©LLOYD GILLESPIE
[HOME PAGE]
[E-MAG]
[INTERNAL EXCHANGE CLEARING
MECHANICS]
[TRIPLE
ENTRY BANKING MECHANICS]
[INTRODUCTION TO INTERNAL
EXCHANGE CLEARING]
[TABLE OF CONTENTS]
"All problems using crude money must be overcome to survive the future
eco-techno-electrosphere."
"Since the first wave agricultural revolution only required
simple single entry banking –– and the second wave industrial
revolution invented and required double entry banking –– then the
third wave technological revolution [will] invent and [require] "TRIPLE
ENTRY BANKING.""
In 1982 I empirically discovered an entirely new capitalist monetary system. This system is in direct evolution with the existing system. It is fully compatible with all known forms of money systems –– past – present – or future. The system is INTERNAL EXCHANGE CLEARING –– TRIPLE ENTRY BANKING – a transactions truth. This new monetary system can be implemented cost free and effectively either unilaterally or globally. It can be instituted on a percentage basis from one percent, to twenty percent –– its most cost effective and productive percentage of operations' basis.
In this short paper, I will explain why I feel a new monetary system is necessary –– what it exactly is –– and how to painlessly implement it. First, I will discuss the present capitalist system to make clear why such a new system is needed. I will frame my discussion on four tenets –– demographics –– jobs and wages –– the present floating exchange rate non-regime –– and the technological revolution.
Many falsely believe the miracle of capitalist markets will cure all our future problems. Let me see if I can change your mind, to show markets of the future may need some new help. The most glaringly obvious problem is one of demographics alone. With the nation five trillion dollars in debt and both political parties fighting for the next spendable penny, when we at present don't yet have a demographic problem –– where do you think the money is coming from to support the retirement of the massive increase of baby-boomers?
This is not only a problem of our nation, but that of all industrial nations and many of the world's lesser nations as well. Japan has been flat on its economic back for five years now. Europe also has flat growth, high unemployment, massive debts, and intolerable rates of taxation. We need say little of the lesser nations as everyone is well aware of their bankrupt conditions. If we are short of the necessary funds now, what nation or group of nations is going to grow enough to resolve the present quagmire –– let alone the future's massive demographic increase of tax burdens? How will they grow? What economic incentives and organizations are presently planned and feasible? Are they capable of meeting future needs? I simply ask you to be the judge.
If nations are to grow their way out of the demographic problems of the future, where are the jobs and wages necessary to do so coming from? At present we are downsizing every economy in the world –– with massive mergers, outsourcing, and layoffs. Wages for forty to fifty percent of the population of America alone have declined over the last twenty years. Yes, it is true some at the top have benefited precipitously –– but at the cost of the bottom? High skilled jobs, such as unions, have shrunk dramatically –– from thirty-six percent of the work force to sixteen percent of the workplace. Are these evidences of true growth in jobs and wages over the last twenty years ––– as many would have us believe? And they fight against an increase in the minimum wage! Where will jobs and wages come from when the computer-robotic-revolution displaces more human workers ––– daily?
I don't mean to sound pessimistic, as I am not. I am only painting a true picture of present capitalism's stature. The system I am proposing –– INTERNAL EXCHANGE CLEARING –– is thoroughly optimistic. So bear with me while I make my points about the present system's problems.
If you think these problems can be easily solved by conventional policy and market performance, you know little of the workings in the foreign exchange markets. These markets exist wherever a foreign exchange takes place –– sort of everywhere and nowhere. They exist everywhere a computer-telephone link is, and nowhere is there any real control. This system is an absolute free-for-all buying, selling, and swapping trillions of dollars and other currencies around the world at the speed of light twenty-four hours a day –– three-sixty-five days a year. The global transactions' figures presently stand somewhere between two-hundred-fifty and two-hundred-seventy-five trillion dollars per year. They are well over a trillion dollars per business day.
In order to understand the above, you must know these markets encompass the Euro-dollar system – the entire foreign exchange system – the forward exchange markets – the entire international banking system – interest, goods, and services arbitrage and hedging – derivatives – swaps – fixed and floating currencies – nations' inflation and tax systems – and all nations' governments and actions –– to mention just a few. The above includes the most intricate and complex of markets in the world. When the courts can't even understand these intricate markets –– how are the policy makers supposed to?
Let me give you a clear example of the above. George Soros has stated "Speculators can short the markets a trillion dollars quicker than governments can print it." He should know as he made one billion dollars on one speculative trade in 1993 against the European Economic Community –– which he documented in his book "SOROS ON SOROS". This is no isolated case, I assure you. Andrew Krieger has also written a book of his speculative exploits titled "THE MONEY BAZAAR – Inside the Trillion-Dollar World of Currency Trading." Both these books are excellent first hand sources of information about speculating against the present easily manipulated floating exchange non-system. Systems of this character must change to survive the ever increasing encrypted computerized future.
If you think the above issues can be brought under policy control – of two warring political parties in our country – I think you have missed the boat. Not only is it almost politically impossible in our own country, but it is even more politically unlikely to succeed globally. Internal tension and gridlock prevents local problem solving, while global tensions of Chinese communism, and Islamic fundamentalism prevents international problem solving. For these reasons, I have designed INTERNAL EXCHANGE CLEARING to be instituted and function properly unilaterally –– with the support and respect of both warring political parties –– and to further be complementary to and compatible with external international processes.
Before explaining the above system, we must explore my fourth tenet –– the technological revolution. Professor of history Paul Kennedy has done the definitive work in this area. I would like to add my vision about the future of technology. I can nowheres near compare to the stature of Mr. Kennedy, but I have a unique perspective –– as I am an international currency and market speculator –– with considerable computer and robotics expertise.
Mr. Kennedy has rightfully shown the nightmare scenario we could be headed for if change is not undertaken. For his part of warning us, he has received the title of "Dr. Doom." Not only is his work not about doom, it is the most accurate possible course of history I have seen. We have a choice to let the future play out terribly ––– or to change it for the better. We had better listen to those who have better ideas than our own.
With all nations being forced by competition to adopt the latest advances in technology –– we are locked in an ever increasing scenario of technological evolution. The forces of markets are pushing us closer to a robotic and databased wage and pricing mechanism future. As the power and agility of robots increase, companies and corporations will be forced by competition to implement this new technology –– thus eliminating more human jobs and wages. Already, Japan is re-importing jobs they earlier outsourced to human labor, to be handled by robots cheaper at home. In other words, even some of the third world's labor is losing to robots –– and we have just begun. Databases, once simply a tool of improving efficiency within companies and corporations, are now being employed to handle massive world pricing mechanisms and on time global delivery systems. Competition in this area will be the most fierce, because it is the most cost effective method to improve profits. This area alone will be where massive layoffs of upper income workers will come from. So ––– while robots lay off the bottom tier –– databases lay off the top tier! And if you don't think this is true –– just check out who is tops on the web ––– Digital and Inktomi – the fastest!
The future will see massive increases in the use of robots to eliminate human labor and wages' costs –– competition requires it. We will see massive increases in the use of giant supercomputer databases and on time global delivery systems to eliminate human labor and wages' costs –– competition requires it. These two technologies alone can do nothing but downsize further the entire global economy ––– eliminating massive human work forces and wages –––– for the bottom line –––––––– profits!!!
There is no turning back. We must go forward with new monetary systems.
©LLOYD GILLESPIE
"All problems using crude money must be overcome to survive the future eco-techno-electrosphere."
"Anyone who thinks the use of crude money will not be necessary in the future is crazy!"
"The present electronic world is diminishing collective opportunity ––– fast!"
Over the past two centuries we have built a wondrous spectacle for the rest of the world to emulate. We have set the standards high for civil human conduct and happiness. The moral, ethical, and family stance we take should make us proud and respected. The institutions we have erected set the rest of the world at awe. Our scientific and industrial evolution and strength have revolutionized the entire planet –– especially since the end of WWII... So why do we feel so insecure?
The reason is we have reached economic entropy under the present world monetary systems and organizations. The technology revolution is creating real job and wage decreases as population increases. This is why we feel so insecure and helpless. To this point in time there are no serious conventional solutions being put forth. This is why I am offering an unconventional solution to our present economic stalemate.
On the surface "INTERNAL EXCHANGE CLEARING" is not a difficult system to understand. It is simply a system to reorganize the control of the foreign exchange market to function more efficiently through internal mechanisms instead of external –– thus making more productive use of our or all nations' national debts. This system will stabilize exchange and inflation rates internally and externally when instituted. This is the real solution we truly seek –– to once and for all end inflation and disequilibria of the exchange rate mechanism. Only this solution will increase real jobs and wages in the coming eco-tecno-electronic revolution of the twenty-first century.
Why? You may ask will this system work better than the present one? What? You may ask is this system and how does it work? I should warn you, this system should not be confused with external exchange clearing advocated by Plato and Dr. Paul Einzig –– though they are the inventors of the groundwork of this system. Plato first advocated such a system some twenty-four-hundred years ago, and Dr. Paul Einzig (the WWII Finance Minister of England) has written the only book on exchange clearing I believe to be in print (Exchange Control, Macmillan and Co.1934). "INTERNAL EXCHANGE CLEARING" is simply a higher evolution of these two great men's work.
"INTERNAL EXCHANGE CLEARING" is based on a new framework of laws for existing markets to function under more efficiently. These new laws recognize and solve the existing problems through a one-fifth military style "P.X". and a "TRIPLE ENTRY BANKING" system. You must realize we do not have a production or resource problem. We have a monetary problem the above system solves at no cost to any parties involved. You say, "This is the old free lunch impossibility." I say, "The future being fast diminished by technological evolution requires a semi-free lunch." Notice this system is only a one-fifth change of existing structures –– and when further inspected is even no total change in existing assets. The system I am proposing takes from no-one, yet has the ability to operate semi-philanthropically for the benefit of all.
The one-fifth level mentioned above does not require being instituted at the twenty-percent level. The system can safely evolve to the twenty-percent level in small increments per year –– through the guidance of the new social contract laws we pass. At present, most every nation of the world is governed approximately twenty-percent by the external forces of multinational trade and international financial flows. "INTERNAL EXCHANGE CLEARING" simply moves the control of the functioning of the mechanics of these markets from external malfunction to internal function. It does not change any actual control of these real and complex markets. They are still free to function as is even after institution. The real change only takes place internally, where we set government in competition with existing business at the one to twenty-percent over time level. By this I mean a reduction in present nationalization from its some forty-percent level to its new twenty-percent level. To accomplish the above, a national set price "P.X." will be instituted, where one to twenty-percent of everything from dust to diamonds is available to all comers alike –– citizen and entrepreneur alike. This is a government created independent "P.X" market totally separate from all present existing businesses –– yet set in competition with all existing business to create truly competitive and fair markets for all players and citizens alike. This market by the very existence of its instituted mechanics automatically controls all inflation, exchange rates, and prices into fair and equitable balances –– once and for ever!
The above market will be semi-philanthropically subsidized by the new "TRIPLE ENTRY BANKING" system –– which must be instituted along with the "P.X." and "INTERNAL EXCHANGE CLEARING" systems. The functioning of the above markets' instituted mechanics make the semi-philanthropic system possible. The system will function unilaterally or universally. It is best recommended as a universal system –– though there is nothing to prevent its unilateral success as well. The advantage of multilateral acceptance is the cooperation of all nations advancing in unison to lessen world tensions. The philanthropic percentage could be set by agreement among many or all participating nations' equal ratios of GNP expansions.
I often state,"We need a fixed value monetary system. At the present time, we have none. Under floating exchanges, America is simply a powerful ship on an ocean, with no rudder. Old gold, silver, and other known standards will no longer work. They will not work due to the massive increases in communication's speed, the varied endowments of nations' natural resources, and encrypted international speculative opportunities. Therefore, we need a new system. INTERNAL EXCHANGE CLEARING is such a system. It is an entirely new fixed value enhancing - [production standard] - monetary system, to benefit all humankind."
It all comes down to: "If we set up government – all government – in business, in competition with existing private commercial business –– we can unilaterally make unlimited reasonable use of the printing press!"
Let's stop the ridiculous political and class battles and consider the abilities of the above to solve our problems ––– and once again unite us in all our desired goals and destinies.
Thank you,
L.A. Gillespie
