Governments have proven themselves unworthy of "managing" currencies, probably due to the fact that
governments are composed of people, and people are subject to greed. Therefore, it is necessary to
establish currencies which have a value that is mathematically related to the intrinsic value of
physical, widely traded commodities. Just as units of temperature are related in some widely known
way to physical heat and cold, units of currency would be related to the rising and falling true
"value" of a basket of commodities (KWh of electrical power, Kilograms of gold, Tonnes of cereal
grains, live chickens, whatever).
The function of banks, traditionally the "creators" of credit (often by proxy for a central bank),
would be relegated to the menial role of "aggregators" of credit – credit would be created by those
who create the actual underlying wealth.
Finally, the value of the unit of currency would be held dynamically stable, by varying a credit
factor K (the amount of credit created per unit of wealth), as the price of the basket of
commodities increases and decreases (inflates and deflates). In an economy where the underlying
commodities are heavily traded, the value of the basket could be priced on a literally sub-second
basis, and the credit factor K updated continuously in sub-second real-time (using an industrial
process-control feedback damping control algorithm called a PID control loop).
As a result, several good things would happen:
The creation and ownership of wealth – by individuals – would be immediately convertible to credit in a currency, proportional to the credit factor K. The value of the unit of currency is held, dynamically and immutably, equivalent to the value of the basket of commodities defining the currency.
New credit would be created proportionally to the creation of new wealth, and by the ebb and
flow of liquid credit within the economy; as prices decline (deflation), K increases, allowing
new credit to be created, to purchase the under-priced wealth. As prices increase (inflate),
the inverse occurs (encouraging the selling of wealth for credit which is stored up or used to
redeem previously pledged wealth), driving excess liquidity from the economy.
All factors influencing the value of the currency (commodity prices, inflation/deflation,
credit factor K) are transparent, allowing the individual creators of wealth to issue/redeem
credit for their own benefit – not the central bank and/or governments benefit!
Units of credit can be stored and passed down to future generations, without loss of value,
allowing multigenerational wealth transfer – something that has been made impossible by the
usury-based central bank monetary systems.
All currencies would all be freely tradable, and frictionlessly convertible at current market rates, as defined by the price of the underlying commodity basket.
Attempts to "corner the market" on commodities by artificially increasing or decreasing their
price would bring the wealth of the entire economy to bear on the attack; as K is
increased/decreased in response, the wealth owners in the economy could use their individual
and collective credit to literally suck the wealth out of the attacker, transferring it to the
wealth owners, and eliminating the attack. Or, they could simply transfer their credit,
immediately and frictionlessly to a different currency, leaving the attacker holding his own
worthless, manipulated currency.
Credit could be used – spent, traded, given, stored, lent – without usury. Of course, it could be lent at interest if the owner of the credit wishes (eg. to companies, strangers).
All transactions in a currency are universally visible and completely anonymous.
Every transaction is provably between the owners of two valid credit accounts, and the credit
system is in accounting balance before and after every transaction (no credit created it lost,
until it is redeemed by un-pledging the wealth by which it was created).
Every transaction is anonymous and cryptographically secured (but either party may choose to
prove and/or reveal their part in a transaction.)
And, best of all:
No government would ever again be able to hold its citizens hostage to a Fiat currency (which it
can create and spend first, in effect robbing its citizens via the indirect tax called
Inflation). Denizens like Robert Mugabe, and the head of the Federal Reserve would be powerless
against the sheer defensive force of wealth created and wielded by their own citizens.