Friday, May 24, 2013

#20.4 A Preliminary Standard for Value Unit Exchange Notes and Coins

This is a link to #20.3 the previous post in this series.

The IVES Standard

The International Value Exchange Society (IVES) would administer a standard numbering system for all accredited Independent Exchanges (IE's) in the Value Exchange Network (VEN). These local nodes of the network have all agreed to use the international standard Value Unit as their unit of trade. Each Value Unit Exchange Note bill will feature numbers on both sides that must match. There will be an array of numbers like this: 0-00-0000. The first number will represent a continent, largest to smallest, so Asia is 1, Africa 2, etc. The second two numbers represent the country code. Countries are numbered as they are alphabetically listed. The final four represent the number of IE's within each country. Each IE gets a number first come, first served. We've given enough space for up to 9,999 IE's represented in four digits within each country. We can't imagine there would be that many. Should that number ever need to grow beyond that astronomical estimate, we can switch to hexadecimal notation. One country, Russia, is given a number for their territories in Europe and another for their territories in Asia. Some small islands in the Caribbean and elsewhere are the direct possession of countries in Europe or elsewhere and therefore any IE's that would be established there would fall under the numbering for the home country.

Here are the codes for the continents and countries. You determine who will be first in your own country to open an IE there.

David Burton

1 ASIA (45 countries)

01 Afghanistan
02 Bahrain
03 Bangladesh
04 Bhutan
05 Brunei
06 Burma (Myanmar)
07 Cambodia
08 China
09 East Timor
10 India
11 Indonesia
12 Iran
13 Iraq
14 Israel
15 Japan
16 Jordan
17 Kazakhstan
18 Korea, North
19 Korea, South
20 Kuwait
21 Kyrgyzstan
22 Laos
23 Lebanon
24 Malaysia
25 Maldives
26 Mongolia
27 Nepal
28 Oman
29 Pakistan
30 Philippines
31 Qatar
32 Russian Federation
33 Saudi Arabia
34 Singapore
35 Sri Lanka
36 Syria
37 Tajikistan
38 Taiwan
39 Thailand
40 Turkey
41 Turkmenistan
42 United Arab Emirates
43 Uzbekistan
44 Vietnam
45 Yemen

2 AFRICA (54 countries)

01 Algeria
02 Angola
03 Benin
04 Botswana
05 Burkina
06 Burundi
07 Cameroon
08 Cape Verde
09 Central African Republic
10 Chad
11 Comoros
12 Congo
13 Congo, Democratic Republic of
14 Djibouti
15 Egypt
16 Equatorial Guinea
17 Eritrea
18 Ethiopia
19 Gabon
20 Gambia
21 Ghana
22 Guinea
23 Guinea-Bissau
24 Ivory Coast
25 Kenya
26 Lesotho
27 Liberia
28 Libya
29 Madagascar
30 Malawi
31 Mali
32 Mauritania
33 Mauritius
34 Morocco
35 Mozambique
36 Namibia
37 Niger
38 Nigeria
39 Rwanda
40 Sao Tome and Principe
41 Senegal
42 Seychelles
43 Sierra Leone
44 Somalia
45 South Africa
46 South Sudan
47 Sudan
48 Swaziland
49 Tanzania
50 Togo
51 Tunisia
52 Uganda
53 Zambia
54 Zimbabwe

3. NORTH AMERICA (23 countries)

01 Antigua and Barbuda
02 Bahamas
03 Barbados
04 Belize
05 Canada
06 Costa Rica
07 Cuba
08 Dominica
09 Dominican Republic
10 El Salvador
11 Grenada
12 Guatemala
13 Haiti
14 Honduras
15 Jamaica
16 Mexico
17 Nicaragua
18 Panama
19 Saint Kitts and Nevis
20 Saint Lucia
21 Saint Vincent and the Grenadines
22 Trinidad and Tobago
23 United States

4. SOUTH AMERICA (12 countries)

01 Argentina
02 Bolivia
03 Brazil
04 Chile
05 Colombia
06 Ecuador
07 Guyana
08 Paraguay
09 Peru
10 Suriname
11 Uruguay
12 Venezuela

5. EUROPE (48 countries)

01 Albania
02 Andorra
03 Armenia
04 Austria
05 Azerbaijan
06 Belarus
07 Belgium
08 Bosnia and Herzegovina
09 Bulgaria
10 Croatia
11 Cyprus
12 Czech Republic
13 Denmark
14 Estonia
15 Finland
16 France
17 Georgia
18 Germany
19 Greece
20 Hungary
21 Iceland
22 Ireland
23 Italy
24 Latvia
25 Liechtenstein
26 Lithuania
27 Luxembourg
28 Macedonia
29 Malta
30 Moldova
31 Monaco
32 Montenegro
33 Netherlands
34 Norway
35 Poland
36 Portugal
37 Romania
38 Russian Federation
39 San Marino
40 Serbia
41 Slovakia
42 Slovenia
43 Spain
44 Sweden
45 Switzerland
46 Ukraine
47 United Kingdom
48 Vatican City

6. OCEANIA (14 countries)

01 Australia
02 Fiji
03 Kiribati
04 Marshall Islands
05 Micronesia
06 Nauru
07 New Zealand
08 Palau
09 Papua New Guinea
10 Samoa
11 Solomon Islands
12 Tonga
13 Tuvalu
14 Vanuatu

Monday, May 20, 2013

#20.3 A Preliminary Standard for Value Unit (VU) Exchange Notes & Coins

This is the link to #20.2 the previous post in this series.

The results of our latest sample of people's reactions to our proposed reverse sides of Exchange Note designs has been very positive. We determined that we could satisfy both those who are used to same size bills and those who wanted different sized bills beginning with a proposed starting dimensions for a V1 (One Value Unit – Valun) note as 7 cm high by 14.7 cm wide.

The following represents our nearest estimates of note sizes:

V1 = 7cm x 14.7cm
V5 = 7.2cm x 15cm
V10 = 7.4cm x 15.2cm
V20 = 7.6cm x 15.4cm
V50 = 7.8cm x 15.6cm
V100 = 8cm x 15.8cm
V500 = 8.2cm x 16cm

Designing a set of notes that grew 5mm in each direction would have produced some impressively large notes; V500 represented as a card 10.1cm high by 19.9cm wide. Clearly one wouldn't need this big a note that often, but even so, one would like to be able to fold them neatly into one's billfold.

As for coins, we want them to perform many weight functions for us, specifically to be used as reliable weights with which to measure that which is measured in troy ounces; gold and silver bullion. The 1/2 valun should weigh 1/2 troy ounce in grams, the 1/4 valun, 1/4 troy ounce in grams, etc. The following illustration gives the approximate weights in grams. Observe that the smallest possible coin represents a current purchasing power of $ .0264 so almost 3 cents. It would be a coin of miniscule weight, about that of a button. Our suggestion to use surgical or stainless steel was also applauded.

[7 June, 2013: We note that the Chinese monetary system divides the main unit of value into ten parts called jiǎo which in turn are divided into ten parts called fēnThere are equivalents in the Value Unit system.  The 1/10 Valun is the jiǎo and the 1/100 Valun the fēn.  We could even call these coins by these names.] 

A symbol for the International Value Exchange Society or IVES was devised for use on the notes and coins. A symbol composed of the simple capital V overlaid with the capital U creates something that looked to many like a pair of outstretched hands, to one like the downward point of an arrow arriving at a determination of value, all sorts of ideas were expressed.
Provisions against counterfeit

The proposed design of the notes employs some simple numbers checking to determine that the note is genuine. On the lower right corner of the reverse (general) sides of the notes will be a series of numbers displayed in red like this: 0-00-0000 and under that the year the note was printed. The number identifies an IE by continent, country and the individual IE. Continents are arranged largest to smallest, Asia is 1, Africa 2, etc. Countries are arranged in alphabetical order. IE's are given numbers as they are organized and join the VEN and are supplied with monetary instruments, notes and coins (Vieira's “scrips and slugs,” though we're really going to make them look good) by the IVES, which is to be a B member of all the independent exchanges, IE's. On the obverse side, the side supplied by each IE based on some simple rules, the same numbers must appear and they must match. Some suggested that individual notes could further be numbered using hexadecimal codes which have the advantage of compressing how much space it takes to represent a numerical value.

We added the words “International Standard” to the words “Value Unit Exchange Note” for a very good reason. We are advocating, as a keystone of monetary reform, an international standard that is exactly like the gram, the centimetre or any other international standard of measurement. In this instance, it's to be an international standard of monetary value, recalling that money functions primarily to measure the value of something. One acquires more of these to measure, to purchase, something of greater value. You acquired those units of monetary measurement by exchanging your goods or labour for them so that you could split the barter between yourself and any other with whom you sold something you produced or time you worked. With your international standard value unit, something that once initialized stands free of even that which originally gave it meaning; the price in dollars of an ounce of gold bullion on 2 November, 2011, you will have a yardstick (again with reference to a standard) that will NOT be subject to the corrosive influences of governments, whose money is never backed even when the backing is supposedly gold or silver and of corporations who feed at the government trough.

Is this as good as we can get? Perhaps if we included the provision that the initial price is reset each time gold or silver rise above their previous initialization values, we could always guarantee a “hard” currency and we could do this without resorting to some weird algorithm to induce scarcity as bit-coin uses. Remember, we are saying that the scarcity of the means to measure value, as constantly touted as a means to stop inflation, is irrelevant and in fact serves as a detriment to trade.

Questions or comments related to this or any related topic on this blog may be sent to

David Burton

Monday, May 13, 2013

#31 Some Characteristics of the VEN

The Value Exchange Network (VEN) is the proposed association of Independent Exchange nodes (IE's), each representing a distinct population of at least 40,000 people residing in a specific geographical area.

Each IE would require a critical mass of members; out of population of 40,000 people in a particular area, an A membership of 5,000 with at least 100 B memberships being viable businesses. Those are minimum requirements for a well functioning IE.

We would expect that IE members would have a number of things in common; they may be on limited incomes, retired or semi-retired; they may be veterans, they may be disabled or living on disability payments; they may be struggling independent businesses or professionals, which could be sole proprietors or simple partnerships; they may be private farmers or foresters. They may be specialized shops with specialized equipment or perhaps small manufacturers. They may be private retail stores of all kinds, especially those selling food, clothing and basic supplies.

Then again, it may be just as possible that those farther up the ladder of wealth and success would have a serious interest in an alternative to the present public monetary system. They may be John Galts at the present peak of their powers, but wary of the implications of being tied to the present system, especially for their futures. Many are very concerned about the world their children and grandchildren will inherit.

Another group might be young people with a fierce determination to succeed in a business where few in the public money world would take them seriously. Quite a few successful careers are built by those without a proper education or credentials.

The one thing these people would all have in common is their shared perception of the present economic situation; that the public monetary system (which it really isn't, since all the factors operating as creditors of all the governments are private) cannot be relied upon to provide a credible social or economic future and they are looking at ways, not only to survive, but to thrive.

A characteristic associated with likely IE members would be their realization that there is something wrong with all the present public money out there, even if they don't know exactly what it is or its cause. We'll be calling this “public” money (even though it really isn't), as ours will be essentially and always private. We offer a truly independent money, created and destroyed by those who use it in the process of trade, that can be used as a reliable store of value for those things requiring a longer yardstick with which to measure their value, that being the real purpose behind saving any money, to acquire in future that which costs more than the money one has in the present with which to buy it.

For the time being, think parallel and complementary, but that will change.

Many hard working folks out there have found two or more jobs that they do part time to make ends meet. In the beginning, access to alternative money can be applied to buying certain things locally, while the current “legal tender” currency is used for those things that must be paid in them (Pay unto Caesar the things that are Caesar's). It goes without saying that this would require employers to be willing to pay employees in this other money to supplement what they are paid in public money.

E. C. Riegel described many ideas to get employers to participate, but I noted with every one of them, that they would have entailed employers to do more “in house” accounting work which they would not be willing, or in most cases, even able, to do competently. Therefore it is proposed here that each IE's would do the bulk of the administration tasks associated with this parallel stream of payments in Value Units (or whatever they end up being called, to be determined by the Steering Committee). All processes should as far as possible NOT add additional work to prospective employers. For example, they need not have to write any additional checks to their employees on payday in Value Units. All that Riegel discussed about “valdol checks” etc. is really unworkable, as it places too much added strain on businesses. Perhaps this is why Riegel couldn't get anywhere. One has always to make things like this as simple to use as possible.

Instead of what Riegel proposed, let's look at it this way: a business must be an IE member to participate; they have a B member account in their local IE. They have employees that are A members of the same local IE (In some cases a company might be large enough to operate functions in many different places, so in each IE they would have a B member account).

What the employer and employee have in common (besides VEN membership) is a simple private Labour Contract that stipulates the terms of employment (a possible future paper on this subject will appear here soon) that specifies pay in Value Units and this contract resides in the local IE which takes care of the transactions the contract requires. Since the pay date might be a month after the employee starts work, and employees in this system finance their own pay, the employer gets the Value Units to pay his employees on the first day they work and has the float to use between the first day of work and payday. The A member employee has created the money with which the employer pays him (he has bought himself a job) and the employer gets the float to use in the rest of the VEN until payday. The employer decides how much the job is worth, but whether the Value Units are many or few, the same principles apply.

So on the first day of work, the required Value Units are placed into the employer's B member business account as a transaction from the employee A member account (It doesn't really come from there but will be so accounted for). On payday, the required Value Units are transferred from the employer's B member business account into the A member's account. The employer and employee are each provided with service and didn't have to do anything extra. The same process continues as long as the contract lasts, pay period after pay period, each time the amount of pay is transferred first into the B member's business account and then when paid, the payment is made back into the A member employee's account. This is one of the core operations of each and every IE!

In this way VEN membership provides another stream of income and does so even while the current corrupt system remains in place with very little added overhead for either employee or employer.

While we're on this subject, let's say that the business doesn't have the public money or as much of it to hire someone as they might want for their particular skills or levels of expertise. VEN membership provides additional units of exchange in Value Units in a growing private market that is potentially international in scope.

As can be seen, the VEN promotes different attitudes between people based on the advantages it provides to those engaged in trade particularly in local communities. We wonder what might be loosed upon the labour market by the idea that one can perpetually finance their remunerations. For one thing, as the VEN grows and the true value of Value Units is perceived, employers are going to be willing to pay more for a nice up front bonus in time and purchasing power they get from each of their fellow VEN member employees. It probably works best for those paid on a monthly basis, but it can serve any widely used pay schedule. It wouldn't make much sense to do all this for pay periods lasting only a few days.

Unlike public money, which flows according to the whims, plans, etc. of various far-flung elites, with their nefarious and evil intentions (just look at the back of a dollar bill), Value Units are never in short supply. Likewise, because the core monetary accounting in the VEN is based on mutual credit clearing, there can never be too much money, such as to cause inflation. Value Units are created and destroyed by everyone who participates in the VEN and each has the potential right, should they need it, to create Value Units to buy their subsistence. Credit too, as we have just seen, is a matter open to each individual based on their abilities. As an employer agrees to pay an employee, that employer is granted the float on that employee's pay until each payday. This method also frankly has the advantage of placing labour and talent clearly on the block in terms of desired abilities and what they would likely fetch in each local market for labour.

Value Units are never created based on a loan at interest, so there is never more demanded back with which to repay that which was not created. Without usury, we contend that the extra wealth created in the VEN, recalling that all wealth is that which is capable of producing income, is most likely to build within the local communities that open an IE and participate.

All the money in a VEN is created (and destroyed) by its members and there is never any question who owns the money in each account, therefore all sorts of weird and wonderful arrangements the public money system has devised to eliminate cheating, theft and fraud are not required. The money in each IE account belongs to individual A and B members, and NOT to any IE. Nor is any money in an IE pledged in any financial transactions unknown by the members because no IE can or will ever be involved with loaning money. These finance functions will be handled by businesses operating for themselves outside the IE, but all the terms of their Credit Contracts must be accepted by the officers of each and every IE to apply to strict and simple rules to be developed to prevent the predatory credit practices that infest the public money system.

The VEN may end up becoming as impersonal as dealing with your local bank or post office, and that's in the nature of things, since money after all is merely an appliance used to accomplish other more meaningful things in life. Nevertheless, in particular due to the self-financing of labour feature, we can expect each IE to provide another dimension to the social affairs of each community.

Fully functioning IE's would serve to eliminate the complaint of sellers not being adequately paid for what they supply, either in goods or labour. One might see places where sellers are willing to take a few extra Value Units along with public money in trade for their goods or services. We believe the same is more than true concerning those in need of employment these days as they could do with less public money as long as they are paid extra in our private money; Value Units.

The core of each IE's business is to earn transaction fees for clearing and reconciling the accounts of buyers and sellers as close to immediately as possible; there should never any banker's 3 to 7 business day hangover due to the balancing acts bankers engage in with loans payments against customer accounts.

IE membership promotes honesty, because no A member can ever 'go broke.' If you are poor, nobody is going to despise you because of your limited finances. You will always have some money and anyone within the VEN will certainly sell you something for the money you have. Should you decide to do some business above the Value Units you are “granted” to create (there are maybe better ways to say this) through the mutual credit clearing in each community, it will not adversely affect your “grant” as happens with government public money welfare systems. Part of this is due to the fact that each A member is already eligible to create money for subsistence. We would expect that this new non-apologetic attitude toward poverty would serve to improve honesty among all people and therefore should discourage many common crimes, because any A member can 'create their own money' according to their own personal needs.

The VEN would tend to raise the lowly and increase avenues for upward social and economic mobility, building back middle classes in the developed world and promoting them in the developing world. Its democratically applied functions tend also to level playing fields: every member actually begins in deficit and those who deliver real value to others are the ones who can become wealthy. Our rules would specifically eliminate schemes and games played in the present financial world using public money, specifically those which deliver nothing of value to the market.

As the VEN grows, it will promote any natural business trading value for value over vast distances, but within each IE will tend to favour local suppliers of both labour and goods. Small and medium size local businesses and private family businesses will not only qualify for B membership without difficulty, the VEN will tend to benefit them more than any other forms in that they will gain exposure to many other similar businesses organized across the VEN. Reliable trade between factors of comparable size will build capital locally where it can be put to use to provide that which people really need and want; houses, farms, businesses, cars, trucks, capital goods, etc. Much in quality that is presently lost to transportation and extended storage, due of course also to the typical corporate structure that justifies this way of doing business, will gradually fade away as the production function will tend to be focused locally.

The VEN and each IE within it, rests on ideas derived from E. C. Riegel's works and those of others, and actively intends to change the public attitude that regards the source of money as a job, when the source of money is actually the delivery of value from one human being or business to another human being or business. We also remind everyone that the real wealth of a community, that capable of generating income, consists in the combined knowledge and skills of its people.

This change in attitude fosters self-reliance and self esteem everywhere and to all without some phony indoctrination trying to get people to whimper to their governments for some public money handout with strings, as “victims” of this or that social injustice that the government, somehow in its profound wizardry hasn't seemingly been able to do anything about, but will pay “victims” for accepting as their victimhood.

Real social justice and a reasonable and rational economic equality of opportunity are not all that complicated. The VEN attempts to do some things the government tries to do, but can't do because it's the government and is operating outside its normal functions by doing so, since in order to do what it does for the “welfare” of some of its people, it BUYS what it cannot SELL back into the economy, thereby adding spurious money into the economy, causing inflation. I should add that the various welfare programs are nothing compared with the hundreds of billions of its public money it spends on weapons and worse, none of which any of us would want them to buy (unless perhaps we were in the “defence” industries).

We solve the problem by turning things on their heads and asserting that ONLY those without money are entitled to create it. The VEN will tend to really give the disadvantaged their basics; liberty and property with which to manage and grow their own life.

Many features of the VEN involve the potential for sharing business information among members. This too is another indispensable function of each IE. If you are a member and seek work on any basis doing whatever you can offer, you will be able to post what you have to offer on the private (for members only) bulletin board system that will be developed.

When one wakes up from the current dream / nightmare of the contemporary world situation, one sees things quite differently. A cadre of “savage children,” who might nonetheless be octogenarians, rules the world from behind the scenes, using grants of public money to buy compliance or provide select promotions. At the same time, the appearance of fairness must be preserved at all costs behind a mask of political correctness, which assures some that nobody will ever dare make fun of them. Oh, how ridiculous!

The truth of course remains the ultimate authority and by the light of its glare just about everyone nowadays sees quite clearly the reality of special favours and spoiled special interests who get to romp and play while the corporations that support them can get away with anything for profit because ... they are so special that they get to run their businesses with a limited liability for any harm they do. Isn't that just wonderful? And Rothbard and the Austrians never seriously questioned any of this. The Keynesians? They positively love corporatism.

But it's killing all of us, and yet it is THEY who dare tell us we're to blame! It's long past time to consider “come out of her, my people” and get with something that will have a future, your own future by your own making.

We're going to need to set up a Steering Committee as a logical next step. Those who are minimally qualified are any who have an honest serious interest and are otherwise of independent means to provide some free time, not much, but some. Please contact me at and we'll continue this discussion off line.

David Burton

Saturday, May 11, 2013

#30 Taking on Edwin Vieira

Dr. Edwin Vieira, Jr. is an attorney. He has written, without question, the authoritative legal history of the US dollar. It is bound in two large volumes entitled Pieces of Eight and is recommended to anyone wishing to approach the subject from the Constitutional perspective. [24 July, 2013: A shorter book describing the same subjects is The US Constitution and Money, Corruption and Decline by Michael Rozeff, a retired professor of finance, available here]  However all that being said, we must regard much of his work as simply irrelevant, because he has not imagined that the men who met in secret to devise the US Constitution were capable of making any mistakes. With regard to money, they made some fabulously serious mistakes, which some of us out here wish to call to the attention of the American people and to others around the world, who are serious about monetary reform, THE most important issue of our times.

In 2005, Vieira published an article called, Are Monetary and Banking Crises Inevitable in the Near FutureIn it, he made some statements which simply cannot stand unanswered. It is not our purpose to condemn Vieira, but to correct him. We value much that he has already contributed to the general debate on the future of the American Republic. All we want to do is to make some points exceedingly clear to him and to anyone else who may be in agreement with him, lest they be led astray down the wrong path.

Vieira begins his article by establishing the fact that socialism did not die with the Soviet Union and then assumes that the reason for socialism's demise there was as a direct result of the failure of central planning. This is misleading and incorrect. First of all, socialism has certainly not been discarded and after the fall of the Soviet Union has had even more opportunities to spread. The reason for this is tied directly to the government issuance of money and the requirements of the government's creditors and their corporate bureaucracies, who have set national policies now for hundreds of years. These people invented both socialism and its dialectic counterpart, capitalism, or the absentee ownership of assets and resources under limited liability. We did not free ourselves from either of these political scenarios by fighting a Revolutionary War and the framers of the US Constitution certainly did not free the people from them either. There is nothing, absolutely nothing, worth pursuing by looking backward and trying to get everyone to go back to some fanciful, non existent free market, which never existed and still does not exist.

Vieira touts the Austrian school's Ludwig von Mises, whose work as we have said before, represents the alternative to Keynesian economics offered and authored by the same people. We frankly aren't very interested in the Austrians, as they never really dare address fundamental issues concerning the common fractional reserve banking business model or the legitimacy of the government issue of money. Not funny how so many take these things for granted, neither of which shall stand the steady scrutiny of an awakened public.

Let's state a few facts as we understand them:

Money originates in the act of buying and the money offered is “backed” ONLY by what it buys. Anything else about money is pure hooey! Money is created by a purchase and destroyed when the same buyer receives equal payment for something he sells, including or especially his labour, thus cancelling out his purchase. We say that the buyer returns what he has taken from the market, by selling something of equal value back into it.

Government issue of money, ANY government issue of money, is illegitimate because it is all unbacked, not by gold, silver or something else the government might be said to own, but unbacked by anything the government would freely compete to sell in the open market. Whenever the government is forced, by whatever public desires or not, to compete with private operators, it inevitably drives them out of the market, because the government can, by money issue, apply FORCE in its buying and FORCE in its taxing (taking) powers. As all students of truth and law now should know, certainly if they have studied Bastiat, law is FORCE and any time such is brought to bear on ANY market, those markets are no longer free. This was in part explained in our piece on markets.

Schemes of so called FIAT currency have always failed BECAUSE they were government issued! This point has never seriously been made and it needs to be and often! People who want to regain control over their governments must begin by coming to their senses and regarding ANY and ALL government money issue as essentially illegitimate.

When E. C. Riegel said that commercial banks do not, strictly speaking, loan money, he was making a distinction between a commercial loan which must be paid back by an individual human or business borrower and a government borrower who would not need to resort to taxes only to pay back the loan, but simply to run deficits forever. Here's what happens; commercial loans are paid back and in the process the amount of money created is destroyed.  (Actually more money is destroyed than created through paying back uncreated interest, but we'll leave it as is for now.)  Where did the money go? It went into assets, property and payment for labour. Money did its job of splitting the terms of barter and after an equal amount was taken back in a sale and the commercial loan retired, that money is no longer in existence.

Not so with Federal government issue. Their debts are never payable because they're the government. Meanwhile the government, in our socialized monetary system, is the biggest buyer in the economy and thus we get all kinds of market aberrations that create monstrous things that we the people never would have wanted and would certainly not buy had we the choice, but we couldn't do anything about it because we were not the buyer!!!

Another wrinkle in this is that just because we have this agreement, that none of us ever agreed to, sorry, called the US Constitution, does not mean that we the people ARE the government or can determine even with our votes, what the government will or wont buy. Those decisions are made by the government's creditors. That too was the result of the founders' failure to correctly understand money.

Fractional reserve banking, which has assumed such an exalted status throughout the world, is a curse from ancient Babylon, imposed on the world by FORCE; not the result of any free market operating under any nominal degree of liberty to the individual or legitimate business. The precious metals, so beloved of the Austrians, were FORCED on world markets, they were not freely chosen or accepted rationally by any free market which is merely interested in settling the terms of barter. Fact is Mr. Vieira, if anything operating as money has any intrinsic value in itself, then it becomes part of the terms of barter and to the extent of its participation in the transaction, is not strictly speaking any longer operating as money.

Real honest money, contrary to all the LIES, therefore should have NO INTRINSIC VALUE. It is merely the means to settle exchange, which will be completed when the first buyer becomes a seller of more than he buys.

Now consider another thing the Austrians and others discuss endlessly ... and stupidly! They discuss “misallocation of scarce capital.” The whole notion that ANYONE can or should be able to determine the proper allocation of capital is ABSURD! This is another case where deliberate misinformation serves the cause of hiding facts from the people. Capital need not be scarce at all. What is involved normally is the credit worthiness of a borrower and his appetite for capital. Again, no governments qualify to issue money, so they must beg for what they can legitimately spend from the public's sufferance of their taxation AND NOTHING ELSE!

Do you honestly want to see an end to war and poverty worldwide and much else that is evil in this world? Solve the money issue question and everything else falls naturally into place. The founders were RIGHT to keep the government out of anything other than minting silver and gold coins, which in fact thereafter were not theirs, they were terribly WRONG to give the government ANY power to issue money based on its credit worthiness, which is how THEY did it, the “it” being the ability to create as much money as THEY wanted the government to spend on what THEY instructed the government to spend it on. The THEY being the chief creditors of the government, the central banks and corporations that would spring up around them just as Thomas Jefferson had warned.

Jefferson knew that the banking model was wrong, as most with any familiarity with the precious metals markets and credit would know from first hand experience. Yes, as it turns out, usury is a problem, but as we proved in another paper, any usury that has the effect of always creating scarcity in the money supply only really happens where the government issues money and nowhere else. The “interest” costs of borrowing end up in the goods or services bought, as that money is brought into the market and is in turn destroyed as the loan is repaid. The difference between our perspective on this point and that of a typical banker are as follows:

The commercial bank bases loaning capacity on a multiple of its “reserves,” established by its average of total demand accounts and other financial assets, which could include government debt; bonds, etc. We seek to separate the transaction clearing function and the finance function completely and forever, as they have always been in conflict of interest and based on a fundamental fraud, a fraud based on the SLAVERY of precious metals, not their propensity to induce freedom, as the Austrians claim. Since the Austrians maintain that precious metals somehow gained acceptance as money in a free and unregulated market, something that never has existed, they are proven flatly wrong, which is just as well as to have shown them the various crowned heads, etc. that have been impressed into such coins. Bluntly stated, the Austrians are proved liars!

“Savings,” so called, exist as leftover money from normal exchange and build up as liquid capital. Is there a limited amount of this at any point in time? Of course, but nothing short of finding someone with the unlimited capacity to put back into the market what it demands of it in resources and services, is really going to change anything. That was likely the Keynesian goal, except that Keynes never really ever attacked banking's business model either. As far as we are concerned there are to be separate pools of capital, personal and private from which finance will spring where it is needed and benefits business. Markets will be free to the extent that government does not intervene, including by inducing everyone to trade using their truly unbacked FORCED “legal tender” money (whether backed by silver or gold makes NO difference).

Credit limits in the proposed system are likely to be rationalized on terms of basic human needs demanded in diverse localities, rather than decided by public edict from the collective wisdom of “specialists” and other “planners” operating from some centralized control centre. We believe that the direction of history is away from people who try to rationalize away the obvious obtuseness of greater and greater centralization until they will be left without an audience for their views. There will probably be some unavoidable bitterness and gnashing of teeth.

The proposed money itself will have no intrinsic value but will be based on a fraction of the price of an ounce of gold on a particular date, and thereafter the trading prices for this money into any other government fiat currency on the planet will be based on how the daily price of gold rises or falls relative to the initial price, the Figure 1, as E. C. Riegel called it. Once initialized, this money, the Value Unit, would be independent of the prices of everything. People would establish reasonable prices for everything within this private monetary system; prices would seek their own levels. The result would be a steady yardstick of value that would not change over many many generations. The greater usefulness of this money would soon be apparent as it would be easier to establish standard prices worldwide. The value system this money would generate would not be affected by government spending.

But the most radical view, probably not original, that E. C. Riegel took was to whom the right of issue of money naturally belonged. He concluded, and so do we, that this right of issue is inalienable and rests solely with each one of us as individual human beings and TO NO ONE ELSE. This meant that in order to get his new system off the ground, Riegel advocated GIVING people the money to start trading. He advocated a system where the poor would get the money to purchase a subsistence to be determined by each community. He recognized that all the extra profit made by any business would come from those who continued to buy while they couldn't sell back into the market. This is precisely where any extra money should be coming from, not from excessive and stupid government spending that benefits insiders and puts millions out of work!

The current proposal advocated by this blog is for the acceptance of an independent Value Unit as a new measure of value in a strictly private monetary system, which disallows certain business creatures and at least for now, all governments. We do not want to base our new money on dollars, because people want something based on gold and silver as they perceive their dollars, euros, etc. don't buy as much as they used to last year, last month, last week, etc. So we say, that's fine because we need a fence around our monetary system, so none of us operating within it need ever hold any dollars, euros, yen, renminbi, etc. It's all the same to us; illegitimate public issue of money by governments that have usurped the inalienable right to create money, the very essence of freedom itself, from each human being on the planet. This amounts to much more than a redress of grievances, which is frankly pointless. This is our answer to state socialism; we will give the poor their right to survive, perhaps to thrive, by giving them the right to create the money to buy their subsistence to the benefit of the businesses in the areas that serve them along with everyone else.

For those with assets that transfer from THEIR system into ours, the answer is how much those things fetch in gold or silver rather than in dollars. The Value Unit currently in proposal started on 2 November, 2011 and at this writing, 12 May, 2013, has risen in purchasing power 16% over its inception. This is entirely due to the engineered collapse in the price of gold and silver. Had the currency been “pegged” to THEIR shifting prices for these metals, that would work out to a definite 16% loss over the same period. In terms of exchange in dollars, whereas the initial price for a Value Unit was $2.16, now it is $2.51. There was no fancy algorithm used, as with bit-coin, to enforce an unnecessary scarcity and there would never be any scarcity of money as exists under our present system. Scarcity has nothing to do with trade, it is if anything a detriment. We prefer to consider it irrelevant.

A lot of things become much clearer under a system like that proposed here. Many cost accounting and business planning functions would soon see the wisdom of smaller units of production, and with the elimination of limited liability from the picture, everyone would have to become more responsible, a lot of stupid and dangerous activities would simply no longer be affordable and we would soon right things; smaller IS better.

The entire system, a Value Exchange Network (VEN) is proposed as a set of local nodes, each known as an Independent Exchange (IE). They would determine and manage membership and account issues, settle transactions among members and earn their way based on set transaction fees (currently proposed one tenth of one percent .01%) They would have primary responsibility for verifying the acceptance of credit contracts (finance) but they would not be involved in the finance or credit businesses at all or ever. Those engaged in the finance business in this system would stand outside the IE's and take on their own risk based on sufficient resources to cover losses, simple as that.

Do we anticipate credit being harder or easier to get under the new system? It depends entirely on the market. There is much complaint about “misallocation of scarce capital,” but how is it otherwise with government issue and buying (spending) representing the interference that it is? We recognize of course that much “wealth” has been stolen over the last two generations and more, and we are well aware how government has helped itself and its friends. How could it have been otherwise given public government issue of money, loaned or emitted into existence makes little difference? What's really sad about it, is that one man in a million has even the slightest clue what's really going on.

E. C. Riegel saw much, but tended to exonerate the bankers, even hoping they'd work against their own business model to get his system started. That was based on the naive and accepted status of their money as a legitimate social function. As it turns out, finance does have such a function, it's just that it needs to be based on a sounder footing. We need a system that is decentralized, so that when it takes a hit in one place, a chain reaction doesn't result in crashing the entire system. Statists and other centralizers and assorted sociopathic control freaks out there, are seemingly unaware of natural limits to the size of any human enterprise. Limited liability masks this reality from everyone.

This is to be an international system that determines its own membership rules locally, but adopts the same money worldwide to manage business.  Money  is literally created and destroyed as needed by legitimate private and personal human need. Governments, non profits, foundations, etc. are fat in the economy that buy without any intention of selling anything back into society that anyone would willingly buy. At least the poor buy what everyone else wants and needs, creating an advantage for production of useful items rather than things nobody wants. As this new system takes off, governments will have to shrink in size and many institutions that enjoy prominence today may simply go away. We suspect that huge corporations once relieved of limited liability, will be unable to compete and disintegrate into much smaller units. We should see a return to lasting quality as a virtue and smaller competing production runs serving many diverse groups of people. Everyone in this system will acquire a reputation and be able to finance their labour through a process involving honest labour contracts. Businesses acquiring the float from employees who finance their own employment will be more concerned about them, since the labour market will become far more fluid than it is now. Everyone will want to have satisfied workers as well as happy customers.

Yes, the current money shall become worthless and banks will fail, but we can get through this as long as we can keep exchange afloat. Vieira says that Federal Reserve note “redemption amounts to exchanging intrinsically valueless rag currency for almost valueless slugs. And a right to use Federal Reserve Notes to pay taxes [legal tender] is of dubious economic benefit to the taxpayer whose wealth is expropriated through that very payment."

We're saying that FRN's represent illegitimate money because they are government issued rather than issued by the people. I don't care what the dang things are made of, people use money the way that's most convenient and don't think twice about whether it has any intrinsic value or not. Today's plastic swipe cards, yesterday's checks; these are all money just as much as those “valueless rag currency for almost valueless slugs” Vieira consistently bashes in his book, So what if a Constitutional dollar is 371.?? grains or whatever percent of a troy ounce of silver? It's a commodity that has a fluctuating value controlled by brokers in far away cities that have nothing to do with a local farmer's price for a dozen eggs or a local dairyman's price for a pound of butter or a gallon of milk. Proposing any money pegged to the moving price for a commodity decided by someone else is ... stupid!

What we propose instead is simply to merge the ends of THEIR pernicious dialectic; make the monetary unit a fraction of an ounce of gold (and comparable for silver) on a specific date and henceforth THAT will be the set of values upon which everything else lands. At 1,000 units to an ounce of gold on 2 November, 2011, that turns out to be a unit with a comparable dollar value of $2.16. If the price of gold falls, well it takes more dollars, yen, etc. to purchase a Value Unit in honest trade. If the price of gold surges above the initial vale, the Figure 1 may be raised but never lowered. This would actually tend to favour a harder currency over time.

What we can probably predict within this system is that all prices will seem lower, though each unit will buy more and labour costs will probably be higher. This is what we would expect. Over time we'd also tend to see very few who are really destitute and a lot more in a wider middle class with much less distance between the wealthy and the rest of society. Wealth is as we've said, not inanimate hunks of precious metals, but that which produces income, so it becomes necessary to determine in what rests one's wealth. For those who labour it will be their labour; for those with tools it will be their tools, their capital assets; for some it will be their savings, though we hope and trust that the avenues for what has been going on in financial markets over the course of our lifetimes shall be far fewer. Recall that all members must join where they are mutually acceptable in a mutually private arrangement. Certain kinds of businesses would be forbidden and would have to subsist on the fringes of the IE's, probably on a cash basis. Markets being what they are, there will always be a place to buy anything, but we do not have to accept them as members of our VEN.

We encourage Dr.Vieira, Bill Still and many others who still worship at the false shrine of state sponsored money issue to come to their senses and begin to see things from quite different perspectives. As for the US Constitution, it may become necessary to mount an unofficial but widely publicized audit of all facts concerning the ratification of every amendment after the 12th. We want the original 13th Amendment back if it was really ratified. We believe that the present 13th Amendment (the new 14th) was correctly ratified, therefore outlawing human slavery (thus disallowing corporations the rights of free people, since they are the slaves of their owners). We are especially aware of facts casting doubts on the actual and acceptable ratification of the 14th Amendment. If proved beyond doubt to have been FORCED upon the states, as we suspect, then we shall call for a wholesale repeal of every statute that is, was or has been based upon it and call for a nationwide and universal dissent, disregard, disrespect and boycott for any such unlawful measures based upon it until those laws are all repealed. We likewise seek the truth concerning all the rest, especially the 16th and 17th Amendments. It's high time that more public legislators were known for the number of laws they got repealed and the government agencies they closed than for the reverse.

That's some of our view. Let us know yours at

David Burton