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An Innovative Credit Free, Free Market Post Crash Economy

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To that purpose we must change the way money is emitted. Instead of making cheap credit to the banks which make credit to their wealthiest customers with the hope that it will trickle down, we must distribute that money without interest rate; that is, give it) equally to the people. This way we will restore demand and eliminate some of the unfairness of the system.

At the same time we must ensure that the supply stays sufficient and create some money uniquely dedicated to investment: the same way we will distribute money for consumption, we will emit money to people that will be dedicated to investments. Those investments would be chosen freely by the people. Of course they would be remunerated as a function of the way they help reach the goals of society at large: maximization of transactions, full employment and fulfillment the basic needs of all.

The purpose being to adjust the direction to which the invisible hand leads us. Instead of leading us to the Liquidity Trap it will lead us to a maximization of transactions and employment:

But the annual revenue of every society is always precisely equal to the exchangeable value of the whole annual produce of its industry, or rather is precisely the same thing with that exchangeable value. As every individual, therefore, endeavours as much as he can both to employ his capital in the support of domestic industry, and so to direct that industry that its produce may be of the greatest value; every individual necessarily labours to render the annual revenue of the society as great as he can. He generally, indeed, neither intends to promote the public interest, nor knows how much he is promoting it. By preferring the support of domestic to that of foreign industry, he intends only his own security; and by directing that industry in such a manner as its produce may be of the greatest value, he intends only his own gain, and he is in this, as in many other cases, led by an invisible hand to promote an end which was no part of his intention. Nor is it always the worse for the society that it was no part of it. By pursuing his own interest he frequently promotes that of the society more effectually than when he really intends to promote it. I have never known much good done by those who affected to trade for the public good. It is an affectation, indeed, not very common among merchants, and very few words need be employed in dissuading them from it.

- Adam Smith, "Wealth of Nations"

Private Enterprise:

Our system would even profit them by providing them demand without which they would have to be liquidated or be nationalized.


By diminishing the power of vested interests if not eliminating them altogether we will increase the competition while preventing it from becoming cutthroat and hence create the conditions of a really free and cooperative market:

People of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public, or in some contrivance to raise prices. It is impossible indeed to prevent such meetings, by any law which either could be executed, or would be consistent with liberty and justice. But though the law cannot hinder people of the same trade from sometimes assembling together, it ought to do nothing to facilitate such assemblies; much less to render them necessary.

- Adam Smith, "Wealth of Nations"


That does not mean that we would socialize the means of production but parallel to private enterprise there would be a system of socialized production which would compete with one another.

At the same time it is not our purpose to eliminate the use of credit based currencies but to establish another system parallel to the existing one.

This way our system would not destroy the prevalent economy but increase both consumption and investment.


In order to distribute our currency we will need to make it electronic. Our monetary institute will be a database to which could connect any type of electronic means of payment: cellular phones, internet, dedicated means of payment...

In order to be effective such a system would need a sufficient number of participants. To that order we implement a system of registration of serial numbers of €55 (five euro) notes: that right to participate constitutes what is called in games theory a cheap talk. We will start to implement our system when the number of participants will be reaches a critical number, sufficient to render the system effective.

Registering does not constitutes an obligation to participate but a right to do so at anytime in the future when the system be implemented.

Registration is anonymous and will prevent any use for discrimination, which would diminish the amount of potential transactions and hence diminish the efficiency of the system.

This right is so cheap it would be in the interest of anyone to register, However we expect that first the destitute, the poor, the jobless and those overburdened with debt will first register. That alone can be sufficient to reach our critical number.

Once launched that economy will not be able to accept any more participants.


Assets under the custody of our system will not be accessible in order to recover debt passed, present or future.

We won't enforce any credit contract with interest. If however we discovered that it was made in disguise we would exclude both the lender and the borrower.

Foreign Exchange:

As any transaction between our currency and any credit based currency can be used to introduce credit in our system any transaction between our currency and a credit based currency will be considered as giving or receiving credit, which is in contradiction with our membership agreement.


Once we get a sufficient numbers of potential participants and given the dangers faced by private enterprise (survival, violence...) it is expected that the owners of capital will eager to finance our infrastructure.


This system will allow us to adjust precisely both demand and supply, the purpose of economic policy. Instead of monetary policy whose purpose is to increase investments we would increase the amount of money distributed for that purpose, which will have a more direct and precise impact. Instead of fiscal policy whose purpose is to increase consumption we would increase the amount of money distributed for that purpose, which will have a more direct and precise impact.

It comes from this that the system will have both short-term and and long-term stability it will also deliver a quick solution to our urgent problem:

But this long run is a misleading guide to current affairs. In the long run we are all dead. Economists set themselves too easy, too useless a task if in tempestuous seasons they can only tell us that when the storm is past the ocean is flat again.

In Context.


Although keeping a constant level of price will not be the main goal of our emission institute, that being the maximization of the volume of transaction, it is expected that our capacity to balance supply and demand will allow us to provide the desirable level of inflation.


Most of our taxes are meant to correct the dysfunctions of this economy. The amount of taxes and hence the size of government will be greatly diminished. Because the income gap will be greatly diminished there wouldn't be a necessity for progressive income tax and we could replace these taxes by emitting money to the governments. By eliminating taxes we will eliminate a large chunk of bureaucracy.

I come next to a criterion of Agenda which is particularly relevant to what it is urgent and desirable to do in the near future. We must aim at separating those services which are technically social from those which are technically individual. The most important Agenda of the State relate not to those activities which private individuals are already fulfilling, but to those functions which fall outside the sphere of the individual, to those decisions which are made by no one if the State does not make them. The important thing for government is not to do things which individuals are doing already, and to do them a little better or a little worse; but to do those things which at present are not done at all.

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Shalom Patrick Hamou Social Media Pages: Facebook page url on login Profile not filled in       Twitter page url on login Profile not filled in       Linkedin page url on login Profile not filled in       Instagram page url on login Profile not filled in

I have an engineer diploma from Ecole Centrale de Lyon (France) and a MBA from Boston University. Since 1986 till 1994 I have worked as a broker dealer on the French Domestic Fixed interest market. Since the spring of 1994 I have worked on the (more...)
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