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.

# # #

17 responses to “First Report from California

  1. Really clear expression of alternative trading systems. Its time they became the mainstream!


  2. Very succinct–also thought provoking. Ghandi taught that economic justice would only come with a general spirirual evolution. The “circle of trust” paradigm would aeem to me to be coherent with Ghandi’s insight.


  3. William Shepherd brings up some very good points about the Bank of England.

    I submitted comments in early June, but they were not published.

    There are many problems with the Federal Reserve System, including private control, non-transparency, fractional-reserve banking, usury and issuing negative-value debt “dollars” rather than genuine positive-value money.

    The so-called “gold standard” is a another ruse used by bankers to enslave humanity and keep us in a state of perpetual war. “We shall not be crucified upon a cross of gold!”

    “Solar dollars” or RECs (renewable energy credits) or TEA (time-energy accounting) could reverse the entire financial system from being very negative to very positive.


  4. Thom

    As usual, I find a great deal of “value” in your offerings. Doors of understanding open for me and I appreciate how hard you try to make this information and understanding accessible to us. If this information is our currency, you offer us a wealth at hand. Many thanks.

    And, that said, as I have spoken to you in the past, this activity depends on a high level of maturity and ability to “value” one’s work and potential. This does not, in my experience, come easily to some of us who have long work as helpmates as wives, sisters, brothers to more powerful personalities.

    Two other books come to mind that may help me and others in understanding the human relationship part of this work. They are the Gift Economy, ( ) and Learning for tomorrow: Whole Person Learning for the planetary citizen by Bryce Taylor, director of Oasis School of Human Relations. His book is currently is a small release but will be available more broadly (hopefully) sometime very soon. Here is his site:

    BTW I am cited a couple of times as Whole Person Learning is bascially my interest.

    So, how do we, at the same time that we are learning of concepts regarding money, trading and credit, also become aware of how we, as individuals might fit in and how do we, as communities of trust, make provisions for those who may not see their own value or be unable to participate as fully?

    Just some thoughts. Thanks so much, Thom, for all your are doing. Have a lovely time on your travels, especially to India.


  5. am intrested in using this idea for development initiative for the people of Niger Delta, read my debate at http:/


  6. This is the most direct explanation of “the emperor has no clothes” that I have yet seen.

    We seel ourselves out to collective authorities in the name of democracy, socialism, or some ism, when we could control our own economic destinies and be free. Great work!


  7. Pingback: Top Posts «

  8. Nice speech; it actually made a complete fuzz brained English major come a little bit closer to understanding credit.


  9. Arthur Edwards

    Hi Tom,

    This is a nice succinct piece – might we borrow it for Associative Economics Monthly?

    Best wishes,


    PS I am sending you by email my PhD proposal “Money in a Global Economy” which Geoffrey Wood of City of London Business School has offered to supervise – I hope to draw on your material – thanks.


  10. …and then there is property…and its ownership and usage…which are intricately interwoven into the credit idea. This linkage is well captured in the blog purpose of ‘liberating the exchange process and restoring the credit commons’. The British Labour Party’s longstanding Clause Four…formulated by Sidney Webb working from the house where Tony Benn was brought up…was abolished by Tony Blair as one of his earliest ‘defining moments’ with scarcely a mention either in the British media or in the Labour Party of the crucial significance of its inclusion of ‘the means of exchange’…discussion revolved around the means of production’. We have spent one hundred years forgetting. George Bernard Shaw homed in on the right starting point in his essays in The Fabian Papers (1884) with his slogan that ‘Socialism is equal money’…and hisinsistence that there was no such thing as a Public and a Private sector. Instead there are three forms of property: personal possessions, private property and common wealth. The idea of central banking with its convoluted system of ‘double dutch’ book-keeping…institutionalised in 1694 with the founding of the Bank of England private corporation…has been enclosing personal possessions and grabbing common wealth for private gain since the Dutch and British formulated the rules at the end of the 17th century.


  11. Dear Tom,
    This is a wonderful and most helpful. Thanks for keeping me in the loop and wishing you all the best in your onward journeys.
    And, of course, do let us know the moment you land in India.


  12. Mr. Greco

    It seems that you are right on the mark with your comments here in this opening statment. You obviously have presented the right approach to the problem by suggesting freeing the peoples exchanges of human energy from only using bank credit and by advocating issuing/monetizing ones own individual labor or goods produced into mutual credit clearing circles, thus (liberating the monopolisation of credit from the bankers). This ideal is to my mind, the pursuit of happyness applied and realized. The secret is that the truth is no longer a bankers secret.


    Mike Aldana


  13. Tom, a very understandable message. With all of our many years of discourse on the topic, the simplicity of “Money is Credit” never stood out so clearly. May we hope it will become as clear to others.


  14. Thanks for keeping me in the loop Tom. Looks like you’re having a great trip!


  15. bravo , I love the clarity of your statement – whether people understand why the present money system must fail is another matter


  16. Dear Thomas-
    Bravo! Well said and thank you for your conitnued outspokeness on the subject of the evolution of currency. I especially appreciate your summation. I look forward to reading more about the Balle Conference.


  17. I look upon it slightly differently.

    The only real value a bank provides is a guarantee of the “borrower’s” credit, and the bank backs its guarantee with a small amount of capital.

    The alternative I see is the “Guarantee Society” where communities with a “common bond” of some description mutually guarantee bilateral “trade” credits, and rather than paying interest, instead pay a provision into a “default fund”.

    If GS members then settle credit using “money’s worth” of goods, services, whatever, then the result is a local currency, and the replacement of a bank as “credit intermediary” by bank as “service provider”.

    So IMHO Money is NOT credit per se, although credit is an essential part of the monetary relationship, as is the “Value Unit”.


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