Monday, July 8, 2013

#44 Two Essays Concerning Property & Value Units

The British East India Company (a corporation) flag
and the modern American flag.
Prologue: On Independence

We just celebrated the 237th year of the grand American Republic known to the world as the United States of America, a people drawn from every nation on earth, ruled as it has been for quite a long while, by a group of people who work hard at trying to pretend that they are drawn from the people and rule of and for the people, etc. ... when as a matter of fact, they do not.

Of particular note are the flags of the British East India Company and the modern American flag. Over here, they used the song God Save the Queen, changed the words, retitled it America and taught it to children in school. Considering how similar these flags are, we were told that the 13 stripes represented the 13 original colonies. No doubt. And what did they represent on the original flag? Yes, exactly. So how “independent” are we?

The following essays are presented in the sincere hope that we discover the means to attaining our true independence.

1.  Rights, Property and Value 

This discussion sets the groundwork for the institution of local Independent Exchanges (IE's) so that everyone understands in and of what their membership in an IE consists.

A “right” is something that is inherent in a particular human being (Black's Law Dictionary) and is distinguished from a “privilege” which is something granted to a particular human being, a class of human beings or a company of human beings organized to perform certain functions and moreover, as an advantage over others. Recall here please our explicit definition of selfishness; to deliberately take advantage of someone else for one's own benefit, especially if they are weaker or poorer than yourself. Privilege by definition is selfish.

Someone grants a privilege to another, based on what? Based on their power to grant that privilege, usually backed up by some FORCE of law; the surety of non-compliance results in punishment from those who granted the privilege. If someone gives you a privilege, they can also take it away. The privilege comes with strings attached. Remember this form well, as it is directly applicable to the patent industry sustaining the fraud that the seller has some control over that which he sold to the buyer. This is the pretence that one has a right over what was sold to another, has a claim on what has become another's property. We remind you all that such conditions apply to ALL forms of common “public” money in existence, bound up with “legal tender” laws, etc. None of it is yours. It is all someone else's property that you rent to use. Let that thought sink in for a while and you'll begin to understand the significance of our proposal.

In contrast to privilege, inalienable human rights are life, liberty and property (this is the crux of the whole matter and shall be the subject of future posts) and these cannot be taken away and cannot even be sold or offered for sale to another human being by FORCE; they are inalienable.

All true rights derive from private property which is all that is said to belong to a particular human being. Of course those behind the Communist Manifesto certainly don't think so. Private property is ultimately of a personal matter. Note how the courts have mutilated the law by allowing corporations the same rights as human persons? Personal, private property extends in many directions. The 4th Amendment of the US Constitution enumerates these somewhat as “persons, houses, papers, and effects.” By “person” here was NEVER implied to include corporations, nor was it to include slaves as “secure in one's persons” might imply that one's slaves could be taken away and sold, etc.

We note in particular that everyone has inalienable rights plus rights which can be limited by the rights of others or infringed by the tyrannical acts of others, groups (including governments) or private companies with licenses to do what would otherwise not be granted except through the tyranny of government edict, that is, obtained strictly by FORCE. 

Every right carries with it particular responsibilities. Privileges usually carry no inherent responsibilities, but require adherence to specific rules set forth in the enabling acts of the government granting the privilege. In fact a wide classification of groups operate under rules which grant them protection from individuals whose rights or property was infringed or damaged by their actions. 

The only limitation on your individual rights are the rights of others. Some these days claim they have a right to healthcare, or more correctly a right to receive healthcare without paying for it in something of exchange. A right to healthcare does not equal a right to immortality or freedom from getting sick. If you are not willing to do your job for free, why assume others are going to do theirs for free? 

A right to your property does not entitle you to another's property no matter how badly you need it. There is no inherent right to another's property.

Rights and privileges are opposites. Governments are allowed to do things, granted to them as privileges, which could theoretically be revoked by those who support the government (voters and taxpayers). Any government which does not observe the rights of individual human beings, as previously defined, are tyrannies, since they are assuming they have rights that are not inherent in themselves, as they are made up of individual human beings. Likewise any policy that aims at despoiling someone's property to give it to someone else, for any reason whatsoever, is tyrannical.

Licenses from governments are either 1) the result of grants from the people for said government to be granting privileges to some and not to others (an advantage over those without licenses) or 2) they are tyrannical decrees by one individual or group of individuals for the purposes of exercising power over other individuals.

You have a right as an individual human being to be able to provide for your subsistence, as long as you are where you are supposed to be, and in that case to create the money to obtain it. It is within the purview and purpose of this blog to demonstrate how a monetary system that respects life, liberty and property, would look and how it would operate, exactly like the machine we say it is.

Michael Rivero and others describe the money they'd like to see as a “public utility” issued free of central bank interest. Actually we consider money to be a measure of value, that isn't even supposed to hold any intrinsic value relative to what it represents, as the more commodity value is contained in the “tokens of exchange,” the more any trade (barter) is influenced by the commodity content in the exchange. It may even be reliably said that one would expect to obtain something “for less money” if they pay for it in the “hard cash” of precious metals. But as I've said, as the price of precious metals rises, as we all know that it will over the next five to ten years, the less likely someone will want to part with these coins as they will gradually assume the status of priceless objects, while everything else as a measure of value disintegrates back to 4th century levels, where there is much bitterness and gnashing of teeth, etc.

Rivero, Still and others, favour giving back to the Treasury department, where they claim the Constitution vested it, the authority for printing and minting the nation's money as a “public utility” without interest. Printing money, by the way, they are actually forbidden by the Constitution to do, since this is equivalent to the government issue of bills of credit, “dollar bills,” which they have been doing anyway for now something over 150 years! All they can do is coin someone else's gold (or silver) for use as money.

Just what are these statists assuming about who gets to use this new “public money” to buy something? Oh, they expect the government to spend it into existence, you know, for the roads, schools, hospitals, jails, etc. and thence from all this activity, the rest of the economy is supposed to benefit, as the sellers of resources and labour to the government receive money in something like a grand swap. And then taxes, which are assumed to be much lower in such a scheme, would be sucked back into the government so that inflation, deliberately caused by government spending, would be reduced. You know what folks? Such a system is completely absurd!

We stoutly hold against ANY government issue of money, as proved by history. So, why keep doing something that's been tried over and over and over again and has never worked? It's stupid! NO government, at any time, should EVER be tasked with providing ANY money to ANY public as a “public utility” or whatever. What, like a public urinal? It that what you people mean? That's what you'll get. That's what you've got.

No, we offer something quite different based on a set of rational arguments from common sense. Money is created in the act of buying, and its right of creation is an inalienable right of a human being only. It is a personal and private utility not a public one, sorry. It is cancelled when it is accepted back in trade by the original buyer creating a monetary circle of exchange. Money performs an accounting function in trade and nothing else. It operates best when it is a fixed point of reference for everything else. This is what E. C. Riegel advocated. This is why this blog bears his name. We believe he deserves credit for the concept of a “universal monetary language” based on this fixed measure of value.

E. C Riegel saw clearly that inflation and government spending were inextricably linked. He understood the “Weimar meltdown” of hyperinflation, knew that it was usually inevitable in all cases of the demise of government issued fiat currency, whether that currency is loaned at interest or not. He would have liked the bankers to take him up on his ideas, but ... poor Riegel ... they were exactly the wrong people to have approached. We know much better now.

The modern banking establishment is the background enemy of humanity as has been sufficiently demonstrated by their complicity in countless wars. Nevertheless, it would be utter folly to openly contest them and Riegel would have placed under his ban on political activism any attempt to coerce the powers that be into whatever may be our ethical considerations. They are beyond any thought of any of this.

Riegel's message was to set up a working monetary machine (well, that's what it is), while the present one was still in operation. To date, bitcoin has succeeded perhaps better than any comparable alternative currency, but it still has problems, including that its price is subject to speculation. You have no way of knowing what the price of a bitcoin represents and it may fluctuate wildly. It behaves exactly as would a commodity under speculation. While we appreciate the (relative) anonymity of the bitcoin system, it has been hacked and there is no guarantee of privacy, as there would have to exist in a private organization.

We consider the proposed Value Unit to be an international standard measure of value that all recognized Independent Exchanges (IE's) would accept as money. This is exactly like a country deciding to adopt the metric system for other kinds of measurement.

Each IE is started when three people get together for the purpose, in a geographical area that can encompass at least 40,000 people. We would prefer these be persons of independent means and even some with property that would give each IE some permanence (Roger Hayes had the same idea for Lawful Bank branches. Our article on The Lawful Bank is here).

Memberships in an IE are either as A members (individual human beings) or B members (businesses formed by A members). There would be of course businesses that are running in the regular economy, while they would be encouraged to run in ours as well. We will never adversely affect or increase the paperwork overhead of any participating business. All we'll need are executable labour contracts. While all companies and employees are earning dollars (euros, yen, etc.) they are all earning Value Units through auxiliary labour contracts. The employers get the float up front until their employees are paid. They must all be IE members, all they do is fill out something that can be said on one page, sign it and assign it as active at the local IE. The IE does the work of debiting and crediting the accounts until the contract is extended or terminated. The employee gets a rating (5 star will do) from the employer and credit for completing contracts spanning time intervals. Most labour contracts will be capable of extension by the employer, though some may be for limited periods.

Some may be “craftsman's contracts” where someone is charged to make or produce something and the cost of materials and equipment is figured into the job. Usually fifty percent is paid up front and the rest at completion. We would want a limited time span for such contracts that would penalize the craftsman for being late. An example looks like this:

Smith wants Jones to build him a shed. They have worked out the details for the job and determined that 300 Value Units would just about do it. The time allowed is 90 days or three months. Smith starts Jones off by paying him 150 Value Units and the clock is ticking. Jones has to get it together and produce the shed per Smith's original directives, on time, or ... Jones get's a certain percentage of his 150 remaining Value Units deducted from his pay. That's the way it is folks. That's the kind of thing we want to encourage. How many projects are left half done, etc.? It's time we finished our projects.

The kinds of businesses that easily qualify are all single proprietorship forms, family owned businesses usually organized as partnerships, general partnerships where each partner shares the profits and losses equivalent to their contribution. Here's where we may take a cue from Roger Hayes and apply the fractional reserve model as he did, upside down, but applied to finance companies only (or perhaps to land purchases only). I doubt we'd countenance more than a five to one ratio however. 

What we're describing here is where say some 20 individuals who are A members of a local IE decide to form a company for the purpose of financing local real estate in Value Units. Let's call this company Excelsior Land Loan Association (ELLA). Perhaps for every Value Unit they deposited, ELLA would loan out five. Loans can be bills, which are for a year or less, notes out to seven years, or bonds out to forty-nine. Most loans for real estate are organized as a set of notes. 

Here's the problem. The people who put up the money aren't going to see any return on their investment for a while, for let's say seven years. That's the length of a note. They can be cashed out in seven years and will receive more than they put in, unless people just simply cannot pay off their loans in which case ELLA folds, the people who invested in it lose their money and either the deadbeats get to keep their property as squatters or the community gets the local Sheriff to run them off. So you see why it is vitally important to split finance from regular transaction clearing functions. Obviously, we'd prefer not to see any of this happen.

All credit contracts must pass through an IE and must be recognized as lawful under our rules. The rules are simple: Only money that has already been created can ever be lent. That kind of eliminates the use of fractional reserve lending now doesn't it? You can charge a rent for your money that most likely is to be paid up front, since we don't allow compounding, or assessed as part of a monthly payment schedule using simple interest only and every last fen (cend or cento) to be repaid must come from money that the buyer has created or earned; all loans are self extinguishing, absorbing all value left in the total sum of payments into whatever item(s) or service(s) it was that was purchased.

A members can and perhaps do run accounts in the red (overdraft), they begin as E. C. Riegel called “red inkers,” while B members must never allow this to happen or they are technically bankrupt. It is thus well that B members have a nice cushion of cash in their accounts to prevent overdrafts from happening. A members have a flag in their account, a field that totals up the number of Value Units they have created as distinguished from Value Units the member deposits into his/her account from other sources. Value Units that are deposited from elsewhere, labour contracts, etc. counteract the number of Value Units created. Eventually the A member is creating no new money, but is earning money from others in exchange and becomes a “black operator.” From then on, an A member may succeed so well that they may never create any more new money in the system ever. This forms a natural curb on inflation.

2.  The Value of Gold (and Silver) and Politics 

“The king [Solomon] made silver and gold as common in Jerusalem as stones, and cedar as plentiful as sycamore-fig trees in the foothills.” - 2 Chronicles 1:15 (NIV)

Now, ladies and gentlemen, what exactly is implied by making silver and gold as common as stones? Cedar, which repels insects, has a nice fragrance and finishes well, was and is rare. What does it mean to make such things plentiful? In both cases the precious metals or fine products are lowered in value; they become as common as stones, because they become less scarce. The natural attraction for both precious metals and good products is a free market based on wealth (that capable of providing income) and possessions (private property), probably on a scale as had not been known up to that time. Apparently Solomon's kingdom was busily going abroad and opening up opportunities for trade. We want to make the point that where trade is free and uninhibited, production will tend to become so as well, and as a result the standard of living will increase and populations will tend to become more stable. These connections have been recognized for a long time, though public policies are frequently deliberately at odds with them, because these public regulations are a mask covering preferences for special interests ... and nefarious agendas.

Right now, there are those out there with their Agenda (the United Nations, the various NGO's and especially the individuals who fund them), which intend massive population reduction, so they aren't particularly concerned about the welfare of the average person. They certainly don't care about raising the standard of living of the average human being either. Ironically, most of these people consider themselves Humanists. Nope, their real agendas for humanity stand exposed more and more every day. Their respect for anyone's human rights and sovereignty ring hollow. Increasingly these people will end up seen as the arch criminals they have always been. They care more for some useless “endangered species” than for the food basket of the United States, which is Central California and are about to destroy what took many generations to build there. Why? Because these people hate the small operator everywhere, who represent competition to their total corporatist control. Globalist suggestions are everywhere the same, to support monopolies on natural resources, increasingly over food and water. There are measures being adopted that imply deliberately turning productive land back to nature and relocating the majority of the population into cities; concentration camps. Most of all, they want to impose by FORCE, their corporatist oligarchy (rule by the few).

Opposed to them, we have those who support anarchy (rule by none), who insist, and we frankly agree, that anarchy is not the same as either social or national chaos. As can be imagined, there are as many kinds of anarchist as there are people, yet few of them advocate a lawless society and insist that questions of rational behaviour and conduct are recognized immediately by most people; we know what it is to be sane and we know how to spot its opposite. We need no expert to demonstrate the differences to us, they are obvious. Anarchists usually assert that most people would be far better off without any government.

Then there are the Libertarians of various stripes. Though we may agree with them on most things, we part company with them concerning both corporations and unlawful immigration. Both instances are ethical equivalents in that they falsely equate liberty with privilege and bullying. Just because some are poor and desperate and are willing to work for less than the people who are native to a country, doesn't mean that their illegal presence does not constitute bullying. Yes, the poor have gotten used to bullying everyone else. We have the solution to that. Nevertheless, there is no liberty granted to bullies; everyone knows how to recognize one, they always try and get away with doing something to someone else, whether that's accomplished in a passive or aggressive manner makes no difference. Many bullies these days work for governments, as bullies have a natural magnetic affinity for FORCE.

There are the nationalists out there too. Where these people frequently go wrong is that they favour a strong autocratic central government (a national socialism) to “lead the nation to glory,” etc. What if we could just separate ourselves from the “would be” militarists of all sorts and accept the realities of race, creed, custom, culture, language and nationality? Moreover, why couldn't we provide everyone, no matter who they are or where they live, with their own means to participate in trade, first among themselves, then building their own communities and finally building strong and HAPPY nations? Obviously there are those out there who have different agendas and DO NOT want to see this kind of a future happen.

Then in the “Western democracies,” we have the various political parties supposedly representing capital (defined as idle money that gets rewarded for remaining as cash) and labour (frequently organized into closed shop unions), ranging from those close to the viewpoint of the nationalists or libertarians to those favouring the command economy approaches whether they be socialist lite or hard line communist. We watch the mutual follies of all of these, but we caution against political action of any kind, as being ultimately useless; a waste of your time, resources and energy.

Our purpose nevertheless, was to point out that none of the presently constituted political parties has any interest in promoting abundance to the people, which is the engine of practical development everywhere in the world. So it DOES matter just how Solomon made silver and gold as common as stones.

E. C. Riegel remarked that everyone knew the prices of gold and silver but weren't sure what they were really worth. Both of course are commodities that were imposed on populations for use as money in antiquity (it was never the free choice of markets as the Austrians and their followers continue to LIE to the gullible public), which is why they nearly always featured the head of some ruler on coins. Gold and silver do not represent liberty as is FALSELY claimed by the Austrian economists, they represent the old order of oligarchy and slavery; those who have the gold make the rules, and believe me you or I are not ever going to have enough precious metals to displace the far away brokers from deciding what their prices will be.

Who are these oligarchs? Formerly they were the royals, nowadays they are the bankers and corporatists. In any case, they are not you or me or of the people.

The prices for silver and gold are set by brokers in London, New York and elsewhere and there are futures markets, where people get to sell contracts for delivery of precious metals, that are not even honoured on date of delivery, but are paid off in the local “cash,” all of which is as we've said, not the property of those who possess it, but of those who issue it by rights established under intellectual copyright law.

But wait a minute, I had a “contract” to deliver gold or silver at a specific time for a specific price. I don't want your cash. Too bad, buddy. You play in a market controlled by those who have the most of that commodity and they decide who to deliver to and that doesn't mean you. So that means these contracts are all false? It means that yours are, that's all. Sorry pal, just take the cash and run along.

So in order to get any physical gold or silver in your possession, you are going to have to pay more than what is called “spot price;” what the brokers say the prices of gold and silver are. We call the price the gold and silver dealers post, the asking price, or sometimes just “ask.” The highest price we expect to pay is the bid price, or just “bid.” There may be situations where the bid is higher than the ask, in which case there is opportunity to buy. In cases where the ask becomes higher than the bid, the supply is supposed to be lower than demand and supposedly encourages more of said commodity back into the market for sale at the new higher prices.

Construction of the International Standard Value Unit

If it isn't simple, most people will just walk away.

We said that there was a bid price for gold that crossed $2,160 per ounce on 2 November 2011. The official close placed that bid price almost $11 higher. We decided to start our experiment by initializing a stack of 1,000 Value Units at this price, using it as our figure 1. After this point, the value of a Value Unit has nothing to do with the prices of either silver or gold. Here are the closing spot prices for gold on that day in all the other common currencies. 

At inception (2-November-2011) the “spot price” for 1 oz of gold bullion, establishing the basis for the international standard Value Unit (Figure 1) was as follows for these currencies:

EUR Euro
USD US Dollar
GBP British Pound
CNY Chinese Yuan Renminbi
JPY Japanese Yen
RUB Russian Ruble

But, our stack of Value Units is based on the bid price.  The bid price in any currency is 25% higher.  This policy proposes that when the time comes, we would offer to buy silver and gold up to 25% above spot price. We express the difference between the Spot and the Bid as the Spread.

EUR Euro
USD US Dollar
GBP British Pound
CNY Chinese Yuan Renminbi

JPY Japanese Yen
RUB Russian Ruble

We now have a set of values expressed in these currencies for the inception value of 1,000 international standard Value Units and for each Value Unit: 

1,000 Value Units
1 Value Unit
EUR Euro
USD US Dollar
GBP British Pound
CNY Chinese Yuan Renminbi
JPY Japanese Yen
RUB Russian Ruble

We have designed this monetary unit to trade for fair value in terms of its initial values, such that they never fall below these initial values.

Initial Bid Price (IBP) = $2,172.61 (or 1,573.75, etc.)
Initial VU Exchange Price (IVEP) = IBP / 1,000
IVEP = $2.17 (or €1.57, etc.)

The basis for comparison is gold and silver bullion, as their prices are dictated by those who control their markets.

Today's bid price (TBP) = Today's spot price (TSP) + 25%
TBP = TSP + (TSP x .25)

Today's VU exchange price (TVEP) = ( (TBP x 1,000) / (IBP x 1,000) ) X 1,000
TVEP = (TBP / IBP ) x 1,000

TSP = $1,236.61
TBP = $1,545.76
IBP = $2,172.61

TVEP = ( 1545.76 / 2172.61 ) X 1,000
TVEP = 711.47605874961451894265422694363
TVEP = 711.48 rounding off all the rest

So based on a spot price of $1,236.61 an ounce of gold buys 711.48 Value Units. An oz of silver has a separate spot price but all the calculations are the same except that the initial spot and bid prices for silver are used. Each metal buys in at its own exchange rates determined by initial and daily spot and bid prices. There is never any attempt made to FORCE a relationship between the metals that does not exist, yes another idealism unmasked; just because you'd like to assume a 20 to 1 ratio between silver and gold doesn't mean you always get one and furthermore setting arbitrary ratios invariably affects markets in unforeseen ways  

We have shown you how to figure out how many Value Units each currency will buy based on an ounce of gold bullion. But recall at inception, you would have been able to buy 1,000 Value Units, so why does an ounce of gold buy fewer today? The simple answer is that the price of gold has fallen, so in order to buy the same number of Value Units, you'd need more gold. How much more? 30% more today under this example. So in order to buy more gold, the dollar, euro, etc. equivalent for a Value Unit goes up accordingly; your "public" money, which isn't even yours, buys less of our money, which would really be yours, than it did at inception.

Now what if the prices of precious metals had gone vertical? In that case, what we would have done, perhaps, is raise the initial value level to a sustainable price to acquire bullion assuming even at stratospheric prices, these things would change hands at all. Of course when that happens it will be too late to get anything off the ground as all currencies would be entering Weimar meltdown scenarios and would lose their ability to measure anything of value, their units of measure becoming far too small.

By comparison, the new initial bid price, whether it be established for one currency or for all, would tend to make the Value Unit a harder standard of value measure against everything else.

In order to find out how much of each currency is required to buy a Value Unit, you need to know the initial and present bid prices (since the Value Unit in each currency is based on multiples or divisions of these). But you also need to know the amount of present currency in each Value Unit representing the fluctuation prices of gold or silver bullion, more as the bid prices exceed initial values and less as they fall against the initial values. We will call this the gold currency price or GCP. It's always simply the TBP divided by 1,000.

Recall we have
IBP = $2,172.61 IVEP = $2.17
TBP = $1,545.76 GCP = $1.55
Now with GCP, we have
TVEP = ( (GCP-IVEP)-IVEP ) x -1
TVEP = ( (1.55 – 2.17) – 2.17 ) -1
TVEP = ( -.62 – 2.17 ) x -1
TVEP = ( -2.79 ) x -1
TVEP = 2.79

Today's VU exchange price (TVEP) = ?
TVEP = $2.79

Performance of the Value Unit

It has been 20 months since inception. Over that period of time, largely due to the fall off in prices of gold and silver, the Value Unit has beat all currencies and silver and gold, at bullion prices and maintained its purchasing power.  Too bad it's only on paper, but we learned quite a few things from our experiment so far..

The Dollar
i Valun at inception
The dollar began at VU inception with an IVEP of $2.16 and now has an TVEP of $2.79 representing a 29% loss in purchasing power against the VU.  At inception a VU would have cost $2.17, now it costs $2.79 [8 July, 2013]. 

The Euro
1 Valun at inception
The euro began with an IVEP of 1.57 but as of 2 July, 2013 had a TVEP of 1.94 representing a 24% loss in purchasing power against the VU.  On inception 1.58 would have bought you a Value Unit, as of 2 July, 2013, the price is now 1.94 or more.

The Pound Sterling
1 Valun at inception
The British pound began with an IVEP of £1.36 but as of 2 July, 2013 had a TVEP of £1.69 representing a 24% loss in purchasing power against the VU.  What began at £1.36 has gone up to £1.69.

The Yen
1 Valun at inception
The Japanese yen began with an IVEP of ¥170 but as of 2 July, 2013 had a TVEP of ¥182 representing an 8% loss in purchasing power against the VU.  Though the Yen certainly did better than any of the others seen here, eventually even the rigged market in their favour for many months came apart.  The VU that cost ¥170 now costs ¥182 or even more.

The Ruble
1 Valun at inception
We included the Ruble in our sample out of respect and thanks for all our readers in Russia.  The Russian ruble began with an IVEP of P66.41 but as of 2 July, 2013 had a TVEP of P80.99 representing a 22% loss in purchasing power against the VU.

The Yuan Renminbi
1 Valun at inception
The Chinese yuan began with an IVEP of ¥13.81 but as of 2 July, 2013 had a TVEP of ¥17.98 representing a 30% loss in purchasing power against the VU.  The renminbi has been sort of "pegged" on the US dollar with similar results. A VU costing ¥13.81 costs in excess of ¥17.98 today.

Gold and Silver
Valuns for 1 gram of gold at inception
1 oz of gold at Value Unit inception, at the IBP of $2,172.61 bought 1,000 Value Units and 1 oz of silver at its IBP of $42.24 bought 19.44 Value Units. Today an oz of gold buys only 739.42 Value Units and 1 oz of silver only 10.98. Notice this is in dollars. You'll get different amounts and corresponding percentages in different currencies. In any case, none of the current prices for gold or silver are as high as they were at Value Unit inception, therefore in hard asset purchasing power terms, both gold and silver at bullion prices have lost purchasing power against the Value Unit.  At inception one of Paul Drockton's 1 gram gold cards would have bought VU 32.15 whereas today one would only buy VU 19.25 !

Again, the Value Unit has not changed, but everything else, including that which is supposed to measure value in the marketplace, has lost that ability compared with that of the proposed international standard Value Unit.  Why am I not surprised ?

David Burton

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