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Solution page 9:
Automatic Market Revaluation of Producer Credits

The fundamental problem with Producer Credits is the uncertainty of the Issuer's matching spending with sales. This, of course, is the same problem a business today has borrowing bank credit money to expand its offerings. In the current system, banks are charged with the social role of evaluating who is worthy of credit and of how much. In the proposed system, Credit brokerages would be required to do the same to validate the reliability of Producer Credit Issuers.

Existing business-to-business (B2B) and mutual credit systems currently have a variety of ways to evalutate and discipline their Credit Issuers and are actively seeking better means to avoid the misjudgments and attempts at fraud that undermine confidence in the B2B trading system.

It is my proposal, that eventually, a computerized marketplace could be developed that could automatically determine, the relative value of any Issuer’s Producer Credits based on the proven demand for that Issuer's Credits at that moment in time.

self-correcting system

The chapter on Self-Correcting System from Money as Debt III

In this way Issuers would be disciplined by the market in real time. As would their employees. As well, such a marketplace would yield enormous amounts of anonymous information.

All Producer Credits could be evaluated by actual supply and demand without the human intervention of bid/ask as we do now. The volume of buy orders divided by the volume of sell orders results in a ratio which is then multiplied by the value unit.

Producer Credit Value = (buy/sell) x Value Unit

Given that such an equation for a moment in time could yield results anywhere from zero to infinity, the buy/sell ratio would have to be a moving average over a certain meaningful volume of sales. The design of the moving average would definitely be a job for expert statisticians and the subject of perpetual ongoing refinement. The purpose of the moving average is to eliminate meaningless random variations while reflecting real trends as early as possible. Careful use of this moving average would balance the ability to dampen market volatility with the need for accurate information. This would make it a political issue requiring the setting of recognized standards.

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