a stimulus     when needed. This will stimulate spending in general across the board. More on that later.

#3 At the same time, it can issue more debt-based deposits into the money market at auctions, thus reducing the money market rate of interest M% and creating more borrowing activity in that sector.

#12.11 We will consider that in the Module 5 workshop and to an extent when looking at the third wrong fork which is usually taken. We are coming to that in #13.


In yet another scenario favoured by some MMT supporters, we will examine the extent to which Sovereign Money Creation can be used to lift people out of unemployment. For money creation in general, here are the constraints:

#12.12.1 Using new money creation to restore a lost optimal level of national output (avoiding a recession) may be acceptable, but going a great deal beyond that may create too much inflation.

#12.12.2 As just explained, when a government borrows money by issuing bonds, it takes money out of circulation; and it causes an increased cost of debt servicing.

#12.12.3 As just explained, an economy with more output needs more spending as well as the means (the extra money in active circulation) for that spending to take place in the time frame available.

#12.12.4 There needs to be a balance between new money coming on-stream and the subsequent increase in national output so that the whole national output can be sold without creating too much inflation in the interim period during which the new produc-tion process is gearing up. In short, the stock of spending money and resulting spending must be backed by sufficient production.

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#12.12.5 This all leads on to the question of who should spend the new money – the government, or the private sector, or borrowers in the private sector, or a mixture of these. Now we get to look at the third wrong fork in the road.

#12.13 A BIG MISTAKE IN BANK FAILURES. A big mistake currently being made is a law which states that if a bank goes bankrupt, depositors lose a proportion of their money, or depositors get given shares in the bank in exchange for some of their deposits to rescue the bank. Depositors are not responsible for the bad lending decisions taken on their behalf. These ideas can create panic. Let the bank fail. They are the ones responsible for lending badly or for offering too much interest on deposits, leading to bad loans. Replace the board of directors, and create the money needed to replace the lost money. The additional money created is needed by the economy anyway.

#12.14 Considering all of these issues is a part of the Module 5 workshop. All participants will discuss these issues and exchange ideas because they have never been tried before.

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The third wrong fork in the road which has been taken, was, and remains, a failure to protect established spending choices, and the related, established, employment patterns, when creating a stimulus.

#13.1 In the event of a recession or a slowdown, a properly balanced stimulus would aim to support existing spending and output patterns across the entire economy including support for all small businesses as well as large ones. As the writer, Edward Ingram, likes to say, “When you water your garden you water all of it.”

#13.2 This does not happen when, as is common practice, governments spend all the stimulus money. Governments do not use that money to buy ice-creams, hairdos, family cars, vacations, and nights out, for example. Nor do they borrow to buy the same assets, goods, and services, which the private sector borrows and buys. The ultimate intention always, is for government to continue to buy what they buy and for the private sector to continue to buy what they buy in the same quantities as before the slowdown. In other words, producers of all kinds should be included in the stimulus.

#13.3 The exception might be if there was a clear change in borrowing preference, for example. In that case, there may be a natural 'adjustment-based slowdown' going on while resources are moved to create more appropriate, more saleable, and different outputs. The same kind of slow-down occurs after an oil-price shock or a ‘loss of resources’ shock: new consumer preferences are created.

#13.4 Afterwards, given the two monetary instruments to be made available by switching to 100% Sovereign money creation, as described above, monetary policy can:

#13.4.1 stimulate more borrowing by increasing the proportion of debt-based Sovereign money in circulation, or

#13.4.2 it can stimulate all other kinds of spending by increasing the proportion of debt-free Sovereign money handed out to all spenders when they spend. [4]

#13.5 By changing the balance between the two policy instruments it can accommodate the change in preference.


[4] The government can create more money and then lower VAT or sales taxes and subsidise untaxed spending such as regular savings and donations using the new money. This will encourage more spending from income whilst the reduced interest rates will encourage more spending from borrowing.

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#20.1 Implementation will require careful planning because such order of magnitude changes will affect different people and entities differently. A good idea would be to make a call for papers and to have a government level committee, or an international committee, consider this.

#20.2 As stated in the conclusion in Appendix #3, a good place to start would be the removal of the LOW INFLATION TRAP, explained in Appendix #1.  There are urgent and necessary improvements to be made to savings and lending contracts and related taxation and regulation issues which would, in any case, help every economy and every elected government through the provision of what will be these popular safeguards for savings and loans.

# 20.3 Remember, it costs no value to repay the value borrowed. It is just common sense but it is an essential feature which has been omitted from the saving and lending contracts currently in use today.


#14.1.1 Most economists regard rising GDP or increasing economic growth to be a main pol-icy objective.

#14.1.2 But if any resource, including the population, its demographics, the amount of oil, copper, platinum, or food, reduces, this can reduce economic growth or even reverse it.

#14.1.3 For this reason, the Ingram School only looks to the optimization of national output for a given set of resources, and to the optimization of work opportunities, as targets.

#14.1.4 In the opinion of Mr. Ingram, to give people the option to work, or not to work, by free choice, given that there is enough national output made available in such circumstances, is also a desirable social goal. But that is beyond the scope of the Ingram School of Economics.'

When using the Keynesian Free Market Platform Paradigm, KFPP, so that people are unaf-fected by the falling value of money, a clear definition of what is a price and what is not a price is required. If something must be paid for then there is a price, or a cost, to pay, and that price has to adjust. In that sense:

    #14.2.1 Costs are a form of price

    #14.2.2 Asset values including the value of bonds, are a form of price
    #14.2.3 The price of goods and services are prices
    #14.2.4 The cost of hiring people (incomes) is a price
    #14.2.5 The cost of a currency exchange is a price.

#14.3 They all cost money. All of them need to adjust in price to offset the falling value of money.

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This is not to say that politicians must never fix any prices or re-distribute any wealth. That is their job. There are always some benefits as well as some downsides to any intervention like that. This is why economists and others get consulted.


#16.1 As things are at present, neither bond maturity values nor the monthly cost of finance are free to participate in creating that Pricing Adjustment Paradigm, or KFPP. They do not adjust to offset the falling value of money.

#16.2 It is true that bonds can be sold on the secondary market at any market price in the meantime, but this is not what we are greatly concerned about. What truly matters is that a buyer can lock in the value paid for a bond once it has been bought. If that is done, annuities and other time related liabilities such as the final value of a pension fund, can be locked in; and the volatility of market prices of bonds sold before maturity will reduce. Reducing this volatility, when that is important to the buyer / investor, can be achieved if the investor opts to buy into the short-dated end of the market. That is, buying bonds which mature sooner rather than later.

#16.3 Governments have an interest in supplying the maturities needed by the market to satisfy market preferences. It costs less to feed market demand and it helps the economy.

#16.4 Given that governments do not need to borrow, (#12.10 above), the main purpose of issuing government debt in the form of bonds which pay interest, is the provision of some risk-free investments for the private sector.

#16.5 But providing too much of that kind of investment income to the private sector transfers excess wealth (the interest coupon payable) from the tax payer to those invested in bonds; and as already stated, it increases the cost of private sector borrowing in the same market.

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In this section, we look at the economic and other costs of doing things wrongly as we are doing today.

#17.1 The value of bonds changes and re-distributes wealth causing confusion and a high de-gree of financial and social damage in much of the financial sector where safety is regarded as being paramount. Fixed interest bonds are not safe or risk free investments by any reasonable definition.

#17.1.1 According to one estimate the world has US$60trillions of government is-sued bonds, destabilising US$60trillions worth of reserves, savings, pension funds, annuities, and other assets. In addition, businesses issue similar bonds.

#17.2 The cost of housing finance varies in a totally different way. The monthly cost of repay-ments does not rise in cost (or price) at a rate which offsets the falling value of money. The cost of monthly repayments rises and falls so fast that property price bubbles and crashes are largely attributed to this.

#17.2.1 This impacts upon up to one third of GDP in some nations; and that one third generates further impacts on the entire social, political, and financial economy.

#17.2.2 The design of these contracts needs to be changed to conform. We at the Ingram School know how to do that. The method has been approved by many experts but reg-ulations and taxes get in the way. This is a part of Module 2 of the course workshops.

#17.3 Next we will be looking at currency pricing. A wrong currency price dynamic will de-stroy many businesses and prevent good forward planning and reduce investment across around half of all global economic activity.

#17.3.1 Damaging half of all global economic activity is a major cost to the world’s economies.

#17.4 Managing interest rates and not optimising the use of credit has other major costs. Interest rates affect almost everything.

#17.4.1 The biggest cost here is generally agreed to be the cost of recessions. This removes a significant rate of growth of output in any economy as well as destroying many a good new business – that is not creative destruction.


It is estimated by the Austrian School that just some of these issues cost economic output growth in excess of 1% p.a. Adding in the rest, the losses must exceed 1.5% p.a. over the longer term. This does not include the social and political costs, including health costs.

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#18.1 Remember that any wrong fork has consequences which make the dynamics of econo-mies complex as well as creating damage and removing the optimal use of resources.

#18.2 We have decided to have just one currency market, not two. The price of the currency impacts on around one half of all business pricing and profit projections. Things can go very wrong.


Having, as we do have, two different currency markets, (one for trade and one for international capital), merged into one market:

    #18.3.1 Creates pricing problems for around half of world business finances.

    #18.3.2 Creates international tension as it facilitates currency pricing wars

    #18.3.3 Destroys huge business investments when they become outdated due to a change in the           value of a currency

    #18.3.4 Limits the creation of international business ventures due to the uncertainties created.

    #18.3.5 Removes the possibility of optimizing the use of the world's trade (production) and capital      resources.

   #18.3.6 Factors such as interest rate changes which should only affect one of the two currency             prices, affects both prices because both prices are the same.


Like having managed interest rates, this also affects the dynamics of the entire economy. The costs are great.

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#19.1 The other way forward for monetary policy, that of trying to fix the value of money, is not achievable. There is no way to fix the value of money. Other schools, notably the Austrian School, brought in the gold standard to do that.

#19.1.1 Doing that would mean somehow preventing people from choosing to change their aggregate level of spending, and / or their mix of spending in respect of:

    a) Borrowed money,

    b) Savings,
    c) Standby money, and
    d) Imports relative to exports.

#19.1.2 These spending variations alter prices. When prices change the value of money changes. It is not practical to try to manage those freedoms of choice. The value of money and the level of prices cannot be fixed.

#19.1.3 On the ‘Gold Standard’: The price of gold is only one price. If the state tries to fix that price then it ends up owning all of the gold or none of it because the value of money is what it can be exchanged for. The value of gold is how much money it can be exchanged for. Too cheap and the state sells all the gold. Too expensive and the state buys all the gold. Either way, the stock of gold needed for the operation runs out. And it impacts on the genuine trade in gold for industrial and other purposes, preventing optimum utility of the commodity.

#19.2 The Monetarists under Paul Volker and Milton Friedman tried to manage the stock of money so as to get a closer grip on inflation. It was a good idea but was defeated by the need for a level of precision which was unachievable through the then (and current) banking system. Nothing significant about that banking system has changed since then. And the instabilities and damage, caused by all of the above were also in place, throwing up multiple other issues for policy-makers which distracted from the main objective. In other words, the KFPP, the price-adjusting platform, as stated above, had never been put in place, so any movements in the rate of interest or the rate of devaluation of money caused generations of problems which policy-makers were unable to address. This remains the case today. This issue, the design of financial contracts so as to put them onto the KFPP platform, has yet to be addressed. The KFPP platform remains to be put in place as an essential element in creating a politically and financially stable and therefore, a manageable, economic framework.

#19.3 No other school of economics is doing this, so they all fail to resolve the management problem.

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To solve this and the other problems given above, we now have a new school of economics, the Ingram School, and a training course at an international workshop for policy-makers at the highest level, which goes under the name of Macro-Economic Design and Management. See #3 for details. To register for this course, go to this link: www.nustcce.com

#19.5 In this course we are looking in close-up detail at the design of the economy, its rules and regulations, its market structures, and its financial contracts.

#19.6 And we are looking in close-up detail at the new instruments of policy which are needed.

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#20.1 Implementation will require careful planning because such order-of-magnitude changes will affect different people and entities differently. A good idea would be to make a call for papers and to have a government level committee, or an international committee, consider this.

#20.2 As stated in the conclusion in Appendix 3, a good place to start would be the removal of the LOW INFLATION TRAP, explained in Appendix 1. There are urgent and necessary improvements to be made to savings and lending contracts and related taxation [5 ] and regulation issues which would in any case help every economy and every elected government through the provision of what will be these popular safeguards for savings and loans.

# 20.3 Remember, it costs no value to repay the value borrowed. It is just common sense but it is an essential feature which has been omitted from the savings and lending contracts currently in use today.


#21.1 If we can make even some of these KFPP changes, then a little wobbling in the value of money or in the rate of inflation, will be more easily tolerated and maybe, if all of the changes are made, it will barely be noticed. The output from the economies of nations can be harmonised and optimised across more of their major units.

#21.2 The political and social benefits were the original motive for considering these issues and they are perhaps the most important concern on humanitarian as well as on social and political grounds.

#21.3 Governments have a significant choice:

    • To make these changes or
    • Not to.

#21.4 The outcome will either be greater social and political stability if they act, or ongoing instability at unacceptable levels if they do nothing.
[5] Tax relief on the inflation element of loans would cease, raising net tax revenues. Taxation of the same element of savings interest would cease, reducing net tax revenues. The net result would likely be an increase in tax revenues. The new ILS lending models would more than offset this lost benefit by a significant margin.

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#A1.1 Here …

…is a fully illustrated online script BUT first please read all of these appendices, especially Appendix 2.


#A2 Today it can be shown that the lower inflation gets:

#A2.1 The greater is the interest rate sensitivity of the value of bonds. Bond maturity values change markedly on any change in inflation or interest rates. They do not re-spond in any common-sense kind of way to the falling value of money. They are fixed price, money-back contracts, not variable price, not value-back contracts which adjust for the falling value of money.

#A2.2 The over-sensitivity of the cost of monthly repayments of housing and commer-cial finance also peaks. Loan 'debt: income' multiples peak. They should not alter much, even in response to real rates of interest which vary over time and have an average rate which can be used to stabilise the 'loan: income' ratio on offer to new borrowers.

#A3 Both of these contracts are unstable and unsafe. There is no attempt written into these contracts to adjust the price / value of bonds nor to adjust the monthly cash flow cost of housing and commercial finance payments in that way. In the KFPP, the Keynesian Floating Platform Paradigm sense of offsetting the falling value of money so that people are not greatly affected, both the value of bonds, and the cost of monthly home loan repayments, have dynamically wrong pricing mechanisms built into their contracts. These are currently designed in a way which makes them unable to adjust as they should. We can change that. Showing how to do that is done in Module 2 of the course.

#A4 It is not a co-incidence that the developed economies had and still have, greater adjustment problems than the higher-inflation, developing economies, both during and after the 2008 financial crisis.

#A5 A significant part of this divergence is caused by

    #A5.1 The differing 'loan: income' ratios, which diverge but should not diverge a lot from nation to      nation

    #A5.2 The more inflated property and bond values experienced at low rates of inflation and                  interest rates. These values should not be much different in any given nation at higher, or different,      rates of inflation.

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#A5.3 In the low inflation nations there is the significantly longer time taken for in-comes to catch up with any increase in the cost of repaying loans. A 6% p.a. incomes growth rate in a developing economy can catch up with a 10% leap in loan repayments in two years. A 1% p.a. incomes growth rate and a low inflation nation may take ten years to do the same thing with the resulting economic difficulties holding down that level of incomes and the growth of economic output.

#A5.4 Whereas the faster, inflation, and real growth driven, growth of incomes, in the developing economies can overcome the problem of 'catch-up' on their smaller loans, the low inflation countries cannot do that except over many years going forward. This, and the bond and the currency pricing problems, combine to prevent central banks in many advanced economies from operating a normal monetary policy. This is why Ed-ward Ingram dubbed it the LOW INFLATION TRAP.

FIG 6 – This shows how difficult it has been for nations to escape from the low inflation trap and why the Federal Reserve Bank in the USA may take many more years to get back to the old, but still unstable, economic state which they left behind in the 1990s.
This illustration shows what the Fed fears most – raising interest rates too fast and re-turning to inside the low inflation trap.

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#A.5.5 The way forward for the developed economies is by redesigning those financial contracts to comply with the Keynesian Floating Platform Paradigm, KFPP. That way, the low inflation trap disappears as if it had never existed.

#A 5.6 How that re-design should be implemented, including how the new financial products should be introduced, especially in the low inflation economies, is something of concern and must be done with great care. This will be discussed during the course.

#A5.7 Developing nationswith higher rates of inflation also suffer in this same way to a lesser degree. But they also have special problems of their own. In particular:

    #A5.7.1 They cannot lend as much as other nations can – which hampers their               social housing and commercial development.

    #A5.7.2 Their currencies are more vulnerable, and

    #A5.7.3 They share all of the other major problems discussed above.

#A6 In short, all nations need to adopt all of the Ingram School reforms so as to resolve all of these instability, and growth retarding, problems.


#B1 Up until now this script has not discussed what index might be adopted in these reformed contracts when there is a need to meet the market demand for guarantees on the cost of monthly repayments and the value of savings bonds rather than relying upon free market forces to make the value adjustments for them. This study on replacement financial contracts forms an extensive part of the workshops, in Module 2, where par-ticipants are asked to give their own inputs. For the purposes of the illustrations pro-vided on how the new financial contracts might perform when guaranteed outcomes are requested, an index of National Average Earnings, NAE, has been adopted as the index of choice to mimic market forces in offsetting the falling value of money. That is, to provide the guarantee.

#B2 In outline the reasoning is as follows:

#B2.1 As the reforms to each unit of the economy, finance, currency, and interest rates, are introduced and the various unsafe pricing distortions fade away, all prices will tend to adjust proportionately and so stay close to being on the KFPP platform. Then most price changes might be expected to offset the rate of the falling value of money. There would be less need to puzzle over which prices to monitor and include in the index. But one index which will definitely differ from the others is the index currently used for measuring inflation of goods and services. If the platform were at rest most of that index’s component prices would likely fall and that index would be at a negative rate compared to all others.

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#B2.2 The difference is that the value of money is given by the total of all things for which it can be exchanged. As just mentioned, goods and services may rise in cost / price at a different, often slower, rate than most other components of the overall (or real), index which contains many additional things for which money can be exchanged. For example, money can buy all the land, the all the property, all the shares and it can hire all of the employed people. All of these items need to be accounted for when at-tempting to measure what money can buy / be exchanged for, and the rate at which money is devaluing.

#B2.3 Now here’s the trick – the reason for selecting National Average Earnings, NAE, as the index to use. As NAE rises it directly or indirectly affects the prices of almost all prices, and asset values which, on a weighted average basis of things which money can buy, gives it an edge over any alternative measure.

#B2.4 There are plenty of practical uses for this NAE index to discuss. And there are other, similar indices to discuss which may be preferred when all is settled.

#B2.5 But this NAE index is easy to measure, does not need a new basket of ingredients from time to time, and having almost any proxy index for use is better than having no index. The alternative of leaving things as they are in a chaotic state by just giving money back and continuing to have economic chaos, is not a good option. Less chaos is better. So, if a guarantee of cost or value is needed, using the NAE index as the measure of value / cost would be helpful. Furthermore:

#B2.6 The NAE Index has marketing appeal and makes it easy to create NAE-based contracts for annuities, preservation of reserves and 'reserve: liability' ratios as many liabilities rise with NAE. And it is easy to use in the maths of making earnings related repayments and to allow the cost of monthly debt repayments to adjust as a part of the paradigm shift. This is all demonstrated in the mathematics and illustrations of a range of the various possible new financial products which is presented in detail in Module 2 of the course.

#B2.7 This part of the course will enable the financial institutions and the regulators concerned to work their way forward in developing these products relatively quickly.

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#C.1 Removing the low inflation trap would be a good place to start the reforms.

#C.2 It will be very popular by making savings, home loans, and pensions safer, property prices more predictable and stable, and financial planning for people and businesses significantly simpler.

#C.3 The practical thesis is that ‘‘Safer' is simpler, less costly, more competitive, builds confidence, and significantly boosts investment, employment, and economic growth.’

#C.4 The process starts with training thousands of people which is what the workshops and the course is all about. No changes coming out of the workshops or these committees will change the principles that are being taught. In the mathematics, any changes will just be a small refinement or the replacement of one index with another.


Some of the more recent updates which immediately come to mind include mention of:

NUSST-CCE, the Centre for Continuing Education at the National University of Science and Technology who have helpfully written a one page description of the course to be offered. This makes it clear that this is a breakthrough in macro-economics.

Several long sessions with Jannie Rossouw, head of school (economics) at Wits University South Africa. He has been most helpful with the depth of his insights and the precision of his challenges and which hopefully have now been addressed to his satisfaction - we will have to wait and see. This script was first drafted in answer to those challenges.

Kind and enduring assistance from Riekie Cloete, a South African economist and past mentor of post-graduate students. She has joined the writing team, as has a Canadian economist, Derek Ross. Derek became interested after discussions in a web forum which clearly showed we share a knowledge of Modern Monetary Theory which is now at the cutting edge of macro-economic research work around the world. We believe that we have an edge over other researchers such as Lord Adair Turner, Positive Money, Professor Steve Keen, Professor Richard Werner, Professor Bill Mitchell, and Warren Mosler, among others.

This theory was kindly brought to the writer’s attention by Redge Nkosi who has his own website called FirstSource Money.

We have a significant following at LinkedIn and are now regularly asked by high ranking professors around the world, to connect at LinkedIn.

Several significant short essays have been published by various publishers including:

Fin24 www.fin24.com (more than fifty essays under the name of Edward Ingram) with some jointly written with Riekie Cloete.

Skyways Magazine – Front cover story - March Edition 2017 – ‘The coming Financial Revolution’

The Chronicle – from Bulawayo publishes articles by Edward Ingram and Riekie Cloete.
GlobalRisk Community gave us first place in their almanac of best contributions. This is a leading website –:


The following organisations and business people have donated something in various ways for which I have been very grateful:

Sun International Hotel in Gaborone Botswana gave myself and my wife very low cost accommodation for many weeks at one time.

Holiday Inn in Harare and in Bulawayo both assisted in various ways and made me welcome with free snacks and internet access when needed due to frequent power failures at my home.

Restaurant at 26 Park Road in Bulawayo held a seminar and this was recorded on video and edited which was a lot of work – all done free of charge by Global Dime Media, Bulawayo. The event was assisted by Daily Print, Meikles Stores, Old Mutual, Merchant Bank of Central Africa (MBCA) and others with free copies of the advertisement flyer.

The University of Botswana offered an hour for a presentation at very short notice, cancelling a prior engagement.

The National University of Science and Technology (NUST) in Bulawayo helped to organise and film two very long seminars with several intervals.

Taonaziso Chowa, a lecturer at NUST, was a part of those presentations. He lectures in actuarial science and risk management, and has now got his doctorate. He is writing the syllabus for a Zambian University. He has mentored some students doing research into related topics inspired by those talks.

The majority at these three seminars at Universities have all strongly urged, in writing on their feedback forms, that these ideas be taken forward.

Darren Mark Thompson gave considerable help with computing and provided other business facilities, freely given in a good cause.

Charl van de Westhuizen of Audiosaurus, and Simon Harvey have given considerable assistance with technical issues.

Chris Malan of Daily Print, Bulawayo, kindly donated free photocopies of an advertisement and gave useful advice.


A hundred or two practical experts and academics in banking, economics, marketing, actuarial science, risk management and financial services of all kinds have kindly assisted with comments and criticism.

There are too many people to name. Almost all have impatiently urged the writer to publish as soon as possible. Two expert committees have been used to verify the findings at various stages. In recent years, a lobby group has been created in the form of Members of the IngramSure (UK) Ltd Board of directors and some consultants have been added. There is a network of websites centred on http://macro-economic-design.blogspot.com and there is a discussion group at LinkedIn entitled MACRO-ECONOMIC DESIGN which people can join.


The first review committee, named the Housing from Income Committee agreed to publish in the October 1974 issue of the Building Societies Gazette. This became a series over the following months.

According to Steve Short, the then deputy editor, this series resulted in a number of changes being made in the lending industry. The crude, basic new ILS lending model, has been re-invented independently twice, but without the refinements that Edward wanted as he indicated in a letter to The Times published on 11th April 1975.

The full committee comprised:

Housing from Income Committee 1974:
J S Oake, a building society manager who made up the accounts needed to test the idea and wrote one of the published essays.  John went on to become a senior executive of the Derbyshire Building Society. Terry Sewel, a lawyer, Michael Morris MP who did sterling work in Parliament and accompanied Edward to Number 10 Downing Street to compare notes with another group that had the same idea in 1983/4. Michael became deputy speaker of the House of Commons and is now retired as The Lord Naseby. In those days, it was difficult to explain the ideas and they did need further development. A Cambridge mathematician also assisted but prefers not to be named. An accountant named Mr A J Cooper, from a leading national company of accountants and consultants also contributed.

Media support came from The Guardian which published Edward’s first letter and from The Times, which published a follow-on letter asking for funding and warning of the dangers of continuing with the present mortgage models.

The traditional lending models eventually crashed as expected, in 2007/8, and they continue to provide a barrier to economic recovery in the USA and elsewhere due to their unwarrantedly high interest rate sensitivity.  Eric Holmes (editor), and Steve Short (deputy editor) at the Building Societies Gazette gave enormous encouragement and assistance.

Keith Redhead, author of several books on economics, Principal Lecturer in Financial Economics Coventry University Business School, wrote a page for Credit Management Magazine in April1987, based on Edward’s ideas and he kindly added Edward as a co-author. Keith has since retired. The idea was to unitise debts so as to take out the volatility from the repayments of commercial and housing finance, even government finance. Repayments would be made as repurchase of units of debt with some of the interest adding to their value and so allowing interest rates greater freedom, and central banks greater freedom, to manage interest rates without having to worry.

Adding some of the interest to units of debt that are yet to be repaid, reduces the impact that interest rate increases have on current repayment levels.


The 2004 Committee: A new committee was assembled after Edward had retired and had developed the mathematics paper needed to take forward the refinements needed for the new mortgage model. This committee was chaired by the Zimbabwean Senior Partner of one of the Big Four Consultancy Groups in the world, (name withheld by request), who insisted on having John Robertson involved. At that time, John was regarded as the country’s leading economist and commentator. John lets no detail go past him and despite having spent decades working with economists in the UK, Edward says that none has surpassed John for getting to grips with an idea and asking all the right questions in a rapid-fire kind of way. Edward gave all the answers just as fast. John had been the senior economist for a local bank. Michael Harrison also came on board, being a Chartered Secretary and the Executive Secretary of the Building Societies Association. Michael was also an examiner for the South African Institute of Bankers. Michael still gives support and advice today, having retired to London. Innocent Matche, joined in. He was the chairman of the economics department at the University of Zimbabwe. Later, Newton Mugabe, a South African Actuary joined in. Newton is said to be now deceased (unconfirmed) so is unable to repeat what he told Edward with words to the effect that there has been nothing comparable to this since relativity impacted the science of physics.  Well, many people agree that it will be a big change for the better. A spokesperson and macro-economist for a Reserve Bank was also on the team and he and his friend Mike Holland both liked the ideas. Bank name and other names withheld on request.

Later in 2004, the Institute of Actuaries in London agreed to take a look at the new model for lending and Roger Bevan, FIA, from the Institute sent an email saying that both he and his associate, Mark Symons were impressed.

At the time, the information was for sale and not published. Protecting / patenting the information proved to be a thankless task and so after many years of trying and having zero viewers, and having been refused a hearing by the USA authorities at the height of the 2008 Financial Crisis, despite a written recommendation from an actuarial source at one of the big four consultancies, saying that the ideas were academically sound and could greatly assist, (name withheld by request), it was decided to publish in full on a Blog which developed into a series of inter-linked Blogs. From that point on the number of enthused people trying to and succeeding in assisting with further developments has mushroomed. And the ideas were further developed into an all-embracing new design for everything economic that was not functioning as it should. These new developments and the feedback coming from LinkedIn readers across the world has resulted in a flow of extensions to what had been discovered which was so fast and so continuous that writing the book became a never-ending task of updates and changes. More recently even greater exposure to the world at large has been gained as a result of Edward being appointed as a columnist for South Africa’s leading online financial magazine, www.fin24.com – a search for ‘Edward Ingram’ on that site will reveal more than 50 essays on this subject as at the time of writing.

NAMES WITHHELD – those that have requested that their names be withheld have done so to avoid breach of contract. It could endanger their positions and damage their companies if clients were to be unhappy with what they read. Public servants are also restrained.

There are 62 followers named on the main Blog

and over 450 members of the MACRO-ECONOMIC-DESIGN group at LinkedIn.


There are far too many names to remember and if anyone feels that they have been over-looked please say so and your name will be added in future editions.

But one name stands out for having spent only about an hour with the author. What Professor Leon Brummer, professor of stock broking at the University of Pretoria, said, on recognising that aligning savings and debt to incomes / demand rather than to prices or not doing anything, is a central theme, was, “It Simplifies Everything”. It brings savings and investments onto the same playing field and it resolves any conflicts with market forces (demand) as demand acts on prices and values. It is key to creating stability and harmony in the investment sector which includes lending / borrowing.

M J Ndhlovu, then head of Business Management at NUST, 2008, greatly encouraged me with his written feedback comment after a presentation saying that “Ingram could be considered for a Professorship”. It turned out I am not eligible until a paper such as this has been published in an academic journal.


Among those that have given full support and are now a part of the official team:

Graham Hollick, Fellow of the Institute of South African Bankers, ex CEO of Old Mutual Central Africa and an Ex-President (by rotation) of the International Union for Housing Finance. Graham, independently of Professor Brummer, suggested this title for the books: “Simplifying the Economic Model.” The more stable the (real) economic model (the real economy), the simpler it is to manage and predict and to work in and to live in.

Andrew Pampallis, ex Head of Banking at the University of Johannesburg. Andrew put in systems for the Bank of Cyprus in his earlier career and is a Fellow of the Institute of Bankers of South Africa.

Professor Daniel Makina, is a leading figure in the faculty of finance, risk management and banking at the University of South Africa, (UNISA). He has published many papers on the subject including mortgage finance and he says that Mr Ingram has solutions to problems to which others are seeking solutions.

Professor Evelyn Chiloane-Tsoka, also from UNISA, says that “These ideas will become prescribed reading at universities.” She was awarded ‘Best Professor’ in her subject (SMEs) in the SADC region last November, 2013.

Zoe Lindesay, a senior auditor at one of the UK’s largest Insurance companies and head of the ‘Re-thinking Economics’ group at LinkedIn. Zoe says this is a Paradigm Shift in the financial services sector and a major development that will significantly reduce the capital needed by the sector. It is a part of an auditor’s job to decide how much capital is adequate to cover a company’s risks. She has also repeatedly added text to Wikipedia about the ‘Risk Free Rate’ as defined in this work but because the book has not been published, the references have been deleted – there needs to be a published source for anything to be added to Wikipedia. A website will not count despite being there for all to see.

WJ Waghorn from London, has kindly been there in the background helping with the mathematics when help was needed.

Taoniza Chowa, a lecturer in Actuarial Science and Risk Management arranged speaking engagements at his local university (NUST) in Zimbabwe. Zimbabwe is where in days past many of Africa’s actuaries were taught. He has also mentored students doing MSc research papers, some of which are based on these ideas, and he continues to do so. The first student got a distinction.

A great deal of help with business and other guidance of the utmost importance has been given by various people including the following:

Alastair France, James Ingram, Alan Gray, and a considerable number of others have given very helpful advice over a long period. Scott Tracy Northcott is hoping to use the lending models when he launches his environmentally friendly building project. He feels that this is essential for the protection of buyers of any property.


Professor, Olu Kuyinu, as the then head of economics at the University of South Africa (UNISA), and later, Professor S Migiro, also from UNISA as head of a research section, spent time listening to Edward. Both liked what they heard and saw. But both moved on to other jobs.

Professor John Hart then at Durban (now at UNISA) and a number of others around the world have offered encouragement.

Others that come to mind include:
Dr. Netswera, whose links to UNISA Press gave great encouragement, and he asked Professor Migiro to assist, the editors of www.fin24.com, who think it is only a matter of time before the world will accept these ideas and who have given great encouragement and publicity to them. They include Fadia Salie (editor) and Eugenie du Preez (senior sub-editor).

Rupert L Sutton, FIA, ex Assistant General Manager of the Prudential Assurance Company Ltd in the UK, and ex General Manager and Actuary of Vanbrugh Life. Rupert assisted Edward by getting him a consultancy at the Prudential Corporation, then the UK’s largest insurer, and he also suggested that the ideas should be sent to the UK’s Minister of Finance. That never happened because writing it up was not easy.

Mike Holland, Edson Mbedzi lecturer in Banking with degrees in banking, risk management and insurance, Moses Chimbari, Alex Jackman, Aziz Gaibie (deceased), and Arnold Matthews, all played a part in encouraging or assisting.

Timothy Hosking, a building economist in South Africa, Alexander Kopriwa, Boris Aggranovich founder of the world’s premier online risk management website. He gave Edward’s essay on Risk in finance the pole position in his two recent almanacs of best contributions for the year. Barry Edwards, Gilberto Hernandez, Ennio Alessandro Palombizio, who clarified some key points that needed emphasis. James Rutz, Rachel L. Chueh, Ph.D.-Finance, Mark Wright, Professor Ashok Dubey, and Joop Remme. All of these provided some valuable comments and suggestions.

Ben Carter, who was introduced by Charles McGiveny, has been seeking to get the ideas introduced in the USA before the next presidential elections, using his many high-level contacts.

Professor Jannie Rossouw, Head of School, Department of Economics, Wits University, South Africa has also taken a very positive interest since 2004 when he was a senior and one time spokesperson at the Reserve Bank of South Africa.



Edward Ingram was angered in the 1970’s by the way the financial system in the UK was throwing people out of their homes and ruining businesses with debts. Inflation was raging and interest rates were constantly rising, yet the value of the debts was constantly being reduced by inflation. Why then, he asked, were regulators insisting that lenders increase the level of repayments on these loans?
Having found a viable solution, widely recognised by actuaries and a whole review panel of others, which had met again and again over many months, he wondered why it was not being accepted. The answer appeared to be the complexity of the world’s economies which confused those with the power to do something when asked to give it their approval. The exceptions were Graham Hollick, the ex-CEO of Old Mutual Central Africa and past president of the International union for Housing Finance, and a whole review team in Zimbabwe, as well as a duo of academics from Cambridge who set up a mildly similar wages-linked mortgage model for civil servants in Turkey in the 1990s. It is crude but it works. Old Mutual in Zimbabwe approached Edward but backed off because of the difficulty of overcoming the regulations and related legislation.
Not to be blocked by this, Edward dived into more researches on the complex dynamics of the world’s economies to explain what would be affected and why all the effects would be beneficial. This led him into examining more of the world’s economic dynamics, and how they are inter-related, than any academic has ever done before.
The task of organising the findings in a wholly readable and clear way proved to be a daunting task, but now it is done. It is available in outline as this currently self-published book, entitled ‘What is the Ingram School of Economics?” ISBN 978-0-7974-8870-0, and in full detail as an online university course at www.nustcce.com under the title of ‘Macro-economic Design and Management.’
Edward C D Ingram practiced explaining it all in over 50 columns written for, and published by, www.fin24.com, and more recently, for other journals and magazines.
His writing encompasses many of the same insights which leading economic researchers are having around the world today, but in a more holistic and simplified setting which has eluded all others.
As Edward explains, when an engineer designs an aircraft the first task is to make sure it is stable in flight. Only then are the management systems put in place. In economics, everything has been done the other way around and the damn thing won’t fly!
There is literally no other person who has looked further and seen further with such clarity as Edward Ingram.

Signed: Taonaziso Chowa, PhD
Lecturer (Actuarial Science & GSB)
The University of Zambia (UNZA)
Great East Road Campus
Cell: +260 96 801 0922
Skype: taonaziso.chowa1

Please tween this link

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