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I have always been quite clear - for maybe 8 years now - that the next (internet) generation of markets will have a holistic global market architecture configured around transaction and title registries. Indeed I said as much to the UK Treasury Select Committee last year when I gave evidence.

The political risk of default by Unit issuers will be addressed through the Clearing Union/Guarantee Society mechanism. ie a globally applicable interactive/consensual framework agreement, not some monolithic centralised quasi Central Bank issuing global fiat currency ex nihilo.

The backing for the mutual guarantee would not come from the limited balance sheets of credit intermediaries - or a single point of failure counterparty probably owned by them (and from which they would in all probability walk away in extremis). It is based upon the balance sheets of end user producers and consumers collectively, which you said yourself is where the financial substance is.

This mutual guarantee would be supported by a guarantee payment/provision collected from both the sell side and buy side (ie analogous to Keynes' Gesellian Bancor proposal), and held by a custodian.

Risk management, access to data/transparency, dipsute resolution etc and the equivalent of monetary policy - ie Unit issue compared to supply capacity - would be carried out by service providers.

It is necessary to view my proposal for energy unitisation in the correct context, and that is the International Energy Clearing Union I have advocated for several years.

"The future is already here -- it's just not very evenly distributed" William Gibson

by ChrisCook (cojockathotmaildotcom) on Tue Oct 27th, 2009 at 05:31:32 PM EST
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that would work, but good luck with getting everybody to give up sovereignty to such an entity.

In the long run, we're all dead. John Maynard Keynes
by Jerome a Paris (etg@eurotrib.com) on Tue Oct 27th, 2009 at 05:56:35 PM EST
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....it's an agreement.

There's no sovereignty given up, any more than there is under - say - the BOLERO contractual platform for transfers of title of goods in transit.

BOLERO is a very interesting beast in relation to international trade finance, with which you may or may not be familiar.

"The future is already here -- it's just not very evenly distributed" William Gibson

by ChrisCook (cojockathotmaildotcom) on Tue Oct 27th, 2009 at 09:36:58 PM EST
[ Parent ]

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