One by one, each of the half-dozen clients lined up at her table in the courtyard of a 15th-century palazzo steps up and surrenders a handful of Italian lire. In return, Ms. Iannamico gives them a multicolored sheaf of a new currency called the simec, at an exchange rate of 1-to-1.

In most places, the simec wouldn't be worth the paper it's printed on. But in the bustling shoe store next door, and at about 40 other merchants in this mountaintop town of 12,000 overlooking Italy's Adriatic coast, one simec can buy two lire's worth of goods.

A simec
The simec, whose name is the Italian acronym for "econometric symbol of inducted value," is the brainchild of Giacinto Auriti, a wealthy local academic. This past summer, the 76-year-old retired law professor spent much of his fortune to finance the simec in an effort to prove his eccentric theory about money and a vast banking conspiracy. So far, his experiment has produced a frenzy of consumption in Guardiagrele, a rupture in the local business community, a rebuke from the Bank of Italy and a legal victory for Prof. Auriti, who hopes to convince the world that central bankers are the biggest con artists in modern history.

His main thesis: For centuries, central banks have been robbing the common man by the way they put new money in circulation. Rather than divide the new cash among the people, they lend it through the banking system, at interest. This practice, he argues, makes the central banks the money's owners and makes everyone else their debtors. He goes on to conclude that this debt-based money has roughly half the purchasing power it would have if it were issued directly to the populace, free.

Initially, Prof. Auriti tried to challenge his own nation's monetary policy through the courts. But Italian judges have thwarted his efforts to sue both Bank of Italy Gov. Antonio Fazio and former Gov. Carlo Azeglio Ciampi for alleged fraud and a slew of other offenses, including incitement to suicide. So, Prof. Auriti conceived another way to make his case.

First, he hired a printer to produce several boxes full of simecs, each emblazoned with a hologram and the image of an eagle. Each bill -- violet, green or mocha, depending on the denomination -- carries a statement that identifies it as the property of the bearer.

Then, Prof. Auriti, who often sports a bulging money belt, made the rounds of Guardiagrele's 400 shop owners. Most refused to accept his simec. But he persuaded about 40 to participate in his experiment, assuring them he would redeem each simec for two lire.

On a sunny July morning, Prof. Auriti, the scion of one of Guardiagrele's oldest and richest families, and a few volunteers, like Ms. Iannamico, threw open the heavy gates of the professor's palazzo and put the first simecs into circulation.

Soon, Guardiagrelians were lined up across the street at a Banco di Napoli cash machine to withdraw lire and trade them in for simecs. By 11 a.m. the first day, about $1,000 worth of lire had changed hands. The daily volume eventually reached $40,000 or more, volunteers say.

Armed with their simec, the townsfolk -- and later their neighbors elsewhere in central Italy's Abruzzo region -- stormed participating stores to snap up smoked prosciutto, designer shoes and other goods at just half the lire price. "At first, people thought this can't be true, there must be a rip-off hidden somewhere," says Antonella Di Cocco, a guide at a local museum. "But once people realized that the shopkeepers were the only ones taking the risk, they just ran to buy all these extravagant things they never really needed." Often, they raided their savings accounts in the process.

The participating shopkeepers, some of whom barely eked out a living before the simec bonanza, couldn't have been happier. "Every day was Christmas," Pietro Ricci recalls from behind the counter of his cavernous haberdashery.

Neither Mr. Ricci nor his fellow merchants were stuck with their simec for long. Once a week, they turned them in to Prof. Auriti, recouping the full price of their goods.

"We doubled the money in people's pockets, injecting blood into a lifeless body," says Prof. Auriti. "People were so happy, they thought they were dreaming."

Non-participating stores, meanwhile, remained empty week after week. "I have to pay my suppliers once every 10 days -- and, I'm afraid, they don't take the professor's paper," explains Febo Di Crescenzo, as reggae music blares from his clothing store.

The competing interests split the town's merchants' association in two, prompting its pro-simec chairman to resign. As tensions peaked in early August, the non-participating merchants and the town's mayor, Franco Caramanico, asked local magistrates to intervene with a ruling on whether Prof. Auriti's currency issue was legal.

Meanwhile, the professor was beginning to have financial troubles of his own as he redeemed mounting numbers of simec for twice the sum in lire at which he had sold them, though Prof. Auriti won't disclose exactly how much money he lost.

The pro-simec store owners, too, were feeling a pinch. Instead of accepting 1,000 simec for an item that cost 2,000 lire (90 cents), participating merchants began charging 1,000 lire plus 500 simec, to keep enough lire on hand to pay their creditors. That cut shoppers' simec discount to 25% from 50%. Merchants who weren't participating were still upset, and some loudly demanded damages from the professor.

By mid-August, says the professor, a total of about 2.5 billion simec had circulated. That's when local magistrates called in Italy's Finance Guard, a militarized police force that deals with such crimes as smuggling and tax fraud. More than a hundred guardsmen invaded the town, carting off boxloads of simec and prompting protests from an angered citizenry.

For a time, the saga appeared to be over. But after a brief investigation, a local court in Chieti found that Prof. Auriti had done nothing illegal and ordered the simec returned. Although local prosecutors are preparing to appeal the decision to a higher court, Prof. Auriti and his supporters rushed to relaunch the simec last weekend.

This time around, however, the currency will be managed by a committee made up mostly of local merchants. Although the professor heads the committee, he is no longer putting his own money into the venture. "Now, we'll only use the lire already in the simectill to redeem the simec we receive from customers," says Giovanni Di Canio, a jeweler.

He is sure there will be enough lire, if only because numismatists from all over Italy have descended on Guardiagrele to buy simec for their collections. Mr. Di Canio says one collector just bought two thousand 1,000-simec bills, none of which are likely to be spent.

Maria Teresa Sciubba, a dishwasher in a local restaurant, bought her simec for more prosaic reasons. The "simec makes me feel rich," she says as she shops in an upscale boutique on Guardiagrele's main street. "Before this, I could only afford low-quality clothes -- nothing like the designer stuff I'm buying now."

But the Bank of Italy isn't amused. In a stern statement released last month, the central bank reminded Italians that the "collection of funds among the public, emission and management of means of payment are, in the best interests of the public, reserved to subjects authorized by law" -- and those don't include Prof. Auriti.

Even so, his simec crusade has attracted vocal support from some unexpected quarters. In coming months, a Franciscan Catholic college in Abruzzo's capital city, L'Aquila, plans to open the School of Monetary Values, an institution dedicated to Prof. Auriti's theory. And the Northern League, a sometimes-xenophobic political party that wants to wrest power from Rome, has invited Prof. Auriti to address its mayors on how to spread "local money" nationwide.

Prof. Auriti is looking ahead to February 2002, when many European countries are scheduled to replace their national currencies with new euro bills. "A storm is coming," says Prof. Auriti, who thinks global central bankers, for reasons that aren't entirely clear, will use the occasion to provoke an artificial cash crunch, turning Europeans into monetary slaves. "The simec," he says, "will help European peoples to survive."

scrivi a Yaroslav Trofimov