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Complementary Currency and Exchange

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Presentation on theme: "Complementary Currency and Exchange"— Presentation transcript:

1 Complementary Currency and Exchange
The Movement to Reinvent Money

2 Why Does Money Need to Be Reinvented?
Throughout the world, money has been politicized and privatized. Money has become the keystone in the arch of political power. Money and banking are manipulated by and for limited private interests. Political money is exploitative, dysfunctional, and undemocratic. June 8, 2006

3 Two Parasitic Elements of the Conventional Money System
Interest Collected by the banking cartel Inflation Caused by government deficit spending June 8, 2006

4 How is Political Money Dysfunctional and Exploitative?
Political money is inefficient and inequitable – many needs go unmet because the supply of money is deficient. Periodic cycles of depression and inflation derive from the actions of central banks. Money concentrates power and wealth – the rich get richer; everyone else gets poorer. Who decides whose interests will be favored? Conventional political money causes social and international conflict and ecological destruction. The Great Depression of the 1930’s provides a prime example of the systemic flaws, as do the innumerable examples of hyperinflation that has occurred in various countries. June 8, 2006

5 Stay the course, Bernanke.
June 8, 2006

6 Privatization Taken to Extremes Means
Not better management, but Privilege, Exploitation, Conflict and Class warfare Elites have typically sought to dominate and exploit others through the strategies of Enclosures Clearances Legal privilege June 8, 2006

7 The Basic Approach Take control of essential or desired resources, and compel everyone to pay in order to gain access. Monopoly Oligopoly Cartels June 8, 2006

8 Examples The enclosure acts in England privatized common land by legal coercion. “Clearance” of lands (Scottish highlands) by military force or intentional destruction of its ability to support life (slaughter of the bison herds in North America). Government-granted monopolies that limit or eliminate competition (British East India Company). June 8, 2006

9 June 8, 2006

10 Money is Credit Credit is Money June 8, 2006

11 Credo = Belief > Credit
All credit derives from belief in a promise. Credit is based on trust. Who deserves credit? Who or what do you trust? Whose promise will you accept as payment? June 8, 2006

12 What is the Credit Commons?
The credit commons is the virtual pool of credit and trust. June 8, 2006

13 Credit is based on trust
The Credit Commons Privatization of the commons. Banks throttle the credit allocation process and exploit users of credit by charging interest for its use. Central governments spend as much as they wish without regard to the amount of their tax or other revues. This is called “deficit spending” and its result is debasement of its currency unit, a phenomenon commonly referred to as inflation. The In’s and Out’s of the Credit Commons Credit is based on trust We all put in, but who can take out? June 8, 2006

14 The Credit Commons can be accessed only through banks!
“Loans” “Loans” Privatization of the commons. Banks throttle the credit allocation process and exploit users of credit by charging interest for its use. Central governments spend as much as they wish without regard to the amount of their tax or other revues. This is called “deficit spending” and its result is debasement of its currency unit, a phenomenon commonly referred to as inflation. “Loans” Central Government The Credit Commons can be accessed only through banks!

15 Fundamental Principle of Modern Money
Modern money is nothing more than credit based on a promise. Money typically takes the form of Bank deposits that are created when banks make “loans,” or Currency notes emitted by the central bank. Why do we trust these forms of money? We trust conventional money because we know of no other kind, because others accept it, and because we are habituated to its use. June 8, 2006

16 Privatization of the Credit Commons
Access to credit is controlled by the banking system. Banks decide who gets access and on what terms. They charge interest on all “loans.” National governments have extraordinary access. By their arrangement with the banking system, they can borrow as much as they wish. June 8, 2006

17 The Central Government-Central Bank Nexus
The debt economy rests upon a conspiracy between the political state and the banking interests against commercial exchange… E. C. Riegel The greatest factor in keeping the monetary and financial systems viable over the past 50 years has been the role of the Federal Government as “borrower of last resort.” When others refused to borrow or were refused credit by the banks, the Federal Government borrowed money into circulation. This began with the institution of the New Deal programs by which the Government began to borrow money and then spent it into circulation. These amounts, however, were relatively modest. It took World War II to provide an excuse for the really huge deficits required to pump up the money supply to adequate levels. June 8, 2006

18 Money Power Equals War Power
…as long as our governments are vast counterfeiting machines, Mars can laugh at peace projects. -- E. C. Riegel If the government were obliged to come to the people for money instead of vice-versa, the people would keep government under control and operate their economy satisfactorily with prosperity and peace resulting. June 8, 2006

19 Reclaiming The Credit Commons

20 The Exchange Process is Being Reinvented
Complementary Currencies and Credit Clearing Arrangements are Emerging on Various Levels and Fronts. June 8, 2006

21 Promising Directions Freedom approaches based on voluntary participation, that involve Grassroots organizations, NGO’s Associations of businesses, Municipal and provincial governments, For-profit enterprises June 8, 2006

22 Main Currents of the Movement
Voluntary Grassroots Social Action For-profit Business Exchange Options Barter Exchanges Trade Exchanges Mutual Credit/LETS Community Currencies June 8, 2006

23 All over the world, mutual credit systems and community currencies are emerging.

24 Established in 1934, the WIR Bank has continued to thrive.
The Swiss WIR Bank is a prime example of a credit clearing association. Established in 1934, the WIR Bank has continued to thrive. The WIR Bank clearing system now serves more than 60,000 small and medium sized business members. June 8, 2006

25 In Argentina, trading clubs and private currencies proliferate in the face of economic and financial stringency. June 8, 2006

26 Commercial interests are discovering the advantages of direct credit clearing.
June 8, 2006

27 Provincial Government Currencies
June 8, 2006

28 What Are the Disruptive Technologies in Money and Banking?
Mutual credit. Credit Clearing. Co-responsibility. Internet based markets, social networks, accounting and information management. Reliance upon “strong identity.” Reliance upon peer-to-peer reputation ratings. June 8, 2006

29 It Is the Unique Combination of Elements That is Revolutionary
These technologies are being combined into new products that make the exchange process: Simpler Less costly More efficient More equitable More democratic Easier to understand Sustainable June 8, 2006

30 The Next “Free Abundance” is Credit
The present system of money and banking is a choke on credit, which is potentially infinite and free. The practical limits of credit are: The productive capacity of the buyer, and The trust of the seller The appropriation of credit by the government and banking sectors diverts a huge proportion of economic output from need satisfaction to accumulation and waste. “Nations, companies and individuals that exploit the ‘free’ abundance (that is, the resource with the plummeting price) gain market share against all rivals…. The political leaders who accommodate them become the prime movers in global affairs. Their countries pioneer and prosper.” George Gilder, Telecosm, p.7). June 8, 2006

31 The Future of Money is No Money
The highest evolutionary step of reciprocal exchange is the process of mutual credit clearing. The future of exchange lies in decentralized autonomous mutual credit clearing networks. These networks will be linked together without the center destroying their autonomy. June 8, 2006

32 A New Economic Order? “…extension of exchange transactions without state money is in reality the beginning of a new system of settling accounts, indeed the beginning of a new economic order." --Ulrich von Beckerath June 8, 2006

33 Sources Books: Money: Understanding and Creating Alternatives to Legal Tender - Greco Money and Debt: A Solution to the Global Crisis - Greco Flight from Inflation - Riegel The New Approach to Freedom - Riegel Website: Blog: June 8, 2006

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