Pool Clearing and Clearing Funds

The points-economy works best for tightly-integrated economies such as a small town or a district of a large city.

Points-banking can then connect these local economies with each other, such as City A with City B.

However, points-banking cannot connect Country A to Country B which might have very different laws on imports-exports and taxation.

In this case, the money system is better suited. For example, the US dollar is designed for cross-border transactions:

• prices are denoted in US dollars
• banks are able to accept local currency for conversion to US dollars for world trade

To import a product, local currency is used to buy US dollars which is then sent to the exporter. Points-banking saves a lot of local currency, and so imports will increase as a consequence.

The problem is that, in the current world trade system, this will create a balance of trade deficit which will then cause a devaluation of the local currency. This then will negate the advantages of the Points system – solving a bad stagnation just to create a bad devaluation.

How can such a trade gap be solved?

Pool Clearing to the Rescue

The economist EF Schumacher thought about this in the 1940’s and proposed a Pool Clearing system as a solution.

Instead of world trade being done in US dollars in an unregulated way, each country joins the global pool, as a closed system, which mandates them to set up a National Clearing Fund.

This fund will be used to:

• accept local currency payments for imports
• disburse local currency to exporters

The Clearing Funds eliminate the need for cross-border money transactions – money no longer leaves any country.

This will make currency speculation and currency crises obsolete. It will also help deficient and stagnating countries get out of crisis by letting them export their way out of their quagmire.

Each country’s Clearing Fund will be subdivided into different industries, with subdivisions, such as:

Investors, such as the Arab sheik, can then park their money in a fund that they like, in a country that they like. If a country can define 1 million industries, then each can have its own fund. The sheik can then have 1 million investment options.

There is still a gaming element since not all funds will succeed equally. Yet not all funds will fail unless the country is totally mismanaged. This will allow people to enjoy such a childish pleasure*.

This will allow capital to spread over many industries in many countries and not just into a few blue-chip companies, as is common in the current system.

It will also increase global trade since the Pool-countries will act as a single economic country. The Pool works on common-interest since all members can help each other export their way out of crisis and provide employment via exports and tourism. This makes trade wars and protectionism illogical.

Lastly, it serves as a better alternative to a single currency like the Euro, which has many regulations, and the US Dollar, which is controlled by one country.

Ends Both Capitalism and Marxism Gradually

The points system gradually reduces the importance of equity. This will cause stock-trading and stock-investments to likewise lose importance, dragging Capitalism with it.

With Capitalism reduced, then the need for Marxism also declines, since Marx created it to counteract the evils of capitalists. This will slowly eliminate the Cold War animosity which currenly manifests as AUKUS-EU vs China-Russia.

Pool Clearing can also unify Hongkong, Taiwan, and China peacefully without the needing to go through the current tensions.

Moreover, it can be integrated with the logistics system so that shipping containers can be allocated correctly instead of having a shortage, like what happened during the pandemic.

This will create a coordinated global logistics system that can make trips as efficient as possible, reducing unecessary ones. This would then reduce emissions and consequently, global warming.