Professional Documents
Culture Documents
A measure of value
For expressing prices
A means of payment
For concluding a transaction
Money Plays Its Role Within the Realm of Reciprocal Exchange The sole function of money is to serve as a medium of exchange (means of payment). The other traditional roles of money: Measure of value, and Savings medium, Must be achieved by other means.
June 27, 2007 Prepared by Thomas H. Greco, Jr. 5
Symbolic money
Redeemable paper, warehouse receipts
Sources of Credit
Banks
Loans
Customers
Prepayments / gift cards & certificates
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Loans
Banks
Loans
Loans Central Government The Credit Commons can now be accessed only through banks!
By their arrangement with the banking system, governments can borrow as much as they wish and never repay.
June 27, 2007 Prepared by Thomas H. Greco, Jr. 15
Interest
Collected by the banking cartel
Inflation
Caused by government deficit spending
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Bank
$
Alpha Company
$ Interest
$
Charlie Company
$
Delta Company
Bank credit borrowed into circulation and used to clear debts amongst companies. Interest must be paid on credit borrowed from a bank.
Alphas i.o.u.
Alpha Company
Alphas i.o.u.
Charlie Company
Alphas i.o.u.
Delta Company
Alphas i.o.u.
A common measure of value is used for pricing but no need to borrow currency. Mutual credit is used to clear debts among companies. No interest paid.
An Example
Suppose $1 million worth of clearing credits are created and spent into circulation by the associated businesses. That means that their collective cash expenditures have been reduced by $1 million. That $1 million remains within the association instead of flowing out to pay for imports.
June 27, 2007 Prepared by Thomas H. Greco, Jr. 24
An Example - continued
If the turnover is 10 times a year, that means $10 million in additional local sales. If the rate of profit on sales is 20%, that will result in additional yearly profits of $2 million.
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An Example - conclusion
Further, the issuance of clearing credits allows some interest-bearing debt to be retired. If the interest rate on debt is 10%, the businesses will together save cash interest costs of $100,000 each year. Every dollars worth of clearing credit issued means:
one less dollar that needs to be borrowed, one less dollar that needs to be spent, one less dollar that needs to be repaid with interest.
June 27, 2007 Prepared by Thomas H. Greco, Jr. 26
A Successful Example
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. Credits cleared: $1.35 billion (2004)
A Likely Scenario
Stage one: Independent Trading Blocs (already underway) Many Islamic countries, under the leadership of Malaysia, form an Islamic trading bloc. Other trading blocs are emerging in Latin America and elsewhere. Stage two: Payment offset (already underway) These nations begin trading with one another under bilateral and multilateral agreements that utilize credit clearing intermediaries that offset payments for imports against receipts for exports and settle accounts at periodic intervals using some mutually agreed currency (dollars or euros). Stage three: Use of Gold Dinar (being considered) Member nations adopt the gold dinar as the common value standard and the settlement currency.
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Conclusions
Political money is credit money that is used to concentrate power and wealth. Private initiative and enlightened government action can evolve credit money into credit clearing to serve the common good. With credit clearing as the means of exchange, gold can be the pricing unit. True Islamic prosperity can be achieved through the organization of direct credit clearing associations. Dollar hegemony can be transcended by organizing trading blocs that use credit clearing instead of international currencies for payment.
June 27, 2007 Prepared by Thomas H. Greco, Jr. 31
Suggested Sources
Explore the website: http://www.ReinventingMoney.com Monitor the blog: http://beyondmoney.wordpress.com Read, Money: Understanding and Creating Alternatives to Legal Tender, and Money and Debt: A Solution to the Global Crisis by Thomas H. Greco, Jr.
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