The Empire of Barter

Although at first it may seem paradoxical, the news that the Beobanka bank is decreasing the price of its loans by 25%, in the midst of galloping inflation, is essentially logical. According to the oldest economic law, the move just demonstrates that the supply of money has exceeded absolutely all economic parameters, even the monthly inflation rate which tops 100%. Money has become useless, everybody is stocking commodities, nobody is producing or trading anything. Even worse times are expected.

The fact that the monthly interest rate for export credits was reduced from 38% to 30%, with a monthly inflation rate of around 150%, can be explained as a direct consequence of the "blockade of exports". The fact that the monthly interest rate for agricultural production dropped from 38 to 32%, however, deserves more attention. Because it is simply guising the government's ambition to squeeze out the food one needs to survive from the dinar printing shop. There is no banking logic there at all, prevalent are state and national interests. Quelling social tensions is also uppermost, so the monthly default rate on current account overdrafts was reduced from 48 to 39%.

Burdened by an enormous mass of fiduciary money, some banks tried to find their way out by setting up trading companies in order to transform legally the worthless money into commodities. Money barely brings a 50% monthly profit, and the commodities three times as much. Even hard currencies do not offer such good prospects nowadays. For even now, few firms are motivated to buy hard cash at the exorbitant black market rates. Foreign debts will not be paid back, the necessary spare parts and materials will not be imported, managers will not be traveling all over the world, there is no use in smuggling money to foreign bank accounts.

The story is already spreading through Vojvodina villages that private agricultural machinery and truck owners will not be provided with fuel during the harvest, in order to force the farmers to let the state the harvest and transport their yield. Thus the produce would be "under control" from the fields to the silos, for at least the mentioned service can be paid in kind. Farmers will get the worthless dinars.

Everything is possible in an "economy without money". Money and socialism do not go together. There is no room for money in "war communism" which the Serbian socialists are preparing. Not only bankers are running away from money, but the citizens too, that is the smaller part of the population which has it. Private stockpiling is not motivated only by the fear of an international military intervention, but above all by the simple feeling that the authoritarian regime still in power has already brought "antagonism and chaos" to Serbia.