Breaking down Fractional Reserve Banking

Part of the retraction from a carbon credit economy would be the abolishment of fractional reserve banking. Why? Because you don’t expect credit to be matched with oil. coal or gas by definition, at least not now that conventional reserves run dry and the US is losing grip on sources against China, Europe and Africa. It means good news for gold, but it is no solution to climate change or the dangers of true resource scarcity or food security. Those problem can only be solved by covering the energy demand using renewable energy sources, all the more important now that momentum is building to deal with the carbon bubble.

The question "Could we have liquidity without fractional reserve banking" is answered by roboeconomic principles. People that generate energy for users are going to be the people that will generate liquidity by selling energy credit. Organic, non input farmers can also extend credit to buy their produce. That credit returns to them as they sell their produce for the credit, and thus a system that is always exactly as liquid as it should be evolves. Banks play no role in them becuase anyone can store the credits in their own stores, especially if they are digital tokens of some kind.

We developed a system called in 2007 that would facilitate such an economy. We are currently working on a hypertransparent system in which anyone can be the issuer of credit of any kind. Of course normal rules and laws would apply, but the source of liquidity and power to control activities would no longer lie with banks. We are looking for sponsors to complete the systems (askus).

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