To read The Treaty of Noordwijk click here ...
John C. Turmel comments on The Treaty of Noordwijk and finds it similar to the UN-C6 UNILETS Resolution... John's comments are in BOLD. See below...The Treaty of Noordwijk is UN-C6 UNILETS
UNILETS interest-free currency on Millennium Declaration C6
An interesting conference that could see the importance of UNILETS. They are discussing the international banking systems
engineering and though I doubt there are any actual banking systems engineer in on this banking systems engineering conference, they rate high in my estimation. Whether they can realize that the Millennium Forum Declaration C6 for an interest-free UNILETS alternative time-based currency is the international standard to complement their national currencies is to be seen.
www.un.org/millennium/declaration.htm recommends to Governments
C. The Forum urges The United Nations:
6. To make serious commitments to restructure the global financial architecture based on principles of equity, transparency,
accountability, and democracy, and to balance, with the participation of civil society organizations, the monetary means to favor human endeavor and ecology, such as an alternative time-based currency.
has Globalization Declaration Themes:
Section 5: What the UN must do.
h) Another area of study should be the UNILETS (United Nations International Local Employment-Trading System).
i) Local Exchange, Trade and currency practices should be developed further and examined for international application. The abolition of debts and the eradication of interest are essential components in pursuing sustainable human development.
j) The UN should convene a conference similar to the Bretton Woods conference of 1944 to discuss what sort of new financial architecture is needed for our rapidly globalising world. The adoption of the time standard of money and abolition of interest
rates are both ideas worthy of consideration.
JCT: For the UNILETS story, see
And if the participants of this conference do not see the importance of the only banking systems engineering resolution
currently on the Millennium Declaration to their discussions of international banking, historians and pundits will make of it as they will.
So to the attendees of the conference, please take note that there already is a resolution for exactly what you want the better world banking system to do. The UNILETS time-standard of money.
Date: Mon, 27 Nov 2000 22:30:33 +0000
From: richard@DOUTHWAITE.NET (Richard Douthwaite)
Subject: The Treaty of Noordwijk
Subscribers to the econ-lets list will be interested to know that on Friday and Saturday, December 1st and 2nd, the Dutch alternative newsmagazine Ode is holding a conference at which it hopes an international money system for the 21st Century will be developed. With funding from the Triodas Bank, it has booked a smart seaside hotel from the same era as the hotel used by the Bretton Woods negotiators for the event. The former Dutch Prime Minister, Professor Ruud Lubbers is to be chairman and Prince Claus has been invited to open it. The system will be devised by the following people:
Samir Amin founder The Third World Forum, Dakar, Senegal.
Marta Benavides Int.Inst.for Cooperation Between People, El Salvador
Peter Blom director Triodos Bank, The Netherlands.
Barbara Brandt author 'Whole Life Economics', U.S.A.
Richard Douthwaite author 'The Growth Illusion', Ireland.
Brian Eno musician and co-founder War Child, U.K.
Stella Eugene Humphries advisor The World Bank, U.S.A.
Jeff Gates author 'The Ownership Solution', U.S.A.
Paul Hawken author 'Natural Capitalism' en 'The Ecology of Commerce,US
Colin Hines author 'Localization', U.K..
Paul Hohnen Greenpeace International, Australia.
Mickey Huibregtsen partner McKinsey Benelux, The Netherlands.
Bernard Lietaer author The Future of Money, Belgium.
Geoff Mulgan personal advisor prime minister Blair, U.K.
Jan Oosterwijk founder The Body Shop Benelux, The Netherlands.
Jonathan Rowe Redefining Progress Institute, U.S.A.
Helen Wangusa African Women's Economic Policy Network, Uganda.
Marilyn Waring former minister New Zealand and author of 'If women
counted', New Zealand.
Eckart Wintzen entrepreneur Ex'tent, The Netherlands.
Cees Zwart professor human relations in business, The Netherlands.
JCT: Richard Douthwaite is a LETS expert, Bernard Lietaer is an monetary reform expert. I believe Jonathan Rowe wrote the American Timedollar book with Edgar Cahn, I think Colin Hines may be up on LETS and Marilyn Waring from New Zealand would probably know about their LETS systems too.
As the preliminary work which underpinned the Bretton Woods agreement took 2.5 years, some serious preparatory work was needed for this conference too. Accordingly, a group linked to FEASTA, the Dublin-based Foundation of the Economics of Sustainability, has drafted a possible treaty which it hopes will provide the basis for the discussions. The text of this treaty is below and any comments would be very welcome. You will see that it attempts to limit the level of economic activity to the Earth's carrying capacity. It also builds in a role for local and regional currencies.
JCT: They've expanded their horizons from local to regional currencies. I have to bring to their attention that an new international LETS currency is on the U.N. Millennium Forum Declaration.
The temptation is to regard this sort of exercise as a waste of time because nothing will flow from it, which of course is a
self-fulfilling prophesy. I think, however, that regardless of what happens at Noordwijk, the exercise of working out how the
international monetary and financial system should be reformed is well worth while. And then, there's always the possibility that the publicity that Ode ought to be able to generate around this event will ensure that the ideas spread. Best wishes, Richard Douthwaite
JCT: Richard was one of the six community currency speakers at the recent INES (International Network of Engineers and Scientists) conference and even though LETS was brought to their attention, no one saw the big picture, quite an Incompetent Network of Engineers and Scientists.
The Treaty of Noordwijk - Discussion Draft
The world economy is not working well. Its over-use of the Earth's resources threatens the stability of the climate and is causing the fastest rate of species extinction since the disappearance of the dinosaurs. Moreover, fisheries and forests are being destroyed by over-exploitation, aquifers pumped out and soils eroded with little thought for the consequences. The natural capital on which future generations will depend is being rapidly lost.
Yet despite the economy's profligate and increasing rate of resource use, the majority of humanity still lives in dire poverty and the gap between rich and poor is growing. In 1997, the richest fifth of the world's population enjoyed 74 times the income of the poorest fifth, up from 60 times in 1990 and 30 times in 1960.
The poverty has serious consequences. Dirty water and bad sanitation enable cholera and diarrhea to kill three million of the poor a year. Indoor air pollution, mainly from cooking stoves, causes two million deaths. Vector-borne diseases such as malaria kill another 800,000.. And urban air pollution and agri-chemicals, the results of the way our economic system has developed, are also major killers. In all, roughly a fifth of all disease in poor countries is caused by factors which could be readily changed if a relatively small amount of resources were switched from other uses.
Even if we were to disregard its damaging effects on the environment and on the lives of millions of people, the world economy has to beconsidered dysfunctional in its own terms because of its fundamental instability. It is widely accepted that something as simple as a stock market crash could cause it to break down catastrophically and plunge the world into a depression comparable or worse than that in the 1930s. Moreover, a national economy can be ruined almost overnight by speculative money flows, as Mexico's was in 1994. .
All these problems are due in large part to faults built into the present global economic system when it was set up at Bretton Woods in 1944. At that time, in response to overwhelming pressure from the United States, mechanisms designed to redress the balance between countries with trade surpluses and those with trade deficits were left out. Consequently, the problems the system produces cannot be solved until it is replaced or radically changed.
The Bretton Woods system is commonly understood to refer to the international monetary regime that prevailed from the end of World War II until the early 1970s. Taking its name from the site of the 1944 conference that created the International Monetary Fund (IMF) and World Bank, it was history's first example of a fully negotiated monetary order intended to govern currency relations among sovereign states. In principle, the regime was designed to combine binding legal obligations with multilateral decision-making conducted through an international organization, the IMF, endowed with limited supranational authority. In practice the initial scheme, as well as its subsequent development and ultimate demise, were directly dependent on the preferences and policies of its most powerful member, the United States - Prepared for the Routledge Encyclopaedia of International Political Economy by Professor Benjamin Cohen, University of California, Santa Barbara.
At the Bretton Woods Conference in 1944, the English economist John Keynes presented a proposal for a world monetary and economic order, aiming at an international equilibrium: a world central bank, a 'neutral' international currency (bancor), taxes on trade surpluses of stronger economic powers, and a development fund for weaker countries.
JCT: Too bad it doesn't say whether this new international "bancor" currency was to be issued at interest or not. The interesting clauses are:
Clause 7. The subscribing states undertake to have two national currencies, one for trading and the other for savings, in operation within five years from the date of ratification of this treaty. They agree to set each currency up so that it has its own external exchange rate which they will allow to move in such a way that inflows and outflows to and from the relevant account balance from month to month.
JCT: Millennium Forum Declaration C6 suggests the adoption of the time standard of money. There is no need for exchange rates when everyone is using Hours as the common standard. All LETS systems link to Hours and can trade with Hours and Timedollar systems readily.
Clause 8. For reasons of national and international financial stability, the subscribing states undertake to issue their national
trading currencies by spending them into circulation themselves rather than by allowing their commercial banks to create these currencies by lending them into use.
JCT: More precisely, the subscribing states should undertake to issue their national trading currencies by spending them into circulation "interest-free" themselves rather than by allowing their commercial banks to create these currencies by lending them into use "at interest."
Comment: Of all the money we use, only the notes and coins are issued by the government though its central bank. The rest - the money we transfer when we write a cheque, authorise a direct debit or use a credit or debit card - is created by the commercial banking system and only exists because we, or someone else, has borrowed it and is paying interest on it.
JCT: Absolutely correct. Banks lend out new deposits, not old savings. Whoever wrote this has not been taken in by the Big Lie of Economics: www.cyberclass.net/turmel/biglie.htm
As notes and coins are now mostly used just for minor transactions, 97% of the money in use in a typical industrialized country has been created by someone going into debt.
JCT: 97% is created by someone going into debt for this new money "at interest" in a contract called "mort-gage" from the French "mort" meaning "death" and "gage" meaning "gamble." Just like musical chairs
where there are insufficient chairs for all to survive is a "death-gamble," so too, the "mort-gage" contract where there is insufficient money for everyone to pay both the principal and the interest when everyone only got the principle has startling "death-gamble" ramifications.
This makes the financial system very unstable because, if people begin to feel a little uncertain about their economic future, they
will not be prepared to take out as many new loans as they did, in total, in the equivalent period the previous year. As the earlier loans are being repaid, the fact that the total value of new loans has fallen means that less money is being put into circulation than is being taken out by the repayment of loans and the payment of the interest due on them. In other words, the amount of money in circulation will contract and, as we have already seen, the Quantity Theory of Money suggests that, unless prices fall or the smaller amount of money is passed from hand to hand faster, the amount of trading carried out in the economy will contract.
JCT: It's true that the interest positive feedback makes the system unstable but not because of the symptom of their taking out less loans. It's because of the cause of their uncertainty, the fact that everyone owes more than everyone can pay and someone must always be knocked out of the mort-gage death-gamble. Play musical chairs to
understand eternal uncertainty. Borrow at usury to understand eternal uncertainty. It is the poverty all around them created by the demand for interest that scares them into reacting this way but taking out less loans is a result of the instability, not the cause.
The lower level of trading will cut business profits and these will be further reduced because the stock of money available to be divided up amongst firms at the end of a year is lower. The lower profits andtougher business conditions will make people even more reluctant toborrow, causing a further contraction in the money supply, which in turn will deter more borrowing. The economy will enter a downward spiral and end in a severe depression. This explains why governments are so keen to ensure that economic growth continues year after year, even though it might be damaging the environment and society. In the present system, growth is necessary to ensure that enough borrowing goes on to prevent the money supply contracting and causing a slump.
JCT: That's certainly how the death of enterprise comes about when everyone is has a mort-gage death-gamble contract to fulfill. Growth is necessary to stave off the financial death.
Allowing the commercial banks to create most of a country's money andcharge interest on it gives a massive, distorting subsidy to this part of the financial system.
JCT: Of course it does but the fact they make a lot by their usury is not the real issue. The real issue is how it affects some borrowers suffering inevitable foreclosure due to an insufficiency of money tokens. I would gladly subsidize bankers with the equivalent amount of money taken as service charges. I would pay them 20% service
charges before I would pay them 1% interest. To understand the difference between interest and service charges, see the end of www.cyberclass.net/turmel/bankmath.htm
The alternative is for the government to spend the required amount of money into circulation itself.
JCT: The government must always levy an equivalent amount of tax for any such money spent to give its money tax-paying value. King Henry I spent his Treasury Tallies into circulation and accepting them in taxes gave them value.
The Argentinian provinces which in the mid 1980s paid all their provincial employees with provincial bond currency gave it value by accepting it in taxes. www.cyberclass.net/turmel/argentin.htm
In an expanding economy, this would allow taxes to be reduced or the level of government services increased. More importantly, by making the amount of money in circulation much more stable, it would make the level of economic activity much more stable too. If the government found that the economy was slowing down and unemployment was developing, it could issue more money to itself and spend it into use. This spending would not only create additional jobs directly but also because the additional money supply would enable an increased amount of trading to go on.
JCT: Yes. Yes. Yes. Yes.
On the other hand, if it put too much money into circulation so that a rapid inflation developed, it could easily correct the situation by putting up taxes and withdrawing the money from use.
JCT: This kind of Treasury Tally is a simple receipt for work. It cannot be exchanged for anything but value. Government can never put too much money into circulation no matter how easily it could now correct that error if some idiot cashier ever did add tokens into circulation without getting the collateral to back it up. He wouldn't
make that simple mistake twice. We'd get a new cashier.
This would be a much more effective way of controlling the money supply than the present one which involves increasing the interest rate so that people are deterred from borrowing.
JCT: When money receipts are issued only in exchange for value, there is no need to control the money supply. Do casinos control the number of chips people exchange for their value? No. As long as they keep bringing in value to pledge, the cashier will keep exchanging tokens. There is no controlling mechanism other than the requirement
that all tokens be issue in exchange for value.
The drawback with this as a control method is that raising the rate of interest raises the price of the money which businesses have already borrowed. This is itself inflationary as it adds to business costs and, naturally, firms try to recover their higher costs by charging higher prices. As a result, quite high, and therefore damaging, increases in interest rates are often required to keep prices steady under the present regime.
JCT: Yes. The writer has contradicted another Lie of Economics. Interest does not fight inflation, interest causes inflation. Businessmen don't lower their prices when interest rates go up, they pass it along by raising their prices. How people can accept that interest is medicine for inflation can only be attributed to its
constant repetition by mainstream economists.
Clause 10. Subscribing states undertake to allow their national trading currencies to be supplemented by regional and local tradingcurrencies. They agree to encourage regional and local governments toaccept the payment of regional and local taxes in supplementarycurrencies which meet specified standards.
Instant saturation. Everyone in town will accept it when they can pay their taxes with it. It will give LETS around the world an incredible boost and their amalgamation into an international trading network will inevitably follow. UNILETS by another name as long as the specified standard is the Time Standard of Money.
Comment: Under the Noordwijk system, governments will cease to have their economies' rate of economic growth as their primary concern. Instead, they will give priority to ensuring that as much economic activity is carried on as is possible within the greenhouse gas emissions allocation. If they put a lot of exchange money into circulation in an attempt to reduce unemployment in peripheral or rural areas, they are likely to find that an excessive amount of money gets into circulation in the more prosperous areas and that this raises the demand for energy there, causing the exchange rate of their exchange currency to fall in relation to the ebcu.
Consequently, a better way of ensuring that all areas of a country are as economically active as their inhabitants wish to be is to encourage the development of regional and local currencies in the poorer areas as these would allow local trading to be carried on even if the national currency was scarce. The local currencies would have their own variable exchange rates with the national currency. As a result, their issue and circulation would not affect the exchange rate of the national currency with the ebcu except to the extent that more fossil energy was used by the extra activity they generated.
JCT: No, local currencies are all based on an Hour of labor. Hounslow in England best demonstrated it by printing both the 1 Hour and #6 Pound values on its notes! The value of any 1/s interest-free token for collateral can never change.
It has frequently been pointed out that if the North of England had had its own currency in the 1980s rather than using sterling, its shipyards, factories and mines would not have been as badly affected as they were by the high value of the pound brought about by the flow of money from North Sea oil and the earnings of the City of London. Similarly, the former East Germany was badly affected by the one-for-one exchange rate chosen for the Ost mark against the Deutschmark. The introduction of regional currencies would prevent these problems and end the social hardship which results from the one-currency-suits-all approach to money matters.
JCT: This is the feeling of being insulated from the evil outside that all LETSers love about their local currencies. Actually, it doesn't matter whether it's local, regional, federal or international, as long as it's based on the Time Standard of Money, they're all interchangeable so one-currency-suits-call can work if it's based on
the same standard as any locals.
Clause 11. This Treaty will come into force when it has been ratified by subscribing states whose total population comprises more thanhalf the population of the world. In short, the Treaty, if ratified, will bring about a more equitable, stable and sustainable future for all of humankind.
JCT: Finally, I would point out that there is a large and thriving network of LETS in the Netherlands whose web site is:www.horizon.nl/~fransleo/lets/
I don't know how many of these international conferences can keep having so many people explaining the local currency solution without anyone seeing the global currency solution. Maybe this is the one.
Perhaps professor Auriti will be there. He should be asked his opinion of the UNILETS proposal.
LETS Cancel Debt Growth First! Then work on debt.
John C. "The Banking Systems Engineer" Turmel
For anti-bank and pro-LETS community currency adventures and reports,
subscribe to www.egroups.com/group/turmel
For links to over 700 timecurrency systems in over 45 nations:
Amen to Jubilee in 2000 with L.E.T.S. interest-free bank accounts for all. If saving the planet from usurious debt does not interest you, mail to: firstname.lastname@example.org to unsubscribe