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Unless there is an effective mechanism to share the burden of adjustment between surplus and deficit countries, we seem to retain the same tensions. while broadening the system increases the number of divergent domestic and FRX policies in competition.
I've been accused of being a Marxist, yet while Harpo's my favourite, it's Groucho I'm always quoting. Odd, that.
Unless there is an effective mechanism to share the burden of adjustment between surplus and deficit countries,
That's where Keynes was onto something with the Bancor/ICU approach.
His design built in a charge on both positive and negative balances. He was apparently a fan of Gesell.
This is in line with the proposal I advocate for credit creation (ie the time to pay/unsecured credit that makes the world go around), as follows:
Point One: Treasuries -probably decentralised Treasury branches as is still nominally the case in Canada - issue undated interest-free credit (which they do already - it's called cash).
Point Two: Service-providers-formerly-known-as-banks" operate the accounting system and assess/manage the issue of this credit to business and individuals in line with policies set by a Monetary Authority.
Point Three: both sellers and buyers using this credit would pay a charge for the use of the guarantee. ie a charge would be made on both credit and debit balances. This is exactly analogous to Keynes' Gesellian approach.
Point Four: Service-providers-formerly-known-as-banks would be paid reasonable costs plus a share in the outcome.
Point Five: A Default Pool of funds - held by a Custodian-foremerly-known-as-a-Central-Bank would provide necessary liquidity to cover defaults, and any excess would be shared equally as a National Dividend.
Point Six: settlement of credit obligations could be made using positive balances of Treasury credits, or in "money's worth" acceptable to the seller.
Point Seven: defaults would be settled by the Pool and collected from defaulters, if possible. Defaulters could have the option to settle in hours of community service.
Settlement could be, and among businesses often would be, in barter. More generally, through "Unitisation" of existing secured debt, new classes of acceptable units would be developed redeemable in:
(a) energy value - the "Petro's" I have in mind as a generic global reserve currency;
(b) land rental value - an essentially "land-locked" currency.
"The future is already here -- it's just not very evenly distributed"
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