Sunday 14 November 2010

Gold Backed Local Currency Networks

I deserve a Nobel Prize for this idea.

Gold backed local currencies.

I have created a whole new economic system that can solve the present problems of the global economic system.

At the moment those with capital in our nations have no choice but to place their capital, such as wages, in High Street banks who operate and invest capital in the global market. The individual places their capital in the bank, and then under the rules of Fractional Reserve Banking the bank can then issue credit to allow it to invest ten times the amount deposited in its account to speculate on the international money markets.

There is no mechanism whereby individuals can put their money into a commodity backed currency that rejects fractional reserve banking.

I have created a whole new system to do this.

We require not one banking system but two.

The first is the global banking system and the High street banks that operate in the global market place.

The second is a series of local economies with Credit Unions who issue gold backed local currencies.

The government creates a new National Gold Standard solely for Local Economies whereby it buys gold reserves with the pound and then issues credit notes to credit unions to release local currencies based on those gold reserves.

As the government buys more gold reserves more credit notes are issued to credit unions to release in the form of local currencies.

The government does nothing but hold and store the gold for the credit unions. Government is not allowed to borrow credit from the international credit markets on the basis of gold reserves set aside for credit unions.

The credit unions are only allowed to release capital in the form of local currencies relating to the value of the gold reserves held for them by the government. The more gold is bought and stored by the government for credit unions, the more capital in the form of local currencies are allowed to be released into local economies.

This will end Fractional Reserve Banking in the local economies system.

As the government amasses more gold reserves by buying gold on the international markets, more capital is released into local economies in the form of local currencies which is then ‘locked into’ those communities, as that capital circulates in just those communities and cannot be exported out of them.

This will produce internal economic stability, allow local economies to be stable and guarantee deposits of customers.

Each year government buys a set amount of gold to be set aside for the use of credit unions - say 5 billion pounds a year.

This will then allow credit unions to issue local currencies to invest that money into local communities, such as in the form of loans to local businesses.

The interest rates on these loans will be less than the market rate for other loans, so will allow local businesses to be more competitive than international corporations when investing in local communities.

Such loans would be predicated on local businesses employing local people.

It would also allow Credit Unions to issue low cost loans with low interest rates to their members, such as poor families in local communities.

This will allow the credit unions to increase economic activity in local areas that benefit local businesses.

Local people could also deposit their national currency into their credit union accounts which will allow credit unions to then use brokers to buy gold deposits to be stored to ’back up’ those new deposits, thereby moving national currency from the globalist high street banks and global economic system and into local economies.

This would create an autonomous, stable, commodity backed network of local currencies that will offer the stability and economic security that the High Street banks cannot offer.

It will also ensure that any future global economic crash will not devastate local economies, as their currencies will still function as commodity backed micro-economies regardless of any systemic crash of the macro-economic global market.

It will also allow nation states to work together on developing the international economic system to facilitate global free trade, whilst ensuring the internal economic stability of nation states as they undertake the creation of an integrated and efficient global economic trading system.

There is no need to create a new International Gold Standard, just local economies with Credit Unions whose local currencies are based on gold reserves and whose currencies can only be used within those local economies.
















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11 comments:

Ade said...

If banks lend out ten times more as thin air credit than they actually hold on deposit then this must mean most of what they lent, is thin air.

So if you have a mortgage with a bank, and you have paid back, one tenth of what they say you borrowed, to my way of thinking, the debt is settled.

You're a lawyer Lee, where am I wrong on this.

Oathkeepers

Ade said...

I don't remember voting for this.

£3Trillion and counting National Debt

Defender of Liberty said...

Hi Ade,

the problem is that you agree to pay back what the bank wants when you take on the mortgage.

Not only that the bank uses the money that you will pay over thirty years as a way to borrow ten times that amount of money to be used by itself and loaned out, before you even pay it out !

Regards,

Lee

King of the Paupers said...

Jct: The yellow rock standard of time has never work but to the benefit of the yellow rock bullion brokers. I dont' have any. But the UNILETS Time Standard of Money where loans can be repaid in cash or in time solves that problem because I've got lots of spare time to pledge.

Anonymous said...

Lee - what about the fluctuation in the price of gold.
Won't that affect the value of the local currency?
Just a thought.

Brian Cosworth said...

Add to this idea a local (Britain only) bank like a People's Bank or the Post Office that only deals with British people's savings, mortgages, salary deposits etc that behaves in a friendly and responsible way to deliver your idea and you've got a winner. International Globalism won't like it but to the gallows with them!

Defender of Liberty said...

Great Idea brian, that will integrate well without Bank Of Britain that we intend to establish.

Re the fluctuation of the price of gold. At the moment the price of gold is going through the roof, and this will continue as gold is bought to escape the collapse of currencies around the world. The fluctuation strengthens the currency, not weakens it as the moment and into the distant future.

As the currencies weaken, gold is always popular.

The simple answer is that as the gold price drops, the local currencies cease producing new currency for circulation.

The currency is pegged on the value of the gold, therefore if gold drops then the credit union either ceases to print new currency or refuses to issue existing currency thereby ensuring the price of the gold in the deposits always relates to the amount of capital available to be used by the credit union.

Defender of Liberty said...

Great Idea brian, that will integrate well without Bank Of Britain that we intend to establish.

Re the fluctuation of the price of gold. At the moment the price of gold is going through the roof, and this will continue as gold is bought to escape the collapse of currencies around the world. The fluctuation strengthens the currency, not weakens it as the moment and into the distant future.

As the currencies weaken, gold is always popular.

The simple answer is that as the gold price drops, the local currencies cease producing new currency for circulation.

The currency is pegged on the value of the gold, therefore if gold drops then the credit union either ceases to print new currency or refuses to issue existing currency thereby ensuring the price of the gold in the deposits always relates to the amount of capital available to be used by the credit union.

King of the Paupers said...

Defender of LIberty: "The currency is pegged on the value of the gold, therefore if gold drops then..."
Jct: The currency is pegged to the value of a volunteer hour (a doctor charges more Hours per hour) therefore if the value of an hour drops to 59 minutes???? Inflation and deflation can't happen when your chips are backed up by time.

Anonymous said...

http://www.thejc.com/news/uk-news/41015/nick-clegg-we-got-it-wrong-israel


Defend this!!!

Adrian Peirson said...

Gold prices and food prices do not rise, what happens is that as the fraudsters print more and more of the stuff the relative value of Gold food, fuel etc rises, in the sense that the pound in your pocket has been devalued, it's not that Gold value has gone up, what has happened is that the money in your pocket is worth less.
A 1ounce of Gold would buy more or less what it would buy 100 yrs ago.

Gold as Money

gold has NOT gone up in value, your money has been devalued because they can print it at will.