Submitted by the People’s Democratic Congress (PDC)

Under the cost of use of money theory, there is no way that the cost of use of local money/value (theoretical/actual) would actually be trending downwards in the country and at the same time there would  NOT be taking place sustained annualized real growth in the political economy and services industry sectors of the country.

Under this same theory, too, is the obverse: there is no way that the cost of use of the Barbadian people’s money/value (theoretical/actual) would actually be trending upwards in Barbados and at the same time there would NOT be taking place persistent annualized real declines in the said political economy and services industry sectors of the country.

In the theoretical and applied political economy research fields, this cost of use of money theory is the near equivalent of the medical DNA technology theory applied in forensic and other tests across many parts of the world. Such is the virtual infallibility of this theory.

For, the cost of use of money theory is built on many fundamental truisms, two of which are already fairly well known in local money affairs circles:

1. That for every EXTRA Barbados dollar that is USED UP in the business of trade and consumption at any given points in time, and in any given meetings of spaces by the relevant consumers, businesses and other entities, there must be ONE LESS Barbados dollar available for USE in the business of trade, investment and consumption at the same time elsewhere in the local trading markets;
2. That for every EXTRA Barbadian dollar that is STORED (saved) at the Central Bank of Barbados, the local Commercial Banks, Credit Unions, in other financial institutions as part of the business of marginal depositing or of keeping money relatively safe, there must be far fewer Barbados dollars available for USE in the business of trade, investment and consumption at the same time elsewhere in the other commercial market spaces.

These two conditions are outrightly satisfied, esp. where there is already a fixed amount of actual money (notes and coins) in circulation/in stock in Barbados at any given times, and where there is already an array of goods and services on the various Barbados markets ready to be used,  bought and sold, but which though may vary in their numbers from time to time.

So, as it stands, as the cost of use of money goes up, there will be far fewer Barbadian Dollars available on average daily/monthly for simple deposit making/safe keeping purposes and for trading, investment and consumption purposes.

Also, such a theory has already explained how whenever local money/value is being USED by consumers, businesses,  and other entities, it must have a cost at the same time as there is also a benefit/are benefits at each of those same innumerable points that money is being used ( but we are not  now dealing with the benefits of the use of money – the said purchases of goods and services, purchases of houses, purchases of cars, purchasing of land rights, entertainment, etc.), a cost which is not money itself – really because money cannot make money, nor can money cost money, other than it is the trading of local currency with foreign currency), but a cost to the nominal incomes, payments or transfers of the relevant individuals, businesses and others.

So, in the long run, any net increases in the costs of use of money must, et al, mean:

• Net increases in the costs to nominal incomes, payments and transfers of the same persons and entities over the nominal value of the relevant benefits derived as a result of the said using of this said money;
• Net decreases in the use of money for simple deposit making/ safe keeping purposes or for trading investment and consumption purposes;  and,
• Net decreases in the use or production or distribution of the relevant benefits that ordinarily come with the use of money. T

Too, in the long run too, any net decreases in the costs of use of money must, et al, mean:

• Net decreases in the costs to nominal incomes, payments, and transfers of the same persons and entities below the nominal value of the relevant benefits derived as a result of the said using of the said money;
• Net increases in the use of money for simple deposit making/ safe keeping purposes or for trading investment and consumption purposes; and,
• Net decreases in the use or production or distribution of the relevant benefits that ordinarily come with the use of money.

Furthermore, one of the implications of the circumstance: that whenever the cost of use of local money/value is trending downwards in Barbados, that there must be increased growth taking place in the political economy and services industry sectors of the country, is that, there and then, the Barbadian people’s money will be being lightly STORED by financial institutions and USED UP by consumers, investors, etc., at a “lesser but faster” rate than at any other specified point in time in the past, present or future in Barbados, when there was, is, or will be NO increased growth taking place in those sectors.

“Lesser” in this context means that, at a given synchronic time, lesser proportions of income, payments and transfers are going towards the use of local money than those proportions of such income, payments, and transfers that were going, that are going, or that will be going towards the use of local money in a particular past, present, or future period under  study. “Faster” means that, at such a given time, the rates of increases at which local money denominated domestic transactions are taking place, are taking place faster than those locally denominated domestic transactions were, are, or will be taking place at a particular past, present, or future period of time under review.

Too, one of the implications of another circumstance: that whenever the cost of use of local money/value is trending upwards in Barbados, that there must be decreased growth taking place in the political economy and services industry sectors of the country, is that, there and then, the Barbadian people’s money will be being lightly STORED by financial institutions and USED UP by consumers, investors, etc. , at a “greater but slower” rate than at any other specified point in time in the past, present or future in Barbados, when there was, there is, or there will be increased growth taking place in those sectors.

“Greater” in this context means that, at a given synchronic time, greater proportions of nominal income, payments and transfers are going towards the use of local money than those proportions of such incomes, payments and transfers that were going, that are going, or that will be going towards the use of local money in a particular past, present or future period under study. “Slower” means that, at the such a given synchronic timeology too, the rates of decreases at which local money denominated domestic transactions are taking place, are taking place slower than those locally denominated domestic transactions were, are, or will be taking place at a particular past, present or future period of time under review.

Another set of facts that confirm the reliability and validity of the applicability of this cost of use of money theory, and that can be logically deduced from many of the above representations,  is that, in relationship to 1a and 1b and 1c, and in relationship to 2a and 2b and 2c (above), as the cost of use of money has been constantly reaching higher and higher levels, from the 1970s until the 2010s, there has also been a trending towards lesser money being made available for public use in the trading systems in Barbados, or alternatively there has been a trending towards greater lighter storage/savings of this entire stock of money in the financial system, as a proportion of the monetary base of the financial system (which is the PDC’s only definition of total money available).

Anyhow, at this stage in this article we are going to introduce another very important indicator related to this cost of use of money theory, that is, the REAL ACTUAL COST OF USE OF MONEY – which is the real/actual cost of use, expressed as a percentage of the Barbados Dollar, of the average value of the monetary base for the last four years (BDS $ 1.2 billion) (One of the Central Bank of Barbados’s Economic and Financial Statistics 2010 on line). As it stands the REAL ACTUAL COST OF USE OF MONEY in Barbados in terms of both purely unproductive, under-used, abhorrent money merchant tourism peddling activity and purely productive, well used, profitable money construction manufacturing agricultural activity is a staggering destructive 83%.

Moreover, included in the very important analysis and synthesis leading up to this particular indicator has been what the PDC would have carefully arrived at, as some very plausible estimates for the performance of this very unproductive, unrational and inefficient financial services sector of this country over the last four years. Furthermore, we have duly deducted those estimates from what has been put out by the Central Bank of Barbados as the so-called GDP contributions of the said Financial Services Sector over the same last four years. Therefore, through this process we have made some ground breaking achievements in this field of political economy research and data synthesizing over and above the very unrealistic mythical theatrical presentations that said Bank has accorded to this sector.

Indeed, it is painful sight to realize that these particular political crystal ball readers have made the Financial Services Sector of Barbados the second biggest sector (18-19%) based on the very unproductive money peddling activity that takes place within the sector. It should never have been included to the extent that it has been as part of the measuring of the so-called Barbados economy since there is little real productive activity involved in the sector. Such is patent nonsense and absolutely defies logic. It is a most pathetic, impractical, unworthy and untenable elevation which could only have been supported and agreed with by that joker of all jokers, Mr. Cleviston Haynes. So much for economics and so-called economists in this country!!

But what must be of great concern to us is that there seems very likely that the Central Bank of Barbados and/or the Barbados Statistical Service are/is grossly and recklessly misleading the public of Barbados with false and unreliable information about the performances of the political economy and services industry sectors of Barbados. For, it is clear that with the proportion of money that is from time to time made available for the Barbadian public uses getting less and less, as a proportion of the so-called money supply, and it not getting more and more as a proportion of the same, there must be, according to the cost of use of money theory,  something fundamentally wrong in Bridgetown with many of the statistics and figures that these two institutions have been putting out as representing growth in the so-called economy in Barbados, or that there is something fundamental despicably wrong with those statistics that represent the money supply, the currency with the public, the monetary base, etc.

We have used the Central Bank 2008 February Economic and Financial Statistics booklet form – Table 1, and various other data/information in Central Bank documents to help us deduce such. Mind you, in that table there are clear and obvious discrepancies with regard to some of the data/figures presented with regard to some of the identically named headings for the same periods referred to by them.

Now, in conclusion we must state that a future PDC Government shall have an commission of enquiry into the manner in which the Central Bank of Barbados has been operating over the years especially with regard to many recent and very questionable statistics that are coming out of the Bank and into the public’s domain for the latter’s consumption. For, as it stands the Central Bank can no longer be made to fool the majority of the people of this country indefinitely as it relates to many published false statistics and information. For what else could be thought when the Governor of the Central Bank of Barbados recently said that there has been a 1.5% real growth rate in the first quarter performance of the so-called economy of Barbados, even when it is clear to our research data disaggregating methodologies and techniques that it seems more plausible that the so-called Barbados economy was estimated at BDS $ 6.5 billion in 2008, that it was estimated at BDS $ 6.0 billion in 2009, that it fell to a further BDS $ 5.8 billion in 2010, and that it contraction to BDS $ 5.7 billion dollars in 2011.