Gold based community credit unionSubmitted by tamckissick on Tue, 05/11/2010 - 09:40
I've been writing a book for a while now and got it completed a little over a week ago. After I had some people review it for me, a conversation sparked up over one of the topics in it. I had proposed a non-government sanctioned credit union type of bank and they all liked it but had lots of questions on how it could work. I've got many of those issues worked out but still have some more and I would like the DP clan to offer their suggestions. Also, if anyone actually wants to take the ball and run with it, feel free to contact me and I'll help what I can for you to start one up.
The idea is fairly simple, but seems complex when you're brainwashed to think today. You deposit your money into a debit account, it's converted to gold ounces, and you can pull it out (converted back at that time also). That's the short version. The long one is that any money excess you have in there is available for loan to someone else. The types and sizes of loans available are determined by the amount of excess stored in reserve. Small in the beginning and building as the deposit grows. Ultimately, it could offer loans for cars, homes, educations and emergency medical bills. That last one is so that its members could ultimately eliminate buying any type of insurance.
It would make money by keeping the rounding differences of gold conversions on every transactions. Since the statistical average rounding difference is 1/2 a penny per transaction, this is the basic revenue of the system.
The members with a positive balance will gain from the price of gold rising while their money is in there. However, they also have the option to set a floor value on their money (one month in advance of activity) which places all their money below that amount in an untouchable investment pool.
People that need money can borrow from this pool but have to persuade 'the community' they are the most deserving of that money because it's a first-come, first-serve basis. To present their case, they have to offer regular dividends back to the pool (or to the individuals who chose to lend their pool money to them). In this way, they compete by their offers of responsibility, repayment history and dividend promises. Anyone desiring to go negative (get a loan) has to have all his income direct deposited into this account so his daily 'checkbook balance' amount is helping work for the system.
All the money taken in is deposited into a digital gold company such as goldmoney.com or similar. I just used that one as an example because I think it's the only one with actual physical gold behind all deposits.
As the systems grows and more savings amounts, stock portfolios and even retirement accounts are moved to this system, the pool will increase. This will essentially become similar to a gold based economy with community lending with no interest cost. Their only cost above the price of gold rising is the dividends they promised in order to get the loan. This is similar to how Prosper.com works.
Beyond the basic income of the system mentioned above, a small percentage of dividends would be charged for system revenue. A public statement of standing would show how well the system is doing for expenses vs. this income and that percentage could be voted up or down accordingly. This would cover the cost of member expenses like visa (or a similar system) backed debit cards or checks, unless those should be directly charged to that member using them.
Ok, so what do you guys think? I'm looking for input, questions and comments.