In times of crisis many companies face a severe lack of cash, although they have an abundance of unpaid invoices, on both sides, they owe to some and they are owed by others.
What if these I-owe-yous (IOUs) were cash?
Then the crisis would either be gone, or it would show some deeper underlying root causes.
IOUs are like cash, with one important difference, they show direction, who owes whom. Cash is a number, IOU is a number with direction, a vector. IOU is vector money.
Eventually, cash is a special kind of vector too. It points towards the central bank. Cash is an IOU offered by the central bank.
Now, what if companies linked the positive IOUs and negative IOUs (=You-owe-mes) in some kind of way that would not harm the relationships?
One possibility would be for companies to entrust their IOUs to a trusted subject, who would be able to issue warrants of entrustment. These warrants would now be exchangeable between companies. Companies with balanced +IOUs and -IOUs would be able to quench their cash thirst and speed up their business cycles again. Companies with too many IOUs on either side, would have to keep the surplus in the cash regime.
Such bodies of trust (BOT) need not be banks. My body of trust can be a family, a club, even a single person. The BOT can only issue as many warrants as many IOUs receives into entrustment. The larger the trust, the bigger the BOT can become.
So, can you become a BOT? Yes. Anybody can be a body of trust. Even better, trust esentially is not something that should ever be monopolized, by the central bank, the government, the church or anyone. Trust is always between people, and therefore has to be decentralized. And so is this system of BOTs with its reliance on the warrants of the actual bearers of trust. You and me.
Now there’s an idea how to fix our broken system. All we need now is a revolution to bring it into reality.