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The title of this website ‘Short of Money’ is intended to capture your attention.

Why? Because the short of money condition does not need to exist when you have a fiat currency which we do.

Our thinking about a fiat currency only needs to recognise the existence of two distinct categories of money, old and new, and deal with them appropriately, that is all.

No person who is without any money but capable of exchanging goods and/or services with others should be unable to get issued with sufficient new money to enter into an exchange with another person.  That is unless they have already reached the limit of the amount of un-off-set new money which each individual is allowed to accumulate.

Currently however this is not the case and those without any money are doomed to remain in that condition forever unless they can get some old money from someone else. They are unable to, by a sequence of perfectly normal exchange actions, automatically transform any new money, that they have received, into old money.

They cannot do this because the  current money system does not allow for it. This problem arises out of the premises on which our current money system was designed to operate.

This system was designed to deal with money which from its issuance had real value. Each unit of currency was linked, by legal compulsion, with a real fraction of the gold held by the State. This meant that right from the point of issuance any unit of currency was in itself an exchangeable item and was rightly treated as such and money could only be obtained in exchange for another exchangeable item. Thus logically money could not be issued to just anybody who had need of it unless this was being done as an act of charity.

When South Africa, amongst other nations, abandoned the gold standard for our currency it became a fiat currency. A fiat currency is just a record of intrinsic worth that exists in something else, namely in an exchangeable good or a service.

Fiat money is defined as:

Money which has no intrinsic value and cannot be redeemed for specie or any commodity, but is made legal tender through government decree. All modern paper currencies are fiat money, as are most modern coins. The value of fiat money depends on the strength of the issuing country’s economy. Inflation results when a government issues too much fiat money.

On the other hand fiat currencies provide the opportunity for governments to issue new money to anybody who needs it to enter into an exchange provided that the receiver of the new money subsequently supplies into the economy exchangeable item[s] to the value of the received new money and personally forgoes the money received from the sale[s] because of having already had the use of its value in the previously received new money.

As we have a fiat currency the South African money system should be changed to enable this to happen. With the availability of modern information technology there are no technical barriers to achieving it. Barriers to achieving it lie solely within the social realm. This website is the first step in what will have to be a collective effort to overcome these social barriers.

There are other changes to our current money system that it would be worthwhile considering at the same time as the above change. Have a look at Positive Money’s website [http://www.positivemoney.org/] to get an idea of them. We have exactly the same problematic money system as does the UK.

If you are interested in campaigning for reform of our money system then email me [rorys (at ) homemail (dot) co (dot) za] with ‘Monetary Reform’ in the subject line so that we can start building a South African movement for monetary reform.

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