CYBER MONEY

It will not only be a question of monetary reform. The present financial system must be totally discarded and make place for a radically new concept of money. Modern electronics and the Internet currency circulation could easily be automated and run without human interference. The new millennium does not need banks with a privileged status anymore. An integrated world needs a means of exchange which works free from national limitations, politics and regulations, which circulates without having to flip-flop in and out via national nodes. It has to be money which everybody trusts and accepts, which is globally transferable, where no politics can interfere with.

Do not look at Cyber money as presently being developed on the Web. That is far from what future money will look like. It will turn out to be only a temporary short lived experiment. It should only be seen as an adaptation by the Cabal of the fiat money system to the Web. The banks are doing all in their power to subjugate the Internet to their loan shark systems. Great ideas like David Chaum's DigiCash have been sabotaged and DigiCash pushed into liquidation. David Chaum pioneered an advanced payment system where anonymity is guaranteed 100% and not only anonymity in financial transactions, but his system also offers total anonymity for any personal records and documentation on the same principle of untraceable communication protocols. Naturally these are developments the banks and the State are fiercely opposed to! Credit cards and loan accounts are being propagated instead. Only after the financial deluge and a total rethinking of money and finance will real digital finance make its official entry. The present international monetary system, being made up out of a multitude of fluctuating national currencies, is totally inadequate for the requirements of the Internet.

Private initiative under strict rules and regulations should run it. Private companies can by brought to justice in case of misdeeds, but the government never. Only once the national currencies will have been replaced by an independent free floating global means of exchange will commerce and finance on the Internet come into their own.

ONLY 100% GOLD OR SILVER BACKED CURRENCIES WILL DO.

The real cyber money, issued independent of any government and based on intrinsic value, could become the cornerstone upon which a free, open 21st century world could be built. After the fiat currency collapse, people and business will be looking for new, solid anchors from which to run their affairs. Anchors, the sinking paper currencies will not be able to provide any longer. Precious metals, commodities, productive off-shore real estate and industrial properties will become sought-after safe havens. However, more than just assets will be needed. It would be cumbersome, if not directly impossible to run one's affairs without stable money to settle transactions. An urgent need will arise for a monetary replacement. Cyber money and standardized precious metal coins will be the money to take immediate advantage of the gap left by the demise of the fiat currencies.

Cyber money based on intrinsic value, digit by digit, offers all the necessary requisites. It cannot be but successful. I can see the best chance for private enterprise to start out with the first real cyber money from off-shore and safe from political interference. Private enterprise will run money more efficiently and correctly than any State ever has managed to do before. Money has to have and keep real value. If it does not, then we would again be faced with the renewed danger that politicians and bankers would return to manipulate and manage everybody's affairs.

Precious metals have played an important role in human history for over 6000 years and all the soothing talk of the last 40 years that gold has had its time in modern society should be seen through the glasses of the ones wanting us to see it that way. As long as there are people, there will be cheating. Only by way of an independent natural element, or "hormone", will it be possible to keep monetary manipulation in check. Many will be the cyber currencies, which will flourish, not just one. Like we have a multitude of national currencies to choose from at present, so will a manifold of private cyber monies offer us choice and spread the risks. After the bitter experiences of the panic, cyber monies will have their best chance by distancing themselves as far away as possible from the characteristics of the old fiat currencies. Gold has many characteristics, non-corrosive and it cannot be tainted. Another one is its malleability: it can be hammered out to near molecular sheets. Instead of it piling up in the cellars of the NY FED, the Bank of England and under the Bahnhofstrasse in lumps, it should be spread out thinly over the whole globe so all its inhabitants will profit from it!

An example of my personal ideas of how a cyber currency should look like runs as follows: Practical digital units of 1/100th of one troy ounce of gold (at present value approx. U$ 3.-) and or units of one ounce of silver (approx. U$ 6.-), each divided into 100 cents. I call them the Aureal and the Argentum. These would be brought into digital circulation by automated circulation banks on the Web. The total sum of the digital circulation would always be covered by exactly the same amount of precious metal deposited with a custodian bank and guaranteed by a reputable international accountancy firm. Participants in the circulation of the digital money would become partners in a global financial umbrella or "cluster" organization. A cluster, properly set-up, could soon become self regulating and work like a cooperative Global Reserve.

The more private Internet bankers would participate in the circulation of such currency, the broader would the risk involved be spread. A risk, which in itself would solely extend to fraudulent behavior, because no banker of the new order would be able to speculate with depositors money or use it for manipulations. The character of digital money based on precious metal is going to be very different from the present currencies in circulation. Digital money backed by precious metals, as envisaged, would always stay under the direct control and legal ownership of its owner, even when deposited in the digi-bank. Digital cash can be made secure: certified by the web-bank, with communication done by high grade encryption and using 2 keys one private and one public key. Proof of all transactions is kept at the web-bank. It is anonymous: nobody can trace the spender. Digital money can only be spend once. All what is needed is a PC, a smart card and e-cash software. Real digi-cash works like a safety box: only the owner can get in and out and that in privacy! Naturally the State and the banks abhor such anonymity and want insight. They can have it but than at the same time we would like to have detailed insight into all government bookkeeping, into all banking transactions on designated public web-sides. And into the share holding structures of the banks and conglomerates.

After what is going to happen in the financial panic, only under the strictest conditions will people be persuaded to start using the conveniences of cyber cash:

• Discreetness: encrypted correspondence with the cyber bank from any fixed, cellular or satellite phone. If wished with pin-code or via a third party.
  
  
• Instant contact: only a mouse click away from the cyber bank.
  
  
• Instant action: one private and one public key will have the cash secure on your PC in seconds.
  
  
• Anonymity: from your PC to your payment destination without the receiving party ever knowing where the money originated, while you will still have proof of payment made.
  
  
• Portability: You can load as much money as you like onto a smart card or the hard-disk of your PC and carry your "loaded" PC around with you wherever you go. But do not forget to make a copy on a floppy for back up! In future even a teeny weeny chip hidden under the family crest of a ring will make it possible to carry one's fortunes around.
  
  
• Property: the money on your account will always be your money with intrinsic value. It cannot be debased. The trust cannot get to it. Nobody can.
  
  

Free cyber money, once it will have succeeded against all the opposition by government and banks, will become a very different kind of money than the kind we have been used to and been forced to accept. Whereas the banks have been sitting on everybody's money, consider it their own and play with it, cyber money will come to reside under the direct secure electronic control of its owner in a digital safe deposit at the custodian bank. Digital financial assets will be held in the same way and will also reside under the direct control of the owner.

The client will be able to keep his own accounts and execute all transactions personally. The bank will no longer be needed to administer their clients' accounts. Cyber techno and cyber custodian banks as envisaged above cannot go broke because the bank's money and the clients' money will be two separate entities for now on, never to be mixed anymore. They will not be allowed to be actively involved in finance and neither will they be allowed to touch their clients' money without the latter' explicit consent. Neither would sudden major withdrawals from accounts affect the standing of the cyber bank because the money is not the bank's.

Free cyber money is going to shake the world's financial power structure in its foundations. So it should be well understood and clear that State and banks will do everything possible to maintain the status quo and impede the birth of free cyber money or try to subjugate it.

Governments hate cyber money, encryption and personal privacy as there is no audit trail, no bank account to check and business can trade from anywhere. Private cyber money, 100% backed by precious metals, would automatically exclude the need to have to cede to any country the privilege of obtaining a dominant reserve currency status. It would also eliminate the unfair advantages bestowed upon the reserve country to live off the credit of the rest of the world.

INTEREST RATES

The question of interest or no interest is bound to arise prominently at the start of the New Millennium on the Web discussion forums in the search for a new financial equilibrium. Interest gives money power status and aggressiveness which in a fully integrated Humapan are no longer desirable. Credit makes slaves and interest leads to capital concentration. Capital concentration leads to unbalanced economic development and to divergence of social levels. The Arabs are living without interest on capital today and the Christians lived without it till the thirteenth century. Once money has intrinsic value and serves as store of value over time, interest will lose most of its importance and so will its perpetrators: the whole parasitic financial establishment. Companies can be financed easily from share participation alone. When short term supplementary capital should be needed, short term share certificates could be subscribed for. But the situation that there are creditors who have preference over shareholders when things go wrong must be eliminated. When participating in a venture it should be on a equal basis with equal responsibility for everybody. The ordinary people should know that their savings today will have the same value tomorrow. But if ever they would like to participate in companies it should be done by the holding of direct share certificates where everybody will have full electronic voting rights and not get the banks or funds get away with the voting rights. There is no need for the wisdom of banks or funds as wisdom here never existed in the first place, only greed. The ordinary investor in the street should in future to able to get all the investment information required by surfing the Web and in case he does not understand it, he better should not invest anyhow!

MONEY DOES NOT NEED INTEREST IT ONLY NEEDS TWO FUNCTIONS: AS A MEANS OF EXCHANGE AND A STORE OF VALUE.

Cyber money with intrinsic value will encourage saving, even without the enticement of interest. Money with intrinsic value keeps its worth through the ages, whereas fiat money, even earning interest, always has been losing value because of the chronic inflation, endemic in democracy.

THE CORPORATION

Another important point of discussion I can see arising on the Web will become the question of anonymity of share participation in financial institutions, companies, corporations, societies anonymous, limiteds etc. Too much advantage has been taken too often and so much illegal dealings have been going on behind the cloak of anonymity that it should be placed on top of the discussion items. I am very much for personal privacy but participation in companies by individuals or other companies, societies, governments or royalty should be transparent and open in a Internet society.

THE BANKS

Since their early days the banks have always enjoyed a special relationship with the State. The State needs a fall-back in case of financial problems and the State needs the banks to assist in running its financial affairs, for instance tax collection. The banks from their side appreciate the privileges granted, the banks' share in the circulation of the currency, credit expansion with curtailed backing privileges, and protection given against unwanted competition. Politicians and bankers are very close. Too close. Banking licences are granted by the State. The State and the banks together draft the rules of the money game and make quite sure new entrants will not spoil the broth. The money markets which should be totally open to anybody with the necessary credentials, have in practice become the exclusive fiefdom of a cartel of privileged banks. It would be very interesting and in everybody's interest to see broad discussions about the privileged banking charters develop on the Web.

THE MARKETS

(See the MYTH OF FREE MARKETS)

Like it is completely feasible to establish an automated digital currency running without direct human interference, so it will be equally feasible to establish markets for anything on an equal playing field on the Net. However strict rules should be laid down for the participants and great care should be taken that not one party will have the advantage of preferential financing, that only people directly connected should participate and that pure speculators should not be allowed in. The latter will mean no futures, no options or whatever derivatives. I would also suggest complete openness and public knowledge on the Web of all transactions and their conditions. Markets are likely to become one of the most complicated subjects for discussion in the restructuring of basic capitalism. And just a reminder that basic capitalism is based on nature's laws of competition and selection.

GLOBAL POLITICS

The upheaval in the financial markets and the rapidly growing power of the Web are going to lead to far reaching political changes. Especially conglomerate nations will come under stress. I refer here to nations and federations with either different ethnic, language, ideology, religious or business composition: Indonesia, the Congo, Sudan, Mexico, Russia, South Africa and India are prime examples. Euroland under strain of depression and joblessness will fall on hard times to stick together. And for the USA the differences between Latin California and Florida, the Deep South, the NordWest, the SouthWest and the East coast have lately steadily been growing, not only population wise but also business wise. The menace of national fragmentation is ante porta. Also here open discussions on the Web are going to carry important weight. Whereas formerly there was not much choice for people unhappy with affairs in their home country than to protest and stay. Today thanks to the Internet the "home" of every citizen now encompasses the whole globe. Governments will have to learn that they do not "own" their citizens anymore! People have "else" to go. Political discussions on the Web are bound to bring virtual global political organizations onto the Web, which in turn must lead to direct political platforms for the people and bypassing the national governments and the United Nations completely. I can see the International Red Cross, Green Peace and other ECO societies and the Human Rights Societies as the first ones to take this route. Clusters as described earlier although not directly political might follow in order to bring their common interests up to a global level. Globalization is going to be very different from what the Bilderbergers and the Tri-Laterals might have in mind at present.

THE CHANCES

The outstanding success of the Internet and the unstoppable advance towards globalization augur well for a Humapan society. But how this is going to happen and when this is going to happen is another matter. Are we going to see a free Humapan or digitorian Humapan? Will the road toward it be peaceful or paved with upheaval? The name "Global Village" is a great understatement and partly a misnomer. We are not going to see a cozy chit chat relationship between nations, but rather the overturn of one era into the unknown. The winds of change are gathering strength as never before in human history and do not bode well for a quick and peaceful transition into the 21st. century. The established order is still solidly entrenched and keeps on introducing controls and usurping ever more power to the detriment of individual liberty. Like a herd of cattle, people are accepting increased regulation and interference by the State, in meager exchange for gains in social security and medical aid till the State will have run out of money. People are surrendering private confidential information to data-banks in exchange for discounts and small favors. It shows how far people have descended into accepting authoritarian treatment and are changing into meek "digitonians". Only few individuals have an inkling of what may lie ahead and only a minority of these might have the guts to stand up to defend their privacy and human dignity. It might take many, many years, until the outcry for freedom will have gathered the strength again to break free from the chains of the Compu-State and a democratic Humapan will become a reality.

If only people could be awakened from their complacency and open their eyes to the dangers ahead. Already stand up now for their rights and take full advantage of the tools for freedom lying within their grasp, then a lot of misery could be avoided.

HISTORY COMING FULL CIRCLE

In the sixth and fifth century BC, the Greeks ousted their tyrants and their philosopher Solon gave Athens the first democratic constitution.

During the same period the Greeks introduced the FIRST EVER STANDARDIZED COINAGE, which became accepted throughout the whole of the Mediterranean basin and the Middle East. It gave a phenomenal boost to trade, travel and cultural exchange.

In the fourth century BC, the Athenian League was established and the combined treasuries of the member states, as if it were a modern GLOBAL RESERVE BANK, were put under JOINT CUSTODY on the island of Delos (OFF-SHORE).

The liberation of CIVIL INITIATIVE, coupled with democratic laws and a FREE FLOATING MEANS OF EXCHANGE, brought one of the greatest advancements in human history. The arts, culture, construction, philosophy and learning, inventions, all thrived and prospered.

And for all the Gold-Eagle Associates, a Happy Golden New Millennium

Part 1

Part 2

Part 3

Hans Schicht
Lake Chapala, Mexico
18 January 1999