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he critical conjuncture
in Argentina is not going to simply disappear by means of electioneering video
diversions, it must be solved by radical means, by thinking the problem through to
it’s roots, and discarding the IMF’s obsolete economic theorems that have been proven
to be a global disaster. It is time for Argentina to be bold, to move ahead with
a new currency, with the world’s first digital currency.
The miracle of a digital currency is that is can be guaranteed by the issuing Governments by consensus alone, as an act of political will of the People to accept it as legal tender within their economies.
If a currency is allowed to have an organic or paper-bill form, it is subject to speculation, since the currency exchange nexus is outside the scope of political control, and falls into the hands of individual speculators in a free market. A digital currency, however, is not convertible to a global currency, outside of the banking system.
Each actor in the economy has the option of accepting or rejecting the digital currency at its assigned value. A digital currency has a conversion nexus that is cyberneticaly centrally controlled, hopefully by a democratic process, and is not subject to speculation by individuals in a free market.
A digital currency has a political value within its domain. A scope of a digital currency is a set of systems where it is used as a value in transactions within traders in an economic domain. A currency has a value, which is simply the consensus of it’s worth among all actors in an economy.
In a traditional paper-based currency, this value is a phycho-policial projection of the worth of the currency by each economic actor, given his/her evaluation of current economic conditions, and the published worth of the currency in the exchanges, that is, it’s currency exchange nexus.
If a currency has a self-defining nexus, such as the US Dollar, it is not subject to speculation, since a nexus can not be changed by itself. For this reason, the liquidity of the US Dollar has expanded globally, without affecting it’s value. A dollar is a dollar, by reason of the global political power of the USA, and has no "real" backing. Its value is political; it has a global scope, and a recursive nexus.
The value of a local digital currency is simply the political consensus achieved by a democratic process; there is no individual psychological component, since the currency is not subject to speculation by individuals. Its value is political; it has a national or regional scope, and a stable cybernetic nexus.
Local and Global Cycles
When a digital currency is introduced alongside a global, paper-based currency, all accounting, financial planning, banking and cybernetic systems must be split into two cycles. Prices and equity values must be expressed in both global (US $) and local digital-currency terms.
Cost accounting must be sub-divided into global and local components, where the global component is that cost which must be imported and paid for in US dollars, and the local component is that can be paid in local digital currency.
A TV set could cost $200. - and e'.100. -, A pound of beef perhaps $0.25 and e'.2. – The fact that the People can indeed adapt to a dual pricing system can be seen today in El Salvador, where prices are expressed both in Dollars and Colones, albeit interchangeably. In Europe, the period before the introduction of paper Euros was notoriously well ordered, despite all prices being stated in both Euros and local currency.
It then remains the right of each trader in the economy to place a value on his or her goods or services for sale, in terms of the global currency and the local digital currency. In the free market, those goods and services that can be provided for the least amount of global currency, in relation to the total price, will be more competitive and win the day. The pressure to produce locally will increase, providing new employment in the local economy, while at the same time, allowing access to the goods produced globally, where there is no other alternative but to import.
The exchange of global currency or local digital currency can only be done by a central bank in a two-tier economy. Paper Dollars can only be deposited into Dollar accounts, not into local accounts, unless they have been converted within the banking system, at the prevailing exchange nexus, and using the process defined for this purpose.
Since it can be assumed that the supply of global currency will not be sufficient to meet the needs of all of the population, a politically consensual system can be set in place to distribute the dollars among the population. Or, in lieu of innovation, a fixed currency nexus can be set in place, and allow exchanges to freely consume the accrued global reserves at the central bank.
If we are radical in our solution to the financial problems of globalization, we will reap abundant rewards in the years ahead. Sadly, it is the established think tanks and economic theorems of the past that will, once again, try to impose themselves. What will result are timid approximations of tiered solutions, which will solve nothing, and postpone the inevitable change ahead.
Atlanta, GA
December 28, 2001
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