Shifting from Central Planning to a Decentralised Economy: Do we Need Central Banks?
by Professor Richard A. Werner, D.Phil. (Oxon)

I. The Central Bank Narrative

For more than the past four decades, public policy discourse, especially when touching on macroeconomic and monetary policy, has been dominated by the views held and actively sponsored by the central banks, particularly in Europe and North-America, as well as Japan.

Their policy narrative has been consistent over time and virtually identical between central banks, which is why I shall refer to it collectively as the ‘central bank narrative’. It has been mirrored in the type of economics that central bankers have supported and that has indeed subsequently become dominant in academia and among the economists selected as the experts of choice in the major newspapers and television channels: the theoreticians advancing neo-classical economics.

This central bank narrative (and hence also the dominant neo-classical economics, also known as ‘mainstream economics’) has at least five major pillars, which I shall list briefly:

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The truth of the matter is: We don’t need central banks. Since 97% of the money supply is created by banks, the importance of central banks is far smaller than generally envisaged. Moreover, the kind of money that commercial banks create is not privileged at law. Legally, our money supply is simply private company credit, which can be created by any company, with or without banking license.

Eurozone countries, having given up the right to their own currencies, can still create money and reflate the economy: the government, for instance in Spain, simply needs to stop the issuance of government bonds, and fund the entire public sector borrowing requirement from the domestic banks that create it out of nothing – and can do so at more competitive rates as the bond markets: this policy of Enhanced Debt Management (Werner, 2014b) not only would make it obvious that Spain does not need the ECB, but it would also put the national debt profiteers – the bond underwriting firms such as Goldman Sachs and Morgan Stanley – out of business.

This reality of private money creation also means that we can, without legal obstacles, create a decentralized system of local currencies, without central bank involvement.

The key principle of such decentralization is local autonomy, self-determination, self-responsibility and self-administration. These are in fact the fundamental principles of the co-operative movement, as championed by Hermann Schultze-Delitzsch and Wilhelm Raiffeisen over 150 years ago. This co-operative movement early on realized that a crucial role for co-operatives is in the creation of co-operative banks controlled by the local communities. Sadly, in the UK credit unions are not banks, since they are not allowed to lend to firms in meaningful amounts, and don’t have a banking license. Thus we need to create true community banks.

Lord Action pointed out:

 

“It is easier to find people fit to govern themselves than people fit to govern others”.

 

“Towns were the nursery of freedom.”

 

The German banking system is dominated by 1,500 community banks, which are also the majority of banks in the entire EU. This means that 80% of German banks are not-for-profit, which has strengthened the German economy for the past 200 years. A banking system consisting of many small banks is also far less prone to boom-bust cycles and it creates more jobs per given amount of loan than large banks. Thus community banks also result in a more equal income and wealth distribution.

Local banking is highly popular in Germany, because SMEs get access to finance that would not be serviced by large banks. The community banks provide their services at competitive rates and support their customers also during recessions. With community banks, the wider community gets a bank whose goals are aligned with theirs, banks that pay taxes, banks that support local growth and jobs. At the same time community banks offer customers a place to put their money where it can benefit the local community, not far-flung projects or speculators.

Can we tackle this challenge?

Until the 1970s, there has been much optimism in economics and there have been high expectations that many of the problems of mankind would soon be solved.

Was this a reasonable expectation?

While it has not come true, it was a reasonable expectation. This is because

 

“Our problems are man-made, therefore they may be solved by man. And man can be as big as he wants. No problem of human destiny is beyond human beings”

John F. Kennedy

I still hold my altcoin and i plan to my all coin holding for longer time  beacuse  altcoin  give  a bright future  alt coin low now so i plan buy the coins.

Don't you think price blast not correlate with its real life usage since its inception?

Its hoarded for speculative purpose but how many major cities in the world have even its ATM?

I mean we all the time correlate its value with fiat currency then buy/take then what's its purpose in my day to day life?

Who will accept it in store when confirmation time is so long.

Based on the success and free time that I have, I have decided to research the top 200 altcoins and release at least one analysis of them a day. Will release the results in this group (first 500 to join will get access to the premium group) Link below...

https://t.me/CookieCrypto


I have 12 Bitcoins. I am not a whale. I started about 6 months ago with 0.01 Bitcoins and $1000. I turned it into 12 Bitcoins so far and am pretty proud to say the least.

My question is, what do I do now?

As far as I can see, I have 4 options;

1) Hold the Bitcoin

2) Invest in altcoins and leave a little in Bitcoin

3) Fund a project and start my own cryptocurrency that solves a problem that current currencies face (scalability, Tx fees etc.). With the funds, I would be able to assemble a team, start a marketing campaign, get listed on exchanges etc. I am also a programmer which helps.

4) Convert it to fiat (probably the dumbest idea)

Edit: I should also add, I dropped out of school and have all the time in the world so can fully commit to any idea. I will earn my living of cryptocurrencies.

A few people have asked how I made my money so, if you are interested, here is a short summary:

Initially, I put it all into Bitcoin during the massive FUD of the fork around June when Bitcoin dipped to $1,900. Then I put half my money into NEO before all of the hype at around $12 and cashed out at $40. Then I invested in a couple ICO's and turned a pretty good profit of off the hype. After that, I got back in on NEO as soon as China announced the regulations regarding ICO's and rode the wave back from around $20 to $40 (I can't quite remember). Then, I rode the hype of Ethereum Dark, eBitcoin and a few other airdrop scams. Finally, I got in on Wincoin before it got to coinmarketcap and turned a 20x profit.

save your money do not take the risk to hold, unless you are sure with one altcoin to invest there, but there are some circles who are very confident that there will be bullish in the near future, I'm not suggesting to take that risk 

I absolutely agree that you should not sell tokens at once, but you just have to wait, if the project was worth it, then they will definitely rise!

There will always be bounty, just not a lot of people that will do what it takes.

Long term investment, go for ETH. These coin will only grow bigger and 500$ is a good start to invest. In a few years you will gain much more than you invested. Also, these coin is highly safe to invest.