Solution page 8:
Producer Credit Brokerage & Supply Chains

I assume that if such a system were to be adopted, especially to operate a global network of online automated markets, a network of professional brokerages would be required. In the current system, banks validate the credit worthiness of borrowers, the real money creators. In the proposed system, Producer Credit brokerages would validate the credit worthiness of Producers, the real money creators. Brokerages would validate the Producer Credits validated by other brokerages etc. until an immense global list of validated Producer Credits could be offered to clients.

At any time, anyone could single out an Issuer to exclude, for any reason.

The brokerage would prosper by ensuring maximum value and security for their clients in exchange for fees.

Two simple and obviously fair laws would be required to make brokerages both reliable agents for their clients as well as honest replacements for the current credit rating agencies:

1. Brokers must be paid by BOTH parties to an exchange and;

2. Brokers must be paid in the exact same mix of Credits they have obtained for their clients.

Constrained by these two simple rules, brokerages would, in their own self-interest, perform the role of honest credit ratings agencies.

In the best interests of everyone, brokerages should be numerous, competitive, and in close touch with the Issuers whose Credits they accept and pass on to clients.

Brokerages could, for instance, offer insurance in the form of a "guaranteed par" to their clients, taking all the risk and benefits of the Producer Credit system internally.

Supply Chains

Producer Credits could be issued by any or all of the entities in a supply chain, from mines and farms to retail stores. However, the simplest approach would be Producer Credits sold by Retailers to their customers. Being pre-purchases at the retail price, such Producer Credits could crowdfund the Retailer and its entire supply chain. This short movie demonstrates.

Governments at all Levels

Governments would use the exact same concept as well. Government Credits would be spent to provide government services and collected back in resource royalties, user fees and taxes.

Local Systems

At the extreme other end of the same proposed system, individuals could use the same value unit and technology to run a local money system entirely on trust between individuals, with their own internal accounting and arrangements and with all credits accepted at par. Using the proposed digital object system, this could be done peer-to-peer, independently and anonymously, in complete isolation from the rest of the system.

This short movie shows how Producer Credits could help a cash-strapped community. Demand creates money directly rather than as debt to a bank.

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