Pub Date : 1900-01-01DOI: 10.4018/978-1-7998-8302-9.ch008
Taking a different approach to the problem, Leo St. Clare Grondona devised a system of conditional currency convertibility that individual countries can implement independently in terms of their own currency. For each of the durable, essential, imported commodities included in the system, instead of stipulating a price-range to be maintained, Grondona stipulated a “price-schedule” in which the price-range to be guaranteed for each commodity adjusts in proportion to the quantity of reserves held, falling as they rise and vice versa. In this way the maximum possible outlay that could be required, even under extreme market conditions, can be decided in advance. Consequently, a government establishing a Commodities Reserve Department (CRD) to implement such a system could legitimately pay for reserves through corresponding expansion of the national money supply, which would be reversed as and when the reserves were repurchased.
格隆多纳(Leo St. Clare Grondona)采用了一种不同的方法来解决这个问题，他设计了一种有条件的货币可兑换制度，各个国家可以独立地使用自己的货币来实施。对于纳入该体系的每一种耐用的、必需的进口商品，格隆多纳没有规定要维持的价格范围，而是规定了一个“价格表”，其中每种商品的价格范围根据所持储备数量的比例进行调整，随着储备数量的增加而下降，反之亦然。这样，即使在极端的市场条件下，也可以提前决定可能需要的最大可能支出。因此，政府设立商品储备部(CRD)来实施这一制度，可以通过相应扩大国家货币供应量来合法地支付储备，而当储备被回购时，这种支付将被逆转。
{"title":"The Grondona System of Conditional Currency Convertibility Based on Primary Commodities","authors":"","doi":"10.4018/978-1-7998-8302-9.ch008","DOIUrl":"https://doi.org/10.4018/978-1-7998-8302-9.ch008","url":null,"abstract":"Taking a different approach to the problem, Leo St. Clare Grondona devised a system of conditional currency convertibility that individual countries can implement independently in terms of their own currency. For each of the durable, essential, imported commodities included in the system, instead of stipulating a price-range to be maintained, Grondona stipulated a “price-schedule” in which the price-range to be guaranteed for each commodity adjusts in proportion to the quantity of reserves held, falling as they rise and vice versa. In this way the maximum possible outlay that could be required, even under extreme market conditions, can be decided in advance. Consequently, a government establishing a Commodities Reserve Department (CRD) to implement such a system could legitimately pay for reserves through corresponding expansion of the national money supply, which would be reversed as and when the reserves were repurchased.","PeriodicalId":193673,"journal":{"name":"Stabilizing Currency and Preserving Economic Sovereignty Using the Grondona System","volume":"165 10 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"1900-01-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"115509538","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 1900-01-01DOI: 10.4018/978-1-7998-8302-9.ch003
In addition to the problems caused by money being fiat, most modern money is moreover created not by governments but by the privately-owned banking systems as debt to themselves. This is not only grossly contrary to all traditions of natural justice, it is also unconstitutional. This problem has been understood and publicised by many politicians and writers over centuries, but it is still not widely known due to the financial and political power of the perpetrators. Since it is also the main cause of the continuing increase in inequality in all the rich countries, the “great reset” being advocated by those in charge of the present system is clearly not fit to become the new basis of the economic system.
{"title":"Unsustainability of Debt-Based Money","authors":"","doi":"10.4018/978-1-7998-8302-9.ch003","DOIUrl":"https://doi.org/10.4018/978-1-7998-8302-9.ch003","url":null,"abstract":"In addition to the problems caused by money being fiat, most modern money is moreover created not by governments but by the privately-owned banking systems as debt to themselves. This is not only grossly contrary to all traditions of natural justice, it is also unconstitutional. This problem has been understood and publicised by many politicians and writers over centuries, but it is still not widely known due to the financial and political power of the perpetrators. Since it is also the main cause of the continuing increase in inequality in all the rich countries, the “great reset” being advocated by those in charge of the present system is clearly not fit to become the new basis of the economic system.","PeriodicalId":193673,"journal":{"name":"Stabilizing Currency and Preserving Economic Sovereignty Using the Grondona System","volume":"107 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"1900-01-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"114633829","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 1900-01-01DOI: 10.4018/978-1-7998-8302-9.ch004
This chapter describes another fundamental criticism of the Western economic system – that from Islamic economics. This is included not because the authors are advocating for Islamic economics, but because Islamic economists generally have a clearer understanding of the fundamental dishonesty of the Western monetary system than mainstream Western economists, who almost entirely ignore this glaring flaw at the heart of the Western economic system. Having forbidden interest-bearing loans, like Islam, for its first 1600 years, Christianity relaxed its rules, and thereby lowered its guard against the “money power,” which is now running rampant in what was once “Christendom.” Recent collaboration between Islamic economists and “dissident” Western economists is very promising.
{"title":"Fiat Money Is “Riba,” Which Islam Forbids","authors":"","doi":"10.4018/978-1-7998-8302-9.ch004","DOIUrl":"https://doi.org/10.4018/978-1-7998-8302-9.ch004","url":null,"abstract":"This chapter describes another fundamental criticism of the Western economic system – that from Islamic economics. This is included not because the authors are advocating for Islamic economics, but because Islamic economists generally have a clearer understanding of the fundamental dishonesty of the Western monetary system than mainstream Western economists, who almost entirely ignore this glaring flaw at the heart of the Western economic system. Having forbidden interest-bearing loans, like Islam, for its first 1600 years, Christianity relaxed its rules, and thereby lowered its guard against the “money power,” which is now running rampant in what was once “Christendom.” Recent collaboration between Islamic economists and “dissident” Western economists is very promising.","PeriodicalId":193673,"journal":{"name":"Stabilizing Currency and Preserving Economic Sovereignty Using the Grondona System","volume":"6 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"1900-01-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"127492543","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 1900-01-01DOI: 10.4018/978-1-7998-8302-9.ch011
The results of the simulations shown in Chapter 10 clearly show the consistent pattern of operation of the Grondona system, buying and selling reserves of commodities in response to changes in market prices as reliably as under a gold standard. This has a range of direct and indirect effects which are discussed in this chapter, including the reliably counter-cyclical timing of changes in the quantity of the CRD's reserves, and the parallel changes in the national money supply, the system's contribution to resisting inflationary pressures, and the effect of a CRD's reserves of a commodity falling to zero. Some remaining uncertainties about the system's operation are also discussed, notably about the foreign exchange market's likely response to the system expanding the money supply when commodity prices are falling.
{"title":"Discussion of CRD Simulation Results","authors":"","doi":"10.4018/978-1-7998-8302-9.ch011","DOIUrl":"https://doi.org/10.4018/978-1-7998-8302-9.ch011","url":null,"abstract":"The results of the simulations shown in Chapter 10 clearly show the consistent pattern of operation of the Grondona system, buying and selling reserves of commodities in response to changes in market prices as reliably as under a gold standard. This has a range of direct and indirect effects which are discussed in this chapter, including the reliably counter-cyclical timing of changes in the quantity of the CRD's reserves, and the parallel changes in the national money supply, the system's contribution to resisting inflationary pressures, and the effect of a CRD's reserves of a commodity falling to zero. Some remaining uncertainties about the system's operation are also discussed, notably about the foreign exchange market's likely response to the system expanding the money supply when commodity prices are falling.","PeriodicalId":193673,"journal":{"name":"Stabilizing Currency and Preserving Economic Sovereignty Using the Grondona System","volume":"37 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"1900-01-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"133226153","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 1900-01-01DOI: 10.4018/978-1-7998-8302-9.ch005
In this chapter, three main approaches to creating a new, more stable monetary system, which is under wide discussion today, are considered in turn. First, the feasibility of reviving the use of gold as backing for currencies is a never-ending controversy, kept very much alive by those who argue that “In a crisis, there is nothing else.” Second, the rapidly growing use of the internet for decentralised finance or “DeFi” services is offering the public a growing range of new, reliable, low-cost financial services. Among these is the use of “crypto-currencies,” which are growing rapidly but which still suffer severe instability and uncertainty. Third, the world's central banks are developing their own internet-based currencies, known as central bank digital currencies (CBDC). However, these are unlike private crypto-currencies since their use would give government control over all transactions – a degree of power which would risk enabling tyranny.
{"title":"What Could or Should Replace Existing Monetary Arrangements?","authors":"","doi":"10.4018/978-1-7998-8302-9.ch005","DOIUrl":"https://doi.org/10.4018/978-1-7998-8302-9.ch005","url":null,"abstract":"In this chapter, three main approaches to creating a new, more stable monetary system, which is under wide discussion today, are considered in turn. First, the feasibility of reviving the use of gold as backing for currencies is a never-ending controversy, kept very much alive by those who argue that “In a crisis, there is nothing else.” Second, the rapidly growing use of the internet for decentralised finance or “DeFi” services is offering the public a growing range of new, reliable, low-cost financial services. Among these is the use of “crypto-currencies,” which are growing rapidly but which still suffer severe instability and uncertainty. Third, the world's central banks are developing their own internet-based currencies, known as central bank digital currencies (CBDC). However, these are unlike private crypto-currencies since their use would give government control over all transactions – a degree of power which would risk enabling tyranny.","PeriodicalId":193673,"journal":{"name":"Stabilizing Currency and Preserving Economic Sovereignty Using the Grondona System","volume":"114 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"1900-01-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"133417218","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 1900-01-01DOI: 10.4018/978-1-7998-8302-9.ch013
Although Grondona prepared detailed guidelines that his system should be implemented in relation to durable, essential, basic imported commodities, he also understood that, once established successfully, CRDs' operations could evolve in various ways in order to achieve greater benefits. For example, the inclusion of precious metals such as gold and silver, albeit on a somewhat different basis than industrial commodities, is an interesting possibility. Grondona also recommended that other products such as basic manufactured components like standardised steel or aluminium strip could be included. Another potential evolution is a CRD's role in a currency crisis: a sudden change in the exchange rate would be countered to some extent by a CRD being asked to sell or buy commodities, which would tend to resist the initial change. A CRD's terms of operation might be adjusted in order to strengthen its influence as such a countermeasure.
{"title":"Potential for Further Evolution of CRDs","authors":"","doi":"10.4018/978-1-7998-8302-9.ch013","DOIUrl":"https://doi.org/10.4018/978-1-7998-8302-9.ch013","url":null,"abstract":"Although Grondona prepared detailed guidelines that his system should be implemented in relation to durable, essential, basic imported commodities, he also understood that, once established successfully, CRDs' operations could evolve in various ways in order to achieve greater benefits. For example, the inclusion of precious metals such as gold and silver, albeit on a somewhat different basis than industrial commodities, is an interesting possibility. Grondona also recommended that other products such as basic manufactured components like standardised steel or aluminium strip could be included. Another potential evolution is a CRD's role in a currency crisis: a sudden change in the exchange rate would be countered to some extent by a CRD being asked to sell or buy commodities, which would tend to resist the initial change. A CRD's terms of operation might be adjusted in order to strengthen its influence as such a countermeasure.","PeriodicalId":193673,"journal":{"name":"Stabilizing Currency and Preserving Economic Sovereignty Using the Grondona System","volume":"22 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"1900-01-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"123780083","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 1900-01-01DOI: 10.4018/978-1-7998-8302-9.ch009
While working in Japan during the 1990s, one of the authors took the opportunity to collect data on past Japanese commodity imports and recent commodity market prices and to use them to simulate how a CRD would have operated over the decade 1987 – 1996 using a computer spreadsheet. The graphs showing the results are easy to understand: the CRD would have bought reserves when Yen prices were falling and sold them when Yen prices were rising, thereby exerting a stabilizing influence on the prices and quantities of these imported commodities. In parallel, by expanding and contracting the money supply counter-cyclically, the system would have helped to stabilize the overall economy.
{"title":"Illustrating the Grondona System in Operation","authors":"","doi":"10.4018/978-1-7998-8302-9.ch009","DOIUrl":"https://doi.org/10.4018/978-1-7998-8302-9.ch009","url":null,"abstract":"While working in Japan during the 1990s, one of the authors took the opportunity to collect data on past Japanese commodity imports and recent commodity market prices and to use them to simulate how a CRD would have operated over the decade 1987 – 1996 using a computer spreadsheet. The graphs showing the results are easy to understand: the CRD would have bought reserves when Yen prices were falling and sold them when Yen prices were rising, thereby exerting a stabilizing influence on the prices and quantities of these imported commodities. In parallel, by expanding and contracting the money supply counter-cyclically, the system would have helped to stabilize the overall economy.","PeriodicalId":193673,"journal":{"name":"Stabilizing Currency and Preserving Economic Sovereignty Using the Grondona System","volume":"22 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"1900-01-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"125966551","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 1900-01-01DOI: 10.4018/978-1-7998-8302-9.ch010
This chapter introduces simulations of how CRDs might have actually operated in the four different countries of Indonesia, Malaysia, Turkey, and Pakistan if they had been established in 2009. Two types of data are used, all from publicly accessible databases. The first is data on the annual quantity and cost of imports to each country for three or more years prior to the start of the simulation, from which each CRD's initial “Index” price for each commodity is calculated, as well as the size of the CRD's “Block” of reserves. The second type of data is quarterly market prices of each commodity, and the national exchange-rate where needed, through the period of the simulation, from which changes in the CRDs' reserves are calculated. For each country the level of reserves of the different commodities held by the CRD are clearly seen to automatically vary counter-cyclically as traders sell to or buy from the CRD at the prices in its price-schedule for each commodity.
{"title":"Simulation of Four National CRDs' Operations","authors":"","doi":"10.4018/978-1-7998-8302-9.ch010","DOIUrl":"https://doi.org/10.4018/978-1-7998-8302-9.ch010","url":null,"abstract":"This chapter introduces simulations of how CRDs might have actually operated in the four different countries of Indonesia, Malaysia, Turkey, and Pakistan if they had been established in 2009. Two types of data are used, all from publicly accessible databases. The first is data on the annual quantity and cost of imports to each country for three or more years prior to the start of the simulation, from which each CRD's initial “Index” price for each commodity is calculated, as well as the size of the CRD's “Block” of reserves. The second type of data is quarterly market prices of each commodity, and the national exchange-rate where needed, through the period of the simulation, from which changes in the CRDs' reserves are calculated. For each country the level of reserves of the different commodities held by the CRD are clearly seen to automatically vary counter-cyclically as traders sell to or buy from the CRD at the prices in its price-schedule for each commodity.","PeriodicalId":193673,"journal":{"name":"Stabilizing Currency and Preserving Economic Sovereignty Using the Grondona System","volume":"5 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"1900-01-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"117002373","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 1900-01-01DOI: 10.4018/978-1-7998-8302-9.ch002
Since the invention of paper money, it has been understood that it is difficult for its creators to resist issuing so much that it loses value. Long experience led to the single uniquely effective means of resisting this fraud: this is for the issuer to guarantee to convert their paper money, on demand, into some defined asset, such as gold, on fixed terms. With the end of the US dollar's guaranteed convertibility into gold, its value became dependent on decisions by leaders of the US government and financial system, unhindered by the need to keep it stable. Predictably, this led to unprecedented inflation of the supply of dollars, leading to ever-rising prices and continuing decline in the acceptability of dollars and US geopolitical leadership.
{"title":"Inevitable Failure of Inconvertible Paper Money","authors":"","doi":"10.4018/978-1-7998-8302-9.ch002","DOIUrl":"https://doi.org/10.4018/978-1-7998-8302-9.ch002","url":null,"abstract":"Since the invention of paper money, it has been understood that it is difficult for its creators to resist issuing so much that it loses value. Long experience led to the single uniquely effective means of resisting this fraud: this is for the issuer to guarantee to convert their paper money, on demand, into some defined asset, such as gold, on fixed terms. With the end of the US dollar's guaranteed convertibility into gold, its value became dependent on decisions by leaders of the US government and financial system, unhindered by the need to keep it stable. Predictably, this led to unprecedented inflation of the supply of dollars, leading to ever-rising prices and continuing decline in the acceptability of dollars and US geopolitical leadership.","PeriodicalId":193673,"journal":{"name":"Stabilizing Currency and Preserving Economic Sovereignty Using the Grondona System","volume":"80 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"1900-01-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"124113628","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 1900-01-01DOI: 10.4018/978-1-7998-8302-9.ch001
The monetary system implemented at Bretton Woods in 1944 made the US dollar the centre of the world economic system, with 43 other countries' currencies linked to it via fixed exchange rates. However, once the US government broke its promise to redeem dollars in gold at $35 per ounce on August 15, 1971, expansion of the supply of dollars was no longer constrained, and like many currencies before it, the lack of monetary discipline led to inflation through which the value of the dollar has fallen by about 98%. The “oil shock” of the 1970s led to the introduction of the “petro-dollar” system whereby Saudi Arabia, then the largest oil producer, agreed to accept only US dollars in payment for its oil in exchange for the US government's pledge to defend it. This shored up demand for the fiat US dollar, enabling it to survive until its now approaching endgame.
{"title":"The Long-Predicted Failure of the Post-Bretton Woods “Non-System”","authors":"","doi":"10.4018/978-1-7998-8302-9.ch001","DOIUrl":"https://doi.org/10.4018/978-1-7998-8302-9.ch001","url":null,"abstract":"The monetary system implemented at Bretton Woods in 1944 made the US dollar the centre of the world economic system, with 43 other countries' currencies linked to it via fixed exchange rates. However, once the US government broke its promise to redeem dollars in gold at $35 per ounce on August 15, 1971, expansion of the supply of dollars was no longer constrained, and like many currencies before it, the lack of monetary discipline led to inflation through which the value of the dollar has fallen by about 98%. The “oil shock” of the 1970s led to the introduction of the “petro-dollar” system whereby Saudi Arabia, then the largest oil producer, agreed to accept only US dollars in payment for its oil in exchange for the US government's pledge to defend it. This shored up demand for the fiat US dollar, enabling it to survive until its now approaching endgame.","PeriodicalId":193673,"journal":{"name":"Stabilizing Currency and Preserving Economic Sovereignty Using the Grondona System","volume":"10 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"1900-01-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"124191721","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
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