Hi Ed Goertzen,
You and I obviously differ in the reading of the history of money. You seem
to say that money is only real when it's issued by governments, whereas I
say that money has always been generated privately for the purpose of trade
(and thus democratically supervised) and is then usually taken over by
governments for their own purposes, usually warfare, whenever they've
become powerful enough. Repeatedly throughout history, governments have
then devalued their own currencies as they overstretched themselves.
I then went on to suggest that governments are gradually losing control
over their own official currencies and that, because of this increasing
weakness, a privately sponsored universal currency might well develop in
the coming years. Initially, this will probably go under the formal name of
the US$ in rather the same way that immense sums of US$s that were
originally forged notes but are now laundered are presently lubricating the
economies of former Soviet countries.
Ultimately, I see the validity of the new universal currency as being
dependent on a consortium of the largest corporations (or even competitive
consortia) which would guarantee a strictly enumerated register of the
currency. There would still be a need for different sorts and sizes of
pensions, savings and venture capital institutions but not banks.
Historically, the latter only came to life by virtue of temporary surpluses
of gold from new discoveries and thus able to support new speculative
ventures. In the new currency world I'm suggesting here there would be no
mechanism for supplying new electronic money (if it's to retain public
confidence), so that extra productivity, efficiency, profits (call it what
you will) would be measured not so much in extra currency, as now by
printing, but in a gradually appreciating value of the electronic 'dollar'
within a constant pool.
There will be no need for banks pure and simple as we have known them since
the Middle Ages. They are still useful at present for being a source of
liquidity for ordinary people but they are fast losing their historical
role as primary sources of venture capital and are becoming merely
intermediaries (and, even so, losing out to many other sorts of
intermediaries). As far as liquidity for ordinary folk is concerned then
the smartcard or its equivalent will be much more convenient because it
will be available to the individual at any place and at anytime. As far as
venture capital is concerned then the present trend towards the supply of
equity capital (particularly for large investments) will no doubt continue
and, as now, elbowing banks out of the way.
I see a register of universal money as being a natural consequence of the
welter of new types of financial institutions and mechanisms that have been
springing up in recent decades as a consequence of the decline of banks as
primary sources of money.
Keith H
___________________________________________________________________
Keith Hudson, General Editor, Calus <http://www.calus.org>
6 Upper Camden Place, Bath BA1 5HX, England
Tel: +44 1225 312622; Fax: +44 1225 447727;
mailto:[EMAIL PROTECTED]
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