Monthly Archives: June 2007

Upcoming Presentation in Kuala Lumpur

Thomas Greco will be a presenter at the International Conference on Gold Dinar Economy July 24 – 25.

The title of his presentation will be The End of Money and the Liberation of Exchange.

Central Banking, Usury, and the Growth Imperative

It seems a difficult thing for people to accept, but the present global debt-money system contains within it a growth imperative. Because money is created by banks as interest-bearing loans, debt grows exponentially as time goes on (the compound interest formula is exponential).

How is it possible for every debtor to pay their loans WITH INTEREST when the money supply does not grow except by the creation of more debt by the banks?

Every actor in the economy must then compete for that insufficient supply of money in order to keep from defaulting. Hence, they must do all they can to expand production, sales, and profits. They must control their markets, both markets in which they sell their products and markets in which they buy their inputs.

That is why the environment is being destroyed, the social fabric is being torn asunder, and the economic product is being increasingly maldistributed. This monetary system REQUIRES that there be many losers.

Under central banking, there are two choices:
1. Keep the money supply pumped up by making additional credit (money) easily available, or
2. Let the economy contract as defaults mount.

The first leads to hyperactivity and inflation. This hurts those on fixed incomes.
The second leads to depression. This hurts small businesses and those who have little financial net worth and live from paycheck to paycheck.

The central banking usury system puts us between a rock and a hard place.

Interest (usury) between two parties to a loan is one thing; interest built into the foundation of a credit-based monetary system is quite another.

There’s a good economic reason why three major religions (Judaism, Christianity, and Islam) have banned usury. Now the economists need to understand it.

First Report From California – Addendum – Sources & Resources

Sources and Resources on Money and Exchange Alternatives

Compiled by Thomas H. Greco, Jr.

P.O. Box 42663 * Tucson, AZ 85733 * Email:

Key Concepts

Credit clearing

Credit clearing is the process by which credits arising from sales are used to directly offset debits arising from purchases without the use of conventional money. This process takes place within an organized circle of associated trading partners. In accounting terminology, Accounts Receivable are offset against Accounts Payable.


Monetization is the process of converting the value of fixed collateral assets into credit that can be spent. In conventional banking, a bank monetizes the value of collateral assets when it creates a deposit by granting a loan. For example, when a bank grants a mortgage, it essentially converts the value of a house into a demand deposit that the borrower can then spend. The process of monetization can also be effected within a credit clearing circle when a member is granted a line of credit or overdraft privilege based on the goods and services they offer for sale.

Websites and Blogs

Reinventing Money:
Community Information Resource Center:
Beyond Money Blog:
Tom’s News and Views:

The Infography about Community Currencies:

The Online Database of Complementary Currency Systems Worldwide. Stephen DeMeulenaere, Complementary Currency Resource Center.

Community Exchange System. South African New Economics Network (SANE). A web-based currency exchange platform and network.

Books – Primary (mostly available at the website

Greco, Thomas H., Jr., Money: Understanding and Creating Alternatives to Legal Tender. Chelsea Green Publishers (VT), 2001.

—, New Money For Healthy Communities. Thomas H. Greco, Publisher, P.O. Box 42663, Tucson, AZ 85733, 1994.

—, Money and Debt: A Solution to the Global Crisis. Second edition, Thomas H. Greco, Publisher, P.O. Box 42663, Tucson, AZ 85733, 1990.

Riegel, E. C., Private Enterprise Money. New York: Harbinger House, 1944.

—, The New Approach to Freedom. San Pedro, CA: The Heather Foundation, 1976.

__, Flight From Inflation. San Pedro, CA: The Heather Foundation, 1978.

Private Enterprise Money is out of print but may be found online through our website,

The other two books by E. C. Riegel may be obtained from Mike Aldana at the E.C. Riegel School of Money, 1430 Mountain View Lane, Idaho Falls, Idaho 83402. Phone 208-522-5050. The prices are $12 for one book, $22 for two, plus postage and handling of $4 for one book, $1 more for each additional book. Acceptable payment forms are cash, check, or money order only.


WIR and the Swiss National Economy. Beard, Philip, trans. Philip Beard and Tobias Studer. Available at


Jacobs, Jane, Cities and the Wealth of Nations: Principles of Economic Life. New York: Vintage Books, 1985.

Kennedy, Margrit, Interest and Inflation Free Money. New Society Publishers, 1995.

Linton, Michael, and Thomas Greco, “The Local Employment and Trading System.” Whole Earth Review, No. 55, Summer 1987.

Modern Money Mechanics. Federal Reserve Bank of Chicago, 1992. Online at

Timberlake, Richard H., and Kevin Dowd (eds.), Money and the Nation State. New Brunswick, NJ: Transaction Publishers, 1998.

Zander, Dr. Walter, “A Way Out Of The Monetary Chaos”. From The Annals of Collective Economy, Geneva, 1938.

Available at

Zander, Dr. Walter, “Railway Money and Unemployment.” From The Annals of Collective Economy, Geneva, 1934.

Available at

Video Documentaries

Money as Debt by Paul Grignon. Website:

Money: Who creates it? Who controls it? Who profits? A film by Isaac Isitan. Les productions ISCA, Montreal, Quebec.

The Money Masters. 1-888-the-plot

Pertinent Quotes

When businessmen resolve to set up a money system, they agree to hold in trust for each other goods and services that are pledged against the drafts which they have issued in the form of money. These values—that are held in trust by all for any who may present a money draft therefore—constitute a vast pool, not housed at one place, but scattered throughout the trading sphere. This vast pool of goods and services is the basis or backing for the outstanding money supply. “Reserves” and metal hoards are but window dressing. Only that which is purchasable is back of money.

– E. C. Riegel, Private Enterprise Money, Chapter 6.

First Report from California

The past week has been intensely busy here in California, filled with presentations and meetings with colleagues from all over the world who have gathered here for our complementary currency conference last Thursday (May 31) and the general conference of BALLE (Business Alliance for Local Living Economy), June 1 and 2 at the University of California-Berkeley.

Last Tuesday I gave a presentation to the Sonoma County BALLE chapter in Sebastopol. That presentation was recorded but the link is no longer functional.

The proceedings of the complementary currency conference were recorded and will be made available later on. Here below is the substance of my own opening remarks.

2007 BALLE pre-conference on Complementary Currencies – May 31, 2007

Opening Statement by Thomas H. Greco, Jr.

I think it may be fair to say that we are gathered here today because we are all passionate about change, particularly economic change, and we all seem to agree that non-governmental currencies and exchange alternatives have an important role to play in achieving the kind of change that will lead to healthier communities, greater satisfaction of basic needs, a dignified and fulfilled life for all people, and a more peaceful, sustainable world.

That’s a tall order. Can it be achieved?
I’m confident that it can.

What we’re about here is more than adjustments to the prevailing system, more than gimmicks and Band-Aids. What we hope to create is an entirely new paradigm. I think we all share a feeling that the world is sorely in need of a truly transformative change in the way we humans relate to one another and to the Earth of which we are a part. But what are we doing, what can we do that is truly transformative?

I receive numerous messages from people all over the world asking me to comment on their essays, articles, books and ideas. I try to respond as best I can to as many as I can, but the burden is overwhelming. I see in these offerings a great urge to make things better, but I also see, repeated over and over again, the same misconceptions and false starts. This is not surprising because this business of money and banking has become such a tangled ball of string that it is hard to discern the fundamental principles and truths in it.

But we have the benefit of a few keen minds who have unraveled this ball of string and who have documented for us the essential points that need to be understood if we are to make the kind of progress in transforming the exchange process that the survival of civilization requires. I speak of E.C. Riegel, Heinrich Rittershausen, Ulrich von Beckerath, Walter Zander, and Hartley Withers, to mention a few. Hardly anyone today has ever heard of these people. But I have taken it as my mission to collect the best of these materials, to make them available on the web, and to apply their insights in the design of alternative exchange systems. You can find these resources at

My main point is that we need to reach a level of understanding that will enable us to move beyond the present plateau of significant but still modest achievement. We have behind us twenty-five years of experience and experimentation with LETS systems, loyalty programs, and local currencies of various kinds and colors.Where are we with all of that?

Well, there have been some small-scale successes and currency alternatives have been getting increasing publicity. The public mind is being opened up to see the possibility at least of using some payment media other than the accustomed and universal political monies provided us by banks and governments. That’s well and good. Where do we go from here?

A couple weeks ago I received in the mail from Europe a screenplay, which I dutifully read. The author had clearly done a lot of study on the money question and understood pretty well how the dominant system of money and banking works. That encouraged me to read on. The main plot line involved a sage old man explaining these things to his college educated grand-daughter. So far so good. The climax of the story is reached when the old man reveals to her the “secret of money.”

But what the author considered to be the secret of money was pretty bland in relation to what I consider to be the secret of money.

So, what is that secret?
From my research and study over almost three decades, I have come to conclude that the real secret of money is this:


These statements challenge our logic because history and our experience of money tells us that money is a THING. But if it is a thing, what is its essence? Is it scraps of paper? Is it electrons residing on a bank’s computer? Money is really a thing of the past.

What we have today in place of money is an information system. But information must be about something, and that something is credit. The paper notes, the electrons that register “deposits” in your bank account are mere manifestations or carriers of information, just as your drivers license is evidence of your authorization to operate a motor vehicle. Do you have credit? How much credit do you have? What does this credit enable you to do? It enables you to buy.

So modern money is credit. It is your credit and my credit. By our participation in the established credit system, we authorize one another to buy. But we have the possibility of creating alternative, parallel credit systems. We have the power to give credit to whomever we are willing to trust. And by doing so, we can free ourselves from the juggernaut that is destroying our planet, rending the social fabric, subverting democratic government, driving nations to war, and impoverishing an ever greater proportion of the world’s population.

The way forward to a peaceful, harmonious and equitable order is the liberation of our collective credit from monopoly control and the implementation of direct credit clearing within a mutual, cooperative framework. We need to build our own circle of trust.

What banks do today is to create deposits or spendable credits by making loans. This process is called “monetization.” It amounts simply to this: it is the conversion of frozen value into value that can be spent. The bank monetizes the value of your collateral assets when it grants you a loan. It essentially converts the value of say, your house, into a demand deposit that you can then spend.

If banks can do that, so can we. And here is the real revolutionary potential of our alternative exchange movement — when we start to monetize the value of our own labor and resources according to our own criteria, without the “help” of conventional banks, when we organize ourselves into circles of trust within which we give each other credit, when we do this in a responsible way over a broad network of exchange communities that include the broadest possible membership, then we will have set in place the cornerstone of economic democracy that can enable the emergence of a world order that is cooperative, humane, and peaceful, an order propelled not by fear and violent conflict over resources, but a world order propelled by love, service, sharing, and respect for the sacredness of all life.

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