Sunday 1 July 2012

Fractional Reserve Banking versus Outsourced Resources Banking


Coins and banknotes account for a very small part of the global money supply (around 8%). Only they have a small guarantee, scriptural money is only debt that someone owes… Creating money without limits means credit, debt, interest rates, inflation and deflation. Creating money without limits leads to environmental and social disasters.
 Every single $, £, Euro… created from nothing by private banks means a material or social value in the real world. But the Earth and Mankind are too small for the colossal money supply in the world.Fractional Reserve Banking creates money supply indefinitely, but only waste, not wealth. Increasing the monetary base is a more motivating challenge than increasing the money supply without limits. Temporary currencies backed by cash or assets and on an hourly basis can be used in a deflation context, to create sustainable activities and emphasize exchanges between knowledge and know how. The knowledge economy and social links are the two economical keys of the upcoming decades. 

Once the activity is created and sustainable, the temporary currency can be converted into money from a central bank or assets, and invested in the activity. It is also possible to back a temporary currency with a basket of currencies, but always in cash, which is also rare. Not backed by gold or silver for decades, but still with a small guarantee. 

No inflation, no deflation, no debt, no credit, only sustainable projects based on abilities that currently exist. This is Outsourced Resources Banking!

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