Friday, December 31, 2010

2011 (MMXI)

It is the 2011th year of the Common Era;
the 11th year of the 3rd millennium and of the 21st century, and
the 2nd of the 2010s decade.

The United Nations has designated 2011:
the International Year of Forests and
International Year of Chemistry.

BSP has issued BSP Circular 702 stating
that effective 2011 CC defaulters are
to be notified formally by the banks as to
where their accounts are endorsed.

Saturday, December 18, 2010

2010 CHRISTmas Message

I will stop being a corrupt government employee;
I will learn how to smile often;
I will not let money control my life;
I will stop earning money thru deceits and inhuman ways
like credit card collectors do;

---------------------Proverbs 30---------------------
7 O God, I beg two favors from you before I die.

8 First, help me never to tell a lie.
Second, give me neither poverty nor riches!
Give me just enough to satisfy my needs.

9 For if I grow rich, I may deny you and say, "Who is the LORD?"
& if I am too poor, I may steal and thus insult God's holy name.

Saturday, December 11, 2010

Bawal Kunin

Collectors often times tell you that they will come to your house and
get your things.

Without a Search Warrant or a specific Court Order, NOBODY can do
that.Otherwise, it's robbery!

Even if there is a decided case against you, there are things which
creditors cannot get.
See Sec. 13 Rule 39 of the Rules of Court for details.

Old electric fan? ano naman gawin nila doon? Pero pag pumilit,
Bigay mo na!



They cannot get your things.
if they want to,
- they have to file a case first.
- obtain a favorable judgment.
- look for a property na:
- real estate
- cars
which are :
- not mortgaged
- equal or below your utang
otherwise, they have to give you the excess value

Saturday, December 4, 2010

Draft Complaint

One of the tricks of collection agencies is
to write you a demand letter, then attach yung
"draft complaint" kuno.

I dont see any logical purpose in doing so, except
maybe to coerce and fool you into paying - tinatakot ka.
blackmail? at niloloko. fraud?

What to do?
write them a letter:
Sir, I will pay in FULL today!!!!
this is just a DRAFT letter.

or better yet, tapon.

why do they have to fool people to collect
is beyond me.
Emotic Brandy 1:  Thinking

Saturday, November 27, 2010


Nobody can prevent you from entering your home,
how much more your own country.

If you have a pending criminal case here,
baka puede pa.deretso sa jail.
But utang? of course not.

Remember :
There is no such thing as " Do Not Enter"
order being issued by a court.

Further reference:

Saturday, November 20, 2010

The End

Even if they file a thousand cases against you,
if you have NOTHING to pay
(e.g. time deposits, condo and/or a Ferrari)
you pay them NOTHING.

Hinde ka naman puede i-harap sa firing squad.
You might end up like Jose Rizal!

Even if you attend or not,
Even if you hire all the lawyers for FREE
the decision is always " You Pay"
eh, you have nothing to pay?
di, "wala"


Before any of you wise guys starts thinking of something else,
let me clarify:
I am NOT advocating non-payment;
I am just advocating using your common sense.
(especially for the so called "credit managers")
(the defect could really be in your own credit initiation)

Saturday, November 13, 2010

BSP Complaints

After complaining to BSP,
they will ask the bank to write you.
eto ang standard reply ng bank:

With respect to your particular experience, we have called the attention of the collection agency concern and have issued an appropriate reminder so as to...( and other ek-ek)

eto ang mabigat:

HOWEVER,we would like to remind you that, based on our records, you still have an outstanding balance of P xxxxx, which .....

Now, tell me if it's really worth it.

Saturday, November 6, 2010

Matapang At Mayabang Na Collector

Matapang at bastos ang mga collectors kasi:

1. Sa telepono or text lang naman yan;
2. Hinde sila kilala ;
3. Panay babae na defaulters ang kausap nila.

Now, kung talagang matapang sila,
try mo na papuntahin sila at sabihin sa harap mo
yung sinasabi nila!

Hanapan mo nga "Authority galing sa banko"
walang maipa-kita ang mga iyan.

choose ka lang dito alin ang gusto
mo isampa na criminal case:

--------Mga Kaso Na Puede Isampa Sa Kolektor --------

1. Art. 128. Violation of domicile ( pilit pumasok ; ayaw umalis)
2. Art. 280. Qualified trespass to dwelling ( pumasok kahit ayaw mo)
3. Art. 282. Grave threats ( tinatakot ka)
4. Art. 283. Light threats ( blackmailing and extortion)
5. Art. 287. Light coercions ( kinuha gamit mo dahil sa "utang" daw)
6. Art. 155. Alarms and scandals ( pinag-sisigaw ang utang mo)
7. Art. 315. Swindling/estafa ( walang authority ng banko)
8. Art. 318. Other deceits ( iba't-ibang style na panloloko - Dubai?)
9. Art. 298. Execution of deeds by means of violence or intimidation
(pilit pinapa-pirma sa Amnesty/Mga Kasunduan)
11.Art. 336. Acts of lasciviousness (!)
11.Art. 353. A libel(pam-babastos sa sulat o text)
12.Art. 358. Slander — Oral defamation
13.Art. 363. Incriminating innocent person (ma-RA 8484 ka daw)
14.Art. 364. Intriguing against honor (pinag-kakalat na may utang ka)

Kulong at criminal records sa NBI

---cross reference----

-------Civil Code of the Phils. ----------

Art. 26. Every person shall respect the dignity, personality, privacy and peace of mind of his neighbors and other persons. The following and similar acts, though they may not constitute a criminal offense, shall produce a cause of action for damages, prevention and other relief:

(1) Prying into the privacy of another's residence:
(2) Meddling with or disturbing the private life or family relations of another;

(3) Intriguing to cause another to be alienated from his friends;

(4) Vexing or humiliating another on account of his religious beliefs, lowly station in life, place of birth, physical defect, or other personal condition.

-----BSP Circular 702 Series of 2010------

see "Banking Updates" of our blog for details


Had that experience several years ago. Grabeng trauma din yun for several months. We came to the point na pinuntahan pa namin yung office ng collector (cubao), dahil di na matiis ng nanay ko yung sinasabi sa kanya kaya gusto niya harapin.

Wala naman nanyari kasi di kami hinarap ng mokong. Nasa taas daw at may meeting, aantayin sana namin kaso di daw alam kelan matatapos. Eh? ;D Duwag pala. Sa telepono lang magaling. Lesson learned kaya allergic ako sa CC. ;D

Saturday, October 30, 2010

Calls - Again(?)

Being pestered by callers?
"Ano plano ninyo"?
"..otherwise we will file a case"

Here are two suggested replies:

"According to my lawyer, sa court na
daw natin pag-usapan ito."

" Mahal ang abogado"
"Problema ko na yun!"

So, what else can they threaten you with?
You already called their bluff!


"Sir/M'am", What we are discussing here,
can't you put that in writing, para formal

Saturday, October 23, 2010

The Family Home

Family Code of the Phils.

Art. 152.
The family home, constituted jointly by the husband and the wife or by an unmarried head of a family, is the dwelling house where they and their family reside, and the land on which it is situated.

Art. 153.
The family home is deemed constituted on a house and lot from the time it is occupied as a family residence.

Art. 155.
The family home shall be exempt from execution, forced sale or attachment.

Art. 157.
The actual value of the family home shall not exceed, at the time of its constitution, the amount of the three hundred thousand pesos in urban areas, and two hundred thousand pesos in rural areas, or such amounts as may hereafter be fixed by law.

In any event, if the value of the currency changes after the adoption of this Code, the value most favorable for the constitution of a family home shall be the basis of evaluation.


Sec. 9. Execution of judgments for money, how enforced
b) Satisfaction by levy.
the officer shall levy upon the properties;
The sheriff shall sell only a sufficient portion of the personal
or real property of the judgment obligor.

In other words, if your property is valued at P 1Million;
Your debt is P400,000.00 only, the sheriff will pay you
back P 600,000.00 once your property is "sold".

What if it is mortgaged?
If it is mortgaged for P 800,000.00, the sheriff will
pay the creditor P 800,000.00 then "get" your house.
Is the bank that stupid enough?

Saturday, October 16, 2010

I Want To Pay

May utang ka.
Walang pambayad kaya na default.
Nanalo eventually sa lotto.
you want to pay now.
where? how?

1. go to the bank personally.negotiate.
2. be prepared to be frustrated though
if they will not entertain you but
refer you instead to their collection agencies.
( wala na kasi silang pakialam sa account mo)
3. Masaya naman si collector! pera na ito!
kaya, mega-harass ka naman para madali ang pera.
4. What option is left? the court!
antayin mo na lang if they file a case.
ganoon din ang mangyayari anyway, as if you
went to the bank to negotiate.

but what if they wont file?
donate mo na lang sa church or favorite charity pera mo
may kabuluhan pa.

Saturday, October 9, 2010

Pag-Ibig Loans

Housing loan is a secured loan with your house itself as collateral.
Financing is not 100%( in most cases)since you are required an equity.
This is also against your future benefits with the Pag-ibig fund.

Hence,it is mostly risk free.
Unlike credit cards.

So, who cares if you have unpaid cards?

Tuesday, October 5, 2010

Mindanao Daily Mirror Item

Some collectors are trying to milk this item to mislead & coerce people to pay:

Bankard files cases against 2 card holders

...against credit cards holders who failed to pay their outstanding obligations. Records from the Branch 4, Municipal Trial Court in Cities
of Davao City shows that.....Sum of money cases were filed in Court by BANKARD Inc.. . .

"The notion that nobody goes to jail for not paying their debts no longer holds true especially with the passing of Republic Act 8484, which now makes it a crime or a criminal act" Atty. Vanessa G. Revamonte explained.


There are TWO issues here being discussed:

1. They filed a CIVIL CASE for "Sum of Money" ;
2. Explained about RA 8484 that imposes a penalty of imprisonment for debts
(IF it stemmed from using FAKE CARDS)

She is right. She is telling the truth, but NOT THE WHOLE TRUTH.
otherwise, Atty. Revamonte could have filed a CRIMINAL CASE and not
a civil case.


- - - - - -

Bill of Rights
SECTION 20. No person shall be imprisoned for debt or non-payment of a poll tax.

RA 8484,and other related laws, punishes you, not because of debt, but because of other things like dishonesty or deceits.

No law is designed to coerce a debtor to pay his debt.

Saturday, October 2, 2010

They Will File A Case!

No big deal.
Collection Agencies collect, not file cases.
They know this, for practical reasons:
- why file when you can just do a harass-and-collect or
coerce-and-collect modus operandi?
- why spend for unnecessary litigation expenses when
a threatening call will simply do it?
- what if there is nothing to collect even after
filing a case? Debtors stopped paying because they do
not have the money in the first place!

Back read post in this blog.
To know your rights. To know their lies.

By the way, may mga bonus pa ang mga iyan. " Early Birds" or
"Top Performer Of The Month".

Saturday, September 18, 2010

Text Notices

Plaintiff vs. Bank Case Filed RA 8484

a text message:
"Plaintiff......vs Criminal/Civil Case 2009 Preliminary Attachment of property you are being summoned to appear in Makati MTC under Judge Benjamin Garcia for violating the RA 8484 Collection Sum of Money

if the summons is "served" thru text,
malamang ang hearing ng case is also
thru text!

what they really meant :
they are advising you to pay their commission.

What to do when you receive text messages?

to simplify your life.

Saturday, September 11, 2010

Warrant of Arrest

Text ni Mr. Collector

" Please be informed that you have a pending warrant of arrest"
" To Hold,call Atty. Ek-ek at 999-8888"
" Pay at least P 5,000.00"

If you are arresting someone, would you inform him before hand?
di nag-tago na yun!

Blackmails and extortions are punishable under Art. 283 on Light Threats.
See Reyes, The Revised Penal Code, 1993 ed., p. 559.
The crime of Other Deceits under Art. 318 par. 1 of the
Revised Penal Code, as amended.

let's try how good their lawyers are pag pinahuli mo
yang mga collectors a.k.a. manloloko na yan.

Saturday, September 4, 2010


Take the call.
It cant kill you anyway.

1. Make it simple -
answer "yes" or "no"
2. You are under no obligation to accomodate them.
No need to explain, plead, argue. useless.
walang nanalo dyan.
3. Just tell the truth - wala kang pambayad.
4. Inform them:
"according to my lawyer, sa court na lang daw natin
pag-usapan ito. Formal at legal. Ayaw mo na nyan?"
5. After which DONT LISTEN anymore kahit ano pa sabihin niya.
6. If the caller starts berating you, what is there to listen
for? kaya, hang-up or let the table, which has no brain too,
listen to him instead.

these suggestions are practical and common sense approaches.
why listen to an irrational caller?

..just a reminder

Hi banker... I was so thankful that i found this blog... Regarding my HSBC card, last year an agent called and told me to pay my outstanding balance amounting to 24k, but he said to me that there is a discounted amount that could be offered to me, amounting to 10k. I made a loan to our comapny just to pay that amount, but I made it in 2 payments, 5k and another 5k. He promised me to give a certificate of full payment on that. But time passed by, i have not recieve any confirmation from that agent. After 5 months they called me up with another agent, asking for my payment. I told him that I made a payment last year, but I never recieve any certificates. I forgot to get his name, and told me that "naloko daw ako ng agent na yun, marami na raw complaints na ganun". Afetr that call, i recieved a txt msg, that I have to pay my account or if not they will go to our barangay with the attorney. Please help me with this, advise me what will i have to do. Thank you very much...

Posted under " Utang, What I'd Do"
Tuesday, September 7, 2010 1:16:00 PM GMT+08:00

Wednesday, September 1, 2010

La Lang

Anak, Hiling Ko Sa Aking Pagtanda
Sa aking pagtanda, unawain mo sana ako at pagpasensiyahan.
Pagpasensyahan mo sana ako kung ako man ay nagiging makulit
Natatandaan mo anak noong bata ka pa?
Pinagtyagaan ko ang kakulitan mo.

Kapag may konti kang panahon,
magkwentuhan naman tayo, kahit sandali lang.
Inip na ako sa bahay, maghapong nag-iisa.
Walang kausap.

At kapag dumating ang sandali na ako'y magkakasakit
pagtyagaan mo sana akong alagaan
Tutal hindi na naman ako magtatagal.

At huwag kang mag-alala,
kapag kaharap ko na ang Diyos na lumikha,
ibubulong ko sa kanya na pagpalain ka sana ...
dahil naging mapagmahal ka sa iyong ama't ina...

Saturday, August 28, 2010

Office Visits

When collectors threaten to visit you,
they will merely hand you a 1/4 s#$t of paper telling you
"to call atty. ek-ek otherwise...."
if he is polite naman,
just receive it without any fuzz.

However, if he makes a scene,and begins to interview or berate you,
You have the right to refuse entry to anybody, especially collectors.

Ask them for proofs that they are legitimate:

1.Collection Agency authority as required by BSP Cir. 702
2.His authority from the supposed collection agency;
3.Board Resolution of the bank authorizing such appointment
4.Employee ID
5.Statement of Account duly signed by authorized bank signatory
6.etc.and etc.

Normally WALA silang maipakita.
Conclusion? they are just there to harass you and milk money

The Revised Penal Code states :
..By means of any of the following false pretenses or fraudulent acts executed prior to or simultaneously with the commission of the fraud:
(a) By using fictitious name, or falsely pretending to possess power, influence, qualifications or imaginary transactions, or by means of other similar deceits.
(b)By inducing another, by means of deceit, to sign any document.
Art. 318. Other deceits.
any person who shall defraud or damage another by any other deceit not mentioned

Penalty? why, kulong, of course!
CALL THE POLICE. its time to turn the table against these rude collectors.

see Home Visits here:

Saturday, August 21, 2010

Costs and Time

By: Socred - B.A., SCMP

According to the generally accepted accounting principles, when physical capital is purchased, it is recorded as an asset and expensed over time as the capital depreciates. “Generally accepted accounting principles require expenditures to be capitalized when they will benefit more than one accounting period, and when they are significant in amount, and when they can be measured with reasonable objective evidence. (Financial Accounting, Henry Dauderis, pge. 393) With accrual accounting, revenues and expenses are recorded when they are incurred. Because capital depreciates over time, and has a longer life than the time at which it was purchased, physical assets are depreciated via depreciation expenses in order to better match costs with revenues. This defers financial costs to the future in order to “allocate costs over its (capital's) useful life”.

From an economic perspective, there are two ways of measuring costs: 1) financial costs, and 2) real costs. One of the purposes of cost accounting is to attempt to measure the real cost of production in terms of financial costs. Orthodox economics regard real costs as "the alternative opportunities forgone" (Hischleifer, "Price Theory and Applications, pge. 176). These costs are referred to as "opportunity costs", and this is what economists call the real cost of production. In other words, the real cost of producing something is the opportunity lost to produce something else. This theory of costs is unusable at the macro-economic level because it infers that the real cost of production is all the non-existent production that could have occured. This cost would be impossible to measure, because it would include all production which is non-existent. Douglas proposed that the real cost of production is consumption over an equivalent period of time. In other words, if we produce ten apples, and consume eight in the same period of time, the real cost of producing those ten apples was eight - profit was two apples. These two apples can then be exchanged for other goods in a barter economy. However, in the macro-economic sense, profit is pointless, since macro-economics is concerned with aggregates. As Douglas made explicit, the purpose of production is consumption (otherwise production is waste). In other words, real profit in the aggregate is merely waste, because it would be production which is not meant for consumption.

Now, the only time that exists is the present. The past used to exist, but it is gone. The future exists as possibility. Time flows from past to present, but consciousness can only exist in the present - in the now. Everything that we are concsious of must exist in the present. While this may seem self-evident, it has important economic implications in regards to costs, and the attempt to allocate financial costs over future time periods.

Financial costs are measured in the currency of the nation that is measuring them. For instance, in Canada, we measure costs in dollars. Douglas proposed that the physical currency in which we can measure costs is the “time – energy unit”. The time – energy unit is “potential effort over a definite period of time.” (Economic Democracy, pge. 100) Obviously, as improvements in process reduce the amount of time – energy units used to produce a unit of output, the real cost of production is diminished, because less inputs are used to produce a unit output.

However, if physical costs are associated with the time-energy unit of measurement, this means that time is an important factor in measuring physical costs. Since the only time that exists is the present, the only time energy units which available are present units. And since these are a measure of physical costs, the only physical costs that can exist are present costs. Past time energy units have been expensed, and future time energy units do not yet exist. In other words, the only financial costs that should exist are current costs. Past costs no longer exist.

If past costs no longer exist, then why are we forced to pay for capital that was built previously? How was the real cost of capital expensed at the time it was built?

Currently, we are forced to pay for capital twice. The accountant is mainly concerned with costs and their impact on price, but forgets that the upper limit of price is what an article will fetch on the open market. When capital is built, purchasing power (in the form of wages, salaries, and dividends) is disbursed to individuals who helped construct the capital. These individuals use that purchasing power to purchase current consumer goods coming onto the market. This activity has a tendency to inflate the price of consumer goods as this purchasing power is recouped from retailers who find that the effective demand for their product rising. In this way, the consumer pays for the capital at the time of its construction via the inflation of the price of consumer goods, and once again as the capital is depreciated over time via depreciation expenses. In fact, the inflationary effect of the construction of capital would be far worse if it were not for the negating effect on this process of improvements in efficiency which tends to reduce prices at the same time.

Since one dollar of income is only capable of defraying one dollar of cost(*read "The Alberta Postwar Construction Committee" posted on this blog), consumers eventually find that they do not have income necessary to defray these depreciation expenses in the future, because they have already used this income to purchase consumer goods at or near the time they received the income. This creates a gap between incomes and prices, and necessitates the further production of goods and services that the consumer is unable to consume in order to distribute the necessary income to purchase all of the consumer goods coming onto the market at some future point in time. Douglas exposed this gap in his A+B theorem.

The solution is not to change the way accountants allocate costs over time, because this is an accurate attempt to match costs with revenues, and is likely the only way many businesses would be able to operate at a profit. The solution entails distributing purchasing power to consumers in such a manner that said purchasing power does not form a part of costs, which is exactly what happens with respect to Douglas’s proposal for a compensated price.

The compensated price mechanism cancels costs at retail by reducing prices to consumers. This increases consumers' purchasing power. The mechanism is designed to equate production and consumption, and to allow financial costs to more accurately reflect the real cost of production. In this way, costs that have been capitalized, and really represent past consumption, can be eliminated in the current accounting period.

Sunday, August 15, 2010

Demand Letters & Text Messages

These come in three forms:
1. Unsealed at tad-tad ng staples na demand letter.
2. a 1/4 s#$t of paper.
3. SMS.

even at unholy hours.

It simply tells you about:
1. Being imprisoned ( IF you kill a cat or under RA 8484 ek-ek);
2. This is your FINAL demand ( you received it a hundred times, though)
3. That they will get your things ( even if you do not have one)
4. To call Atty. Ek-ek otherwise.....
5. That your spouse shall be included under rule 3 sec 4 of the new
rules of court.( eh, single ka? or so what? Wedding vow namin yun!)
6. That you will have NBI,Barangay,Police running after you
( some would even include manhunt operations by the entire AFP,
including the Phil. Air Force and Phil. Navy! - sus, ginoo.)
7. That you will be blacklisted forever in the files of,well, everything!

Since there are no good news there anyway, but only lies:
letters - dont open ; "take and tapon" diskarte
SMS - press 'delete'

Saturday, August 14, 2010

Right Minus Wrong

It's okay for a collector na sisingilin ka.
Inutusan kasi sila, right?

But is it right na:
Magalit sila. "Bakit ayaw mo mag-bayad!"
Murahin ka " balasubas."
Lokohin ka " may warrant of arrest ka na!"
Ipahiya ka. " We will call your HR "
Blackmail you " Barangay kap will visit you"
Gawin kang TANGA " you are liable under RA 8484"

If you compute it with right minus wrong,
you simply raise your two hands.
After the right, there is nothing LEFT.

Wednesday, August 4, 2010

Going Abroad

Bureau of Immigration
- handles the administration and enforcement of immigration, citizenship, and alien admission and registration laws.

- A Hold Departure Order (HDO) issued by the Regional Trial Court (RTC).

Circular No. 39-97

Hold-Departure Orders shall be issued only in criminal cases within the exclusive jurisdiction of the Regional Trial Courts;

Violations of BP 22 are within the exclusive jurisdiction of the Municipal Trial Courts or Metropolitan Trial Courts (MTC). This means that the Information or case can only be filed with the MTC, regardless of the amount involved.

Therefore, there is NO Hold Departure Orders for BP 22s.
Nor for debts which fall under civil cases.

Lalo na ang " DO NOT ENTER" ORDER for you.
that is plain S-2-PEED

Saturday, July 31, 2010

Dubai Debts

Wala tayong pakialam sa batas nila ; wala din sila pakialam sa batas natin.
this is because of the "territoriality concept of law".
once you are here in 'Pinas, mahirap habulin because of the cost and the
separate territorial laws involved.

Di ba ang tawag sa mga bansa "Independent"? wala bansa ang puede
makialam sa ibang bansa.

Kaya, ang mga masigasig lang ay yung mga Pinoy sa Dubai and Pinoy
dito who try to squeeze money from OFWs by blackmailing them.
(Special Mention po dito ay Bilkish)

May debtors prison doon? dito, wala.

Think about this :
Kung puede mag-asawa doon ng lima, dito ay considered yan "adultery"
see the difference?

From A Lawyer:

The XXX (OTHER ARAB COUNTRY) authority can only hold or refuse the entry or departure of an foreign national for violation of its immigration laws or its local laws (it is possible that they consider a person undesirable alien if he has a case before UAE) but the actual case for violation of UAE laws can only be prosecuted and filed in UAE since violation of criminal law is jurisdictional meaning it can be filed only in the place where it was committed.

My Translation : WALA pakialam ang GCC sa kaso mo sa Dubai

Each countries has an agreement with their respective local police through Interpol to apprehend violators of their law and if the host country (GCC) is willing to cooperate with UAE government through its INTERPOL or the immigration office, they can apprehend the subject for eventual turnover to UAE authorities for his prosecution.

My Translation : PUEDE ang GCC country na dakpin ka at i-turn over sa Dubai.
meaning - IF you are that important and has committed heinous crimes or plunder
at tumakas ka with $100,000,000.00 from the bank.

In THEORY, everything is possible.
In Reality, not everything is feasible.

Saturday, July 24, 2010

Publishing Your Face

bag lady avatar
Collector's diskarte: PJ Publication

Threats to publish your name, picture and your face in the newspaper
is silly.

If they do that, WALA ka ng mabasa sa newspaper kundi pur0
pangalan ng 500,000 CC defaulters! Incredible? its like
reading who passed the board exam, complete with your face
and picture.

BTW,ang ba ang pagka-iba ng face and picture?
(It's also libel - a criminal case - no matter the reason)


Saturday, July 17, 2010


Police avatar

Under its enabling law, Republic Act 157, as amended, the NBI is empowered to:
* investigate crimes and other offenses against the laws of the Philippines, both on its own initiative and as public interest may require;
*assist, when officially requested in the investigation or detection of crimes and other offenses;
*act as national clearing house of criminal records and other information for use of all prosecuting and law enforcement entities.

Utang is not a crime. If unpaid, its a violation of certain conditions of a Contract or Kasunduan.( Just like your marriage contract. lol!)

Friday, July 9, 2010

Help Not Blame


What to better define people with credit card problems - worrywarts? oppressed maybe? or victims? Would exploited CreditCard Defaulters be most appropriate?

From the start, Cardholders are already at the losing end, exploited by corporate greed - Tempted to meet their emotional wants and desires masquerading as actual needs.
Rationalization comes in - CCs are handy, to be used only on
"emergency cases". And how many " real emergency cases" did we have? Its Midnight Sale in the mall, there's a promo on appliances sayang naman if we pass this opportunity,I like that bag, baka wala na yan pag-balik ko. familiar scenes?

Default starts. the exploitation continues. Where in the world can you have an interest of 42% plus a penalty of 60% or a total of l02% per annum? you only heard about it when speaking of 5/6 before! On top of that, there are over-the-limit fees, hidden charges na hinde mo naman maintindihan how it got there and at collection fee of 25%,the logic behind it also puzzles me.ahhh....deceits.....greed.....

Aside from harassments of the collectors, and the paranoia created afterwards, when others heard about the exploitation, reaction would most likely be:

"iyan, kasi they are irresponsible in handling their finances"

maybe,losing a job is also being irresponsible?
maybe,using your card to put dear father under ICU to keep him alive is being irresponsible?
maybe,not being able to look at your family go hungry is also being irresponsible?

Exploited na nga yung tao, you add pa to their miseries by blaming them.
In such case, I dont want to go to church with these hypo-critical people.

If you cannot help, dont blame. leave us alone.

Wednesday, July 7, 2010

RA 8484 In Pilipino

Unless you used a FAKE Credit Card, here's the law for regular unpaid cards:
Section 9.Prohibited Acts:
(j) Obtaining money or anything of value through the use of an access device, with intent to defraud or with intent to gain and fleeing thereafter;
nangutang na ang layunin ay umalis na lang pag-katapos at hinde na mag-babayad

Section 14. Presumption and Prima Facie Evidence of Intent to Defraud
a. Debt - more than Ten thousand pesos (P10,000.00);
b. Status - past due for at least ninety (90) days ;
c. Action - abandons or surreptitiously leaves the place of employment, business or residence

Nag-layas o umalis sa lugar ng trabaho, negosyo o tinitirahan, ng palihim o patago.

Friday, July 2, 2010

China Trust & BP 22

I havent paid my chinatrust loan mag 2 months na po.sayang kasi june 2010 na kasi ako matatapos pero di na tlaga kasi kaya cause na lay off po ako last nov. sir, paano po yung check na i have signed before? baka ma estafa po ako eh..pero wla naman akong cheking account eh...i dont understand kung for wat yung checks na pina sign nila sa akin before pagka kuha ng loan ko.. please advice po. thanks!

Please call them up and inquire kaninong account name yung checks
which you signed and you will be in for a surprise!

Saturday, June 26, 2010


♫♫♪ I did my best to keep you satisfied
You never really know how much I tried
.....but from now on ♪♪♫
you'll just something that I used to love ♪♫♪♪

Saturday, June 19, 2010

Masters Of Deception

Somebody calls you up. Says " I'm from the bank"
Hmmm... you readily believed him.
He says " You have a Warrant of Distraint"
Pagka-alam mo it's :
SEC. 205. Remedies for the Collection of Delinquent Taxes.
National Internal Revenue Code (NIRC)

He advises you to call Atty. Ek-ek otherwise,isampa na
ang RA 8484 sa iyo.
..teka..teka.. bakit nauna ang "warrant" keysa filing of case?
"and the bank will take your properties"
akala ko criminal case ang i-file?

Sa mga taga-subaybay ng blog na ito,
maybe we will not call them "Masters of Deceptions"
but rather:
"Masters of Discrepancies"

Saturday, June 12, 2010

Imprisonment For Debt

Bill of Rights
SECTION 20. No person shall be imprisoned for debt or non-payment of a poll tax.

RA 8484,and other related laws, punishes you, not because of debt, but because of other things like dishonesty or deceits.

No law is designed to coerce a debtor to pay his debt.

Saturday, June 5, 2010

So Many Things To Be Thankful About

Let us rise up and be thankful,
for if we didn't learn a lot today,
at least we learned a little,
and if we didn't learn a little,
at least we didn't get sick,
and if we got sick,
at least we didn't die;
so, let us all be thankful.

I decided to republish this
for people who seems to have
given up. don't.

Sunday, May 30, 2010

EB Batch 2010

To Miss Hopeful who coordinated everything
To Strider who was a very accommodating host
To Dragon76 who led the raffle prizes
To the EB Girls/Secretariat who made the event memorable
To everybody who lend their precious presence
To others whom we missed but remembered

Sunday, May 23, 2010

Sunday, May 16, 2010

Emotional Blackmail

While surfing last week, I chanced upon an article:

Emotional blackmail are attempts to influence or control by manipulating emotions. Emotional blackmail often follows a cycle of :
Demands - Resistance - Pressure - Threats - Compliance - Repetition.

Emotional blackmailers use fear, obligation and guilt (FOG) in ensuring that the victim feels afraid to cross them, obligated to give them their way and feeling guilty if they don't.

• You feel dominated - your life feels controlled
• You feel intimidated by unreasonable demands
• You are attacked with words, laughter or threats
• You feel manipulated by guilt, fear or compassion

A blog chapter about how to deal with them was previously posted:

Monday, May 10, 2010

The World Of Credit Card Business

It lends.

1. What if the debt remains unpaid and uncollected?

Series of 2003

Credit card receivables shall be classified in accordance with age as follows:
No. of days past due: 181 or more
Classification : Loss

2.What does BSP advises?

Series of 1999

The amount of loss is difficult to measure and it is not practical or
desirable to defer writing off this basically worthless asset even
though partial recovery may be obtained in the future.

3.What should CC companies do then?

Series of 2004

Banks... may write-off loans against allowance for probable losses (valuation reserves)as soon as they are satisfied that such.. are worthless

Notice of write-off to the supervising and examining department at least twenty five (25) banking days prior to the intended date of write-off.

4.What happens afterward?

The income tax expense deferred, corresponding to the amount of loan written-off considered deductible for income tax purposes, shall be recognized and reversed in bank’s books.


Pag-hinde makabayad ang may utang,deduct lang ng bangko ito
sa taxes na babayaran nila sa gobyerno.

Paunawa : their words, not mine

Friday, April 30, 2010

Collectors & Janitors

They both do dirty jobs
Janitors come out clean;
Collectors remain dirty.

Saturday, April 24, 2010

Is It A Crime ?

This blog is often being referred to when people search concerns about "Credit Card debts being a crime".

One generally cannot be thrown in jail for failure to pay a credit card debt or failure to pay someone's car loan or failure to pay their home loan. Yet collectors, debt collectors much of the time will call up and pretend to be police officers, pretend to work for a sheriff's department, pretend to be with the government and tell a consumer that the debt collector is a detective. Unless the consumer gives bank account information over the phone, then the consumer will be arrested that afternoon. The consumer cannot be arrested and jailed for failure to pay a consumer debt.
(Consumer rights and debt collection - An explanation of consumer rights and debt collections.

Another popular searched subject covers collection agencies like Molaer, Bilkish, Enzi, Arteche etc. which are define as:

Debt collectors, who work on commission, may be highly motivated to convince debtors to pay the debt, often to the point that they are threatening or abusive to the debtors.

Here are the details :
1.RA 8484 – unless you faked your CC, you need not panic.
2.Dubai - wala tayong pakialam sa civil laws nila and vice versa. Puede
doon 5 asawa. Dito, hinde. See the difference?
3.BP 22 /ChinaTrust – No jail. The judge will issue a bench warrant
only IF you do not attend when invited.
4.Kulong/Warrant of Arrest/HDO – Debt is a civil case ; These are only
applicable for criminal cases

Monday, April 12, 2010


Dubai World sent shockwaves across financial markets last year when it said it would not be able to repay its debts on time and asked for a six-month freeze on debt payments.

Saturday, April 3, 2010

My Name Is Sue

Hello there.My name is Sue.
Some people drop my name to intimidate.
But others are really afraid of me.
Like a curse, maybe?
Oh, if only they knew....
I am not what they say I am.
Why not try to know me better?
You see, I am really nice, just often misinterpreted.
If fact, by knowing me better, you will have that
peace of mind that you have been desperately wanting .
Now,you know who I really am?

Saturday, March 27, 2010

Raison d'ĂȘtre

I am so thankful to the Lord I have found this site!!!This really is a great relief and a wonderful blessing to me.

...was able to pay consistently for half a year until I got pregnant. forced to resign ...during my 1st trimester because I had hemorrhage and was advised complete bed rest.

When the bank called, I tried to explain my situation and asked for consideration ....Still they demanded payment and sent someone to my house to check if im still residing here......Because of this I got hospitalized and had premature labor when I was 8th mo. pregnant.

They even called me when I was already in the ER.

This is an answered prayer because I had been fervently praying about my financial problem for a long time.I can now sleep soundly at night and just concentrate on taking good care of my baby boy whom my husband and I had been waiting for 5 years.

Thank you very much BANKER..May God shower you w/ blessings a thousandfold for helping and enlightening people like me..THANK YOU!!!

Thursday, January 14, 2010 6:53:00 PM GMT+08:00
Posted at "The Unwanted King" chapter

Hello banker,

To be perfectly honest, I'm in tears while I compose this email. I suppose it's a combination of fear, relief, anxiety and panic. But I thank the Lord that I came across your blog.

I have started reading your blogs and I find some relief from it, but due to the nature of my disease, I cannot find long-lasting relief. I suffer from Anxiety Disorder and I just recently recovered from Clinical Depression din. I have to say that my credit card paranoia is making me really ill.

Ruth's e-mail
Wed, Mar 3, 2010 at 2:34 PM

Monday, March 22, 2010





It is generally assumed that the purchasing power of money
is increased or decreased by its velocity of circulation. However,
this theory will not bear examination in the light of the facts regarding
the issue and withdrawal of money under the established system.

For purposes of analysis the following simple illustration of
the velocity of circulation theory will suffice:

A wage-earner A. uses a $10 bill of his income to buy two
pairs of shoes from a shoe merchant B., who immediately goes into the
adjoining store and spends the $10 to purchase some shirts from C.,
C in turn immediately goes across the street to grocer D. and buys
some provisions costing $10, grocer D. then takes the $10 bill across
to the local garage E., to buy some gasoline and oil.

The contention is that the $10 bill provided purchasing
power to the extent of $40 during the day by virtue of its "velocity of
circulation" in enabling $40 worth of goods to be purchased by consumers.
On the face of it this would appear to be the case, but on examination
it will be found to be a complete fallacy.

Because all money issued creates a debt of the corresponding
amount at its source of issue, for all practical purposes merchants
B., C., D., and E. can be assumed to be operating on credit loans
from their banks with some "savings" invested in their stock.

The proceeds of every sale they make can be divided into three
parts: (1) repayment of a bank loan before a new line of credit can
be obtained to replace stock, (2) payment of operating costs and
(3) net profit- i.e. personal income for services. Suppose that in
each case B.,C., D., and E. work on a 15% net profit. From each
purchase amounting to $10 they would be obliged to set aside - say,
$8.50 repayment of their bank loans for replacement of stock and overhead
costs, and only $1.50 as personal income.This is likewise true of C. and D. Therefore, by spending the $10 both of them created a liability against their future purchasing power.

When A. obtained the $10: in wages there was against it a
corresponding cost in the prices of goods coming on the market. This
liability must be kept in mind.

On buying the two pairs of shoes from B., A. surrendered his
right to $10 purchasing power and B. acquired the right to $1.50 of
this, the balance going for the repayment of his bank loan and cancellation
of the money as shown previously. (If he was operating on his
own capital it would make no difference, for the $8.50 would have to
go to the replacement of working capital with the same result.)

If B. does not repay his bank loan, but spends the whole $10,
he will have a liability of $8.50 outstading which will constitute
a debt against future purchasing power. In other words he will have
to sell over $50 worth of goods without getting any portion of it for
his own use in order to make good the deficit.

Thus while it is true that in the example quoted ,the $10
bill resulted in $40 worth of goods reaching consumers, there was
created a trail of debts against their future purchasing power amounting
to $10 (the liability against the original issue of the money) plus
$8.50 (B.'s undischarged liability) plus $8.5O (C.'s undischarged
liability) plus $8.50 (D.'s undischarged liability)- making a total
of $35.50. Suppose E. now meets his obligations of $8.S0, he retains
$1.50 as his net profit--:ie.,as purchasing power.

It will be evident that the effect is exactly the same as
if A. bought gasoline, etc., from E., and B. and C. and D had obtained
goods from each other "on time", pledging their future purchasing

The so-called "velocity of circulation" did not incredase purchasing power at all.
The fallacy in the theory lies in the incorrect assumption that money "circulates",wheras actually it is issued against production, and withdrawn as purchasing power as the goods are bought for consumption.

Saturday, March 20, 2010

Tatay, Ano Trabaho Mo?

Father : Anak, collector ako.
Anak : ng ano po?
Father : Credit Card debts
Anak : Ah... yung nambabastos ng mga taong may utang?
Father :( silence )

Saturday, March 13, 2010

Don't Worry. I'm Lying

got another txt message from fiscal pigares from makati prosecutors office informing me that my :court summons subpoena" is out within 24 hours and that it will be delivered by CIDG camp crame police station, to be assisted by NBI warrant section. am i supposed to take them seriously? honestly, had i not been as educated as now upon reading this blog, i would have panicked and cringe in fear. but now i know how to handle them, so i will just let them be. in fact, i will send them a msg telling them to sue me and we will just see each other in court. right, banker?
- Cathy

Saturday, March 6, 2010

Blaming Wont Help

Whatever you do with your life is not my problem.
It's your life anyway.
People around you are merely mirrors that tell you
what could be right or wrong with you.
Ultimately, it's you who will decide.

Should you fall,however,
we are here to HELP, not BLAME.

"Help, Not Blame" chapter
posted September 08, 2008

Saturday, February 27, 2010


This is really a powerful word - NOTHING

For CC defaulters, collectors would tell you about:

1. filing a case - They have NOTHING to prove they are authorized to do so.
2. Imprisonment - There is NOTHING in our laws that penalizes debtors with it.
3. Barangay - They have NOTHING to do on disputes between a person
and a corporation.
4. Hold Departure- NOTHING can stop you from entering or leaving
our country since utang is merely a civil case.
5. Dubai - There is NOTHING they can do if you are here in our
6. Visits - NOTHING much.except giving you a 1/4 shit of paper
to "call atty. ek-ek otherwise...." or "We made ocular ek-ek"
7. Letters - NOTHING worth reading.Tapon
8. NBI - Your clearance will state "NOTHING" since they handle criminal
records only.
9. Publish Pix - If they do that, you will read NOTHING in your papers anymore.
10. Gulf Council - NOTHING but an economic cooperation among Arab states similar

Anonymous: Thank you Blog Team for this post
Blog Team :Oh,its NOTHING.

Thought of the Week

I asked God what I wanted
But received NOTHING.
He gave me instead

Friday, February 12, 2010

The Debt Cross I Carry

We are glad you finally found us!
Before you proceed, let us offer you some tips.
- We have blog archives ( so far, 155 chapters all in all)
Read the Chapter's titles.
- If you cant seem to find what you were looking for, type
under the "Search Box" the root word/s ( e.g. Dubai,imprisonment)
- If it still proves fruitless, post your query, then choose your
desired ID under "Name/URL".
- Click "Publish Your Comment".
It will, after we approve it.

Saturday, February 6, 2010

Amnesty Fantasy

What is there to waive if your debt is already "closed".
Who is waiving but just the collector and not the lender,
who by the way is no longer interested to collect
( for a "wondrous" reason)
How sure are you that everything is authorized and legal,
there is no way to find out.
How sure are you it goes to the lender and not just to the pockets
of you-know-who.
Even if you fully pay now, would that erase the experience
and the fact that " once upon a time, you defaulted your CC"?

If you still feel comfortable after knowing these things, then,
it's about time you should pay the Collection Agency, and not
the Lender.

----------- How To Post ---------

After typing your post
1. Go to "Choose an Identity"
2. Click "Name/URL"
3. Indicate there your preferred ID
4. Click " Publish Your Comment"

Your comment will appear after approval

Sunday, January 31, 2010

Truth Hurts

Hi Ms. Anonymous, share ko lang.
May nagpuntang messenger sa amin noon, being polite naman kinausap ko siya sa reception namin, he ask lang about my card and informed me to pay some amount, then biglang sabi, "mam kung ako sa inyo wag nyo na bayaran, grabe po silang mang harass at pag nagbayad tatawan ka lang nila at pera mo paghahatian lang nila." yung iba daw na tinatakot at hinaharass ng mga CA minsan direct nagpupunta sa office nila to pay, kawawa naman. Sabi ko nga sa messenger, siguro di ka nahahatian kaya sinasabi mo sa akin to noh? Natawa lang siya.

Ms. Oh
Friday, January 29, 2010
2:08:00 AM GMT+08:00

You : I want to avail of your Amnesty Program.
Collector : M'am, you have to pay at least P 5,000.00
in order to qualify forward....weeks later

You : Kumusta yung Amnesty Application ko? I already
paid you P 5,000.00 last week.
Collector : M'am, disapproved e. would you like to........
You ( bangs the phone, disappointed ; felt naisahan)


Collector visits your house.
Collector : You should show your intent to pay by paying even
P 500.00 sana...
You : (innocently pays P500.00 coz "I am not running away from
my debt")

Collector arrives at the office

Attorney : may na collect ka ba?
Collector : Wala Sir. lahat "next week" daw.
( there goes your P500.00 down the pala)

Saturday, January 23, 2010

Mr. Hawtrey's Giraffe


THE much-abused but resilient A + B theorem is still a thorn in Mr. Hawtrey's flesh, and he has what he evidently regards as a new and devastating criticism to make, since he makes it twice; once in the introduction to his book, and again in the chapter devoted to Social Credit. The argument is so neatly condensed in the introduction that it will serve well here to open the subject. This is what he says:

"The concept of a deficiency of purchasing power, on which the whole fabric of Social Credit is built, means two different things, and not merely different, but contrary. At one stage it means an excess of money over goods and a consequent dilution of purchasing power by a rise of price; at another stage it means an excess of goods over money. The tacit assumption in the mind of the supporter of social credit is that, if the excess of money over goods co-exists with the excess of goods over money, the deficiency of purchasing power is doubled. With this impregnable redoubt in the background the conflicts over the outworks are mere skirmishes. All the arguments of the orthodox economist are put out of court because he has missed this fundamental principle."

Dear Mr. Hawtrey. That last sentence is meant to be sarcastic, of course, but what a funny thing the subconscious is. Perhaps he had a fleeting memory of having said something three years before which contradicted his new argument. It is a fact that in his debate with Major Douglas at Birmingham he gave a brief outline of the best orthodox account of how goods and services are produced and distributed, while money is created, issued, withdrawn and destroyed, with a description of a period of inflation followed by deflation. It would be tempting to criticise this account, particularly where he begged the whole question which was being debated in one crisp sentence:

"Payments by one trader to another cancel out." But we are concerned here only with the concluding sentence: "This account of the relation of the credit system to productive activity differs from that of Major Douglas in that it reaches the conclusion that an excess of demand IS just as likely to occur as a deficiency."

Careful comparison of this conclusion with the new argument discloses that Mr. Hawtrey has discovered that the A + B theorem does take into account an "excess of demand," but that (oh, horror!) it treats it as a dilution of purchasing power. This Social Credit is even worse than he thought it was. The curious thing is that he admits, as will be seen, "the rise of prices which is caused by the dilution as a decrease or deficiency of buying power. That usage," he says, "is quite defensible, for the rise of prices does diminish the command over goods represented by a given money income."

It is as if Mr. Hawtrey, confronted by a giraffe, exclaimed, "There it is, but I don't believe it."

Now the curious thing is that Major Douglas actually supplied at Birmingham the clue to the reconciliation of the apparent contradiction that worries Mr. Hawtrey so much. He said:

"When Mr. Hawtrey says that it is possible to have an excess of demand, I think what he means is that it is possible to have an excess of demand for consumable goods, in which I agree with him. It is possible to have this excess of demand by making a large quantity of goods which are not intended to be sold to the public and using the purchasing power distributed in making these goods to buy consumable goods."

After that it was really rather criminal of Mr. Hawtrey to be so slipshod. He should at least have said "an excess of money over consumable goods." The whole passage is sloppily worded in the eyes of a Social Crediter, trained to accuracy of expression (note, for example, how he misuses that word "doubled"), but Mr. Hawtrey is an economist, and moreover could plead that the passage quoted is only in the introduction. That, however, is no excuse for leaving out the word "consumable." Besides, it is also left out in the main argument. Mr. Hawtrey begins his main argument on page 296 by summarising the A + B theorem (quoted in full below*). Summaries of the A + B theorem are frequently misleading, but, as Mr. Hawtrey's argument is not affected, there need be no complaint about this one in its context. He then makes a remark that calls for extended comment before proceeding to his main argument.

"The sentence 'A will not purchase A plus B,' has been taken both by critics and by supporters of Major Douglas to mean that there is an inherent deficiency of demand. This interpretation has derived support both from the nature of Major Douglas's remedy, since his subsidy takes the form of the creation of additional purchasing power, and also from some direct pronouncements of his own."

I should like to make a plea here for the King's English and for commonsense. A theorem is not a parable that it should require interpretation; it is a proposition which can be demonstrated by argument to be correct or incorrect. Mr. Hawtrey is engaged upon the attempt to disprove it, and it is his business to deal with what Major Douglas actually says and not with anybody else's so-called interpretation of it.

The sentence "A will not purchase A plus B" means one thing and one thing only.* Mr. Hawtrey, in the last sentence of his chapter, compares some of Major Douglas's calculations to a misprint in the multiplication table, but here we have simple addition and subtraction applied to symbols. Either A will or will not purchase A plus B. If not, then a proportion of the product at least equivalent to B must be distributed by a form of purchasing power which is not comprised in the description grouped under A.

Very seriously indeed I suggest that Mr. Hawtrey read the theorem again carefully, and try to understand exactly what it says. It does not just say there is an inherent deficiency of demand, it says something subtly but vitally different from that. It says that there is an inherent deficiency of demand unless something is done to supplement it.

As a protagonist of the orthodox theory that the present financial system is self-liquidating, Mr. Hawtrey has to prove one or the other of two things. He has to prove that the rate of flow of purchasing power to individuals is not A but A plus B, or else that a proportion of the product at least equivalent to B is in fact distributed by a form of purchasing power not comprised in the descriptions grouped under A. In doing so it is not enough for him to make emphatic assertions on the strength of his eminence in the financial world. His theoretical position is that of an eminent professor of Newtonian physics confronted by the challenge of Einstein—orthodox but shaking. But his real position is much worse than that, for he has to defend a theory which is responsible for the existence of a National Debt of £8,000,000,000, with a third of the population unable to spend as much as 6s. a week on food, while measures for limiting the production of food and discouraging the import of food are in full swing for the purpose of protecting prices; to say nothing of other evils.

It will be his business to prove that any money apart from A which is used to purchase A + B has not left outstanding any cost which must still be defrayed, and that any cost that has been defrayed is not at the expense of another cost left outstanding. For example, on page 302, Mr. Hawtrey, dealing with the item of cost known as depreciation, says:

"If it is invested either in the business itself or through the investment market, it is made available directly or indirectly for the production of new capital equipment, which will generate [he, presumably, means 'distribute'] incomes. "Nevertheless investment is a separate act, without which the surplus depreciation allowance would tend to cause a deficiency of purchasing power. And it undoubtedly does sometimes happen that such funds, even if not accumulated in cash, are applied to paying off bank advances."

In fact it is admitted here that when a trader charges for depreciation in his price and obtains his price from the public, he does so at the expense of an equivalent deficiency of purchasing power to meet the price of all the goods that remain unsold. But the next point made is that the money so obtained may be distributed again in the production of new capital equipment. Quite so, and, so far as it is paid to individuals, it will be available to buy the unsold goods mentioned above. But it is included as a cost in the charge for new capital equipment which can be met only by the creation of new money. The deficiency has merely been transferred from one account to another.

Again, on this subject of depreciation he says:

"The practice of applying depreciation allowances to the repayment of bank advances is an absorption of cash. But the tendency to cause a deficiency of demand will be counteracted if the banks create equivalent advances in other directions. And this they will seek to do in order to maintain their advances in due proportion to their cash reserves."

Unfortunately for Mr. Hawtrey, this is a perfect example of the situation described by the A plus B theorem in actual operation. Here, in quantitative terms, is the situation he has described in respect of one only of the items included in Group B in the theorem.

The price of a batch of goods is A + B, and B is a depreciation charge. The purchasing power distributed in respect of it (according to Mr. Hawtrey) is A, but the trader gets his price A + B, so that the general pool of purchasing power, which we will call x is now x – B; a proportion of the general pool of goods at least equal to B must be distributed by a form of purchasing power to be described by Mr. Hawtrey. B has been cancelled by the bank and the deficiency remains unless, says Mr. Hawtrey, the banks create equivalent advances in other directions. That is to say, another trader gets a loan and the amount is B, which he uses in his business. He charges it all into his price, so that even if the general pool of purchasing power were thus increased from x - B to x, the price values attached to the general pool of goods have been increased by the same amount B and the original deficiency still remains. Worse, it has been augmented, for when the trader received the loan he used it to create two groups of costs, group A and group B, so that the general pool of pur¬chasing power is still something less than x though more than x - B. So Mr. Hawtrey has his work still to do, and has already made his position more difficult.

If he knew it, his position is impossible, for he has yet to face the fact that Major Douglas has shown in his various works the methods, the efficacy of which is steadily decreasing, by which the present lunatic financial system endeavours to provide the new money with which "a proportion of the product at least equal to B must be distributed," but to do so in such a manner that (a) the power to monetise the credit of the people does not pass out of the hands of the money monopoly which has filched it, (b) the monopoly retains control of the lives of individuals by dictating the terms on which they shall obtain the purchasing power which is their license to live (the most stringent condition being the nerve-shattering neces¬sity to compete for paid work in an employment market steadily depleted by technological improvement), and (c) the monopoly can dictate the policy of Governments who have to borrow all their funds from it and then compete with the price system to extract taxes from a pool of money insufficient to meet both, so that Governments can be solvent only when their people are insolvent.

From all of which it can be seen that Mr. Hawtrey is defending an irresponsible and tyrannical system of government by money. Which brings me back to the main argument once more.

Mr. Hawtrey's main argument must be stated in his own words:

"In the chapter following the enunciation of the A plus B formula he [Major Douglas] deals with the creation of credit. When a banker creates credit, for example, by allowing an overdraft, he enables production to take place. The borrower and those who supply him* get to work, and 'all those concerns are distributing purchasing power to individuals, in the form of wages and salaries, ahead of production, which causes a rise in the price of existing ultimate commodities, the only commodities that individuals buy' (page 33). This is the dilution of purchasing power already described in 'Economic Democracy.' Yet on this very same page the A plus B formula is summed up in the proposition 'that the current flow of wages, salaries and dividends is less, much less, than the current flow of price values of articles produced.' The former proposition asserts that there is an excess of purchasing power over goods, which forces up prices; the latter asserts that there is an excess of goods over purchasing power. How are they to be reconciled?"

After what has already been said every reader will be itching to point out to Mr. Hawtrey the enormity of his error. With apologies to them and in deference to him I must dot some i' s and cross some t's. Neither of the pro¬positions asserts either of the things he says they assert. The former is very precise and refers to a distribution of purchasing power ahead of production causing a rise in the prices of ultimate commodities. The latter refers to the current flow of wages, etc., being less than the current flow of price values of articles produced.

Purchasing power is not quite the same thing as money; it is money in relation to price. One pound is money and it has the power of purchasing five articles priced at four shillings, but only four if their price is raised to five shillings. Take Mr. Hawtrey's phrase, "an excess of goods over purchasing power." That is not what we should say; it is not precise—try it with five articles and a pound; you will find it depends on the price of the articles, and Mr. Hawtrey does not mention the price. What Major Douglas says is that the current flow of wages, etc., is less than that of prices of articles produced. That is precise – try it with five-articles-a-week-at-five-shillings and a-pound-a-week.

The two propositions that have to be reconciled for Mr. Hawtrey are not what he says they are. It is very easy for Mr. Hawtrey to be superior and devastating about propositions he has mangled to suit the easy flow of his pen. It would be very easy to score off him by rewriting the propositions in some way which suited me, so I invite the most careful and suspicious scrutiny of what I am about to say by way of reconciling two propositions which are made by Major Douglas.

They are two propositions, and they are separate. One is a major and the other a minor proposition. To take the major first, contained in the A + B theorem (quoted in full on page 561), it is contended that there is an inherent deficiency of purchasing power in relation to prices if purchasing power and prices are both regarded as a flow, which is the correct way to regard them, and is how Mr. Hawtrey regards them, as a subsequent quotation will show.

If we isolate a given period of time to illustrate the major deficiency we must at least compute the total book values of all consumable goods, and of all capital and intermediate goods produced in a given period of production, against the total of wages, salaries and dividends distributed in respect of production during the same period.

Let us suppose that in the period chosen the purchasing power distributed in respect of all production is sufficient to meet the prices (book values) of all finished consumable goods, and that they are all bought and consumed. This, I take it, is the situation which would satisfy Mr. Hawtrey's sense of fitness, and it leaves all the remaining goods unsold, but it also leaves outstanding all their book values, which the public will have to pay in the future, since all costs must be defrayed by the public. Now it may be true that purchasing power has been distributed in the past in respect of all these costs (as a matter of fact Mr. Hawtrey has already demonstrated that it is not true for those allocated costs called depreciation), but it is clearly irrelevant since it has already been withdrawn in previous periods in the purchase of consumable goods. In other words, the public has made the goods and paid for them, but the costs are still outstanding and a proportion of them will be included in the cost of goods produced in the next period, and the remainder in succeeding periods.

Since the economic system is a continuous process, successive periods flow into each other, so it must be regarded as a flow, and the A plus B theorem so describes it. The B costs referred to in it are the outstanding costs carried over into any period from previous periods plus any fresh allocated costs and costs in respect of semi-manufactures which the public does not buy.

But, says Mr. Hawtrey:

"To say that 'the wages and salaries (already insufficient to buy the whole production) tend to be diluted in value until they merely represent the subsistence allowance of the persons concerned' (page 34), does not help; the fact is that confusion has been introduced into the subject by Major Douglas's practice of describing the rise of prices which is caused by the dilution as a decrease or deficiency of purchasing power. That usage is in itself quite defensible, for the rise of prices does diminish the command over goods, represented by a given money income. But unfortunately the same expression, a deficiency of purchasing power, is equally appropriate to the case where there is a deficiency of incomes. In the one case a deficiency of purchasing power means an excess of demand in terms of money over supply at a given price level, in the other it means a deficiency of demand."

I am puzzled as to the exact shade of meaning intended by the word "unfortunately," but to return to the period already described, let us suppose that there has been an expansion of capital equipment (armaments, for example, or, if guns annoy Mr. Hawtrey, electric power stations or blast furnaces), so that there is distributed purchasing power in excess of available consumable goods at their book prices. This is the minor proposition at which Mr. Hawtrey boggles. Prices rise. That is to say, sellers add a fresh and profitable allocated cost to the previous book value. Purchasing power is diluted so that a pound, instead, say, of buying ten articles at two shillings, can buy only eight at half-a-crown.

Apart from the painful repercussions of this in the relations between capital and labour (resulting in rising costs), it is clear that the major deficiency has been aggravated (not doubled, Mr. Hawtrey). But what do the traders do with the extra profit? Briefly they do one of four things. They save it, which deprives some other seller of a market for the time being. Now or later they will part with it, however. They will most probably hastily pay back a pressing bank loan which, as Mr. Hawtrey puts it, is an "absorption of cash." Or they will go out and spend it, which is all right, of course; the price rise has merely transferred the right to consume to them. Or they will invest it in their own or some other business, which distributes part of it (the A part) but creates an equivalent A plus B cost. All these processes, except spending for consumption, aggravate the major deficiency; some more than others. Additionally, the "boom" conditions encourage the installation of new capital equipment, the purchasing power distributed in respect of which will augment the process just described, and the cost of which will be outstanding in the next period.

Now the following paragraph constitutes the entire argument that Mr. Hawtrey advances in support of the assertions he has made—based as we have seen on garbled paraphrasing of the opposing argument:

"In practice all stages of production are in operation simul¬taneously. Those which cause an excess of demand and those which cause an excess of supply tend to neutralise one another. But if we apply the same description, a deficiency of purchasing power, both to the rise of prices in the one case and to the shortage of money offered in the other, it is fatally easy to be misled into the idea that as each stage of production taken separately tends to cause a 'deficiency' of purchasing power, therefore when they co-exist they must reinforce one another."

Again, the use of the word "fatally" produces an odd qualm. It reminds me of Huxley's definition of a tragedy as "a theory killed by a fact." That is the classical or deductive standpoint. From the realist or inductive view, if a theory is wrong the discovery of the fact that kills it is a triumph. Fatally, fatally—what does it mean?

In any event a period in which purchasing power exceeds the prices of consumable goods, that is to say, a "boom" or inflationary period, does not in the world of hard fact occur simultaneously with a period in which purchasing power is less than the prices of consumable goods—a "depression" or deflationary period. Such periods, as is surely well known, alternate with each other to the glory of Mammon.
(To be concluded:)


A factory or other productive organisation has, besides its economic function as a producer of goods, a financial aspect—it may be regarded on the one hand as a device for the distribution of purchasing power to individuals, through the media of wages, salaries, and dividends; and on the other hand as a manufactory of prices—financial values. From this standpoint its payments may be divided into two groups.

Group A.—All payments made to individuals (wages, salaries and dividends).

Group B.—All payments made to other organisations (raw materials, bank charges, and other external costs).

Now the rate of flow of purchasing power to individuals is repre¬sented by A, but since all payments go into prices, the rate of flow of prices cannot be less than A plus B. Since A will not purchase A plus B, a proportion of the product at least equivalent to B must be distributed by a form of purchasing-power which is not comprised in the description grouped under A. (Quoted from the Statement of Evidence submitted by Major C. H. Douglas to the Macmillan Committee on Finance and Industry, May, 1930.)