She is doubling people's money. One by one, the half-dozen clients lined up at her table in the courtyard of a 15th-century palazzo step up and surrender a handful of Italian lire. In return, she gives them a multicoloured sheaf of a new unofficial currency, the Simec, at an exchange rate of l-to-l. In most places, the simec wouldn't be worth the paper it's printed on. But at about 40 merchants, in this mountaintop town of 12,000 on Italy's Adriatic coast, one simec can buy two lire's worth of goods.

Simec, named after 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 to prove his eccentric monetary theory. So far the controversial experiment has produced a frenzy of conspicuous consumption, a rupture in the local business community, a stern rebuke from the Bank of Italy and a legal victory for Prof. Auriti, hoping to persuade 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. They lend the new cash through the banking system, at interest. This practice makes central banks the money's owners, and 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 free directly to the populace.Initially, Prof. Auriti tried to challenge Italy's monetary policy through the courts. But judges thwarted his efforts to sue both Bank of Italy Gov. Antonio Fazio and former Gov.

Carlo Azeglio Ciampi for alleged fraud and other offences. 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 identifying it as the property of the bearer. Then, Prof. Auriti made the rounds of Guardiagrele's 400 shop owners. Most refused to accept untested simecs. But he persuaded roughly 10% to participate in his experiment, assuring them he would redeem each simec for two lire. On a sunny July morning, Prof. Auriti and volunteers like Sandra Iannamico, put the first simecs into circulation.

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

Armed with their simecs, the townsfolk - and later their neighbours elsewhere in Italy's Abruzzo region - stormed participating stores to snap up smoked prosciutto, designer shoes and other goods at just half the lire price. 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. Once a week, they turned them in to Prof. Auriti, recouping the full price of their goods.

Non-participating stores, meanwhile, remained empty week after week. And their owners brooded. "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,owner of a clothing store. The competing interests split the town's merchants' association in two, prompting its pro-simec chairman to resign. 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 simecs for twice the sum in lire at which he'd sold them. The pro-simec store owners, too, were feeling a pinch. By mid-August, says the professor, about 2.5 billion simecs had circulated.

That's when local magistrates called in Italy's Finance Guard, who invaded the town and carted off boxloads of simecs, prompting protests from an angered citizenry.

But after a brief investigation, a local court in Chieti found that Prof. Auriti had done nothing illegal and ordered the simecs 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. Though the professor heads the committee, he is no longer putting his own money into the venture. 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 authorised by law" and those don't include Prof.

Auriti. Prof. Auriti, meanwhile, 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."

(The Asian Wall Street Journal) Instead of accepting 1,000 simecs for an item that cost 2,000 lire, participating merchants began charging 1,000 lire plus 500 simecs, to keep enough lire on hand to pay their creditors. That cut shoppers' simec discount to 25% from 50%. But this wasn't good enough for non-participating merchants, some of whom loudly demanded damages from the professor.

"Now, we'll only use the lire already in the simec till to redeem the simecs we receive from customers," says Giovanni Di Canio, a jeweller.He is sure there will be enough, if only because numismatists from all over Italy have descended on Guardiagrele to buy simecs for their collections.

Mr. Di Canio says that one such 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 simecs 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."

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 of 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.