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Making money for business: currencies, profit and long-term thinking by Bernard Lietaer and Gwendolyn Hallsmith

Submitted by on October 17, 2011 – 4:24 pmNo Comment

In brief:

Businesses have tended to leave the question of how the monetary system works to the government, central banks, and the banking system. Yet in doing so they miss the opportunity to solve key monetary and financial problems that cause real heartburn in times of economic downturn—leading to layoffs, bankruptcies, and cascading economic crises.

Small and medium-sized businesses provide between 65 and 95 percent of private jobs worldwide. Their main challenge is access to working capital, which is crucial for job maintenance and creation. When credit lines get prohibitively expensive or are pulled back, as is the case today, the jobs evaporate.

A financial innovation — the Commercial Credit Circuit (C3) — provides critical working capital for small- and medium-sized businesses and already operates in several countries. It represents a substantial improvement on commercial barter by making its business-to-business (B2B) currency convertible into official national currency.

This article also discusses how inventory receipts and storage costs for commodities and services could form the basis of a new international planning and trading currency, called the Terra. Multinational companies that produce or use commodities and international services could establish the value of the Terra by creating a standardized basket of the most important commodities and services in global trade (e.g., oil, wheat, copper, carbon credits, or container shipping services). Among the benefits of such a system would be that it could make it profitable for multinational businesses to think long-term, and also would contribute to stabilizing the world’s business cycle.

Article published in the Solutions Journal, Volume 2, Issue 5, Sept-Oct 2011.

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