Self-Issued Credit: A Monetary Solution

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by James Corbett
December 18, 2012

As the global economy continues to slow down, the world is being asked to focus on issues of so-called "sovereign debt," "austerity," "fiscal responsibility," "belt tightening" and other such euphemisms for the grim reality that the public is now being asked to pony up the dough for the trillions that have been handed over to the banksters in the past few years. What the constant focus on these issues effectively hides, however, is that underlying the economic woes that are the symptom of the disease is the disease itself: the monetary system.

As monetary reform advocate Bernard Lietaer of the University of California points out, this is not by accident.

Although many are ignorant of this fact, the "Nobel Prize" for Economics is as much of a Nobel Prize as the Federal Reserve is a federal reserve; that is, not at all. This doesn't prevent the press from lauding "Nobel" laureate Paul Krugman for his deep economic wisdom, however, and it doesn't prevent Krugman from using his bully pulpit to argue for ever-growing amounts of stimulus spending in a vain attempt to plug the holes in the sinking S.S. Global Economy with ever larger bales of debt-based Federal Reserve Notes.

So if arguments over "sovereign debts" and bailouts and stimulus and easing and other forms of tinkering with the current monetary paradigm are not the answer, that begs the question: what is?

As we have been examining in previous weeks here on The Eyeopener, the question of monetary reform and alternative currencies lies at the heart of the long-term solution for steering us away from the edge of these systemic "fiscal cliffs" and toward a system that is inherently rational, equitable, predictable and sustainable. As everyone who has examined the issue will attest, however, there are a bewildering array of alternative currency systems on offer, from time banks and LETS systems to TEMs, Bitcoins and privately minted precious metals.

For those who are overwhelmed by the variety of choices in the world of alternative currency, it is important to note a basic principle that many of these systems have in common: the idea of self-issued credit.

By examining the roots of this idea, and combining it with modern breakthroughs in communication and data processing, alternative currency proponent Paul Grignon has proposed Digital Coin, an idea for a global economic system that operates on this principle of self-issued credit.

The ins and outs of the digital coin system are complex, and are best served by a thorough review of the proposal at, but the idea that it operates on is simple and time-honored. As Grignon demonstrates in his other works, just as the ancient marketplace thrived in times of "monetary scarcity" (a lack of silver or gold coins) by trading credits that were self-issued by reputable businessmen, so too could a global monetary system be arranged, completely eliminating the need for the outdated "technology" of Federal Reserve notes or central bank administered national currencies.

The implications of this system are enormous. In the digital coin system, money could be split into its functions as a unit of measure and a means of exchange, individuals could issue their own credit and allow it to exchange in the market, speculation would transform from an endeavor to suck money out of transactions into an endeavor to add value to existing relationships, and people would be free to refuse specific credits that had been issued by specific businesses, giving total control of individuals to choose what groups or businesses they are willing to support.

Last year I had the chance to talk to Paul Grignon about this system on my radio program.

Obviously, we are still light years off from implementing such a system, not necessarily due to the technological impediments (though there are those), but because the idea of monetary reform is still far from the minds of the public, who are generally too busy chasing those Federal Reserve notes or Euros or Yen or Pesos or Pounds to contemplate what it is that forms the basis of our entire economic existence.

And if Krugman and the so-called Nobel Laureates and the central bankers and all the others who benefit the most from our current economic paradigm get their way, that profound state of ignorance will never be disturbed.

For those of us who do know about the possibilities of alternative currencies and new monetary paradigms to solve many of the most intractable economic problems that we are facing, it is incumbent upon all of us to better inform ourselves about these issues, and to start raising the awareness of those around us before we are all driven off of the bankster-created fiscal cliff.

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