Suggestion for new monetary system. Feedback please.

[UndercoverElephant]

Let's assume the existing fiat money system ends up in serious trouble. Permanent stagflation, or persistent high inflation threatening hyperinflation, ongoing debt crises all over the place, you get the picture... In such a situation, it would become politically more realistic to suggest a new monetary system.

My suggestion is that it involves two new sorts of currencies.

1: Regional/local currencies issued as universal basic income and only usable within a certain geographic range (details to be filled in). This would encourage the growth of a new localised, resilient, efficient economic system. It encourages local sustainability and ties support for the poorest sectors of society into this new economy.
2: A new international currency (NIC) under the control of a new international body created for the specific purpose of administering the NIC. This new body would democratically elected by the entire global population. It's remit would be to manage the new currency in such a way as to encourage the entire global economy to move towards sustainability. This currency could be backed by gold (or something else?) rather than being fiat.

National fiat currencies would still exist – you can't stop a sovereign state from having a fiat currency. So this would only work if enough people would actually prefer to use the NIC. But presumably this NIC would be attractive to many people, for both economic and political reasons. It would mean international traders of various sorts would not have to hedge against currency fluctuations, for example.

Ultimately the purpose of such a system would be to steer the whole world towards sustainability and to level the playing field by depriving any one nation of control of an international reserve currency. But it also sets up a long term possibility of a global governing body with real power -- opening up a path to unprecedented levels of global co-operation.

I'd be interested in any feedback on this suggestion. Do you like the idea? Do you think it could actually work? Is there some reason why it is unrealistic? How could it be improved? Should the NIC be backed by gold?

[Ralphw2]

The second option hasn't a hope in hell of being set up. Global political agreements are fragmenting, fossil fuel exporters are becoming more powerful again as high prices are making them richer and more powerful. The current supranational currencies {crypto currencies} are massive energy hogs and widely used for money laundering.

Historically, issueing of a currency has been the chief means of political control over a region. Setting up a rival mint was treason. In the early industrial revolution some industrialists started issueing tokens as employee wages, forcing employees to spend them in company shops, increasing the company profits. Needless to say this was deeply unpopular.

There were attempts to set up legal local currencies in the UK about 20 years ago as part of the transition town movement. They failed.

It is almost impossible to set up parallel currencies at a local level because of the administrative overheads of taxation and accounting. Local currencies will only return after global financial collapse, under the control of local warlords.

[UndercoverElephant]

The second option hasn't a hope in hell of being set up.

I understand why you are saying that. However, it really is possible that the existing global monetary system is going to fail, either spectacularly or a slow, grinding death. And that does open up new options, politically.

What I would like to know is if you would support it if it was being suggested? Do you think it would be a good idea?

There were attempts to set up legal local currencies in the UK about 20 years ago as part of the transition town movement. They failed.

They did not have government backing, and weren't issued as a UBI.

[BritDownUnder]

Democratically elected by the entire global population. I am guessing the CCP would speak for the Chinese population who would get a fifth of the votes. India too would get a lot of votes. Another large population centre or two e.g. Pakistan and Indonesia might just give a majority from four or five not very democratic countries. Wait! We already have that grouping and it's called BRICS.

Gold might be a possibility but getting more gold out needs a lot of energy these days.

[Catweazle]

Maybe a new currency could be the Calorie, two variants, food and fuel.

Feeling a bit doomish today.

[Default0ptions]

I think the old fashioned form of a UBI was the commons on which any commoner could graze and raise a subsistence level of animals; eg graze a milk cow or a couple of sheep, some geese or other poultry etc. similarly each family had a strip of land to farm - these strips are still visible all over the countryside. Of course you had to pay a proportion of your production to your feudal lord of the manor but it was quite obvious that if this was too onerous you simply lost your serfs due to starvation and your workers and income along with it.

I’m not saying it wasn’t a damn hard existence, but your commoner’s rights were your basic income.

Then along came the enclosures and the end of that system.

Longer distance trading involved moving livestock and produce to markets. Basic currencies for trade were simply rare, exotic or hard to come by commodities such as gold, silver, and other low bulk easily transportable commodities.

Once the realities of the only possible renewables economy
- ie plants photosynthesising and point of production wind and water power reassert themselves, as they will, we will simply have to go back to what worked for all that time before industrialisation.

I admire your efforts to try to work out other ways to manage things, but ultimately we are left with whatever we can produce from each year’s sunshine, rain, wind and ingenuity.

I much admire the old and long lasting system of guilds setting prices. For example the price of a basic chair would be fixed and the tradesmen who could make the best chair for the price would be successful.

Now we compete on price rather than quality and our chairs rarely last longer than the credit terms we stupidly arranged to pay for the worst possible product at the worst possible price.