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Tuesday,
June 15th 2004, Committee Room 2, Via St Stephen's entrance -
6pm-9pm • Sponsor Lord Ahmed • MUTUALLY CREATED MONEY
FOR SOLE TRADERS AND SMALL COMPANIES: E Banc Trade Credits - An
Internet Tool as International Currency - with Judith Hunt - Managing
Director, Trade Unlimited
Introduction:
Trade
Credits are the kind of complementary currency that we wish the
Government would create more of: interest-free and infinitely
available. Whereas conventional money tends to be limited by a
budget over time, Trade Credits are mutually created through any
transaction between two trading parties. However, not every trade
can be executed as 100% trade credit and we will have to learn
how to balance our pound accounts with Trade Credits as long as
tax payments, energy, water and communications companies still
require Sterling.
Judith's recent wedding was entirely financed on trade credits
- no wonder then that she advocates a cashless or minimal cash
economy! Her experience of using trade credits to extend budgets
was in running ocean races where campaigns "ate" sponsorship
monies like smarties and often the only way to get young racers
to the start line was with bartering her event management skills
for much needed photography, branding, sponsor events and just
plain old printing.
When she first heard of the E Banc Trade concept she grasped the
opportunity to buy the master licence for the UK and launched
in January 2004. She has now developed her own software and is
trading as TRADE UNLIMITED. The community is now 175 companies
strong and she is targeting 40,000 by December 2005. Judith is
a qualified linguist and marketeer and has had careers in running
cruise lines, major events for the DTI, Canon and a multitude
of blue chips. She has run her own management consultancy, Rogue
Management for the last 10 years.
REPORT
OF THE MEETING
i) Donald Martin has resigned as Chairman of FSC as his work load
and a troublesome back make it wise to limit his engagements.
Warm appreciation was expressed for Donald's firm discipline,
erudition and clarity in guiding our discussions these last SIX
years.
ii) It is sad to report that a FSC associate, Chris Marrs, died
in March at the age of 43. Cliff was a fine Quaker, theologian,
writer and communicator on issues of globalisation and monetary
reform. His work will be captured and made accessible.
iii) Peter is always glad to receive news, projects, letters published,
work extended etc. to keep his work-in-progress report updated
so that we are encouraging each other to be active wherever appropriate
in work on monetary reform; described by Ronald Stamper 'a difficult
topic of the greatest importance'.
iv) Sabine is advancing her main professional initiative, mathematics
and software design, and will sponsor future FSC initiatives through
her office and staff.
APPLICATION, APPLICATION, APPLICATION -
that's what delighted the Chairman as we heard how BARTER MONEY
is taking off on an international scale. The sheer practicality
of the interest-free system and the clear positive response to
every searching question was the hallmark of the evening on Tuesday,
June 15th 2004.
JUDITH
HUNT spoke on
MUTUALLY CREATED MONEY FOR SOLE TRADERS AND SMALL COMPANIES and
eloquently described the approaching launch of Trade Unlimited
- Her Barter Company and Clearing House for Barter Currencies.
"Trade Crediare the international currency that enables members
of different barter companies to trade with each other through
a clearing house. Barter companies have long been the professional
version of LETS, Local Exchange Trading Systems. Judith Hunt is
Managing Director of Rogue Management, her management consultancy
firm. She wants to help other small companies to start up and
to increase their trading by setting up "Trade Unlimited"
as another barter company. The difference of this company is that
it allows for trades with many other barter companies and that
it goes as far as including property and pensions as investment
opportunities that can partly be traded for "Trade Credits".
Trade Credits are the kind of complementary currency of
which we wish the Government would create more - interest-free
and infinitely available. Whereas conventional money tends to
be limited by a budget over time, Trade Credits are mutually created
through any transaction between two trading parties. Follow the
course of Judith's 21 Power-point outline of her remarkable innovative
and entirely practical system, knowing that many of the questions
you might find arising as you read were dealt with in convincing
ways in the stimulating and detailed discussion that ensue. .Trade
Unlimited - set up by Judith Hunt, Director of Rogue Management
and partner Glenn Heuker, to be launched on July 1st, 2004. A
support system for business owners. • Getting them to
first base... 20 years launching companies for entrepreneurs
in Europe. Started own company 1994 • Entrepreneurs have
same mindset as talented sports people • Both know success
depends on having an "intention" or goal • And
the need to practice, practice, practice, practice and practice...Until
they are competent at what they do best. • Giving them
"space" • Space to practice or to focus on
your core abilities depends on sponsorship & investment •
It depends on creating the maximum number of opportunities or
chances to get to the start line, with the least expense •
Allowing them to fly • Supporting entrepreneurs or sports
people is intensive and expensive • Rogue has looked for
ways to get them to the "start line" in good shape •
Key to being fit for business: control expenses and maximise income
• Trade Unlimited • Rogue's newest division •
Conceived from age-old trading methods of "bartering"
given "hyper-drive" with the Internet • Takes uncertainties
of bartering & replaces it with accountable, online trading
system - 24/7/365 • Level playing field • New
companies need to control expense • Trade Unlimited gives
them interest free credit line to trade immediately • Freedom
to trade with 'OOO's of companies worldwide. • How does
it work? • Companies source suppliers via on line databases
• Negotiate transaction • Agree on price -100% barter
or mix of barter and cash • Barter transaction possible through
acceptance of alternative currency Trade£'s, Trade$'s, TradeEuros
etc • Trading companies have online secure trading accounts
showing real time balance and transaction history • Trade
Unlimited charges brokerage fee for enabling trade • Key
benefits • Interest free credit • Promotion of company
worldwide • Stretch budgets • Incremental business guaranteed
• What can be traded? • No limits to what can be
traded • Pre-launch membership - 220 in UK - 60 in Belgium
• Property • Utilities • What's different
about Trade Unlimited? • Over 1500 trading exchanges worldwide
do not trade proactively with each other • Through patented
IBECH* software possible for any members of any exchange to trade
with each other • Possibilities for trade = exponential •
International Barter Exchange Clearing House • Plan for
growth • Clearing house for global exchanges • Local/country-wide
networks • Partnerships with multipliers • Chambers
of commerce • Industry associations Legal and financial advisors
• The global picture • Since 1997 worldwide trade
volumes increased by 10% year on year • 2001 +15% = US$10.25bn
• 2002 +16% = US$11.89bn • 2003 +20% = US$14.27bn •
2004 +20% = US$17.12bn • NATE statistics [National Association
of Trade Exchanges] • Total number of trade exchanges 1500+
• Total no of companies trading using some kind of alternative
currency = approx. 1.5 Million • The opportunity •
40% of all trade exchanges stagnate by end of year two - "cannibalisation"
• Only 3% of all trade exchanges offer online transactions
• The future • Trade Unlimited is targeting 2% of
this business by year two • Already linked with 550 exchanges
• Or 550,000 trading companies in Europe & USA •
Killer proposition • Unique support system • Wrapped
with unique investment vehicles • In first rounds of negotiations
with private equity investors • Official Launch 1st July
• The future is....Un Limited!
Points arising in
discussion
• Practical, and working with businesses
small and great.
• The Future is unlimited - the global scene is very encouraging
-10% per yeargrowth to 2003 and a forecasted 20% for next 10 years
• Pension Vehicle for property
• Membership fee is a once off £195 and then 4.5 %
on the "trade credit" component of any transaction.
• Who administers the trade currencies? - the trade exchange
and its reciprocal partners
• Parity between Trade£ and Sterling. Trade£
are not redeemable.
• Breadth and higher level of trading with trade credit or
mortgage cash
• Key to sustainable trading is servicing - momentum - velocity
drives it - so management and account /marketing managers at 40-1
ratio
• Most traded products or services? hotel rooms, travel
products, restaurant tables etc or any product which has a shelf
life.
• Implications for Tax ? for $17Bn.of annual transactions.
No obvious regulations as yet. Income is taxable and accountable
Financial experts from specialists 3RRR working with Trade UnLimited
are assessing the status. But clear that the system is accountable
and transparent. Negotiations with Inland Revenue continue and
will certainly have advantages established in tax law. Testing
already re personal income with Inland Revenue : ie a company
director drawing trade credits for personal spend is only taxed
on the marginal value of those credits to his company - Trade£1000
may only have cost the company 25p/£1 to generate or £250.00
so the IR are being asked to agree that the director is only taxed
on 25% of the trade credits he/she uses for personal spend. An
incentive to increase the proportion of trade. Corporation Tax
yet to be tested. If VAT liable must be paid. Pay VAT in cash
• Trade Unlimited only gets commission income when trade
accomplished (internal "carrot") so huge incentive to
maintain trading. 40% of tradings stagnate without customer relationship
management
• Described as an International "multi-coloured swap
shop".
• Breaking the mindset of double entry bookkeeping, so as
to understand parallel systems.
• The system guards carefully against rogue traders. Set
limits per company and Standard credit on line checks, within
overdraft. Can't trade with out danger flags coming up, e.g at
£3000 per transaction or £15,000 of trading in one
month; immediately reviewed.
• Minimum 10% barter - max 100% [ LETS advice is no more
than more than 20% of personal income.]
• Upper limit of £10000
• Half a dozen "small business solutions" designed
so that small companies in particular can easily see the benefits
of trading with virtual currency eg print package, start up web
design, basic legal advice on tap; straight forward accountancy
support etc. Trade UnLimited will work with preferred suppliers
to offer these simple packages to member companies
• Never trade more than 15% of annual growth/ turnover. Not
every trade can be executed as 100% trade credit and we will have
to learn how to balance our pound accounts with Trade Unlimited
Trade Credits as long as tax payments, energy, water and communications
companies still require Sterling.
• Each company has an entry in contrast to Banking double
entry
• TUn communities already trading in a variety of currencies
and trade currencies
• Model is classical multilevel marketing - we grow by country
and multi-licencing
• Induction programme for licensees on education and sales.
• Payment by invoice and in retail situation, presently by
cheque book and later looking to take payment method to IPOS swipe
card system
• The website is just a tool and directory - the key to sustainable
trading is customer service and events for members
• the whole transaction narrative is captured before the
transfer occurs, so transparency for all is paramount.- Say, £5m
trade 15% barter - all must go through contra or barter column.
All is shown.
• Links with LETS system - TUn team will be meeting with
LET's representatives over next few months to see if there is
a way to offer support
• Interest of Local Gov should be encouraged to look at this
economic activity ( satisfying human needs ) in barren zone.
• Community funding bid for LETS simply not understood. Chairman
urged this be investigated. When TUn has developed with businesses,
they could then tap their experience to interpret to Grant giving
bodies, since LETS are reluctant to pay commission - not professional.
Examined the point that in interest of TU that LETS become professionally
guided and supported. Lot of sole traders.
• Staple consultancy list as core of our business.
• Selling services : there are constraints of distance. Marketing
generating regional communities. • London has six licences.
Other areas less.
• Sound advice : If in debit trade up. If in credit trade
down.
• 90% of all businesses less than 20 staff and 80% of these
trade in 50 mile radius.
• work with specialists trade exchanges ie media, holiday
and travel products
• Not allowed to inflate prices in this self policing system.
It is like having all that's 'in the shopping Mall' to give maximum
choice. Always seek optimum quote.
• Its transparency generates trust through absence of anonymity
• TUn maintains a Non contributory Debt Reserve Fund to fill
any deficit.
• Judith's recent wedding was entirely financed on trade
credits - no wonder then that she advocates a cashless or minimal
cash economy! Her experience of using trade credits to extend
budgets was in running ocean races where campaigns "ate"
sponsorship monies like smarties and often the only way to get
young racers to the start line was with bartering her event management
skills for much needed photography, branding, sponsor events and
just plain old printing.
Report by Peter Challen
FORUM
for STABLE CURRENCIES
A Voluntary Initiative of Parliamentarians and Concerned Citizens
across the full political spectrum and from all religious persuasions
www.monies.cc
PUBLIC CREDIT FOR PUBLIC PURPOSES
is the title of Early Day Motion 323 which addresses the issue.
It was tabled by Austin Mitchell MP on December 17th 2003 and
set out with six signatures (now 21). The complete text and up-to-date
list of signatories is on http://edm.ais.co.uk/weblink/html/motion.html/ref=323.
Voters should bring the topic to the attention of their MP and
invite Parliamentarians to appreciate the degree to which political
life has become a financial issue. EDM 323 again invites the Treasury
to investigate the benefits of increasing the money supply through
'publicly created money'.
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