International Forecaster Weekly

A Beginner Guide to Monetary Reform

From mutual credit systems to time banking to private currencies and social currencies, there are no shortage of ideas for how to transition off of the current system in a gradual manner while increasing and facilitating local trade.

James Corbett | June 18, 2016

As events in Cyprus, Greece, Brazil, Zimbabwe, and elsewhere in recent years have taught us, the euros or real or dollars or yuan in your bank account are only as secure as the bank that holds them.


In fact, the lesson is deeper than that: That the money in your bank account is not cash at all, not pieces of paper sitting in a bank vault waiting for you to withdraw them, but mere digital ones and zeros in the bank’s database, capable of being subtracted from your account at a moment’s notice, or even less. Cash that is not in your hand, it turns out, is not cash at all.

This should be reason to give pause for thought about some of the deeper issues behind our current international financial order: what is money, after all, if it is not physical pieces of paper that we keep in our wallet? And if we don’t control it, who does?

As opposed to this system of financial control by a few bankers, heading as it is toward a seemingly inevitable financial collapse that threatens to crash the entire world economy, there are many alternate ideas for facilitating transactions. Some advocate for a gold-backed system, or some other hard asset backed currency that protects against rampant government printing and the possibility of hyperinflation. Others tout debt-free government-issued money, spent into the economy on infrastructure and other tangible benefits to the community and kept in check through taxation or demurrage. Yet others believe the answer lies in more technological solutions, pointing to the recent surge in the value of bitcoin as an example of how alternate currencies can thrive in the cybersphere.

While each system has its merits and demerits, it is vital that we realize the issue of monetary reform is not constrained to hoped-for changes to our current system that will possibly be implemented one day in the future in all-at-once changeover. In fact, there exists right now the globe examples of alternative currencies that are currently existing alongside the Federal Reserve notes and Euros and other bankster-manipulated debt-based fiat money systems that are already helping facilitate transactions and grow local economies all around the globe. [See this and this and this and this and this.]

These alternative systems do not require a resolution to be passed in congress or parliament, and do not require any wholesale change in the international financial order. These currencies already exist and are already thriving in numerous localities around the globe. Referred to as "complementary currencies," they provide a way for communities to bypass the inflation tax and capital controls and arbitrary confiscation that defines the modern era of central-bank administered currency.

Just as the fiat money printed up by these central banks (or issued as debt in the form of back loans) are backed up by the collateral of the people’s promise to pay later through the sweat of their own labor, so too can these complementary currencies be issued on the back of the people’s own labor. The difference being that in this system, the money is not controlled by banksters in closed door meetings in far away offices, but by the people themselves, in their own back yards.

One example of a complementary currency success story is the Ithaca Hours currency issued in Ithaca, New York. Launched in 1991 as a way to invigorate the local economy, Ithaca Hours have since facilitated millions of dollars in transactions and helped businesses and customers alike bypass the uncertainties of the Federal Reserve notes of the central banking economy.

As Ithaca Hours founder Paul Glover told The Corbett Report in 2013, the currency started as a way to rejuvenate the local economy, but has grown into something even more important: a means to foster a sense of community itself.


Well, 22 years ago in Ithaca, New York I noticed there were a lot of people, friends particularly, that had skills and time that were not being employed or respected by the prevailing economy. While we had much desire to create things and trade them with each other and many services we could provide to each other, we didn’t have the money. So since I have a background in graphic design, journalism and arrogance I went to my computer and designed paper money for Ithaca, New York.
I designed pretty colourful money with pictures of children, waterfalls and trolley cars denominated in hours of labor. One-hour note, half-hour, quarter, eight-hour notes and two-hour notes. I then began to issue to each of those pioneer traders who had agreed to being listed in the directory a specific starter amount, and the game began. An hour has been worth basically $10 U.S. dollars which at that time 20 years ago was double the minimum wage. People who usually expect more than $10 per hour of their service can charge multiple hours per hour but the denomination puts between us as residents of our community, that reminds us that we are fellow citizens, not merely winners or losers scrambling for dollars.
It introduces us to each other on the basis of these skills and services that we have, that we are more proud to provide for each other than often is the case with a conventional job. Just the stuff we have to do to get the money to pay the bills. So through that trading process, that more intimate scale process within the community, we’re more easily able to become friends and lovers and political allies.

Now, similar ideas are springing up all across America and around the globe. From mutual credit systems to time banking to private currencies and social currencies, there are no shortage of ideas for how to transition off of the current system in a gradual manner while increasing and facilitating local trade.

As has been pointed out by many over the years, these alternative and complementary currency ideas look good on paper and occasionally even serve to further trade within a given community, but very rarely if ever do they grow into a monetary instrument that is able to truly match the resilience and utility of the prevailing legal tender. This is because these currencies are inevitably circumscribed by the limits of the community itself. A community currency is only as useful as the community which uses it. Until now, the idea of community has been necessarily a geographical construct, and thus community currencies have been mostly limited to small, local groups of businesses.

With the advent of technology, however, there is now the possibility for a radically different monetary system with the potential to connect people around the world in ways that were never before possible.

Meanwhile, as weak jobs reports and Fed rate hikes and the never-ending Euro dramas (economic and otherwise) continue to loom, it is important for the public to realize that there is more to be done than to merely sit idly by, waiting for a credit crunch or, worse, total monetary collapse to wipe out their savings and their economic livelihood. At the very least, those who are actively contributing to and participating in their own local alternative community system are building up the structures that can survive just such an economic meltdown, and contributing to their local economy as they do so. This is the type of win-win situation that the banksters in charge of the current system would prefer you never find out about.