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It's not all that complicated. <br>
Yes, LETS is a form of mutual credit clearing.<br>
Credit clearing simply allows us to use "our" money (that we create
in the process of buying/selling) instead of "their" money, which
must be borrowed from a bank or earned from someone else who
borrowed it from a bank.<br>
<br>
If I do some work for you, we must agree upon a price. Your account
is debited and my account is credited for the same amount. I can
then use my credits to buy whatever I want, at an agreed price, from
someone else in the system. You must eventually provide value to
someone in order to bring your balance back to zero. If you default,
the collective membership bears the burden of that instead of me
personally suffering the loss. <br>
The system must have sufficient revenues to cover such losses as
well as its operating expenses. <br>
I've explained all of this many times in my writings.<br>
<br>
<pre class="moz-signature" cols="72">Thomas H. Greco, Jr.
<a class="moz-txt-link-abbreviated" href="mailto:thg@mindspring.com">thg@mindspring.com</a>
Mobile phone (USA): 520-820-0575
Beyond Money: <a class="moz-txt-link-freetext" href="http://beyondmoney.net">http://beyondmoney.net</a>
Tom's News and Views: <a class="moz-txt-link-freetext" href="http://tomazgreco.wordpress.com">http://tomazgreco.wordpress.com</a>
Archive Website: <a class="moz-txt-link-freetext" href="http://www.Reinventingmoney.com">http://www.Reinventingmoney.com</a>
Photo gallery: <a class="moz-txt-link-freetext" href="http://picasaweb.google.com/tomazhg">http://picasaweb.google.com/tomazhg</a>
Skype/Twitter name: tomazgreco
My latest book, "The End of Money and the Future of Civilization"
can be ordered from Chelsea Green Publishing, Amazon.com, or your local bookshop.
</pre>
<br>
On 06/22/2011 4:33 AM, Apostolis Xekoukoulotakis wrote:
<blockquote
cite="mid:BANLkTi=kKNW-p2693e2wCiUWWpu9fbuzNQ@mail.gmail.com"
type="cite">I tried to find information about mutual credit
clearing Unions. I couldnt find much, so I guess that the name
itself explains it. I suppose that LETS is such a system.
<div><br>
</div>
<div>Let me make an example so as to see if we are talking about
the same method of exchange and to clarify things.</div>
<div><br>
</div>
<div>We have John, Michael and all the others. John is making
furniture. In fact he has 5 different kind of furniture that he
is making. Michael is a software engineer, he is paid by the
hour and has expertise in a number of programming languages and
frameworks. Both of them had done previous work and they have a
reputation that distinguishes them from other of the same work.</div>
<div><br>
</div>
<div>John decided that he wants to have a site advertising his
furniture so he goes to Michael and tells him to make him a
site. Michael and John make a contract. Michael through the
(system)site knows at which proportionality has john currency,
ie furnitute been exchanged with other currencies, products even
if that exchange is indirect. The system transforms to him
through past transactions or future contracts the currency of
furniture into the products he wants. This way Michael has an
exact understanding of the pleasure he recieves at a specific
time vs the work he will have to do now.</div>
<div><br>
</div>
<div>John on the other hand understands the amount of 'happiness
he will receive' , ie the product. There is no need for such a
transformation.</div>
<div><br>
</div>
<div>Both now have enough information to start trading, decide the
amount of work each one will be obliged to do and at what time. </div>
<div><br>
</div>
<div>Lets just say now that Michael now has a contract with John
that allows him to ask for a specific number of furniture of a
specific design till a specific date. That means that after this
date John has no obligation to make these furniture. He has no
debt and he is free to abandon his workshop, retire.</div>
<div>Till that date Michael has to find work for John so as to
transform his currency into another he likes. The system told
him that most likely he will transform it into the products he
likes but it is up to him. </div>
<div><br>
</div>
<div>Let us say that someone likes the furniture of john and wants
to trade. At this time he can trade directly with John or with
Michael.</div>
<div><br>
</div>
<div>As you can see if John decides to abandon his obligations the
one to be harmed will be Michael. This system doesnt have an
abstract sense of money. It tries to transform the currencies
into currencies that we want.</div>
<div><br>
</div>
<div>How much value do 500 dollars mean to you? 500 dollars have
different value per person depending on the things they can buy
with them. After a period of time you will still have 500
dollars but the things you can buy are different because the
prices change. Not only that, the person or node that has the
money plays an important role on the value of money. Big
corporations buy stock with a lower price than smaller ones.
Their value of money is different. </div>
<div><br>
</div>
<div><b>The topology of the graph plays an important role in the
transformation of money into goods. </b></div>
<div><br>
</div>
<div>So Dollars or any kind of such a currency, like gold, doesnt
contain within it the pleasure, happiness we will receive with
those money.</div>
<div><br>
</div>
<div>Now If someone were to give us how happy he would be if he
were in a specific situation( number of products, amount of
work), if everyone did that, I could take all those people and
organize them in such a way, automatically creating circles of
flows, automatically finding the prices and amount of products
that are to be traded. If I am given enough information, I could
even tell an engineer how his invention will change the flow of
products and prices.</div>
<div>
<div>I havent made the insertion of data user friendly yet, but
I think that It takes all parameters into account and the
price is determined in such a way so as that the individual
maximizes his gain. You must also understand that noone can
cheat. If someone says something different from what he wants
, he will get worse results.</div>
<div><br>
</div>
<div>Savings equal the amount of money on negative balances.
There are methods to stop people from not paying and this
should be enforced globally. If someone has a flow of products
every day, if he doesnt want to pay old debts, he could be
dropped out of the system, not be able to buy new things.
Other people could also insure someones debt.</div>
<div><br>
</div>
<div>As old debts are transformed into new debts by making new
contracts, savings change position from one person to another
as debt changes hands. You can undestand that those who will
have debt will be the ones that are thought as the most
productive and usefull in the future. Another method for
savings allocation is proportionality of your savings to the
goods you will want in the future. </div>
<div><br>
</div>
<div>What I am saying here IS experimental. What is sure though
is the fact that it requires a lot of information to make it
work.</div>
<div><br>
</div>
<div>Best regards...</div>
<div>
<div>
<div><br>
<div class="gmail_quote">
2011/6/22 Thomas Greco <span dir="ltr"><<a
moz-do-not-send="true"
href="mailto:thg@mindspring.com" target="_blank">thg@mindspring.com</a>></span><br>
<blockquote class="gmail_quote" style="margin: 0pt 0pt
0pt 0.8ex; border-left: 1px solid rgb(204, 204, 204);
padding-left: 1ex;">
<div bgcolor="#ffffff" text="#000000"> Dear Apostolis,<br>
<br>
Below are the links to my websites, and the title of
my latest book.<br>
<br>
Clearing circles have been operating successfully
for many years. It is an old idea.<br>
Now, the challenge is to optimize the procedures and
protocols and take it to scale, then network local
exchanges together to provide an means of payment
that is locally controlled but globally useful.<br>
<br>
A debit balance in a credit clearing exchange can be
looked at as a loan. It is a draft upon a line of
credit that is extended by the collective
membership. In a clearing system some accounts must
be allowed to be negative. The total of negative
balances (or positive balances) can be looked at as
the supply of internal currency.<br>
<br>
Savings and investment, or <b>finance </b>is a
separate function from <b>exchange</b>. <br>
Yes, they are related, but require different
mechanisms.<br>
<br>
Thomas<br>
<pre cols="72">Thomas H. Greco, Jr.
<a moz-do-not-send="true" href="mailto:thg@mindspring.com" target="_blank">thg@mindspring.com</a>
Mobile phone (USA): 520-820-0575
Beyond Money: <a moz-do-not-send="true" href="http://beyondmoney.net" target="_blank">http://beyondmoney.net</a>
Tom's News and Views: <a moz-do-not-send="true" href="http://tomazgreco.wordpress.com" target="_blank">http://tomazgreco.wordpress.com</a>
Archive Website: <a moz-do-not-send="true" href="http://www.Reinventingmoney.com" target="_blank">http://www.Reinventingmoney.com</a>
Photo gallery: <a moz-do-not-send="true" href="http://picasaweb.google.com/tomazhg" target="_blank">http://picasaweb.google.com/tomazhg</a>
Skype/Twitter name: tomazgreco
My latest book, "The End of Money and the Future of Civilization"
can be ordered from Chelsea Green Publishing, Amazon.com, or your local bookshop.
</pre>
<div>
<div> <br>
On 06/21/2011 7:35 PM, Michel Bauwens wrote:
<blockquote type="cite">Thomas has written a few
books and is in touch with many local credit
commons initiatives ...<br>
<br>
he's in cc,<br>
<br>
Michel<br>
<br>
<div class="gmail_quote">On Wed, Jun 22, 2011
at 3:38 AM, Apostolis Xekoukoulotakis <span
dir="ltr"><<a moz-do-not-send="true"
href="mailto:xekoukou@gmail.com"
target="_blank">xekoukou@gmail.com</a>></span>
wrote:<br>
<blockquote class="gmail_quote"
style="margin: 0pt 0pt 0pt 0.8ex;
border-left: 1px solid rgb(204, 204, 204);
padding-left: 1ex;">What you say was
exactly the idea with which I started
working.
<div><br>
</div>
<div>Where is more info about it? Has
Thomas created such a clearing house?
<div> Most importantly, has he found an
algorithm to create trading circles?
has he studied the macroeconomy of
such a system?</div>
<div><br>
</div>
<div>Why do we need to see the global
network? </div>
<div><br>
</div>
<div>Well, in order to be able to make
investments. New investments about a
specific product can have indirect
consequences to the whole network. We
may then have to compute what
percentage of the investment will have
to be paid by each peer.</div>
<div><br>
</div>
<div>We need to know about the global
network in order to decide to which
persons we can store our savings and
the ability of those currencies to be
transfered into goods that we will
want in the future. </div>
<div><br>
</div>
<div>It is important to think of each
peer as a producer, a seller, an
investor. Investors need information.</div>
<div><br>
</div>
<div><br>
</div>
<div>
<div>
<div>
<div class="gmail_quote">
2011/6/21 Kevin Carson <span
dir="ltr"><<a
moz-do-not-send="true"
href="mailto:free.market.anticapitalist@gmail.com"
target="_blank">free.market.anticapitalist@gmail.com</a>></span><br>
<blockquote class="gmail_quote"
style="margin: 0pt 0pt 0pt
0.8ex; border-left: 1px solid
rgb(204, 204, 204);
padding-left: 1ex;">
<div>El 21/06/11 04:23,
Apostolis Xekoukoulotakis
dijo:<br>
<br>
</div>
<div>> What I am about to
say needs testing and more
thinking but let me tell you<br>
> what I have done so far
to create an alternative to
the free market.<br>
<br>
</div>
We're probably using the term
"free market" in a different
sense. The<br>
market can refer simply to the
cash nexus, or the arena of
commodity<br>
production for monetized
exchange.<br>
<br>
But it can also be used, by
market anarchist like me, to
describe the<br>
entire spectrum of voluntary
transactions and relationships
--<br>
including cooperatives, gift
economies, communal property,
informal<br>
barter, mutual aid, etc.<br>
<div><br>
>> I have created a
new class of currencies that
are very similar to the<br>
>> very<br>
>> old currencies.
What if each person used the
creation of his work as<br>
>> currency. When
someone owns 5 paul's chairs
for example , It is meant<br>
>> that<br>
>> Paul will have to
give him those 5 chairs in
the future if he asks for<br>
>> them.<br>
>> This is then some
kind of loan. Someone gives
something now in exchange<br>
>> for<br>
>> something in the
future. If he doesnt need
the chairs, he might have to<br>
>> exchange Paul's
chairs with something else.<br>
<br>
</div>
That sounds a lot like Tom
Greco's mutual credit clearing
networks,<br>
which I'm a big fan of. Every
member runs a balance that
looks a lot<br>
like the balance in a checking
account. When you sell a good
or<br>
service to a member your
balance goes up, and when you
purchase same<br>
it goes down. And the system
allows people to run negative
balances,<br>
so long as the negative
balance is limited to some
value relative to<br>
their average monthly sales
and the account continues to
be active and<br>
turn over. So "money" is
essentially backed by the
goods being<br>
traded; rather than being a
store of value from past
production, it is<br>
simply a unit of account for
denominating trade of
present-for-present<br>
or present-for-future
production. Nobody has to
have a store of money<br>
from past production in order
to trade, so there's no
problem of<br>
economic stagnation for want
of liquidity ("there's not
enough money<br>
in circulation"). People
create money by trading.<br>
<font color="#888888"><br>
--<br>
</font>
<div>
<div>Kevin Carson<br>
Center for a Stateless
Society <a
moz-do-not-send="true"
href="http://c4ss.org"
target="_blank">http://c4ss.org</a><br>
Mutualist Blog: Free
Market Anti-Capitalism<br>
<a moz-do-not-send="true"
href="http://mutualist.blogspot.com" target="_blank">http://mutualist.blogspot.com</a><br>
The Homebrew Industrial
Revolution: A
Low-Overhead Manifesto<br>
<a moz-do-not-send="true"
href="http://homebrewindustrialrevolution.wordpress.com" target="_blank">http://homebrewindustrialrevolution.wordpress.com</a><br>
Organization Theory: A
Libertarian Perspective<br>
<a moz-do-not-send="true"
href="http://mutualist.blogspot.com/2005/12/studies-in-anarchist-theory-of.html"
target="_blank">http://mutualist.blogspot.com/2005/12/studies-in-anarchist-theory-of.html</a><br>
<br>
_______________________________________________<br>
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</blockquote>
</div>
<br>
<br clear="all">
<br>
</div>
</div>
-- <br>
<span style="font-family:
arial,sans-serif; font-size: 13px;
border-collapse: collapse;">
<pre style="white-space: pre-wrap;">Sincerely yours, </pre>
<pre style="white-space: pre-wrap;"> Apostolis Xekoukoulotakis</pre>
</span><br>
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</div>
</blockquote>
</div>
<br>
<br clear="all">
<br>
-- <br>
<span style="font-family: arial,sans-serif; font-size:
13px; border-collapse: collapse;">
<pre style="white-space: pre-wrap;">
</pre>
<pre style="white-space: pre-wrap;">Sincerely yours, </pre>
<pre style="white-space: pre-wrap;"> Apostolis Xekoukoulotakis</pre>
</span><br>
</div>
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