from TPDL 2000-Oct-10, from the Wall Street Journal, by Yaroslav Trofimov, Staff Reporter:
Conspiracy Theory Gains Currency, Thanks to Town's Professor Auriti
GUARDIAGRELE, Italy -- From her perch below a poster that depicts a miracle of Christian faith, Sandra Iannamico is performing a little wonder of her own. She is doubling people's money.
One by one, each of the half-dozen clients lined up at her table in the courtyard of a 15th-century palazzo steps up and surrenders a handful of Italian lire. In return, Ms. Iannamico gives them a multicolored sheaf of a new currency called the simec, at an exchange rate of 1-to-1.
In most places, the simec wouldn't be worth the paper it's printed on. But in the bustling shoe store next door, and at about 40 other merchants in this mountaintop town of 12,000 overlooking Italy's Adriatic coast, one simec can buy two lire's worth of goods.
The simec, whose name is the Italian acronym for "econometric symbol of inducted value," is the brainchild of Giacinto Auriti, a wealthy local academic. This past summer, the 76-year-old retired law professor spent much of his fortune to finance the simec in an effort to prove his eccentric theory about money and a vast banking conspiracy. So far, his experiment has produced a frenzy of consumption in Guardiagrele, a rupture in the local business community, a rebuke from the Bank of Italy and a legal victory for Prof. Auriti, who hopes to convince the world that central bankers are the biggest con artists in modern history.
His main thesis: For centuries, central banks have been robbing the common man by the way they put new money in circulation. Rather than divide the new cash among the people, they lend it through the banking system, at interest. This practice, he argues, makes the central banks the money's owners and makes everyone else their debtors. He goes on to conclude that this debt-based money has roughly half the purchasing power it would have if it were issued directly to the populace, free.
Initially, Prof. Auriti tried to challenge his own nation's monetary policy through the courts. But Italian judges have thwarted his efforts to sue both Bank of Italy Gov. Antonio Fazio and former Gov. Carlo Azeglio Ciampi for alleged fraud and a slew of other offenses, including incitement to suicide. So, Prof. Auriti conceived another way to make his case.
First, he hired a printer to produce several boxes full of simecs, each emblazoned with a hologram and the image of an eagle. Each bill -- violet, green or mocha, depending on the denomination -- carries a statement that identifies it as the property of the bearer.
Then, Prof. Auriti, who often sports a bulging money belt, made the rounds of Guardiagrele's 400 shop owners. Most refused to accept his simec. But he persuaded about 40 to participate in his experiment, assuring them he would redeem each simec for two lire.
On a sunny July morning, Prof. Auriti, the scion of one of Guardiagrele's oldest and richest families, and a few volunteers, like Ms. Iannamico, threw open the heavy gates of the professor's palazzo and put the first simecs into circulation.
Soon, Guardiagrelians were lined up across the street at a Banco di Napoli cash machine to withdraw lire and trade them in for simecs. By 11 a.m. the first day, about $1,000 worth of lire had changed hands. The daily volume eventually reached $40,000 or more, volunteers say.
Armed with their simecs, the townsfolk -- and later their neighbors elsewhere in central Italy's Abruzzo region -- stormed participating stores to snap up smoked prosciutto, designer shoes and other goods at just half the lire price. "At first, people thought this can't be true, there must be a rip-off hidden somewhere," says Antonella Di Cocco, a guide at a local museum. "But once people realized that the shopkeepers were the only ones taking the risk, they just ran to buy all these extravagant things they never really needed." Often, they raided their savings accounts in the process.
The participating shopkeepers, some of whom barely eked out a living before the simec bonanza, couldn't have been happier. "Every day was Christmas," Pietro Ricci recalls from behind the counter of his cavernous haberdashery.
Neither Mr. Ricci nor his fellow merchants were stuck with their simecs for long. Once a week, they turned them in to Prof. Auriti, recouping the full price of their goods.
"We doubled the money in people's pockets, injecting blood into a lifeless body," says Prof. Auriti. "People were so happy, they thought they were dreaming."
Nonparticipating stores, meanwhile, remained empty week after week. "I have to pay my suppliers once every 10 days -- and, I'm afraid, they don't take the professor's paper," explains Febo Di Crescenzo, as reggae music blares from his clothing store.
The competing interests split the town's merchants' association in two, prompting its pro-simec chairman to resign. As tensions peaked in early August, the nonparticipating merchants and the town's mayor, Franco Caramanico, asked local magistrates to intervene with a ruling on whether Prof. Auriti's currency issue was legal
Cont ....