united for freedom 

Community Currency*

The money conventional markets use is printed as debt. If there is not enough money in the economy the state prints or issues a bond or an IOU on the state revenues. It sells these bonds or IOUs to brokers who sell them on the open market. This provides the state with funds it is able to spend. As the IOU is paid back the state pays down its debt. If the bond holder is a bank the bank can lend these dollars to private borrowers.

To eliminate debt is to eliminate money in its conventional form.

If a Central Bank needs to expand the Money Supply it purchases bonds from a lending bank. Central Banks have a monopoly on increasing the supply of money in a nation, unlike a commercial bank a Central Bank is authorized to print or have the mint print more legal tender. 

A lending bank has, for example, $10,000 it got by selling Bonds. The bank loans this money to companies and private individuals. If Joe borrows money from the bank he now has a claim on the assets of Sue though Joe produced nothing except a liability owed to the bank. This effectively amounts to robbery backed by the governments power to enforce compliance. Free Market money is a license to rob the productive sector of the fruits of their labor.

Gold did not work out as a medium of exchange because though gold has value as a commodity it is not discovered or mined at the same rate as the economy grows. This creates booms and busts as the  amount of gold relative to the needs of the economy grows or declines. Spain went into hyperinflation  in the 16th century due to the importation of silver and gold from the New World. The average cost of goods quintupled compared to previous eras in which prices were relatively stable.

In an economy that uses paper money the person who mines gold needs not carry it around - he can deposit in a bank and get credit on the basis of his deposit or he can sell it and get paper money or a credit balance in a bank in exchange.

If the banks are on the gold standard then the paper the banks are allowed to print or the loans they are able to make depends on the gold in their vaults. This system seems workable because the paper money represents a specific amount of gold and the gold is an asset with real value. However, if the productive sector doubles its productivity while the gold mined remains constant gold denoted dollars become twice as valuable as they were. Which penalizes the productive sector. Joe who has a huge balance of unproductive dollars is able to purchase twice as much from Sue who is a hard worker. Sue, who bought supplies with one days work equal to $32.00 and then sold the goodsto Joe gets dollars that are only worth half of what there were. She gets $16.00 for goods she purchased for $32.00.

This is why those who advocate a return to the gold standard are not really solving the problem. Gold still gives the owners of financial assets a license to rob wealth from working people (the asset makers).

The only solution is to limit the right to make money to those who also produce assets. This is the secret to asset based versus debt based currency.

Imagine Joe without money. He goes to Sue and gets a cylinder head machined. Joe is in debt and Sue is his creditor. From another perspective Sue just created an asset by machining the sylinder head. She has a claim on the economy that is worth something based on the work she performed. The economy in fact has created two different but complimentary assets - the machined cylinder head owned by Joe and the economic claim held by Sue.

Sue may go to Arnold and get bread and eggs with the credits she has earned. For the sake of argument we will say Joe also goes to Arnold and buys bread and some ham. Now Arnold has created credits by his sale to Joe and has also obtained a share of the credits held by Sue.

Arnold goes to Mary who has an abattoir and purchases a pork leg to make ham. Mary uses these earned credits to hire Joe to kill some pigs and prepare them for sale. Joe is now in a positive balance having earned credits from Mary that eliminate the debits he got when he had Sue machine his cylinder head. He now has credits to purchase more goods and services.

We can look at this situation as Joe running a debt but the important thing to note is that Sue created a liability with Joe by providing an asset for Joe (the cylinder head). This is done because ultimately Joe has assets capable of liquidating the debt, i.e. his ability to butcher pigs. Money is positive when tied to the production of assets.

Joe gets credit to obtain assets because assets are produced equal to the value of the credit extended him. The government borrows on the basis of the credit of the Bond it sells. When a person purcases a good or service the asset they acquire covers the liability the purchase creates.

So Joe's debt does not produce inflation. Nor can Joe go bankrupt because his debt is collectable by anyone it is also owed to everyone. It is in the economies best interest to provide Joe with work and sales that allow him to liquidate his obligations.

A negative money debt only allows the creditor to claim recompense. A community currency debit is collectible by anyone. Joe's debit to Sue was paid off by working for Mary. Debts are debits owed the economy not to any particular individual. In this way debts are turned into assets of the economy. Joes debit benefit the economy because debits are part of the assets of the economy.





Capitalism a business model built on the acquisition of capital. Capital is debt-based currency. The free enterprise system is about individuals being allowed to make whatever use they wish of money. Basically the theory suggests everyone should be able to purchase or sell whatever they wish at whatever price they think reasonable.

To start a capitalist business requires capital either owned by a single or multiple investors. If the interested parties do not possess sufficient capital they borrow funds on the strength of their investment and the projected future earnings of the business. This is an ancient and reasonably sound tradition, it being assumed that the earnings from the invested funds will pay the costs of the investment. But borrowing money to start a productive enterprise soon transposed into borrowing money to speculate on the future value of a company.  This gives the company that sells shares in its enterprise funds to develop the business and so again it was reasoned that by investing money by purchasing shares in the company one was helping the Company succeed.

If a business person can borrow money and use the income produced by investing it why should not consumers borrow money to get what they want? Eventually debt became a way of life for most people. Students borrow money to get an education, money is borrowed to buy stocks and other speculative products in the hope that they will increase in value enough to offset the debt charges, we borrow to buy our homes on the assumption that the housing market always goes up, we borrow money against our homes equity and on our life insurance. When the economy slows down governments lower interest rates to make borrowing easier.

At one time borrowing was the exception. People purchased what they needed with cash including the family home and they did it with larger families and on one income. We may not be able to compare the past with the present in any meaningful way but we can look to see if some of the difference between then and now are benefiting us or harming us.






about us  

who we are 

what we do 

how we do it 



business statements


monetary policy

fiscal policy

conventional money

ethical communities

community currency

central banking