At the post WWII Bretton Woods conference, Keynes proposed that international trade be conducted through a country-to-country mutual credit system called the Bancor. The conference initially agreed the idea was sound and just, but then the USA unilaterally squashed the idea with a dollar/gold standard, then defaulted on their obligations and created the petrodollar system. Today few alternatives are discussed but the idea of going to back to the bancor has been mooted. This is especially significant for an economy experiencing deflation - a scarcity of circulating money. The act of one account extending trust to another account to enable it to participate in a ‘split barter’ exchange can be seen as an act which creates liquidity. While ledgers are used throughout the financial world, there are much fewer examples of ledgers being used without the intention ever to settle, which is to say to settle debts through reciprocal exchange rather than money changing hands. The most prominent is surely the business barter industry which helps businesses move unsold stock and get bums on otherwise empty seats, followed by the LETS movement which encourages the middle classes to meet each other and save money together. (French SEL, German Tauschkreis) finally timebanking, in which poor and excluded people are given opportunities to support each other and build confidence. At present a great many of these systems are poorly governed from a credit perspective and have a poor understanding of how mutual credit is supposed to work. Regulation within the business barter industry fails to prevent the owners of exchanges running up a deficit, which means buying all the best stuff and flooding the members with credit, and then never earning that credit back. Similar things happen in LETS and timebanks, but usually not for personal gain. This has the effect that credit accumulates in members’ accounts and they want to spend, but the corresponding debit is not looking to earn. Thus the marketplace has more buyers than sellers and very often barter dollars change hands at less than parity with US dollars; inflation in these systems is a sure sign of poor governance. Bartercard national franchises do this routinely, I understand, but since their accounts are private, their innocence or guilt cannot be established. When the same things happens in LETS and timebanks, it matters much less because members depend less on these systems and are more forgiving. The governing board may decide to issue some credit to express the collective intention of the community, say to organise a festival, and the units may not be collected back in tax or entrance fees. The party account may stay negative forever and the corresponding units may slosh around creating a net positive balance in all the other accounts. Then someone might die with an equivalent positive balance and unwittingly the equilibrium is restored. I have heard members of business barter systems report that it didn’t work for them, never quite sure why it was so much easier to earn than spend the barter credit, members of LETS and Time banks almost always have positive experiences, often despite poor fiscal governance! The reason is because a mutual credit accounting system, accompanied by a directory of goods and services, exists to enable exchange and yields positive, productive relationships by the way. In contrast, the legal tender economy forces producers compete globally for every dollar or face poverty and shame languishing on the heap of the unemployed. Many members report feeling that this ledger money is easier to earn and less painful to give - it unlocks generosity.