International Promissory Note: Fill & Download for Free

Let us say you are a farmer and you have mango plantation (keeping in line with the season's favorite :P). You do hard labor and work day and night and grow 100 kg mangoes every year.Now, one cannot live his life eating only mangoes, And since mango is a good seasonal fruit, good for health, and not to mention utterly delicious, there would be others who'd happily trade their farm products, say wheat, for some of your mangoes. Realizing this, you decide to exchange your mangoes for other products. You tell about it to your friend who has wheat farms. Incidentally, he happens to be a mango lover like me and together you develop a rate of exchange, with mutual understanding of course in this example, say, 5 kg mangoes for 10 kg of wheat. You give him 10 kg mangoes and get 20 kg wheat for your family, which you assume should suffice for 6 months. You do the same thing with your other friends as well in exchange for pulses, rice, vegetables etc.Now, past 6 months comes winter, and your supplies have started to diminish. Moreover, you do not have any mangoes to offer in exchange for wheat and other commodities. But without the commodities you wont survive for next six months. Now what should, or rather, what could you trade in exchange for wheat?You find a solution. You go to your best friend who trusts you a lot, and you promise to give him 5 kg of mangoes next summer for 10 kg of wheat right now. He thinks about it for a while. There are of course things to be concerned here. What if you refuse to give him mangoes later? What if the mangoes you give him aren't good quality? What if next year is a drought and there are no mangoes?Let us say for the sake of simplicity here that your friend here thinks about it but on goodwill and years of friendship, he trusts you and agrees. Similarly, you go to your other friends, gain their confidence and promise them some mangoes next summer for providing you with supplies right now. Now, what you have done here is that you have developed a trading system wherein you trade items and commodities for other items and commodities. And the trading currency is none other than the "items and commodities".But now, since you are trading with so many different people at different time, it is getting difficult for you to keep track of how much mangoes you owe to whom. So what you do is that you start handing over promissory notes to the people you trade with, with your sign on it and the amount of mangoes you owe them. So next summer, whenever you have mangoes harvested, people come to you, show you the promissory note with your sign on it, and take the mangoes.But there is a problem with this system: you are promising X kg of mangoes which you have not harvested yet, i.e., which do not exist. Similarly you would have supplied mangoes to someone for a certain commodity he'll have in future but doesn't have it now. And then there is always a risk factor, i.e., next year maybe a dry one and you may not have enough mangoes to trade.Realizing this, you are worried now. You need a damage control. You consult this with your trusted friend and ask him how to avoid possible damage. Now this friend of yours is quite a trader himself and has traveled many cities and traded with many people. He tells you not to worry about it and that he'll let you on a little secret. He explains it to you how people will need mango no matter what: after all it is a seasonal fruit and very delicious. Now if there is less growth of mangoes next year, then he can ask to negotiate exchange rates in his favor, i.e., more commodities for same amount of mangoes. Simply put, due to scarcity, his mangoes will become costly.You get it a little bit, but you are still confused. You wonder how will you negotiate rates when you do not know how much mangoes you are going to harvest next year; how can you negotiate when there is uncertainty? Your friend smiles, and tells you that you can. He suggests you to issue only a certain value of promissory notes, lets say 1000, and then do the trading with these notes after declaring their new meaning to the traders. These 1000 notes will represent 100% of your harvest, no mater how much you harvest. So if there is a guy with your promissory notes valuing to 100, he''ll have 10% of your harvest next summer, no matter how much you harvest. He can also decide to not exchange it for mangoes next year when there is a drought, and wait for next to next year hoping for more amount of mangoes then. Lets call your promissory notes as Mango Currency (MC)All goes good and the mangoes, being good quality and sweeter than its competitors, are valued more. People want to buy mangoes from you even if they have to pay more. This means the value of MC gets more, only a few people can afford it. The very lower class, who wants to eat mangoes but cannot get hold of MC due to its high value is suffering. This also causes you loss in business since people are now holding MC instead of trading it for mangoes since the value is increasing. Since mangoes are not being traded, they are rotting in the collecting compound with very less people to buy them, causing you huge loss. You now need to keep the value of MC in check so that people do not hold up to it.You go to your friend again and consult him on how to keep value of MC in check. He tells you to simply issue more promissory notes. Since the total sum of promissory notes is equal to 100 % of your harvest, if you issue 1000 more promissory notes in addition to the initial 1000 that you've had, the value of MC would be halved. 100 MC that was 10% of the harvest would now only be 5% of your harvest. (This is also how RBI keeps the value of Rupee under check, else Economic activity of country would go down)Now you have developed a good trade system and also know how to keep the value of MC under check by regulating the supply of promissory notes. Now you decide to expand your business. You go to your best friend who deals in wheat and has currency WC (Wheat Currency). He is already doing very good in business and has surplus money. You tell him about your plans to expand our business and your requirement of more money for expansion purpose. He listens to you and agrees to lend you some money at certain interest rate: he already has enough money and extra money sitting at home isn't earning him anything, so lending it to you for certain interest seems a good deal.You borrow 500 WC from him. Now WC is quite strong in market. So much that 500 WC costs around 1000 MC (how much % of wheat harvest it represents doesn't matter).Now, you use up all the WC for expansion but suffer heavy losses. All the WC went down into the drain. You bought some stuff from it and have it still, but it is not bringing you any revenue and nobody is ready to buy it back. You are now left with only a few MC (remember, your currency is also floating in the market; you have maybe 1200 MC at hand). To pay back 500 WC, you need 1000 MC. But if you give 1000 MC right now, your remaining business will not be able to sustain itself with only 200 MC at disposal and you'll eventually end up bankrupt.You now think about possible way out. You plan to issue 2000 MC more, exchange 1000 MC for WC and return the loan. But if you issue more MC, the value of MC will be halved. Moreover, you can not think of cheating because the value of various currencies is now checked by Association of Auditors and you need to report any more printing of currency to them before it can be floated in the market, and all the currencies are numbered to keep the authenticity in checkBasically, you are now left with only one option: to try to get your act together and grow your business back to what it was, and then further more to get enough MC with sufficient value, to be able to return the loan amount.Now in the above scenario, lets replace you with our country India, and replace mangoes you harvest with the economic activity that takes place in country; and replace your promissory notes, valuing to 100% of your harvest, to 100% of the economic activity in the country.Now, back to your question: What happens when RBI prints more money to pay off bank loans? You should be able to guess it. More the money printed, lesser the value of currency. Money flowing in the country is nothing but standardized promissory notes issued by RBI. They are equivalent to the total economic activity of the country. If the economic activity does not increase in proportion to the money printed by RBI, the value of Indian Rupee will go down.And obviously, value of MC will go down with respect to promissory notes issued by other people for other commodities. So when value of Rupee goes down, it does w.r.t other currencies, USD being one of them.Its not difficult to guess that loans provided by World Bank are in USD. If money is printed to pay off the loan, value of Rupee goes down, which means you need more Indian Rupee to buy USD. As you can see, you can not repay the loan unless you actually have the money, over and above what you 'll need to run the country.P.S.: Up-vote and Comment.. ;) :PP.P.S.: In case of any wrong concept/explanation, please comment such, so that changes can be made.P.P.P.S.: Sorry for the long answer, I was getting bored in office. ^_^

The question is based on a very false premise, but it’s understandable because the teaching of United States history is so deficient.The willingness to give up freedom for perceived security has been a theme in American political discourse from the beginning. It was a component of the debates of the Framers of the Constitution. It was a portion of the debate about ratification of the Constitution. One can look to the Sedition Act of 1798 to see an example of liberty being sacrificed for security. Other examples abound: Lincoln’s suspension of the writ of habeas corpus (justified, in my view, but certainly a choice of security over freedom); the Sedition Act of 1917; the Espionage Act of 1918; the internment of Japanese-Americans; various loyalty oaths and other anti-Communism measures, culminating with HUAC and McCarthyism; the documented abuses by the FBI, including COINTELPRO; the Nixonian enemies list, claims of executive privilege, and domestic snooping; all this and much more. For a bit of discussion, see America: Choosing Security Over Liberty Since 1798Here’s the simple truth: fear sells. That’s how many religious leaders peddle their message. That’s how advertisers sell goods. That’s how politicians get elected. That’s how demagogues rise to power.It isn’t just this generation. Indeed, I’d argue that this generation shows more promise of resistance to authority, thank goodness.What happened to freedom in America is what always happens to freedom: it is under assault by those who find power and profit by so doing. And each generation needs to find its Thomas Paine, its Ida Wells, its Martin Luther King, Jr., its ACLU volunteers, its union organizers, its protestors, to do the hard work of challenging authority and bringing America back to the path of delivering on its claimed aspirations.In a sense we've come to our nation's capital to cash a check. When the architects of our republic wrote the magnificent words of the Constitution and the Declaration of Independence, they were signing a promissory note to which every American was to fall heir. This note was a promise that all men, yes, black men as well as white men, would be guaranteed the "unalienable Rights" of "Life, Liberty and the pursuit of Happiness." It is obvious today that America has defaulted on this promissory note, insofar as her citizens of color are concerned. Instead of honoring this sacred obligation, America has given the Negro people a bad check, a check which has come back marked "insufficient funds."But we refuse to believe that the bank of justice is bankrupt. We refuse to believe that there are insufficient funds in the great vaults of opportunity of this nation. And so, we've come to cash this check, a check that will give us upon demand the riches of freedom and the security of justice.From Martin Luther King, Jr.’s “I Have a Dream” speech, 1963.

Funds transfer was done through a variety of ways. To start with, a bank in Paris would establish a relationship with a bank in London. Both banks would agree to have deposits in each others banks and in their respective currencies (or gold). These would be physical deposit of coins, gold, currency notes, etc. These would essentially be the credit-lines each bank was providing to the other.The initial deposit from one bank to another was indeed a physical movement of wealth, i.e. gold, coins, silver, etc. was moved in secure boxes and physically made its journey to the other city.Once the wealth was in place, then the two banks would have an agreed method/code of how to present money promissory notes to each other and how they are to be cashed out.At a predetermined period (weekly, monthly, etc.) the notes would be collected and the ledger entries be updated. Along with this, the credit lines would be replenished as well.The actual transfers were very much physical, and were essentially promissory notes (IOUs) being channeled across from town to town. For small value transfers people preferred to carry their wealth with them, i.e. their gold and silver coins with them, on person. This is also how a lot of the people got robbed.If you read up on it, the early pilgrims traveling from Europe to the Holy Lands (now Israel), a lot many of them had their wealth stolen, this is how the Knight Templars came up with their own coded and sealed method of transporting an IOUs. You gave up your coins in say London, and were issued a cryptic IOU that only the Knight Templars knew how to decode. Reach the other end of your journey and present the note to receive equal amounts of gold (less fees).They (the Knight Templars) were essentially responsible for setting up the early international correspondent banking.