This is a discussion of the central banking monopoly, fiscal, monetary, decentralized, and social contract based credit money concepts. It explains why small businesses and new businesses should have access to easier financing.

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Copyright© Schmied Enterprises LLC, 2022. Trieste, Italy, EU

Both fiscal and monetary policies require central banks to be independent. A monetary policy that reduces unemployment, and provides basic goods and services is sometimes not in the best interest of the governing majority. Central banks can loosen the monetary policy to allow more small businesses to grow. The government is there to subsidize the economy otherwise.

Many debtor countries choose the path of loosening central bank rigor to grow their economy, especially those, who are in the early stage of industrialization. There is nobody to disrupt, there is no dissent. This allows room to rate setting, but also to some inflation, booms, busts, currency fluctuation, and contemporary arbitrage.

As a matter of fact debtor countries do not exist. Governments can build up debt. Debt may accumulate in the currency of a central bank. Citizens can not be responsible for the debt of their government or institutions, regardless whether it is elected or not.

Such a lousy monetary policy may not be in the best interest long-term asset holders of industries of an advanced economy. You can easily experience this talking to an insider person in the economy. They are skeptic as usual. An outsider person is invested in growth and change.

Keynesian government intervention has drawbacks as well. Should the government replace private services, they make a monopolistic competition. This may disrupt the economy shrinking the tax base. Even worse, public services may shift the government in a non-democratic way. Private companies supported by the government may manipulate elections weakening democracy. Leaders staying for a long time may indicate such a situation.

Many private companies can thrive on the mistake of the majority. The author of this article was brought to Canada and the United States based on a decision fifteen years ago. Private companies made a decision, that he can provide more value growing the domestic product. He could earn a multiply of what he earned back in Europe in 2007 exporting to countries in the Middle East or East Asia.

This hiring decision was made with the assumption that tech companies like Amazon, Intel and Microsoft have access to adequate financing. They could evade the interests of the majority earners being big and having access to investment bankers who banked on the lower risks of leading human resources systems. Cash salary was not the dealbreaker, actually. It was capital gains that made the project lucrative.

Datacenter financing fueled tremendous amount of growth of such companies in the decade that followed. Private companies improve the system causing growth and improving both employment statistics, and per person GDP.

Private companies focused on employment and consumption have a conflict of interest dealing with governments focusing on unemployment and central banks focusing on low inflation. The existing asset holders and earners represented by the central bank, and the private interest of growth oftentimes compete for financing. Easing this conflict of interest is the goal of any universal basic financing scheme like the credit card system.

This makes the system interesting. Big Tech exists, because there is a demand for stable employment, and low risks. It is useful to have someone with a team of lawyers to address EU and US regulators instead of suburban LLCs. Small businesses can just follow and depend on the rules that Big Tech negotiates for them. They just buy the cloud services.

Sometimes a part of the population falls out of the financial system. This can happen due to personal issues, family, community, wars, and general disorder, etc. The quick solution used to be the legal partnerships, personal checks, letters of intent in the Wild West Frontier. The credit card system also allows to weather such depression periods time to time.

Cryptocurrencies addressed the same scenario, when the constitutional monopoly of the federal monetary politics has not reached territories, yet. Cryptocurrencies also help to speed up the circulation of money. They have some issues being more complicated to verify than a dollar bill. This is addressed by crypto backed ETFs.

Robotics, artificial intelligence, and open communication systems project a bright future. Pay later schemes satisfy the need of fulfilling all the demand for the benefit of increasing the GDP per person.

A good credit money system does not just increase GDP per person, it also allows successful businesses grow faster, meet the needs of temporary unemployed. It solves the issue of the long term disabled, and it also removes the major driving force of tribalism and community politics reducing the chances of wars, and disorder.

The topic is not just welfare. There is only one way to resolve the issues of the environment, and that is a strong economy. It is capable of building up the solar farms and recycling facilities of the sustainable industry. Living in most climates requires machines for heating, water, electricity anyway. Larger population can actually address issues quicker being able to focus on resolving climate disasters, and moving on to something else.

Central banks can still be the single source of money ensuring price stability. Industry specific investment and commercial bank lending on demand allow shifting away from monopolies and oligopolies. Extra desirable products for exiting asset holders or earners address the issue of inflation better than starving newer businesses.

Statistics are oftentimes distorted. Demand is clear. Universal basic financing is the social contract between individuals and the state. Why?

Financing limited by individuals allows decisions to happen right in the store. Financing limited by individuals allows medical decisions right in the doctor's office ensuring short term health, happiness, return to employment, and growth.

The Keynesian approach was lending the money to the government that gives it to people as subsidies or jobs. This assumed that taxpayers will pay it back later leveraging the multiplication effect. Should a project fail, plenty of others succeed.

Problem. The pure Keynesian approach has limitations in the 21st century. It cannot handle competing products well within a single federal organization.

Solution. Power grids reflect the state that could just spend enough to build a single line and company ensuring electricity for town with a fixed population limited by water supply. Extending the power grid is problematic with increasing demand from electric vehicles. The fixed cost is too high for a variable demand across geographies. The higher the risk, the higher the rate, the more likely managers decide against a project. Grid extensions will probably be solar and local.

Problem. Does the central bank monopoly apply to computers?

Solutions. Computers are too fast. Spending that is between robots and supply chains that do not involve people do not need to comply with minimum wage requirements and labor standards. Systems excluding people may have their own monetary instruments in the future as a result. It might well be a cryptocurrency. The same technology is already in place today providing computerized cloud services for open authentication tokens representing monthly subscription payments, but different branding than a coin.

Universal financing allows limiting prices by giving a choice of options to spend the money on. It improves employment by eliminating the question, who gets what. Everybody gets what they want. If they want too much, they need to figure out how to meet a matching demand for it. Robotics will help.

A good financing system drives the supply chain in an elastic manner putting people where they can analyze, decide, and act with significant long term impact.

This article was revised on February 25, 2024.