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The new normal and the Tierra Solution

Post By gaia1 in Economic crisis

The new normal and the Tierra Solution.

The following comment was published yesterday in Paul Krugman’s column in the NY Times dealing the permanent slump which seems to become the new normal. Note how the NY Times informs you about the comment.


Why not push harder in this globalizing world for international solutions in the realm of monetary policy? Part of US trade deficits is the US Dollar functioning as an international currency making it easy for the US to borrow in its own currency. Why not push harder for the expansion of SDRs and even start discussing using the international monetary system to deal with this century’s greatest challenge of climate chaos by basing it on a carbon standard?

c The New York Times




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The decline of US Pre-eminence

Post By gaia1 in American Monetary Matters

 An important contribution to the rapid U.S. government ascension to a world power status after WW II is its monetary dominance by way of the Bretton Woods UN conference during end of the war. The conference’s acceptance of the dollar/gold exchange standard was pushed forward through the political might of the US though the Keynesian plan, also supported by the Canadian delegation, held a far greater promise for global reconstruction and prosperity.

The U.S. government could loose its financial predominance if it is unable to resolve its debt ceiling conflict. It would become one nation among others that would have to compete notwithstanding its deep financial structure with a plethora of good (and dangerous) financial services. Thus, more instability would emerge in international monetary system that already is unstable and rudderless.

One way to counteract the global impacts of such financial crisis—they are more devastating than the domestic impacts—is for the U.S. government and other stakeholder to start negotiating towards a new international monetary system with an international transaction currency not bound to the US financial system or to a regional financial system such as the Euro. Time would seem to be ripe to again raise the issue of Special Drawing Rights (SDR), the basket of currencies that would replace the U.S. dollar as transactional currency. This reform would greatly improve monetary, financial, economic and commercial systems because the monetary system, like glue, binds those systems together.

It is during this time of negotiation and debate of a just, sustainable, and therefore, stable international monetary system that stakeholders in the global North and South consider the feasibility of developing a monetary standard upon which national or regional currencies can be pegged. The 2012 book The Tierra Solution: Resolving the Climate Crisis through Monetary Transformation presents the case of taking a very specific tonnage of CO2e per person as the monetary standard by discussing the conceptual, ethical, institutional and strategic dimensions of such carbon-based international monetary system. This carbon standard would not only transform the international monetary system and lead to a just, sustainable, and, therefore, stable system but would also combat this century’s greatest challenge of climate change and advance low carbon and climate-resilient development in both the global North and South.



US Government shutdown and internnational action

Post By gaia1 in American Monetary Matters

 Hardly anyone in the US points to the adverse international impacts of the looming government’s shutdown on account of crazy demands on budget and debt ceiling by Republicans. IMF’s Christine LaGarde points to the uncertainty these US financial actions cause to business, governments and civil society the world over. However, she does not mention any action that the international community should consider taking.

I for one and I am not the only one that favors the replacement of the U.S. dollar with Special Drawing Rights (SDRs) which were first proposed in the middle seventies after the Nixon Administration had  closed the dollar/gold exchange window. Civil society and perhaps business should start agitating and pressuring their countries’ financial authorities to have the IMF change its articles so that the US with its 18% voting rights is unable to block the decoupling of the U.S. dollar from being the international exchange currency. Once this process is underway, I for one and not many others yet, believe that we can use this reformed international monetary system to make a final transformational change by basing it on a carbon standard. This transformational change is needed because we are headed towards a climate catastrophe and we need drastic changes in global climate policies if we do not want to imperil people, species and planet.



The transformational challenge of the new US Fed chairperson

Post By gaia1 in American Monetary Matters

This comment was submitted to the NY Times on September 16 when Dr. Summers withdraw his probable nomination by the Obama Administration.

Given that the US Fed in the absence of global central bank is the nearest to a global central bank its new chairperson has the obligation to not only deal with monetary matters at home but also play a leading role in making the unjust, unsustainable and, therefore, unstable international monetary system less unjust, unsustainable and unstable. Optimally this would mean that s/he consider transforming the role of the dollar by not having it play the role of an international currency.

As proposed during the middle seventies and emphasized by the UN Stiglitz commission after the financial collapse in 2009 moving into SDR (Special Drawing Rights) realm would be to the benefit of the US and global economy.

A really transformational international monetary policy for the new US Fed chairperson would be the basing of the international monetary system on the carbon standard of a specific tonnage of CO2e per person. In that way the international monetary system would become stable, just and sustainable. Should the various monetary unions in the USA, South America, Europe, Africa and Asia not begin to discuss the feasibility of a global central bank with its appropriate administrative, regulatory and monetary functions? The conceptual, institutional and strategic dimensions of such carbon-based international monetary system are presented in a recently published book entitled The Tierra Solution: Resolving the Climate Crisis through Monetary Transformation.



The carbon monetary standard in an anchorless world

Post By gaia1 in TFD system

 The carbon monetary standard for an anchorless world.


On September 12, 2013 NYTimes Op-ED columnist Roger Cohen presented his views of “An Anchorless World” focusing on the unsteady hand of the Obama Administration during the Syria Crisis. He goes back to 1945 when the US was the steady hand after WW II and set up a world order around the U.S. dollar and the US economy. Having noted the steady decline of the world order, he, a German friend and John Kornblum, the former U.S. ambassador to Germany commiserate together about the anchorless world without a vision of an alternative world order. I submitted the following comments (probably #199):


From an anchorless world to a world with a monetary carbon anchor is a huge challenge that humanity has to discuss if we want to avoid a climate catastrophe. We need an integrated vision that would deal with the climate, economic, political and monetary challenges simultaneously. We need such vision, because dealing with one or two major issues separately and disjointedly often creates other, unforeseen, problems.

By discussing and developing the challenge of carbon-based international monetary system we are dealing simultaneously with the climate crisis and the unsustainable patterns of economic, financial and commercial global systems. Changing, i.e. transforming the international monetary system which acts glue of those systems, changes and transforms the monetary, financial, economic and commercial systems. Details of this carbon-based international monetary system, which is the necessary but not sufficient condition in removing the present anchorless world, can be found in the recently published Tierra Solution proposal which presents the conceptual, institutional and strategic dimensions of such new world order.



Krugman's Age of Bubbles

Post By gaia1 in American Monetary Matters

 The following is an expanded version of my shortened response to Krugman’s column in the New York Times of August 23, 2013. It may also function as the basic information for an OPED piece in the New York Times.

Why did so many bubbles happen during the last couple of decades while they were absent during the 50s and 60s and early 70s? There are many reasons, but the most important one is often not mentioned, let alone studied.

It was during this period that the international monetary system was a stable system, based as it was on the dollar/gold standard. When the Nixon Administration in August 1971 removed that standard, instability started to creep into the monetary, financial, economic and commercial systems. The latter systems were affected because the international monetary system acts a glue of those systems: change that basic monetary system and all other global systems change.

So the question becomes of how we can return to a stable international monetary system in the 21st century. The Stiglitz UN Commission of June 2009 investigating the effects of the financial meltdown of 2008 on developing countries argued that no one country’s currency should be the international transaction currency nor should the currency of a regional monetary union act in that way. The Commission and quite a few other monetary economists starting in the late 1970s came up with the solution of Special Drawing Rights or SDRs.  This would a first major step in the right direction.

Given that all global systems, i.e. monetary, financial, economic and commercial systems have to deal with this century’s greatest challenge of a changing climate that affects all dimensions of social and ecological life on this planet, it is my argument that we can use the world’s most basic system of monetary relations to also deal with this climate crisis. Thus, I have proposed the Tierra Solution that would resolve the climate crisis through monetary transformation, i.e. basing the international monetary system on the carbon standard of a specific tonnage of CO2e per person. The conceptual, institutional and strategic dimensions of such transformational change far exceeding the paltry reform efforts of the IMF are presented in a 350 page book published in 2012.  Applications of this carbon-based international monetary system can be found at various places on the internet by googling my initials of fcvnyc and on the website of International Institute for Monetary Transformation, i.e.

In this Age of Bubbles where the future of social and ecological wellbeing is at stake it behooves serious people to consider and debate transformational changes such as the feasibility of carbon monetary standard that would force nations to decarbonize in their pursuit of low carbon and climate-resilient development in the global North and South.



spurring economic transition

Post By gaia1 in United Nations

 The following post was submitted on August 3 to which is part of the UN Post2015 effort to device a new integrated framework after the MDGs framework and action expires. It describes the contents and goals of its debate in the following terms.

‘Inclusiveness’ has become a buzzword, particularly in development economics. But how can we create a more inclusive economy and what obstacles lie in the way? These are the questions that The Broker's 'Spurring economic transition' debate addresses.  

Spurring economic transition is about building a global economic model that is durable, is aimed at more than just economic growth, and seeks to involve those who are currently excluded in a participatory way. Such economic transformation might be needed in all countries - developed, emerging, and developing.

The Broker aims to provide an overview of the lessons learned from efforts to transform the economy in such a way, all over the world. We bring together diverging approaches on how to effectively and structurally evoke this change by connecting the knowledge of academics, policy-makers, practitioners and entrepreneurs. The debate focuses on the following questions:

Assuming that the goal is to transform the global, regional and local economy in such a way that well-being for all is more important than growth rates:1. How could this be done?2. What hinders this economic transformation?3. How can such an economic transformation be structurally incorporated into policy at national, regional and global level?



'Spurring economic transition' to a more inclusive economy also includes the need to look at the most basic global system, i.e. the international monetary system. It acts like glue binding together the financial, economic and commercial systems. Transforming that basic system means transforming the other global systems that are built upon i.

Taking that international monetary system and basing it not on a gold but a carbon standard is one way of transforming it. How that can be done is presented in the 2012 book The Tierra Solution: Resolving the Climate Crisis through Monetary Transformation which discusses the conceptual, institutional and strategic dimensions of this “extraordinarily innovative” proposal. (see review in Amazon.) Bill McKibben, author, environmentalist and founding leader of the global wrote the following statement on basing the international monetary system on a carbon standard as proposed by Verhagen’s 2012 Tierra Solution book: “The further into global warming area we go, the more physics and politics narrows our possible paths of action. Here’s is a very cogent and well-argued account of one of the remaining possibilities.”

The conceptual, institutional and strategic dimensions of The Tierra Solution is an answer to your first question. Assuming that the goal is to transform the global, regional and local economy in such a way that well-being for all is more important than growth rates: 1. How could this be done?

The answer to your second question “What hinders this economic transformation?” is presented in the last two chapters of the book.

Part of the answer to the third question of the Brokeronline debateHow can such an economic transformation be structurally incorporated into policy at national, regional and global level?is presented in chapter 7 in the section on global governance and derives much of its views based upon the invitational UNITAR Conference on global governance and its subsidiary levels held at Yale University in September 2011.




Post By gaia1 in American Monetary Matters



I am opposed to the pipeline and support's and James Hansen's 350 ppm standard. I also  believe that a global carbon tax is needed in the sense of a fee and dividend as proposed by the above two proponents and US representative van Hollen's legislation.

 If the international community and particularly civil society were really serious about dealing with the all-pervasive challenge of the climate crisis, they might start discussion transforming the international monetary system of exchange rates and balance of payments by introducing the carbon standard of a specific amount of CO2e per person as presented in the Tierra Solution: Resolving the climate crisis through monetary transformation as proposed by Dutch-born sustainability sociologist Frans C. Verhagen.



Need foran integrated global taxation system

Post By gaia1 in Economic crisis


The need for an effective/just/integrated international taxation system

This blog post reflects the comment I made to the New York Times May 21, 2003  article entitled Apple’s Web of Tax Shelters Saved It Billions, Panel Finds.


“The tax policies of Apple and other multinationals show how the international taxation system does not work for the common good. Apple, Inc and others even believe that their subsidiaries are beyond the reach of any taxing authority. Thus they are able, legally, to avoid their fair share of taxes.

The loopholes in the American corporate tax code cannot be closed without considering its international dimension, i.e. the international taxation system.

Though Apple asserts that it welcomes “an objective examination of the U.S. corporate tax system, which has not kept pace with the advent of the digital age and the rapidly changing global economy”, it does not advocate an international tax overhaul where it would be subject to national taxing authorities.

Any international taxation system cannot be separated from its nexus with the global financial and monetary systems. An integrated policy has to be developed based upon the integrated social and ecological forms of justice. A proposal for such policy is made by basing it on carbon-based international monetary system as described in The Tierra Solution: Resolving the Climate Crisis through Monetary Transformation .”



Deep rethinking needed

Post By gaia1 in European Union

 Deep Rethinking Needed

April 2, 2013


David Jolly in the NYTimes of April 2, 2013 entitled “Unemployment in Euro Zone Reaches a Record High” cites a lot of statistics showing the dire economic situation in both Euro and other European countries. The sad thing is that the future does not seem to bring realistic improvement in the millions unemployed because of non-working austerity policies.


Though in the short term those European economies can improved by stimulation as opposed to austerity, in the medium and especially in the long term, serious deep rethinking is needed.


Such rethinking should start with some agreement about a basic values framework that would undergird such thinking. A new monetary, financial, economic and commercial edifice cannot be built on the loose sand of unclarified and vague values.


It is such value frame work of sustainable communities in the global North and South that is presented in 20012 The Tierra Solution proposal. Its value system is a, not necessarily the, value system that would respond to the needs of the global monetary, financial, economic and commercial systems.


A second element beside an explicit value framework for the deep rethinking that is needed is the need for the integration of these global systems, a challenge that was lifted up during the June Rio Earth Summit. The Tierra Solution provides such integration by transforming the world’s most basic system of monetary management. This transformation takes place by basing the international monetary system on a carbon standard, i.e. a very specific tonnage of CO2e per person.



Relocated, but not retired!

Post By gaia1 in IIMT


March 3, 2013

The last three months have been hectic for my and my spouse Anita Wenden in the selling of our Queens cooperative apartment and our Hampton Bays bay front coop and in moving from the City to Chapel Hill in North Carolina. After about 3 weeks of moving into the beautiful continuing care retirement community of Carolina Meadows, I consider myself to be relocated but not retired. Much of the work done in the City will be done now on line in my spacious study that looks out on the Carolina pines and on landscaped bushes and trees frequented by lively birds. Note the new address and telephone numbers in the attached signature file.

I will resume my blogging for IIMT and responding to monetary/financial articles. My pen name for the latter activity is now fcvnycinc, indicating my locaton i(n), n(orth), c(arolina). So, in googling my internet contributions after 2013 the longer 9 letter term has to be used. I also plan to become a regular contributor to several magazines, basically focusing one the ten chapters of The Tierra Solution. I also plan to produce a dozen UTube videos that would present The Tierra Solution.

Any assistance in carrying out the enormous challenge of The Tierra Solution—which is well described in the two unsolicited reviews of the book on—would be most welcome.

Frans C. Verhagen, M.Div., M.I.A., Ph.D., sustainability sociologist,

Adjunct Associate Professor Sustainable Communities at Pace University, NY (2009-13)

Founding President, International Institute for Monetary Transformation (IIMT) (2008-present)

Sustainability Fellow at the Green Institute in Washington, D.C.


UN ECOSOC representative for the International Peace Research

 Association (IPRA) (2000-2013)

Director, Sustainability Research and Education

Earth and Peace Education International (EPE), (1998-present),,

327 Carolina Meadows Villa, Chapel Hill, NC 27517, USA
voice: 1+ (919-240-7164); fax 1+(919-240-7164); cell 1+(917-617-6217); Skype: fcvnyc,;;


“The intuitive mind is a sacred gift and the rational mind is a faithful servant.  We have created a society that honors the servant and has forgotten the gift”

Albert Einstein






The UN target year 2015

Post By gaia1 in American Monetary Matters


November 29, 2012

Two main areas of discussion and negotiations among UN member states have taken the year of 2015 as their target in the achievement of their goals. These two most important areas of development and climate policies are discussed and negotiated as if they are unrelated. The 2015 target year is proposed here as a point in time where serious global discussions of an integrated global governance approach are to commence.

The development strand called the post-2015 sustainable development framework wants to come up with a sustainable development framework that will succeed the framework of the Millennium Development Goals or MDGs that ends in 2015. This development strand also includes on an equal level of importance the discussions dealing with the Sustainable Development Goals or SDGs that were initiated as part of decisions taken at the Rio June 2012 Earth Summit. Both development strands and discourses only tangentially deal with the 21st century’s main challenge of the changing climate.

The second major area of discussion and negotiation, dealing with the climate crisis, takes place mainly within the confines of the UN Framework Convention on Climate Change (UNFCCC) of June 1992 and its Kyoto Protocol whose second implementation in 2013 is being discussed during its present two weeks conference in Doha. This UNFCCC conference and the ones of 2013 and 2014 are geared towards the establishment of a New Accord in 2015 which would replace the Kyoto Protocol with its many shortcomings. The official climate negotiations have even less connection with the development issue than the official development community’s connection with the climate issue.

Though those two UN strands of discussions and negotiations hardly make any connections with development and climate, civil society on the other hand generally make connections between development and climate. However, its connecting the dots between the two is still inchoate and needs far greater emphasis and far more resources to arrive at an integrated global governance system.

The connection or rather integration of development and climate is the major focus of a proposal by the International Institute for Monetary Transformation. The proposal called The Tierra Solution or the Tierra Fee & Dividend system or the Tierra System for short, presents the conceptual, institutional and strategic dimensions  of an integrated global governance system. It is based upon the transformation of the international monetary system which is the most basic of global system that as glue binds together the monetary, financial, economic and commercial systems. It can also be considered the lubricant of those global systems making them work smoothly and even as their linchpin. This global money system is to be transformed by the introduction of a carbon standard of a very specific amount of tonnage of CO2e per person. The introduction of this standard makes exchange rates stable by having currencies pegged to the standard or by the introduction of a single global currency.

This carbon-based international monetary system is predicated on at least two major new institutions. One of them is a balance of payments system that accounts not only for financial credits and debts, but also ecological (climate) debts and credits. Given that countries in the global North are financial creditors and ecological debtors and countries in the South ecological creditors and financial debtors, negotiations of converting financial debt into ecological credit become a real possibility. The second new institution is the Global Central Bank which would not only administer, regulate the new system, but would be the only institution that together with its regional central banks engages in money creation. Limits to money creation as described in the 1865 US Senate document are set by the imagination of responsible public officials. Transformational financing for the enormous needs in development and climate change areas becomes possible without the straitjacket of austerity.  Gone are the privately-owned banking systems with their fractional reserve systems, because they have become financial utilities without the privilege of money creation. People and their public officials direct their ample financial resources where they are needed as was done by the public banks in various countries during the 1930s.

There are two main strategies by which this carbon-based international monetary system with its fixed exchange rates, its transformed balance of payments system and Global Central Bank can become a reality. One is the top-down, UN strategy and the other is the bottom-up, grassroots strategy. They are fully described in the last chapter of The Tierra Solution: Resolving the Climate Crisis through Monetary Transformation, the June 2012 Cosimo publication that also describes in detail the earlier mentioned conceptual and institutional dimensions. For additional information, see

The Tierra Solution went public for the first time during UNITAR/YALE Global Governance conference in September 2010 and has been presented at various UN meetings in preparation for the Rio 2012 Earth Summit and at the two NGO Committees on Sustainable Development and Financing for Development at UN Headquarters. It is hoped that the year 2015 will be the year that serious discussions will take place in the UN development and climate communities about this integrated global governance proposal, propelled and pushed by the leadership of civil society.




Recession or redirection?

Post By gaia1 in American Monetary Matters


OPED article submitted to the New York Times by

Frans C. Verhagen, M.Div., M.I.A., Ph.D., sustainability sociologist

Tuesday, October 23, 2012

We live in turbulent and carbon-constrained times where government, business and civil society are increasingly forced to make major decisions in the next ten years that will influence life on the planet for the rest of the century. At this cross roads the stark decision to be made is whether the world permits itself  to drift into another recession—bigger than the one In 2008— or is willing to generate the courage and insight to redirect the global monetary, financial, economic and commercial systems that enrich the few, impoverish the many and imperil species and the planet. It is argued here that the world will drift into recession within the decade unless we use the reset button and pursue approaches to integrated global governance that emphasize low-carbon and climate resilient sustainable communities development in the global North and South.

Though I am an optimist, I consider the likelihood for recession—larger than the 2008 0ne— to be strong within the next couple of years if present global monetary, financial, economic and commercial policies are not changed and nations continue pursuing national policies that may be rational in terms of national priorities, but irrational in terms of global priorities.

During the recent IMF/WB Annual meeting in Tokyo Yi Gang, vice governor of the China’s central bank, pointed out that the lowered forecasts by the IMF/WB for 2012 from 3.3 percent to 2.2 percent is too optimistic. He saw “an increasing possibility of growth below 2 percent” with the consequence that the developed countries would have plunged into further recession while emerging economies encountered further dramatic slowdown. He considers the global economy to be “on the brink of recession” and he pointed to the European debt crisis, mounting US deficits and stagnant growth in developing countries.

To this analysis we could add recent developments in the US society, where the Dodd-Frank regulations are fought tooth and nail by the banking and financial industry and where Too Big To Fail does not have sound conceptual and political support in the direction of capping the size and complexity of the megabanks. Fortunately, the Volcker rule that would separate investment/ trading/speculation from commercial banking, is now being supported by reports in Britain and the EU, respectively by economist John Vickers and central Finnish banker Erki LiiKanan.

Notwithstanding the emergence of this hopeful tool that would go back to the Glass-Steagall Act of the early thirties, the overall US monetary, financial, economic and commercial situation is still precarious, particularly also due to the political paralysis in Washington. The Federal Reserve System is pushed to carry the main or almost exclusive load to make the economy recover given the stark absence of fiscal legislation by a U.S. Congress which has received the lowest ratings in several decades. Thus, the FED is pushed into an open-ended quantitative easing policy that makes sense nationally, but not globally. IMF head Christine Lagarde rightly points to the need for global cooperation without the power to do much to make this happen. 

It is the lack of global governance institutions that makes the global monetary, financial, economic and commercial systems so fragile and prone to causing a recession. Strong emphasis has to be placed on the challenge of strengthening global governance, particularly integrated global governance where separate social, economic and environmental governance systems are to be integrated. Rightly the Rio 2012 Earth Summit adopted the formulation of such an integrated global governance system as its second theme, calling it Institutional Framework for  Sustainable Development. It did not, however, produce a formulation for such a global governance system, let alone an agenda for pursuing it. Now, notwithstanding its pursuit of Sustainable Development Goals by organizing Post-2015 Global Consultations and other means it still has not pushed the reset button in its formulation of integrated global governance, let alone in its pursuit.

What is needed is an all-out approach to find alternative global governance systems that would redirect the unjust, unsustainable, and, therefore, unstable monetary, financial, economic and commercial systems. One of those alternative global governance systems has been proposed in my recent publication entitled The Tierra Solution: Resolving the Climate Crisis through Monetary Transformation. It presents the conceptual, institutional and strategic dimensions of an international monetary system that would be based upon a carbon standard with, consequently, fixed exchange rates, a Global Central Bank and a balance of payments system that would balance not only financial debts and credits but also ecological (carbon) debts and credits. In such a balance of payments system nations in the global North who are financial creditors and carbon debtors can start negotiating with nations in the global South who are financial debtors and carbon creditors. Equally important, the Global Central Bank in such a carbon-based international monetary system would behave like the central bank in the EU or in the USA in its administrative, regulatory and financial functions.

Since the end of the 19th century when John Stuart Mill advocated a global central bank and during the 20th century when several US Fed Chairmen, including Paul Volcker, and quite a few other observers pointed to the need for such bank in our ever globalizing world, the time has come in the early part of this 21st century to have such central bank. Without it the only main beneficiaries will be the global financial services companies and their affiliated global companies which no longer have any loyalty to nation states or to the people who inhabit them.  Without de-financialization of the globalization process and the adoption of a value-based planning framework that integrates social and ecological values such as are reflected in the Earth Charter the world has no other direction than to drift into another, monstrously large recession with disastrous impacts on people and the planet.


Frans C. Verhagen, M.Div., M.I.A., Ph.D., a sustainability sociologist, is the founding president of the International Institute for Monetary Transformation and the author of The Tierra Solution: Resolving the Climate Crisis through Monetary Transformation published by Cosimo Books in June 2012.





The Tierra Solution and Brazil's call for transformation at the UN

Post By gaia1 in American Monetary Matters


Wednesday, September 26, 2012

Yesterday Brazilian President Dilma Roussef made a strong statement about the need for a global effort to deal with the economic crisis. Appended is the UN summary of the speech.

She emphasized that monetary policies in the developed world cause currency problems in the emerging nations and that monetary policies have to be wedded with fiscal policies. She understands that only a global cooperative effort can result in effective economic policies for all.

The Tierra Solution proposes integration of monetary and financial policies where a global carbon-based international monetary system is wedded with a financial system that is based not on debt and privately-owned banking system, but on money or credit. One of the economic departments in the USA that has done most work on such monetary and financial system is the one of the University of Missouri-Kansas City with its modern monetary theory or MMT. They are have been taken their MMT views outside their university such as in the well-organized course at Columbia University entitled Modern Money and Public Purpose.

When will the time come when leaders in government, business and civil society are going to pursue an integrated approach to progress and prosperity by simultaneously focusing on resolving the economic and climate crises?


New York, Sep 25 2012  1:05PM
One of the first world leaders to address the United Nations General Assembly’s high-level debate today, Brazilian President Dilma Rousseff called on countries to boost international efforts to tackle the global economic crisis, stressing that a balance must be found to stimulate growth while at the same time controlling public spending without resorting to extreme austerity measures.

“The grave economic crisis that began in 2008 has taken on new and worrisome contours,” she said. “The choice of orthodox fiscal policies has been worsening the recession in the developed economies, with repercussions for the emerging countries.”

Scores of the world’s heads of state and government and other high-level officials are attending the Assembly’s General Debate, at UN Headquarters in New York, and are expected to present their views and comment on issues of individual national and international relevance over the coming days.

In her remarks to the gathering, President Rousseff stressed that countries must find a path that combines appropriate fiscal adjustments with measures to stimulate investment and demand to halt the ongoing recession and ensure future economic growth.

In particular, the Brazilian President noted that monetary policy cannot be the only response to growing unemployment and poverty as this is causing imbalance in exchange rates, which, in turn, is creating an artificial appreciation of emerging countries’ currencies.

“There will be no effective response to the economic crisis without strengthened coordination efforts between United Nations members and multilateral bodies such as the G20 [Group of 20], the IMF [International Monetary Fund] and the World Bank,” she said.

She added, “This coordination must attempt to reconfigure the relationship between fiscal and monetary policy, in order to prevent the deepening of the recession, control the currency war and once again stimulate global demand.”

Countries must build a comprehensive pact for the coordinated resumption of global economic growth, President Rousseff said, noting that this is crucial to prevent social unrest and despair prompted by high unemployment rates, and social inequality.

The Brazilian leader emphasized that Brazil has addressed the crisis domestically by exerting strict control over public spending, while simultaneously increasing investments in infrastructure, education and social inclusion.

“We have overcome the incorrect view according to which measures to stimulate growth are incompatible with austerity plans. This is a false dilemma,” she said. “Fiscal responsibility is as necessary as growth measures are indispensable, for fiscal consolidation can only be sustainable in a context of economic recovery.”

President Rousseff also spoke of the need for multilateral action to achieve all the commitments made at the UN Conference on Sustainable Development (Rio+20) which Brazil hosted in June. The Conference, she emphasized, helped to set a starting point for a sustainable development agenda for the 21st century, and give countries guidance as to how to address challenges such as climate change, poverty and exploitation of natural resources.

“Rio+20 shone a powerful light on the future we want. We have an obligation to heed the many warnings being sounded by science and society,” Ms. Rousseff said. “In a context of environmental challenges, economic crises and threats to peace in different parts of the world, Brazil continues committed to working with its neighbours to build an environment of democracy, peace, prosperity, and social justice.”

Earlier today, the Brazilian President met with Secretary-General Ban Ki-moon, who thanked her for making the Rio+20 Conference a success and expressed his appreciation for Brazil’s contribution to UN peacekeeping operations in Haiti.
For more details go to UN News Centre at

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Ryan's monetary policies and the Tierra Solution

Post By gaia1 in American Monetary Matters


Friday, August 24, 2012

Paul Krugman’s column in today’s New York Times entitled “Galt, Gold and God” is the inspiration for this blog post. He shows and other authors show the danger of Ryan’s monetary views and how they are based upon the extreme market fundamentalism and extreme individualism of Ayn Rand that has been rejuvenated by the Atlas Society. He would repeal the dual mandate of the Federal Reserve, i.e. inflation fighting and employment creation, in favor of inflation fighting only, leaving unemployed people who are considered “moochers” anyway, to fight for themselves. Furthermore, he would raise the interest rate in recessionary times in order to draw investors into the market, a position that runs counter to economic thinking and the historical evidence of the Hoover Administration during the Great Depression. He takes Fed Chairman Bernanke to task in his House Budget hearings spewing arrogantly his impossible ideas as if he is a genuine monetary policy wonk. He, together with other republican pundits, believes in hard currency rather the fiat money and in return to a gold standard or at least a commodity standard, so that the FED is unable to print money and engage in quantative easing. Together with Ron Paul and other libertarian politicians he would use its shrinked mandate to reduce government involvement in monetary matters.

The Tierra Solution also proposes a monetary standard, but not one based on gold or a set of commodities, but one that can be set according the requirements of the times. In these carbon-constrained times it would be a standard of a specific tonnage of CO2e per person. Unlike the libertarian position, the Tierra system is based upon an explicit value-based planning system of sustainability economics with a strong role of governmental engagement in these complicated times where the free market is not delivering the social, economic and ecological results for sustaining futures. Finally, unlike the dangerous Ryan system which is only domestically focused,  the Tierra system is globally focused where cooperation rather than competition between states is the preferred mode of co-existence.


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