Here below is a more detailed description of a currency project I’ve been promoting for some time. It is as clear and concise a description of a sound private currency as I’ve ever produced. It could be easily implemented anywhere in the world, and while this article describes a currency based on renewable energy, the same model could be applied on the basis of any product or service that is in everyday demand, be it organically produced food, shared transportation, or anything else we wish to promote, as I describe toward the end of the article. Any company wishing to consider implementing this design should contact me at firstname.lastname@example.org.-t.h.g.
Solar Dollars – a way to promote renewable energy, while supporting the local economy and providing interest-free financing for utility companies[i]
Revised August 24, 2016
Thomas H. Greco, Jr.
This document in PDF format may be downloaded here.
In good times and bad, local economies find themselves short of liquidity. Communities always find that, to some degree or other, there is unused business capacity alongside unmet consumer needs. What is usually lacking is sufficient money circulating in the community to connect these unmet needs with the unused supplies. It is a situation that derives from our banking system which is increasingly centralized and reluctant to provide credit to local businesses, especially the small and medium sized enterprises (SMEs) that are the backbone of every economy. If and when banks do provide them with credit, it is on onerous terms, including high interest rates, burdensome repayment schedules, and the demand for collateral assets to secure the loans.
The defects and instabilities inherent in our system of money and banking increasingly appear to be insoluble. In the credit expansion phase, banks create asset price bubbles based on government guarantees, subsidies, and/or the expectation of government bailouts when the loans go bad. Then, in the contraction phase, they become risk averse, choosing to invest in “safe” government and corporate securities rather than financing the legitimate needs of businesses in their communities, especially the SMEs.
At the same time, industrialization and population growth are causing other problems including despoliation of the natural environment and climate destabilization. It is clearly desirable to shift our energy production from fossil fuels to renewable sources but the incentives for doing that have not been adequate to propel this shift quickly enough to stave off severe environmental, economic, and political consequences.
Solar Dollars (SD) are intended to address at once the needs of the environment for reductions in greenhouse gas emission, the needs of local communities for more circulating payment media, and the needs of utility companies for low cost financing.
How Solar Dollars are issued?
A Solar Dollar is a credit instrument of a local electric utility company. The circulation of SD begins when a contractor or supplier accepts them directly from the utility company in payment for services rendered to it. To the extent that contractor or supplier himself can utilize the services of the utility company, the SD clearly have value for him because he can use them to pay his electric bill. For example, if the contractor has electric bills averaging $500 per month, he could easily utilize SD amounting to at least $1,000 in face value.
To the extent that the contractor is unable to use SD directly in operating his business, he will seek to pass them on as payment to his sub-contractors and suppliers who themselves have electric bills to pay. He will therefore seek to source the goods and services he needs from those who are willing to accept SD as payment. These sub-contractors in turn will undoubtedly be able to use some amount of SD directly to pay their own electric bills and will pass on the rest to other vendors that supply them. Now, since virtually everyone has a need for electricity, the local economy should be able to absorb a large amount of SD vouchers, with shopkeepers and even employees at all levels of the supply chain being willing to accept them at least as partial payment.
Circulation and value of SD
Of course, a particular amount of SD vouchers, between the time they are first issued into circulation and the time they are presented back to the utility as payment for electricity services, can change hands many times as others in the community use them to pay one another. There is a multiplier effect in stimulating local business because now the supply of dollars has been augmented by this entirely local medium of exchange. Many bills that would otherwise require payment in dollars can now be paid using SD, an entirely “home-grown” payment medium the creation of which does not require any bank loans or action by the central monetary authorities. Still, SD can be a sound and dependable exchange medium because they represent a claim on a valuable service, electricity provided by the utility company.
The value of SD vouchers in the market will be determined by the law of supply and demand. If the amount issued (supply) becomes excessive in relation to the collective needs of those in the community for electricity services (demand), the SD will begin to be discounted, i.e., they will be accepted at a rate below face value. This will occur because there is no legal compulsion for anyone to accept them at face value, or to accept them at all. For example, if shopkeepers in the community perceive a superabundance of SD being offered as payment from their customers, an amount that is beyond the amount that they and their trading partners can use within a reasonable span of time, they might begin to accept them at less than face value. A one dollar SD note might be accepted at the rate of only 95 or even 90 cents. At the latter rate, an item with a cash price of $90 would require payment in SD with a face value of 100.
But as the market rate for SD drops, anyone who has an electric bill to pay will be more eager to acquire them sine the electric company that issued them is compelled at all times to accept them at face value. Once a significant amount of SD vouchers enter circulation, it is likely that a free market for trading them will develop. Large users of electricity will ever on the lookout to buy them whenever their price falls much below par.
However, the utility, finding that its contractors and suppliers are no longer willing to accept SD at par, will cut back on its rate of issue until supply and demand come back into balance and the discount is eliminated.
Since no one other than the issuer is compelled to accept SD or any other private currency as payment, such currencies are self correcting. This feature makes them superior to political currencies that rely upon legal compulsion (legal tender) as the basis for their circulation above and beyond their acceptability for the payment of taxes.
Benefits of SD to the utility company
The issuance of SD by the utility in the way described is analogous to the emission of a short term credit note or account payable, however SD by comparison have two advantages, first, there is no interest cost and secondly, there is no redemption in official money—the SD vouchers are redeemed only by the provision of electric services. This is especially significant during times of financial stringency and economic recession when official money may be in short supply.
As Dr. Zander pointed out more than 80 years ago with regard to a similar proposal for a railway currency, when the company issues a note that promises to pay cash at a later time, it “undertakes to deliver something at a fixed date which at the time of the promise it only hoped to obtain. Whether its hope will materialize, is uncertain. The undertaking to pay at maturity contains therefore a speculative element, which is particularly hazardous in times of depression. It is therefore obvious that the Railway must be extremely circumspect in making credit purchases i.e. in promising to pay at a later date with resources which have yet to be secured. But the Railway may promise something else, namely, to transport commodities and persons that is, to fulfill its function as a Railway. There is nothing speculative about that.”
Likewise, in issuing Solar Dollars, a utility company is promising to provide electricity, that is, to fulfill its function as an electric utility There is nothing speculative about that. The utility company’s only obligation is that it should accept the SD at any time at their face value, irrespective of their current market rate. It would be in no way obligated to redeem the SD in cash or in any other way.
Once the SD vouchers have been presented to the company and accepted as payment for electricity, the SD will have competed the reciprocity circuit and will be retired. Of course new SD vouchers can be put into circulation (or old ones recycled) so long as the amount outstanding at any point in time does not become so great as to cause the market rate to fall too low below par. Thus, there can be a continuous flow of SD through the local economy as new vouchers enter it (when the utility spends them) and old vouchers are retired (when the utility accepts them as payment for services).
How much Solar Dollar currency could be issued?
In the general case of a private currency that is spent into circulation the amount that can be safely issued depends first of all upon the solvency or general financial condition of the issuing company, indeed, the market will be unlikely to accept the currency of a company that is on shaky ground and at risk of failing. Assuming that the company is sound financially however, its currency becomes merely another short-term credit obligation. But unlike other short-term obligations like accounts payable or notes payable, private currency vouchers can be used by the entire community as a means of payment supplementary to the available supply of official currency.
Lacking legal tender status, a private currency must stand on its own merits in the marketplace. The value that the community places on the currency will depend primarily upon the demand for the products or services that are its foundation. In the case of Solar Dollars, that foundation is the ability of the company to provide electricity services. A further factor in determining the amount that can be outstanding at any particular time is the extent to which people wish to use it as a medium of exchange. The greater the use of the currency as an exchange medium, the greater the amount of it that the community can absorb. The signal that needs to be monitored in making the ultimate determination of the volume of currency that can be circulated is the market rate at which the currency passes. As pointed out above, if the discount from par becomes significant, that is an indication that the amount issued is becoming excessive and needs to be throttled back.
Here it is useful to introduce three concepts “emission,” “reflux,” and “turnover.”.” We are describing here a continuous process of issuance and redemption of the currency. Each occurs at a particular rate. The rate of issuance or the rate at which currency “goes out” is termed emission, and the rate of redemption or the rate at which currency “comes back” is termed reflux. Suppose the rate of issuance (emission) is 30,000 per month and the rate of redemption (reflux) averages 20,000 per month. You can see that the amount outstanding will be building up by 10,000 per month and over a period of time the market will eventually become saturated. The point at which saturation occurs will be indicated by the market in the form of the discount at which the currency passes. At that point the emission must be reduced and/or the reflux increased. Since there is little the issuer can do to control the reflux, the adjustment will typically be made by reducing the emission until the discount is eliminated. In the long run the emission must match the reflux. There is however a rule of thumb or heuristic that is based on past experience that can be used a rough guide to estimate the maximum amount that might be outstanding at any particular time. It says that there should be no less than a 1% daily reflux. In other words the amount of currency outstanding should be able to be retired in the normal course of business within a period of about 100 days or less. This period is the “turnover,” the period of time in which the entire amount outstanding will be replaced with newly issued currency. Of course any currency should be put into circulation gradually and its market rate and circulation closely monitored so that adjustments can be made long before the maximum amount is reached.
In the special case of Solar Dollar currency there is an additional constraint that is intentionally built into the program. Besides the objectives of providing the local economy with a supplemental means of payment and providing the utility company with interest-free financing, the Solar Dollar program has another fundamental objective, that is to promote the shift from fossil fuel energy to renewable energy. This environmental objective is achieved by limiting the issuance of Solar Dollars to some fraction of the value of only the renewable energy that the company delivers to its customers. This feature provides the proper incentives to the company and to the prospective payees and users of the SD vouchers.
The utility company will want to deliver more energy that is generated from renewable sources because that will allow it to issue more SD which provides it with more interest-free credit. The companies suppliers and anyone else in the community who favors the shift to more renewable energy will want to accept SD in payment as a way of supporting that shift.
In what units should Solar Dollars be denominated?
The Solar Dollar being a credit instrument must be denominated in some particular unit of measure. We are assuming that SD would be denominated in units equivalent to the predominant currency in the area, the U.S. dollar. That would be the most convenient choice since the company bills its customers dollar units. Thus, if you receive a bill from the utility saying you owe $100 for electric services, you have the choice of paying with dollars from your checking or credit card account, or, if you happen to have 100 SD vouchers, you can pay with them instead.
However it is interesting to consider another possibility. Suppose the Solar Dollars were denominated in terms of some unit that is better defined than the U.S. dollar, something real, like electricity units? The usage of electricity is measured in kilowatt-hours (Kwh), and the company bills its customers at the rate of so many cents per Kwh to arrive at the dollar amount of each customer’s bill. But rates are subject to change (with approval of the regulatory agency that has jurisdiction in that area). If SD were denominated in Kwh units, each would be good for payment of a kilowatt-hour, regardless of the going price of a Kwh at the time of payment. This would have the advantage of protecting the holder of SD from any possible increase in price. Of course, in the case of public utilities, requests for rate increases are announced well in advance of any actual increase so the market will have plenty of time to adjust its valuation of SD vouchers. But, in the general case of a private currency, denomination in real units instead of dollars becomes a more interesting option, especially in times when general price inflation is rampant and the purchasing power of the dollar is declining rapidly.
In what form should Solar Dollars be emitted?
It is important to understand the distinction among these three aspects of currency circulation:
- The essence of a currency,
- Its form of manifestation, and
- Its methods of transmittal
These are three separate things that are often mistakenly conflated in discussions about currency innovation and development.
The essence of a currency is credit. It is the issuer’s i.o.u. or promise to reciprocate, i.e. to provide real value and accept his currency back as payment. SD is a credit instrument that is spent into circulation by the utility company.
A currency can manifest as a paper note, a number in a ledger (written or computerized), a smart card balance, or some other electronic format. SD might be circulated in any or all of these forms, but if paper vouchers are issued they should carry an expiration day to prevent them being hoarded and causing disruption in their circulation.
A currency can be transmitted hand to hand as in the case of paper notes or tokens, electronically within a ledger of accounts using debit cards or SMS messaging, or directly from one electronic wallet to another using perhaps near field communication technologies. This is a rapidly developing field in which convenience must be balanced against security. But since every SD unit is accounted for at all times, fraudulent or improper transactions can be refused or reversed.
The SD model can be applied to other goods and services
Note that this same basic currency model can be used not only to promote the shift to renewable energy but also to promote other desirable economic shifts. The fact is that the value of any product or service that is in everyday demand can be monetized in the form of a private currency. Providers of organically produced food, for example, could issue Organic Dollars or Bio Dollars by using them to pay their contractors, suppliers, and employees, in just the same way as we described for the issuance of Solar Dollars.
The requirements remain the same—that they be spent into circulation by a trusted issuer that is ready, willing, and able to accept their currency back as payment, at face value, for the goods and services they sell.
Frequently asked questions
1 Q1. What are Solar Dollars (SD)?
A1. Solar Dollars are currency vouchers that are issued into circulation by a local Electric Power Company in some limited proportion to the annual amount of energy from renewable sources that the company sells to its customers.
Q2. How are Solar Dollars issued into circulation?
A2. Solar Dollars are spent into circulation by the utility as payment to contractors, suppliers and employees who are willing to accept them as partial payment for the goods and services they have rendered to the company.
Q3. Why would suppliers and employees want to accept SD instead of taking all that is owed to them in US dollars. What makes Solar Dollars valuable?
A3. SD are valuable because the company stands ready, willing, and able at all times to accept SD back as payment for the electric services it provides, or for any other payment owed to the company. SDs represent credit obligations of the issuing company that are solidly backed by the energy that it produces and/or sells.
Q4. What’s the point? What can be accomplished by such a project.
A4. There are several advantages that derive from a project of this sort, including the following:
- Financial and Economic Benefits
- Vouchers, such as SD, that are spent into circulation provide an interest-free source of working capital to the issuing company. As such, they provide significant interest cost savings over bank loans.
- Vouchers spent into circulation by a trusted entity such as a local utility company provide the local community with home-grown liquidity, i.e., a supplemental means of payment that is independent of the monetary policies of banks and central government, providing the community with a greater measure of self-determination and making the local economy more resilient.
- Vouchers, such as SD, that are spent into circulation by a trusted issuer can change hands many times between their issuance and their redemption, thus stimulating local business.
- Home-grown liquidity based on the production of real goods and services provides sound exchange media that stays local and encourages local economic development. Locally issued currency vouchers, by their nature, stimulate local production and prosperity because they tend to stay within the community, and even if they do range more widely, must ultimately come back home to be redeemed by the issuer when accepted as payment for utility bills.
- Environmental Benefits
- Anyone who is concerned about problems like global warming, pollution, depletion of fossil fuels, the ill effects of resource extraction like fracking and offshore drilling, will want to encourage a shift to renewable energy sources. Accepting the company’s own solar energy vouchers as payment will provide that encouragement and help move the company toward the goal of providing more of its energy from renewable sources. The more renewable energy the company produces or distributes, the more Solar Dollars it will be allowed to issue, providing it with a greater amount of interest-free credit.
- Public Relations, Publicity, and Image
- There has been for some time a great and growing amount of media interest in stories about community currencies, local self-help initiatives, green energy, and alternative finance. This innovative project can provide a tremendous image boost to the utility company, the municipality, and the state, and establish the region as a hub of creativity and innovation. As the significant benefits of the project become apparent, all the involved entities will gain in prestige, and other communities will follow its lead.
- Educational Benefits
- A private local currency that is spent into circulation by some trusted issuer like an electric utility is an important step in promulgating new memes and weaning the public away from their illusions about political currencies, like the U.S. dollar, as the only way to pay bills or settle accounts.
Q5. What form will Solar Dollars take?
A5. We’re talking about using the credit of the local utility to provide local liquidity. That can manifest in a variety of forms: Paper vouchers or coupons, stored value cards, prepaid debit cards, or ledger credits that can be accessed with cards and point of sale card readers, or via mobile phones. There are advantages and disadvantages to each of these and it will probably be advantageous to use some combination of these forms depending on the local availability and cost of the required technologies.
# # #
[i] Solar Dollars represent a special kind of privately issued currency, of which there have been many historical precedents, most notably the “Railway Money” issues of the nineteenth and twentieth centuries. Other such issues were proposed during the Great Depression of the nineteen thirties. Of particular relevance is a proposal made by Dr. Walter Zander in 1934, the English version of which was published by Williams and Norgate Ltd., London in 1935, under the title: “Ending the Unemployment and Trade Crisis by the introduction of purchasing certificates and the establishment of an international clearing system.”
This Solar Dollar proposal is patterned after that work which may be found at https://reinventingmoney.com/the-papers-of-dr-walter-zander/railway-money-and-unemployment-and-further-remarks-concerning-railway-money-with-special-reference-to-the-position-of-the-american-railways/.
Greece Workshop Report
During the last week of June I conducted a weeklong workshop and colloquium on Innovation in Exchange and Finance at the Alexandros campus of the Kalikalos Holistic Summer School on the beautiful Pelion peninsula overlooking the Aegean Sea in Greece.
I had planned this to be a collaborative, interactive and problem-centered workshop that would bring together skilled and accomplished people to produce significant innovations in the areas of exchange, finance, and economics. We were fortunate in being able to draw together an excellent cohort of participants having diverse knowledge, skills and experience. Nine of these were full-time and several more participated in various parts of the workshop, particularly the June 25-26 weekend when we had a number of Greek participants from Volos and Athens. The Volos contingent shared their experiences over the past four years in creating and operating the Volos TEM trade exchange. It was very useful for all of us to hear about their difficulties and false starts and the lessons they have learned which will be applied as they move forward into the next phase of their project.
In addition to the registered workshop attendees who came from Australia, India, Ireland, Serbia, Sweden, the US and the UK, several Kalikalos staff members participated in some aspects of the workshop. We were disappointed however that one registrant from Saudi Arabia was unable to attend because his entry visa was denied by the Greek government.
Our work sessions were loosely structured to allow space for each person to share not only their questions but also their experiences and insights, and for the spontaneous emergence of ideas action plans. In addition to my presentations of foundational concepts using slide shows and videos, the format included a number of participatory exercises. Participants had opportunities to showcase their ongoing or planned projects and receive feedback from the group, and as is usual in any such gathering, informal discussions and networking were an important part of the experience.
Kalikalos has invited me to return again next year to conduct another similar workshop on monetary and financial innovation. It will be scheduled in the general timeframe of the second week of June (exact dates to be determined soon). My colleague Matthew Slater, one of this year’s participants who has particular expertise in IT, crypto-currencies, has agreed to assist me in that workshop, and over the coming months we will be working to further develop the format and the program.
I am hoping to once again attract participants who are ready, willing and able to put their knowledge and understanding into action. As Malcolm Gladwell points out, it takes mavens, connectors, and marketers working together to make a project successful, but most of all I think it takes entrepreneurs who are able to bring harmony to the mix, to hold the vision and to dedicate themselves fully to its realization.
As the time approaches, we and the Kalikalos team will be asking you to help us get the word out to our target groups— trade exchange operators, social entrepreneurs, local government officials, serious students, and enthusiastic agents of change.
In the face of the ongoing global economic and financial crisis and increasing political uncertainty, the creation and deployment of innovative decentralized mechanisms for reciprocal exchange and equitable finance are becoming ever more urgent and the opportunities have never been greater. We are now on the brink of ushering in a new more just and sustainable economic paradigm that will enable small producers and local enterprises to thrive, and communities to gain more control over their own destiny and quality of life.
Before and after my workshop I spent an additional three weeks at Kalkalos living in community at the Kissos campus. That in itself was an enlightening and enjoyable experience.
Upcoming presentation – Malaysia
In October I’ll be presenting at the International Forum on Inclusive Wealth (http://www.ifiw.my/) in Kuala Lumpur, Malaysia. I’ll be outlining my revolutionary plan for a decentralized global exchange network based on direct control of credit by producers.
“IMF admits disastrous love affair with the euro and apologises for the immolation of Greece“
In a July 29 article in The Telegraph, journalist Ambrose Evans-Pritchard dissects a recent report by the IMF’s Independent Evaluation Office (IEO). He says the report, “goes above the head of the managing director, Christine Lagarde. It answers solely to the board of executive directors, and those from Asia and Latin America are clearly incensed at the way European Union insiders used the fund to rescue their own rich currency union and banking system.”
He concludes that “The injustice is that the cost of the bailouts was switched to ordinary Greek citizens – the least able to support the burden – and it was never acknowledged that the true motive of EU-IMF Troika policy was to protect monetary union. Indeed, the Greeks were repeatedly blamed for failures that stemmed from the policy itself. This unfairness – the root of so much bitterness in Greece – is finally recognised in the report.” Read the full article here.
Recommended reads and views
Michael Hudson interview: The new global financial cold war
Basic Income gaining ground:
- Europe: 64% of People in Favour of Basic Income, Poll Finds
- Canada Is About To Start Giving Away Free Money
General Wesley Clark, former Supreme Allied Commander of NATO, testifies in this 2-minute video that the US planned to overthrow seven countries after 9/11.
Wishing you a relaxing and enjoyable summer,
David Stockman, who was Budget Director under President Ronal Reagan, makes a great deal of sense in this essay which is about much more than Donald Trump’s “domineering and authoritarian personality” and his scary authoritarian inclinations (he accuses Trump of being and “incipient police statist.)” Stockman also presents facts that belie the justifications for insane government policies like monetization of government debts, the war on drugs, and foreign interventions, as well as the illusions created by the sensationalist media. I recommend reading the entire article but here are a few excerpts.—t.h.g.
Donald Trump’s Demagoguery—–The Dangers And Digressions Of It
By David Stockman
“…both parties are fully onboard, of course, with the massive fraud that has become central bank policy both here and around the world.”
“The Fed has actually purchased $4 trillion of Treasury debt and GSE securities since the year 2000 and funded it with credits conjured from thin air. This has been a monumental act of “something for nothing” economics in which the trillions Congress has wasted on war and peace have been financed with digital money magic.”
“The purported crime and terrorism wave, in fact, is essentially a figment of cable news version of reality TV, and most especially the CNN War Channel and its perennial Black versus Blue &White race narrative. …According to the FBI data there has been an astonishing 50% reduction in the U.S. violent crime rate since the early 1990s.”
And regarding the supposed increase in targeting of police officers by criminals, Stockman points out that, “In fact, the actual rate of intentional, felonious killings per 100,000 officers has been plummeting for decades. During 2014 it was actually 71% lower than the year Ronald Reagan left office.”
“At the end of the day, the overwhelming message of the data is that there is no crime wave nor an eruption of police violence on either the giving or receiving end.” —More
I don’t usually put much energy into partisan politics but comes the time when opportunity knocks and we all must stand up and be counted. That time is now.
The US has been on the road to fascism for a long time. Both Democrats and Republicans have for decades been advancing the same agenda of ceding power to transnational mega-corporations and the global banking cartel. So called “free trade” agreements are simply ways of allowing capital to more freely exploit labor and the environment and forcing governments to guarantee their profits.
Changes in financial regulations, like the repeal of Glass-Steagall under Bill Clinton in 1999, have enabled banking companies to grow to monstrous size (“too big to fail”) and to more easily cheat the clients they are supposed to serve. In this article, James Rickards places the blame for the 2008 financial crisis squarely where it belongs and demolishes the arguments of the big bank apologists: http://www.usnews.com/opinion/blogs/economic-intelligence/2012/08/27/repeal-of-glass-steagall-caused-the-financial-crisis.
Many countries are caught in the debt trap and are being forced to sell off government owned assets which further concentrates wealth and control of “the commons.” Those who control the creation and allocation of money are able to control politics, economics and virtually everything else.
When political and financial pressures prove inadequate, the US military is used to bludgeon countries into line with the global financial regime which is the most anti-democratic force in the world today. General Wesley Clark, former Supreme Allied Commander of NATO, testifies in this 2-minute video that the US planned to overthrow seven countries after 9/11: Iraq, Syria, Lebanon, Libya, Somalia, Sudan, and Iran. A thorough account of General Clark’s story is told by Glenn Greenwald here: http://www.salon.com/2011/11/26/wes_clark_and_the_neocon_dream/.
Under Bush, Cheney and Rumsfeld, the Pentagon came up with a new organization–the “Proactive, Preemptive Operations Group (P2OG) to carry out secret missions designed to “stimulate reactions” among terrorist groups, provoking them into committing violent acts which would then expose them to “counterattack” by U.S. forces. Those “violent acts” would also be used to justify regime change in countries accused of harboring the terrorists. This article from 2002 clearly described the causes of the mayhem we have seen unfold in the years since then: http://www.counterpunch.org/2002/11/01/rummy-s-plan-to-provoke-terrorist-attacks/. A little research will make it clear that the US and NATO are responsible for the turmoil in Syria and the consequent refugee crisis.
Hillary is clearly in the pocket of the banking/corporate elite and will continue to promote their agenda, just as Obama has. We were sold on Obama with promises of change and the feel-good idea of electing the first black President. Hillary is being sold to us as the non-Trump candidate together with the feel-good idea of electing the first woman President. I’m all for making the oval office accessible to minorities and women but what we have gotten is a lot of broken promises, a continuation of the Clinton-Bush policies, and an escalation of US interventions in other countries and a rekindling of the cold war against Russia.
Trump appeals to people’s fears and outrage over being misled by both parties. He promises what he cannot possibly deliver, while pandering to the religious right with his selection of a running mate whose policy positions seem diametrically opposed to much of what Trump says he is for. That makes his promises as unbelievable as Hillary’s and leads me to wonder if he has even a glimmer of understanding of the geo-political facts of life. I can only conclude that he is a megalomaniac to whom winning is everything.
So, what can we do to stop this madness?
We can continue to bide our time, watch the chaos unfold and hope for the best while waiting for new opportunities to emerge, and working to make our communities better and more resilient in spite of it all.
But maybe we already have an opportunity to make a change at the level of national politics. There is a viable third choice, and it is on the ballot in every one of the 50 States. It is the Libertarian Party ticket of Gary Johnson and Bill Weld. Johnson is a former businessman and Republican governor of New Mexico, and Weld is a former Republican governor of Massachusetts, US Attorney, and head of the Department of Justice Criminal Division. In this short twitter video they make a strong pitch for their progressive social and anti-war agenda. https://mobile.twitter.com/GovGaryJohnson/status/748320273754165249/video/1. It sounds good to me.
This ticket should have broad appeal, especially among Sanders supporters who cannot bring themselves to vote for Hillary and Republicans who cannot bring themselves to vote for Trump. With the Republican Party in disarray and Hillary’s vast unpopularity among voters, this may be the year when a third party candidate can win the White House and upset the pattern of politics as usual.
With virtually no advertising, a recent CNN poll shows Johnson already with 13% support (and the Green Party candidate Jill Stein at 5%), and a CBS/New York Times poll had Johnson at 12 percent. According to the Libertarian Republic, “If Johnson, former governor of New Mexico, polls at least 15 percent in five national public opinion polls before the first presidential debate, he’ll be eligible to appear on the stage with the Democratic and Republican nominees.”
If Libertarians, Greens and all the rest of us who are dissatisfied with the state of politics in America can get behind the Johnson/Weld ticket, we can have the much needed Second American Revolution before this year is out.
Are we the people ready to govern ourselves? The power elite think not; let’s show them that we are.
# # #
No, it’s not xenophobia, as the elite propaganda machine would like us to believe. It’s the same phenomenon we’re seeing in American. Quite simply, people in Britain, America, and elsewhere are finally getting wise to the neo-liberal agenda which seeks to disempower people and their elected governments and place power in the hands of the unelected, undemocratic, global banking and corporate elite. As I said in an earlier post (What do Trump supporters and Sanders supporters have in common?), people are sick and tired of:
- Politicians who promise one thing but deliver another.
- “Political correctness” that interferes with our ability to debate the deeper issues and concerns.
- The rich getting richer and ever more powerful while the middle class is being destroyed.
- Big banks that are “too big to fail” yet refuse to provide adequate financing to small local businesses.
- Legislation that favors big corporations over small and medium-sized enterprises.
- Fiscal policies that reduce taxes on corporations and the rich while forcing states and municipal governments to assume ever greater burdens.
- Trade agreements that cede power from sovereign governments to transnational corporations thus undermining democratic government, the rights of labor, and environmental protections.
- A disastrous foreign policy of interference in countries around the world that kills thousands of innocent people and stirs up hornet’s nests of resentment that manifest as massive displacements of people and acts of terror against the U.S. and its European NATO allies.
And as I concluded in another recent post, “Since the debt crisis of 2008, Americans of all classes and ideologies have finally begun to wake up to the facts that the game is rigged against them and that they have been manipulated and exploited by the Wall Street-Washington nexus. The next American revolution will happen when liberals and conservatives, Republicans and Democrats, Americans of all religions and races, stop being seduced by “hot-button” rhetoric and come to realize what their common interests are and are able to work in harmony toward the common good.”
In the following video, British filmmaker John Pilger expresses similar thoughts with regard to Brexit:
It’s very difficult to know what the tactics and specific manipulations of the global elite might be from day to day. The Brexit vote surprised almost everyone, including me. But it’s hard for me to imagine that Brexit might be something the elite want because they have engineered the terms of European union to concentrate ever more power in their own hands, which is what they’ve been up to for decades, if not centuries.
Therefore, I expect a lot of foot dragging and I do not expect the referendum to be acted on with any haste. Instead, terms of union will be renegotiated with the apparent, but not real, return of some sovereignty to the Brits. Then “stay” will be sold to them and another referendum held to legitimize remaining in the union.
In the meantime, the ongoing financial crisis is approaching another tipping point which may throw the banking system into a chaotic state with which governments will be unable to cope.[i] It may then be a case of “every nation for itself” as people demand that their respective governments “do something” to prevent breakdown of their domestic economies, and to hell with EU regulations. That will mark the de facto disintegration of the European Union.
Of course, I may be completely wrong, but it will more likely be an error of timing, as I see the breakup of the UE and the demise of the global money and financial regime as inevitable. –t.h.g.
[i] According to a recent IMF report, “…Germany’s contribution to ensuring the success of the new European financial stability architecture is crucial for fostering its domestic financial stability and the success of the European reform agenda.” (IMF Country Report No. 16/189. GERMANY FINANCIAL SECTOR ASSESSMENT PROGRAM, FINANCIAL SYSTEM STABILITY ASSESSMENT). But an analysis of that same IMF report by Tyler Durden, (http://www.zerohedge.com/news/2016-06-29/imf-deutsche-bank-poses-greatest-risk-global-financial-system) concludes that “Deutsche Bank poses the greatest systemic risk to the global financial system.”
Society is Exchange! – Frederic Bastiat.
All the perplexities, confusions and distresses in America arise not from defects in the Constitution or Confederation, not from want of honor or virtue, as much as from downright ignorance of the nature of coin, credit and circulation.
– President John Adams, from a letter to Thomas Jefferson (1787-08-25), in The Works of John Adams
As the time grows near I want to remind everyone that my workshop on innovative finance and exchange is set to begin in about 10 days time at Kalikalos Holistic Summer School in Greece (http://www.kalikalos.org/exchange-finance). It will start on the evening of 24 June and conclude on the morning of 1 July.
While it is described as a “course,” the format will be that of a workshop/colloquium in which everyone plays an active role in an intensive process of inquiry, discovery, sharing and collaboration aimed at:
1. achieving a deeper understanding of sound principles of credit, finance, and the exchange process, and,
2 developing action plans for the design and implementation of robust systems that can be widely proliferated and quickly scaled up to global dimensions.
3. assembling a knowledge base that can provide guidance to others on the same path toward achieving more equitable and sustainable economic structures.
There is still space available for those who feel moved to participate.
Details about the course, fees, and booking are at http://www.kalikalos.org/exchange-finance.
Some of the areas that we will explore include:
- The essence, function, and forms of money
- The concepts of currency, credit, credit clearing, liquidity, monetization, and basis of issue
- Various models of private currencies and moneyless exchange
- Value measurement and units of account
- Exchange networks and inter-trading
Don’t let finances stop you as will be able to offer a limited amount of bursaries. Please write an application for that to our team at email@example.com.
We offer Greek participants who take part in the week-long workshop a discount of 30%.
The weekend Saturday, 25 and Sunday 26 is being offered to Greeks on a Gift Economy basis which means that you offer what you are able to give. If you want to participate on these terms please send a mail to: firstname.lastname@example.org.
I look forward to working with you. –Thomas
I have long argued that the likelihood of getting government to do anything “good” about the money problem is near zero because the controllers of the present monetary regime are able to buy the kind of government they want that will keep in place the system that enables them to consolidate their power and increase their wealth.
Even if your proposal to restore the Greenback could be legislated into actuality it would only be a stop-gap measure and there would be negative side-effects. FDR ameliorated the 1930s crisis in a somewhat similar way and managed to get some progressive legislation passed, and WWII provided the excuse for massive government deficit spending (along with rationing and “bond drives” to control consumer demand).
Massive increases in productivity enabled a flood of consumer goods to enter the market after the war, and people had the money to buy them.
But in today’s world the old tricks will not be sufficient. We need a totally new system of money, banking and finance, one that is decentralized and interest-free. This will emerge by the design and deployment of relatively small credit clearing exchanges in which it is possible to build trust through personal relationships (verified identity and reputation of all parties, along with organizational transparency), and to allocate credit to members based on that and the market value of their output. At the same time, these credit clearing exchanges can be networked together to enable non-monetary payment on a global basis–a payment system that I describe as “locally based but globally useful.”
We will have an “exchange revolution” that is analogous to the IT revolution. Our micro-computers were initially isolated and had limited capabilities; now we have tremendous power right at out fingertips to do many useful things, and our local devices are linked through the internet giving us unprecedented access to each other almost anywhere and anytime, and almost unlimited amounts of information on most any subject.
Realization of this vision is close at hand.–t.h.g.
I’m excited to be back in Greece and reconnecting with my colleagues here. The mood here seems to be more subdued as the people try to cope with asset privatization, wage and pension cuts, higher taxes and other conditions imposed from outside. I’m told that mortgage foreclosures will begin soon, which may trigger some popular reaction. The metro workers in Athens have announced they will be striking for several hours each day over the next few days. Fortunately the hours of service disruption have been posted so one is able to plan accordingly.
All of this underlines the urgency of designing and implementing systems that are capable of devolving power to the national, community, and personal levels. For me, the most effective strategy seems to be reclaiming the “credit commons”. That is what we will be working on during my workshop on innovation in exchange and finance from 24 June thru 1 July, 2016 at Kalikalos Holistic summer school near Volos, Greece.
Space is still available if you would like to participate. Details about the course, fees, and booking are at http://www.kalikalos.org/exchange-finance. Don’t let finances stop you; we will be able to offer a limited amount of bursaries (Please write an application to our team email@example.com).
Special arrangements for Greek participants provide them (1) a discount of 33% on the full course, or (2) for those who can participate only on the weekend of 25/26 June, an invitation to do so on the basis of a free will offering.
This will be a workshop/colloquium in which everyone plays an active role in an intensive process of inquiry, discovery, sharing and collaboration aimed at:
- achieving a deeper understanding of the principles of credit, finance, and the exchange process, and,
- developing action plans for the design and implementation of robust systems that can be widely proliferated and quickly scaled up to global dimensions.
# # #
An academic study from the European School of Management and Technology highlights the utter futility of the bailout programs in pulling Greece out of the quagmire of debt bondage and economic depression.The report concludes:
“This paper provides a descriptive analysis of where the Greek bailout money went since 2010 and finds that, contrary to widely held beliefs, less than €10 billion or a fraction of less than 5% of the overall programme went to the Greek fiscal budget. In contrast, the vast majority of the money went to existing creditors in the form of debt repayments and interest payments. The resulting risk transfer from the private to the public sector and the subsequent risk transfer within the public sector from international organizations such as the ECB and the IMF to European rescue mechanisms such as the ESM still constitute the most important challenge for the goal to achieve a sustainable fiscal situation in Greece.”
See Rocholl *, J., and A. Stahmer(2016). Where did the Greek bailout money go? ESMT White Paper No. WP–16–02. http://static.esmt.org/publications/whitepapers/WP-16-02.pdf