The Terra international reserve currency is the basis of the Terra International Monetary Union - the TIMU system. Each nation will have its carbon account become a line in their balance of payments which will be administered by the proposed World Central Bank (WCB), roughly in the same way as the European Central Bank does for the European Monetary Union. This bank with a democratically chosen Board of Governors will have two additional functions, one dealing with credit and the other with liquidity. It will monitor credit creation around the world, so that a credit crisis of the present scope cannot occur again. The Bank will also monitor hedge funds and promote transparency and accountability in the global financial services sector, seeing to it that risks are combined with responsibilities. It will promote the abolition of offshore banking and the transition of privately-owned banking systems to publicly owned banking systems. The bank will also engage in making available extra liquidity, somewhat in the same way as the Special Drawing Rights of the old International Monetary Fund.
Though the proposed World Central Bank does not tell the nations who have signed and ratified the TIMU Treaty how to deal with their credit creation institutions, it will advocate the abolishment of fractional banking. James Robertson of the New Economics Foundation has testified to that effect to the UK government—the host of the G20 Summit on April 2 in London. He thinks, like me, that the present privatized banking system operates on two conflicting goals: money creation and at the same time competing with one another. No wonder that the most “imaginative” bankers go into the nirvana of impossible derivatives!
Besides fixed exchange rates that are based on the Terra international reserve currency the TIMU architecture has as its sixth component a bioregional economics and frugal trade approach. What this means is that living well within one’s own region as much as possible becomes an economic objective rather than building an export-oriented economy with its concomitant consequences of outsourcing and global corporate control. The Washington Consensus with its “unholy trinity” of the IMF, the World Bank and WTO is disappearing and as Mr. Gordon Brown stated in his address to a Joint Session of the US Congress on March 4, no ideological barriers are to stand in the way to find the proper solution. Though he mentioned the challenge of the climate crisis he did not mention, in his address and elsewhere in recent days, using the resolution of the climate crisis as a way to resolve the economic crisis. Much work has to be done particularly by civil society to make that happen as we will see in the final article on mobilizing for the Terra solution and its TIMU architecture.
Mobilizing for the TIMU international monetary system
The year 2009 may become an axial or pivotal year in the history of humankind and of the Earth. Decisions that are going to be made at the G20 Summit in London on April 2, the UN Negotiating Conference in early June and the UNFCCC Conference of the Parties in Copenhagen in December are going to set the direction for the next couple of decades and, perhaps, for this century. They are going to contribute to or delay the major historic challenge of the sustainability revolution that was described in article 3 of this INSnet series. They will determine the fate of millions of people who are suffering through the economic
recession and deepening climate crisis.
A mass movement of enlightened government, business and civil society individuals and organizations is needed to make transformational changes; simply reforming present structures is not enough. The 300 year old privately owned banking systems have to be subjected to global scrutiny in a wide ranging public debate. It is not only governments and business that have to engage in transformation, it is also civil society and, in last instance, every individual person. I have suggested to one of America’s best radio programs, Democracy Now, that they take the initiative in the USA in organizing this public debate, because these monetary and financial decisions are key decisions in which participatory decision-making is to be key. Technical resources for this mobilization can be found in websites such as www.neweconomics.org where former governmental monetary planner Mr. James Robertson’s testimony to Mr. Gordon Brown can be found about removing fractional banking and the establishment of a non-national international reserve currency, www.ethicalmarkets.com where economist Hazel Henderson has a column on global economic reform, www.timun.net where you can also find a two-fold petition to this effect besides much of the extended information that underlies this short series. An appendix of Resources will be part of my forthcoming book entitled–TIMU: The Transformative Approach to Monetarily Solve the Economic Crisis by Solving the Climate Crisis, to be published this summer by Cosimo Publishing.
Frans C. Verhagen, M.Div., M.I.A., Ph.D., sustainability sociologist,
International Institute of Monetary Transformation. www.timun.net
New York City March 2009