“The ideas of economists and political philosophers, both when they are right and when they are wrong are more powerful than is commonly understood. Indeed, the world is ruled by little else. Practical men, who believe themselves to be quite exempt from any intellectual influences, are usually slaves of some defunct economist.” ― John Maynard Keynes
These blog posts are each papers, preliminary to drafting something like a Manifesto and from the beginning were intended in the same spirit as the Federalist and Anti-Federalist Papers prior to the drafting of the US Constitution. I'll briefly describe my role in these matters as, so far at any rate, might perhaps be similar to that of one of the Founding Fathers of the American Republic. I'll explain. Our position in time, in the stream of current events, is similar in all respects to those times just prior to the American Revolution. We should remember that these men were all those who did something about it rather than those who were allowed to do something by grant of some authority. None of them got anyone's permission to do what they did.
Observing matters as they are, with the very survival of the planet in the balance, certainly the survival of civilization as we have known it everywhere at risk of dissolution into barbarism or worse, as we are driven ever closer to world war by homicidal maniacs pulling the levers of power, it comes down to “well if not me, then who?” That should serve adequate notice to men far better than I, to be setting about doing what I am doing. Are there any among you anymore in every country for that matter because all our concerns are the same; are there any more statesmen left? I am looking for them. For now, I manage to have the time, and by my age, George Washington would have had but five more years to live. I'd rather be a Franklin than a Washington in these affairs: I am looking for the other counterparts among younger and abler men than myself.
Hence, arriving at seniority, having observed and studied and been places and met people few others have, after studying the history and mechanics of exchange, trade, money, economics, politics, etc. after spending at least twenty-five years of my life researching these matters, I came upon the work of E. C. Riegel, read his works, scant as they are, and began this blog, because “when the student is prepared, the teacher arrives.”
This blog is not however a memorial to E. C. Riegel. It should be understood that there are other matters posted on this blog that have to do with gaining basic thinking skills themselves, rational thinking, the seeking and knowing of certain provable truth, not in the sense of the loose corrupted “science” of the present day, itself held prisoner to the cynical interests of financial speculators and special interests. These are matters that you likely never were taught in school, any school, therefore they are of the nature of finally gaining a worthwhile education, beginning with learning how to think rationally, so that you can defend yourself against fraud, lies, jeers, etc.
That said, what impresses one most about Riegel, or should, is his bare bones rational approach to everything. Any weaknesses he shows are in the nature of implementation. In the intervening period, between his time and ours, certain things he predicted have already come true and technology has marched ever onward, affording if anything, an easier means of implementing his ideas in concrete form and usefulness for the peaceful benefit of all mankind.
When this blog's launching was announced on my other blog, I received this eloquent comment;
“In my opinion E.C. Riegel was, so to speak the greatest composer of classical music in the theory of money to ever live. He has challenged and invited in his composing those who wish to be inspired and lead by his masterful theory of monetary conducting. His orchestra is now coming together to finally discover him. If one were to try to compare him to the musical composers such as you have featured on this musical blog he would be by far the worlds greatest. Self taught, he stood virtually alone in his field as he independently transposed his classical money manuscripts. Unfortunately because his musical money compositions are so obscure, they have for the most part eluded the world, though a few of us have now discovered them. The virtually un-read and un-played masterfull scores he so brilliantly composed, are free to the world. It is up to us to follow the conductor E.C. Riegel and play them. His writings contain the most valuable and liberating music ever written.”
Construction of a viable Value Exchange Network (VEN) is a monetary engineering feat or architectural effort, based on the sparse rigour of Riegel's ideas, as if he made a few pencil strokes indicating the basic design, while it was left to someone else to attempt a blueprint for bringing them into reality, at a precise moment in history when they are most needed. Riegel regarded money as the measure of value, not the holder of value, as a mere accounting tool, an appliance, not something intrinsically valuable in and of itself. He regarded money as the means to account for splitting barter perfectly in half between buyer and seller and nothing more in and of itself; that money's value was “backed” by whatever it bought and nothing more. If that's all it is, then why would we want to use something as expensive, scarce and clunky as precious metals, to accomplish this task?
In ordinary terms of trade worldwide, we don't and we haven't for a long time. There are certain parts of the world where precious metals enjoy a larger role in trade than elsewhere, but close examination reveals that while these societies are at this time benefiting from technology transfers (originally due to the lure of cheap labour and expanding markets in these places), that among those areas of the markets in these countries that rely on trade in gold and silver by tradition, people are usually poor because only a few have these metals, because after all they are scarce relative to other things. The scarcity of money issue only benefits those who have the tokens to participate and if they be intrinsically rare, fewer people will have them and there will be less trade accomplished accordingly. As I said, falling back to trade in only say gold, silver and copper, else barter, is returning to perhaps the 4th century, a barbarous era when life was “nasty, brutish and short” for the vast majority of humanity.
No, we ordinarily use paper, some coins, or plastic, or digits on computers for money, because money is nothing more than a bookkeeping appliance. As money measures value, the more of it one has, the larger thing that can be measured with it for the sole end purpose of procurement. Which is where we come to ... the intrinsics of cash.
Cash, in any monetary unit, is that representation thereof that confers personal anonymity on the possessor in any purchase. Cash, represented as familiar bills and coins, is made up of standard interchangeable material objects you can hold in your hand, fold in your wallet or stash in a drawer, it is a thing or many things comprising the appliance of measuring value in trade with any other trading partner willing to take it as payment for a tangible good or service. If you keep it in your possession, this appliance or pieces thereof, can be passed along, whether given by free will or taken by theft, to someone else, who may then also anonymously use it in trade for something else, in a monetary circle that is closed every time the buyer takes back the equivalent amount for some good or service offered for sale.
But cash these days can and is also thought of as electronic representations in accounts. The advantages of having one's “cash” in an electronic account may be ease of settlement of trading transactions across the globe, but they do not convey the same idea of anonymity as do the actual physical representations; usually bills and coins. This can simply no longer be denied, as of the revelations of what we have long known has been going on for years, ever since the dawn of the internet. The surveillance society is the kind of thing the government buys, on the orders of those behind the curtains. These are not things we would willingly spend our own money on, “in the public interest.” So any money in electronic accounts is not strictly speaking “cash” in any money because it does not confer anonymity on the holder.
Swipe cards do not represent anonymity in transactions either as has likely been the case now for many years. Transactions made electronically, those using any of the popular modes of communications, leave a trail.
Showing the basic Value Unit designs around, crude as they are, found many who have become used to their swipe cards, who seem to think that notes and coins, with their mix of worldwide and local flavour, represent a kind of “return to Mayberry,” a reference to an old American TV sitcom, centred in a small country town. But we have also heard from some who say that most small or medium sized businesses, in most countries, will take nothing but the public notes and coins used in their countries; cash. They will not take swipe cards or checks. Therefore the concept of anonymity is familiar the world over and for the advantages mentioned, serves as the best means to represent the appliance of value measurement to trade.
The reasons “cash is king,” as they say, are that any cash that isn't traded in, that is stacked up, saved, represents a potential immediate and incontestable claim on resources (goods or services), when it is presented in trade, of course within the community of traders who would willingly take it in trade, normally a political country. Cash also gets the lowest prices on anything and that applies even more so to quantity purchases. As we said, when a purchase is perfectly cleared, then both parties are fully paid then and there. The purchase has been finalized. Obviously most businesses like operating this way, which is why cash works better than anything else.
Is cash always going to be in short supply in a Value Unit system as it is in the regular “public” monetary systems? It will be sufficient for an individual's subsistence by locality and cost of living, to be determined by the members and will be sufficient to justify most general transactions. Value Units can be stored in accounts or as notes and coins, as cash and eventually a worldwide cash market will develop, because whether people are IE members or not, trade will find a way and people will figure out that Value Units represent a steady value that doesn't change due to whatever “the masters of the universe” are doing in the crumbling old monetary system. So it may well turn out that the seeming “return to Mayberry” forms of money that we are all familiar with, will become once more the most familiar form of money as people continue to back away from anything showing a trail of any information for government insiders to use to their advantage.
This is why we proposed that the obverse (front) sides would each represent a specific location and its people, so that the variety of designs would themselves add artistic value to these exchange tokens that we hope to introduce to the world in order to rescue one of the greatest technical achievements of mankind, money, from destruction by those who have less understanding (Keynesians) or profess to take us to a utopia that existed nowhere in the past (Austrians), using fraudulent methods that would not change; these people will simply not throw out usury as their reason for existence, even when more of the world is waking up to the sinister nature of this clear mathematical anomaly, that allows liars and thieves to steal from the productive and the poor alike.
And finally we put it to you, take a good look at what you presently hold in your wallets, your cash, notes of the debts of states, they will claim these as your debts to them, not to the states in most cases, but to the creditors of the states, the private central banks. The Federal Reserve supposedly charges 6% interest per year on all its issue, the IRS collects this sum from taxpayers; your taxes do not go to pay down the principal of the national debt as that is more or less perpetual, except for the greatest swindle of them all, the locking up of valuable resources and land in America as pledge for the debts of the corporate government to foreigners.
And foreigners hold a lot of US government debt (treasuries). I did say there was an active market for these issues known as sovereign debt. What happens when a creditor believes they are holding unpayable debt or when they suspect that the debtor is attempting to “pull a Weimar on them,” by inflating their money so the debts are paid back in increasingly worthless currency? The creditors eventually dump it, but they want to be careful so as not to ruin their investment in America. None of any of this did you personally have any say in and like it or not these pieces of paper and their coins facilitate wars, are not intrinsically worth anything more than any similar pieces of paper, but that isn't really the point.
We know what they are, they are money despite what Rothbard and his deluded followers may think. Everything begins with identity, facts are facts, these tokens are money. We know what pieces of money do, they buy things. Clearly no one thinks beyond the reality that whatever one buys with one's presumed money is what backs it and nothing more. When we take a look at who generates this stream of money that everyone must use, we see the machinations of governments spending money they don't have on things none of us would ever buy. That goes for any country on earth too. We can't tell them not to, because it isn't our money and isn't even our government any more.
Paul Craig Roberts pretty much said as much the other night for all who heard it. The other day I heard Roberts' appearance on John Stadtmiller's National Intel Report on RBN. If I am at home on any weekday at 5 pm Eastern time, I will normally be listening to this programme. Roberts told everyone that the people in charge were going to need a war to keep it all going or it was going to come crashing down, and then get this folks, they'd give us another currency for the one that failed, etc.) and they would start it all over again! Why would anyone accept their new currencies, except that its use would be coerced by government FORCE? Really? Is this the 21st Century or sometime during the Dark Ages? Take a look at whose visages are on their money; “render unto Caesar the things that are Caesar's.”
We also draw every American's attention back to that weird pyramid with an eye over it and the weird Latin motto on the reverse side of every dollar bill. This is supposedly the great national seal of these United States! Is there anything really American about this symbol and this motto? If not, can we submit for fair examination before all Americans (as well as the many people outside the USA who visit this site) that these things are foreign to our ideas of what it means to be an American? Yet we continue to use this money, because we know how it works and everyone just goes along with it, all the while we're being pillaged by inflation and the eleventh marble of usury and all the rest; what the largest buyer in society buys for itself and its creditors and the worldwide corporate Goliaths that absorb and destroy everything or anything that is really innovative, creative, beneficial, artistic or honest and deliver to us Franken everything delivered to ensure a profit to the few at the top.
Instead, on the reverse sides of the proposed international standard Value Unit exchange notes, there would be a simple map of the world. Perhaps the words would be different or their equivalents printed over the basic designs in their home languages, but in any case, each community everywhere would be using the same monetary language, therefore putting money changers out of business and saving everyone everywhere a lot of extra expense. The obverse (fronts) of these notes would depict scenes, places or people from diverse places, these pieces of money would reflect the varying cultures of the people of the earth.
Who would be backing this money? The people identified on these obverse (front) sides. What would be the nature of their backing? That they would agree to take these same notes from anywhere in exchange for things they have to sell. It's as simple as that! It would be our money, not theirs. We would protect it with a system that forbade certain practices and business combinations that benefit no one but speculators. We are going to actively discourage as far as possible the practices of making money from nothing but money. Eventually we expect an international accounting standard to emerge within the VEN as well (each business would use the same set of accounts, so that it would be possible to ascertain very quickly whether we are dealing with a fraudulent or real business that has honestly earned equity, etc.) Speculators? We expect that there will be a few, there always are. But what can be done is to make rules that recognize the essentially criminal (fraudulent and parasitic) nature of their practices and forbid them membership in our exchanges. What will they do then? If they choose to operate, they will be restricted to the cash market, where anonymity is more attainable anyway.
I note in passing that at this point gold and silver have been trounced by the futures markets, the torrents of naked short selling by the banks. The brokers will eventually put forth a spot price that cannot be supported by normal supply and demand at usual tracking levels above spot for actual transfer of bullion. Meanwhile they are talking the gullible public into switching out of clunky chunks of precious metals (which aren't true wealth anyway as they produce no income) back into the paper equities markets (where they may pay you a pittance in a dividend that is itself bogus and based on nothing resembling true profitability). Of course as was predicted, the stock markets have plunged also which indicates my friends that both ends of their dialectic are losing the trust of the public.
[23 June, 2014: Even with new highs scored by this year's stock market rally, there's really nothing behind it. How long can they keep it up? I suppose indefinitely as long as they control the levers of power and payment and people continue to accept their money as payment for goods and services. But eventually, their abilities to delay and delay and delay and delay ... will come to an end. That would be nature taking its course. Right now, whoever has lots of cash is clearly putting it into corporate equities, because they simply can't afford to lose these; to admit that they are grossly over-valued, because what they represent in power over resources is more than matched by whatever the resources themselves may actually be worth in a fair and free market such as has never existed. That too will be rigged. It's a nightmare scenario where reality can change relatively quickly if the right occurances coincide just right. Call it a "black swan event" or what have you,the eventual death of the present system is inevitable. If you're still in the equities markets, you're playing with fire. If you buy precious metals, the deflation wave could still sink your attempts to preserve purchasing power. Only the proposed Value Unit is different.]
We note that as this happens, whatever value the market for paper equities or precious metals might represent is transferred back into currencies, into cash. As it is further transferred into the actual notes and coins of dollars, euros, pounds, etc. pools of liquidity develop, the potential for purchase just as the mass sale and exit from markets represented the realized potential of pools of held positions in equities or precious metals. What we are seeing though, as more and more people begin to realize that the markets are all rigged and that despite all attempts to control something as big as worldwide markets in securities or precious metals, that due to the sheer size of these enterprises they are ultimately doomed. Cash becomes the ultimate safe haven even from the traditional safe havens like gold and silver, even while it is devalued daily due to continued government spending. But why we haven't seen a Weimar meltdown is two fold; first that most people still regard cash in whatever national currencies as safer to keep until they can determine what out there is worth buying and secondly the money is distributed disproportionately in the hands of fewer people therefore it doesn't circulate much. The biggest cash deals that float world markets involve either commodities like oil or sovereign debt. Otherwise with so little money out there that isn't immediately reclaimed in debt service, there is a natural deflationary pressure that can build for a while; "full shelves but no money to buy it," until the economy rots or people finally stand up and do something about it. .
We note, somewhat insolently in fact (using Ayn Rand's preferred venom), that since inception on strictly price to value terms, the proposed international standard Value Unit has held its own against all currencies and gold and silver! Right now, with today's dramatic falls in spot prices for the precious metals, each hypothetical Value Unit becomes fair tradeable at the so far not exceeded $2.71 per Value Unit! Imagine a yardstick of monetary value where the primary unit would currently be worth closer to $3 than to $1? Imagine what the prices would be. Think about the structure outlined so far and the labour and credit contracts. On paper only, this proposed money has risen 25% against everything else in almost 20 months (1 year and 8 months), measured against gold, and this is at bullion trading prices too, not spot.
Where do we go from here? Paul Drockton says, and we agree, that the present system is designed to loot the rest of us and it is about done and over with (so they can then just issue another currency of exactly the same kind and start the looting all over again) unless they can get a nice good war going that will put everyone back in debt to them for the next hundred years, if there is anyone left. Do you understand how insane this all is? Do you understand that what they have in mind doing with their money, their corporations, their governments, etc. has nothing whatever to do with a peaceful and sane sojourn through any civilized place on the planet where normal people try to live their lives? Drockton also informs us that they have succeeded in bringing down the price of silver below the cost of taking it out of the ground. He doesn't believe this can continue. As for gold, he suggests this is a good time to buy, especially the pieces under 1 oz. Our position on precious metals can be summarized as follows:
We believe that it is appropriate at this time to be holding some gold and silver for the long run (certainly 5 years out or more), understanding that what one is doing is placing one's current purchasing power (which is diminishing in all currencies) on ice. You wont usually be renting your silver or gold, so you wont be earning any income from it, therefore again, precious metals are not explicitly speaking wealth, though some may claim erroneously that they hold wealth. Their relative trading power is also at the mercy of futures markets until such a time, and it may come soon, when their prices no longer represent anything comparable to real supply and demand prices for real available bullion, at which point these phony paper exchanges will cease to exist as viable and ... nature will take its course. At that point the prices of precious metals may go vertical as any and all currencies become as the Weimar reichmark in the 1920's.
But ladies and gentlemen, if gold and silver become virtually priceless, they wont be passed around as trading tokens now will they? I'd certainly rather not trade mine away for very much of anything. That attitude will prevail and then nothing but barter will happen until someone comes along and tries to set up money. By then it may be too late. Yes, I know, the guy would be lynched perhaps right on the spot, because at that point worldwide society would have plunged back into the 4th century and people's lives would revert to becoming nasty, brutish and short.
And please make no mistake people, if you have been paying any attention to what's presented on this blog to date, there are those out there, the “stakeholders” in UN Agenda 21 for instance, with visions of future reinstatement of serfdom and feudalism in mind, who would certainly like nothing better than a return to some general level of barbarism as they have plenty of silver and gold and will the better be able to have their way with the rest of us. You see why we have to think about all of this NOW before the present financial system becomes inoperable due to the dead weight of corruption finally bringing it to its demise. Bigness will not save it either, because the entities have grown to such gigantic size, making them literally unfit to survive under the scrutiny of the public following a financial collapse, and removal of limited liability and absentee ownership from the economic equation within the VEN will seal their fate. Corporations are dinosaurs. Anyone working for them, especially those among the most hated by the public, is at greater risk in the future than they can possibly realize as sooner or later nature will take its course ... so it is time to start NOW.
To begin with then, any new system will have to presume that some people start out with more ready cash. Some will whine, why can't we all just have more government cash instead? My answer will be as follows: You can get their money easy enough through lots of grants in aid etc. All you have to do is figure out how to fill out lots of forms that are in accordance with the agendas behind the regulations, which you also have to know and agree to, and then perhaps they'll let you “own” (while you go into debt due to inflation, etc.) some business or other enterprise. Government issue of money leads inexorably to the state turning all businesses into appendages of itself, eventually to communism. You cannot run a truly free enterprise economy with a socialized monetary system. It never works. All corporations in fact are creatures of the states. Is that what we really want? We think we can do better, but what would it take? Into whose lap do we automatically decide to grant the right to begin with more cash, when the market for our money opens, as indeed it will once there is ample money out there waiting to be spent into circulation.
That's the power of cash and why it is king, it's potential to be spent. Those with a lot of cash are correctly considered rich, but they may not necessarily be wealthy unless by their craft, skill, or capital, including land, they manage to provide an income to live on. The common-wealth is thus obviously the totality of that which would produce the living income for those who dwell in the realm comprising it. One of the grave errors made by the economic planners of whatever stripe, is to attempt to make communities interdependent where they should in fact be as independent as possible. Redundancy at the level of small towns or communities within larger cities is thus by definition healthier, more efficient and capable of providing a decent livelihood, than a massive Goliath organization that runs ineffectively and inefficiently, because it cannot be everywhere or be everything to everybody. Each community is likely to determine its strengths and weaknesses going forward as new trading pathways develop. The VEN will tend to support this trend too. But who should be getting this cash to begin with?
If this is an engineering feat, we would be looking for our foundation, and our support so that our structure would be strong. We suggested that the ranks of military and law enforcement veterans be chosen as a vanguard from which perhaps the statesmen we are looking for might emerge. The other group that deserves empowerment and could benefit society greatly, would be grandmothers of every conceivable walk of life. Simply put, a crop of politicians and community leaders drawn from the ranks of these two groups would on average provide a better social and political order than the one presently in evidence. Many of these people have a few hours of time each week they could use to do what they may already be doing; networking with others in their communities, discussing an alternative to present arrangements as concerns virtually everything having to do with money, especially that money which would be chosen to represent their own choices for real advancement, often denied and even FORCIBLY curtailed by the present governments, for whatever handy excuses to cover for the fact that they are politically and economically the appendages of the financial elites who pull their strings.
Yes, we know that the whole thing is orchestrated and runs like a well oiled machine and we know what it produces; war and genocide, because it has been infected like all governments down through time by the avarice of power, fed by the lure of riches, all of which is on loan, so the politician who knows he may never be able to pay anything off or live a normal respectable life, lives it up instead. It's what's supposed to happen given the architecture of the structure the US government, and all others don't be fooled, have become.
Veterans and grandmothers might convene in every community and start forming networks with others, a minimum of three interested people in each community. Then each two bring another, and so on and so on. To begin with, perhaps you serve coffee and cake or what have you and discuss using an alternative money when it becomes available, discuss the merits of a universal international standard that would be adopted everywhere locally, discuss the various little businesses that have been around for years that might participate as B members of a local independent exchange, etc. You'd form a steering committee. You'd select officers. You only need three who alternate their effective responsibilities so they get to handle all aspects of an IE's operation.
Then you do something that some have difficulty with, you make an agreement among yourselves that you will follow the proposal of beginning a preliminary account for each A member (only individual human beings, no groups, businesses or governments), knowing full well that whatever is in it can not be spent yet. Each of the original three A members holds the responsibility for another A member's account and they should always have a means of staying in contact with the person given responsibility for their account. When a new A member is added, that person's account becomes the responsibility of one of the two sponsors and the new member gets the account of the person held by that sponsor in exchange. In this way responsibility and anonymity are preserved and bonds of trust are built among members. The extent of the network can never be known by any single member and it wont have to be to work.
Each of these A members, from the aforementioned groups only, would present to the other A members, some official documentary evidence that a state, military or other usual pension authority is providing or should be providing (in cases where aid has been cut off) some amount of money in the public currency per month, probably exclusive of the cost of any other benefits. Each A member's preliminary account, it could be in a simple folder, would include a copy of this document, plus the following documents; a piece of paper signed by the member and his/her sponsors, or the original three members, to the effect that it is understood that a preliminary account has been opened and that it will be thenceforth having the dollar value in Value Units added to it, subject only to the termination of this by the A member owner of the account or the A member's decease. The third piece of paper is a simple ledger indicating the date and the amount of Value Units deposited. There could be another column giving the running balance.
Additional deposits to these preliminary accounts are made after the first of each month and reflect the number of Value Units the aforesaid dollars, euros, pounds, whatever as described on the pension notice, would buy on or after the first of each month. We can presently offer a free service for all those figures in dollars, see the bottom of this page under History. What you would be doing is taking the monthly dollar amount and dividing that by the dollar amount given on the table for that month and year. That would give you the number of Value Units to add as an entry on the ledger and you would carry forward the running balance.
Another part of the original proposal was that once this schedule was in place, no further changes would be accepted; we know already that their money is going to depreciate in inflation, as it can't help it, so we wont be changing the monthly dollar amounts based on cost of living increases, etc. You'll see, the Value Units will more than keep up with inflation. For all intents and purposes this is going to seem a fantasy to most people. But please carry it forward as if everything you're doing is real, because there will come a time that just as batteries are required for an initial jolt, the new monetary system will require pools of capital in order to get started. You are implementing the golden rule by distributing this paperwork and responsibility for others. These preliminary accounts could get started right away, built just as I've described. If you want a future structure, you have to start from the ground and build with good materials. We badly need to build back mutual trust, responsibility and respect and this seems the best beginning effort. If there aren't any straight thinkers among the ranks of those who put their lives on the line, or of grandmothers who have seen much of life, to see the value in this sort of advanced planning and organizing, then heaven help us!
What I've presented here is a bold and unique idea. I imagine that anything that can happen would require the least effort, literally only a few extra minutes each month to record deposits into the account of a fellow A member who is doing the same for you. Begin to plan to do it today, do it soon, as we never know how much time we have before the “savage babies” in charge start something new and terrible for us to deal with. Please let me know as you proceed. I'll be available for any questions. I'd also be perfectly delighted to hear from anyone in either of the groups aforementioned who “get it.”