#14.20 School Sucks Project Podcasts 266 thru 270

2014-02-23: 266 The Practice of Self-Responsibility (The Six Pillars of Self-Esteem Part 3)

2014-02-26: 267A Carlos Morales - Truth, Comfort and Child Protective Services (2014 Liberty Forum Interview)

2014-03-01: 267B Derrick J. Freeman - Our Most Popular Guest Ever (2014 Liberty Forum Chat)

2014-03-03: 267C Jeffrey Tucker - 90 Minutes of Peaceful Chaos (2014 Liberty Forum Rap Session)

20174-03-07: 268 The Practice of Self-Assertiveness (The Six Pillars of Self-Esteem Part 4)

2014-03-12: 269 The Shame Debate, With Thaddeus Russell

2014-03-17: 270 Book Review - Learn Anything In 20 Hours? 

INTERMISSION

#58 A Letter To Pal

[This is a letter to a pal, a brother actually. I'm removing his name, because this letter could go out generically to many others. A pal is also an acronym for a Politically Active Leader in the making.]

Dear Pal,

I heard you on an internet broadcast. You could have come off much better. You need to get less complex, and get with people's feelings. We thank you for ferreting out the facts. That's fine, but you ended up being caught up in details that only matter to nit pickers, without understanding the depth of our anger. THAT you must place first; acknowledge the rightful anger of the awakening American (and world) public. [Zbigniew Brzezinski certainly has good reason to be afraid, as he expressed it at a meeting of the CFR, in London]

Secondly, everyone is disgusted with inflation, taxation and government interference and meddling. We're also damn tired of corporations that are too big and that get funding to do terrible things. We do not buy AT ALL that we are responsible for degrading the environment, so we're disgusted with the guilt pandering too. We know who has been degrading the environment, the Monsantos, the British Petroleums, the GE's, etc. We suspect and can prove sufficient corporate involvement too.

You cannot ignore the research that has come before you, especially concerning the Federal Reserve. It WAS conceived and enacted in secret. There is a reason why certain people wanted a central bank to control the issuance of money here and in every other country, enough that they were willing, as they always have been, to make money on three wars to accomplish their ends. You say they're just a bank. What is so great about any bank, let alone one that controls the nation's money? I'll answer you, ABSOLUTELY NOTHING!

We will not be satisfied with splitting hairs over public vs. private corporations, etc. Certainly Congress could dissolve the Fed's charter and I believe there's a provision in there to buy them out too. Fat chance of any of that, because the cancer that really exists is bank debt. Want to know why? It's simple, Pal. All the money you know of was created the same way, as a loan from a bank. No big deal? Well what about the interest? That part of the money supply was NOT created, so it is always scrounged from everyone else. A false scarcity is created even during periods of inflation. Prices may rise but there's never enough money. It's the fatal flaw of the entire system and it's the reason it will eventually fall.

Let's get back into the post you passed along to me, since you think you've found someone who can do the job of POTUS.

Step 1 – Establish a Federal (national) anti-usury law.

He can do what he likes, he seems to have more confidence in law, certainly more than I do. But a law is only as good as it has support among the people. Someone somewhere will still be loan sharking. Any folly imaginable is not something the US government can or should be involved with. My criticism is not that it shouldn't happen, but that the government is ineligible from doing it. It is also ineligible from legitimately creating any money, because it has nothing to sell for what it buys, and if you think so, you haven't drawn the conclusion that he who does the buying gets what he wants, and in this sense, the government creates the money, it is theirs and they do all the buying, which is why we get all the things we do not want; empire, war, unemployment, etc. etc,

Step 2 – Freeze the stock market.

Again, it's none of the Federal government's business, 10^th amendment. If corporations are formed at the state level it's their business. You do not seem to understand that even if the US is a corporation, and it is, that this is itself unconstitutional and unlawful. It should be exposed and dissolved. If that offends foreign creditors, let them whine in our courts (which shall all be turned upside down too since they are all crooked). Most of these creditors deserve the scaffold and it should be public too! [Yeah, and most of the people out there mean this too.]

Government is not a business, nor should it be. What would happen to the stock market if some rival private money system got started? Let's say further that the people managing that system did not practice fractional reserve banking or taking of interest for a loan. There are lots of other ways to finance something without asking the borrower to return more than was created.

Let's say that business gravitated to this money because it was more stable, so they could actually rationally plan contracts using it with better results. Let's say this money system became so popular that it became the international money in competition with all national currencies? Let's say that nations finally decide to stop creating money because their own money wasn't being accepted? What would happen to the stock market then?

I'll tell you, it would either dry up or change and become something other than it is. Government would have nothing to do with it in either way

Step 3 – Forgive all unlawful debt and taxation.

Of course. But this will happen anyway, it's called default and repudiation. You will of course have to unbundle all the “corporations” that have infested our government, as they are all technically unconstitutional.

As POTUS we'll want him to go further than that. We want a complete audit of all the so called amendments to the constitution and we'll want all of them after the 12^th stripped away, as they were not ratified under the guidelines set forth in the constitution. Likewise we'll want mass repeal of most of the “law” that was built on those amendments, especially and we mean it, everything that is based on the 14^th amendment. Whole areas of government involvement would thus fall away, as indeed they should. If all the money was private and the governments of the world came demanding taxes, they'd have to deal with us. Do you know what we'd want? An audit, a real one. If we found things we didn't like, we wouldn't fund them. What's the government to do then? 

Do you want to debate anyone on this? The 13^th amendment is really the one that was ratified in 1810 not allowing, barring titled persons including lawyers from holding public office. We want that one in. We believe that the 13^th amendment outlawing slavery was actually ratified so it stays in. The 14^th was similarly not ratified so it gets thrown out. The 15^th probably stands. We want the 17^th thrown out too, as it wasn't ratified. We want a return of the US Senate to the states where it belongs and we want the idea of taxing someone's labour repealed forever as it is immoral. No more IRS, no more 16^th amendment as it too was never ratified.

If you're such a researcher prove me wrong. I'll be open to it. But I still want those amendments struck form the constitution! The 14^th is particularly bad. We are natural born citizens of the states and we become citizens of the states based on their own residency requirements. It is how a Californian gets to be a New Yorker by choice. It's realistic to have the amendments giving black men and women the franchise retained in some form but the 14^th which enshines the falsity of “civil rights” over “natural rights” must go!. 

[2 April, 2014:  It will not be the concern of this blog to address these issues, especially the fraudulent 14^th Amendment, that are very important and critical to the cause of natural rights and real freedom for Americans and everyone else. These are not properly the subjects of this blog.  However others are taking on that aspect of our fight and deserve your consideration and support.  Here's one of them.]

Step 4 – Overhaul the Patent Office.

This is among the best of his ideas. I say that because it's one of my own too. We all know that there have been many innovations that have been deliberately kept from the market to protect someone's monopoly. As far as I'm concerned nobody deserves to keep any patent unless they develop the idea. But I'd be harsher than he would about the matter.

Why give anyone more time to do what they have not done already? They had their chance, yank it from them and put it up for sale to someone else. Same deal applies, if they don't come up with something, the patent is sold to someone else. The patent office should be reorganized to trace development activities so that patents are thoroughly checked out for worthiness, and more importantly so that corporations do not resort to delay so that they don't have to do anything. Delay is one of the tactics of the bigs.

Step 5 – Replace paper, plastics, and textiles with hemp and produce alternative energy.

It's none of the government's business, 10^th amendment again. Get with it! The only thing anyone can and should do is get the government OUT of the way of their development through honest competition.

Step 6 – Dismantle the Armed Forces into state militias.

Another fairly good idea. But the states are responsible for organizing their own militias not the Federal government. Nevertheless, I sense here that he might not like the 2^nd amendment. I'll tell you right now Pal, he nor anyone else will EVER disarm this country, ever! Get that one though your heads right now. And if this government doesn't get that, or tries to do some United Nations or NWO arms registration or confiscation programme, you can expect war, civil war, the worst kind imaginable! We will not go the way of Russia or for that matter China or Libya. If they try any of that on us here, we're awake enough to know who was responsible and we'll likely make it personal if you know what I mean.

Step 7 – Dismantle the prison industry and abolish 100% of victimless crimes.

Fine with me. As far as I can see the wrong people are in prison anyway. Child molesters deserve death and those who sponsor such things (Bohemian Grove) deserve death too. Those who have conspired to profit from our deaths and intend to kill more of us would be my first candidates for prison cells and some of them deserve execution for their crimes and PLEASE Pal, continue to confound the pissants, sissies, ninnies and weanies out there and do it publicly! If some other amendments are offered, I'd also want the words “cruel and unusual punishment” changed to read “the punishment shall fit the crime.”

Step 8 – Education is paramount, voluntary, and free.

You are obviously hung up on the state doing it! [New York explicative deleted] The state needs to be OUT of it, all of it. Dump the Education Department, they are nothing we want any more of. Get that? We want NONE of their advice. Why would we, look at their track record.

You speak of making things free. You have no idea at all, because your basic assumption is that the state should be creating money when all that money they create is illegitimate; they have nothing to sell that we would want to buy and all governments live by taking from the rest of us as economic parasites. By creating all the money, they are the primary buyers. Why should that be? They do not know better how to spend their own money, where we are concerned, than we would if we created it ourselves.

So I put to you something you've never considered in your life, that the person without money has an inalienable right (cannot be taken away) to create their own money, as they have a right to buy with the likelihood that there is something they will want to sell back in the future.

Something you have not understood, because let's face it, you're still learning, is that THE issue is money and that there is never enough of it, that it is created by the wrong people, that it is naturally and accordingly spent in the wrong ways. Correct all that and much evil falls away. Of course it has to be international and private, NOT under any government sponsorship, and that's what it will be.

Step 9 – Promote the liberal arts, free thinking, and sovereignty.

You can enact any legislation you please and it will accomplish nothing. Sovereignty? Go after all those agreements we signed with the British monarch and the Crown, which is really the nexus of all that stands athwart our freedom, not just ours, but everyone else's throughout the world, as they are the core of the idea that states should issue money through lending it from central banks. In truth Jefferson was correct in wishing to forbid the US government from going into debt. THAT should be another constitutional amendment.

I'll give you one of my own ideas. Inform the British monarch and all others that certain persons will be considered war criminals, war profiteers and subject to an act of war, unless they are extradited for trial and likely execution in the United States. Oh yes, we will be doing the same with our own here too, but they have always had collaborators in London. We want an end to it; to fractional reserve banking, lending at interest, state sponsorship of business, other countless ways of meddling in our personal affairs.

We want money that we create, that even the poor are entitled to as a human right. We will take care of pensioners, the elderly, the handicapped, the infirm, etc. especially veterans, who have, in our opinion been very badly used by this (and every) government. We will do this by issuing our own money. If you have none, we'll give you some until you can get into the black. But maybe you never will, but we'll still give you money. It will be cheaper than welfare. Once you are in the black we'll assure you a steady price level and much faster transactions because we wont have to hold your money to make short term profits on it for lending it out, again at interest. We will abolish compounding of interest too, which is like taking a vice and legitimizing it ten fold.

What will the rich do to earn money on their money? Legitimate business I should think, or they'll live off what they have made and that will be that. We are about bringing an end to stores of money that accomplish nothing and of classes of people who are living off interest that they are literally not economically entitled to, because it is money that was never created in the first place and has in fact been STOLEN from others.

Step 10 – Apologize to the world and start a new beneficial friendship with our now foreign enemies.

Apologies are cheap. [NY explicative] your apologies!!! Millions have died. We know who were responsible. JUSTICE MUST BE DONE! The bankers, crooks, speculators, war profiteers, all have blood on their hands! You imagine that merely saying we're sorry is going to cut it? You really need to get a fix on people's anger. It's real.

As for all those people in their fancy suits, etc. I know them, they are callous and heartless, and the richer they are the worse it is with them. Not a single billionaire is entitled to their wealth, and many who are only worth hundreds of millions are just as bad. They made a lot of money on money itself, without producing a thing of value.

The issue of “backing” is moot without understanding that people can back money with anything and it's all irrelevant. I suppose that you understand this. All money is backed by what it buys, simple as that! If I sell you a pen for a dollar, I don't care if that dollar is backed by anything, because I know where I can spend that dollar. Money is nothing more than a means to split barter, period. Any other attribute it has been given like the time value etc. is phony and whether made lawful or not, is still phony.

Now that I might have blown you off. If you're still reading, and you seem able to read, and willing to read, then try these, they're short: 

#A.1 PRIVATE ENTERPRISE MONEY – E. C. Riegel   

#B.1 NEW APPROACH TO FREEDOM - E. C. Riegel
#C.1 FLIGHT FROM INFLATION – E. C. Riegel 

Then you can join the discussions and contribute here

Best,

David Burton

dpbmss@mail.com

PS: I'll read the rest of your blog as I can.

[22 March, 2014: It seems pretty clear to me that Riegel was a Democrat. Do you think he would approve of direct democracy – voting over the internet? 

I wouldn't know.  Regarding direct democracy, I would caution to beware of very cunning and expert forces out there that know quite well how to mould public opinion, that would take easy advantage of any such schemes for very bad ends.

What's your personal brand of politics? It seems to me that Riegel's ideas could be picked up by moderate socialists, libertarians and even fairly conservative types.

I am an agnostic when it comes to American politics. I see governments in the West (and probably elsewhere too) as ultimately the captured prey of the banking oligarchy – and of course we are along for the ride as taxpayers, etc. into the worst of possible bargains involving exchange of our natural rights, for so called “civil” rights. The military industrial complex is the age old creature of the bankers going straight back to Babylon. Corporations are the monopolies that serve oligarchy. Ultimately such a system makes anyone not part of it expendable. Simple as that, and Tom Jefferson was right. We should have listened to him. But we followed Hamilton's advice instead.

That Riegel was a Democrat was part of his essential naiveté. It's now 2014. It's time to wake up. Riegel's ideas are something found in a time capsule. We take them up and adapt them to present circumstances. It is going to become increasingly important moving forward not to allow discourse to be determined by their definitions of the words we use. Watch for any tendencies in this direction, as representing a direct infringement on your natural rights to freedom of thought, speech and action. Of course one must always assume responsibility not to infringe on the natural rights of others.

A socialist is essentially a statist with a solution requiring the state to do something about the plights of people in society. We say their response to human suffering is natural, but their solution is poor as it depends on the state to “take care of it,” when that should be each human being's own personal responsibility. We suggest, along with Riegel, that the present monetary system was always unable - by design – to be able to handle these matters in a rational manner. It would be another subject entirely to go into detail to show how the socialist perspective is inextricably tied up with notions of equality and fairness that frankly have far less substance to them than property, which can always be objectively defined. What we are saying is that Riegel identified the right of money issue as an extension of one's personal property as a natural right. We assert and contend the correctness of his observation, to which we subscribe whatever our politics might otherwise be. Likewise if the idea of getting paid in one's own money really catches on, it will forever change the relation of employer and employee to the better for both. Since labour costs will be determined by the extra value of the labourer's float, cost accounting should result in cheaper products as well as less unemployment long term.

We have our disagreements with libertarians. In particular we disapprove of their Austrian school fellow travellers; usurers all. But libertarians usually have a far clearer perspective on personal responsibility and understand that individualism and the right for many to contract together to perform needful labour are hallmarks of a just and free society.]

#10 VEN Finance Models

[Originally written 17 November, 2011] 

In this report, we will examine various kinds of financing contracts that would be available through the Valun Exchange Network (VEN), which would fit the criteria established by E. C. Riegel as follows:

1. Interest on loans, specifically defined as asking money back that was never created, (and certainly compounding of interest) are forbidden. When practised universally, usury enslave humanity in a false monetary scarcity

2. Any activities that have anything to do with making money on money through any speculative tricks or leverage is prohibited as an invalid and unethical use of money

3. The fractional reserve model of banking is roundly discarded by the VEN as patently dishonest, allowing certain people (bankers, financiers and their hostage governments) the right to create more money out of nothing (regardless of the other tricks they use to try and convince us that their money is “backed” by anything of any tangible value).  Riegel of course believed that banks do not actually lend any money at all, they lend credit, all the money lent is paid back except the interest.  The interest paid is actually required from someone else, thereby creating scarcity.  [This is one contributing factor to the "musical chairs" economy, requiring that someone's concern always has to fail or be gobbled up by someone else, resulting in actual contracting of business activity ... and destruction of wealth; YES usury always results in destruction of wealth as it centralizes it in fewer and fewer hands until the debt required finally can't be repaid and the whole thing collapses.  It has happened before, it shall happen again because that is the curse of usury .] 

Perhaps not so curiously, these basic and fundamental ideas have much in common with Islamic financial practices and are actually in strict accordance with traditional Christian and Jewish values as well. Be not deceived by prejudices spun by others, though perhaps we will not agree with them on much else, we can certainly find agreement with Muslims (and Orthodox Jews) concerning their methods of finance where they happen to agree with E. C. Riegel's principles.  

“Shariah does not consider money a commodity for exchange. Instead, money is a medium of exchange and a store of value.” Adil Manzoor Bakhshi - Developing a financial model for Islamic credit card for the UK. (2006)

We would be in agreement with the first point, but regard the second (the intrinsic store of value idea) as a superstition; money is backed only by what it buys and contains no intrinsic value in and of itself, except to settle terms of a sale by barter; the exchange of one commodity or service for another commodity or service.

For example, those who assume that “sound” money must be backed by gold or silver (or anything else for that matter), are merely substituting one commodity for another in a barter arrangement; the trade is made in terms of gold and silver, represented by paper or coin of some inferior metal, etc.

It is also widely believed, erroneously too, that somehow this “hardness” of the money enables it to retain its purchasing power and stability. These are absurdities spawned among the populace, actually fostered by bankers and their economist accomplices, whose ideas harken back to the age old fractional reserve banking model, which creates “bad notes” in excess of good ones in hopes that all will not seek to redeem them at the bank (storehouse) for their gold at the same time.  Instead, we put forth the idea of a single transaction establishing a set unit of purchasing power at a particular point in time.  That becomes a Value Unit.     

[20 March, 2014: You said, “It is also widely believed, erroneously too, that somehow this “hardness” of the money enables it to retain its purchasing power and stability,” and yet elsewhere you prove that your own Valun proposal produces “hardness” of the money if and when precious metals reach new highs. I think I know your answer, but I'd like you to explain this.

Yes, I was speaking of the classical gold or silver backed money. Under the classical monetary system, if there is some correspondence between a store of precious metals and circulating tokens of currency that supposedly represent this store of value, the money is said to be “hard” relative to a complete fiat currency issued by a state and obtained as a loan at interest.

The flaw at the root of this classical understanding, accepted as well by the Austrians, is that precious metals are themselves commodities traded in controlled markets. One arrives at E. C. Riegel's observation that we're sure precious metals are worth something, we're just not sure what.

All we know is that if we are about designing a better money system, it will have to beat any paper competitor and precious metals, whatever any of them do, at retaining purchasing power and the Valun proposal does that remarkably easily and remarkably well. The Valun proposal will provide a naturally “hard” money that will only get harder over time. Real hardness of the money is attainable without pegging to precious metals (we only use them to make exchanges with foreign “public” currencies). Other than that, within the VEN, using Value Units, everything finds its own price.)

This fiction that people believe that money itself must have intrinsic value in and of itself, used as a fractional reserve, not even a total reserve, plus the terrible consequences in creating that which has no real basis in anything (all those “bad notes” in circulation), has been tried over and over again down through the centuries, in hopes that it will someday finally last and become the vehicle for certain power mad people to take possession of the entire world! It is in point of fact, criminal insanity masquerading as respectability.

The truth is fast approaching the tipping point, where more and more people begin to understand that, in particular, billionaire speculators and hedge fund mangers, are neither worthy of much respect nor are anything but merely the latest scourge of robbers and pillagers to have declared war on a civilization they mostly despise, because that's the attitude most genuinely criminal minds have of the rest of humanity. In fact, the present hugely dishonest financial system, is nothing more than a vast criminal network serving its own goals, its dreams of world domination, etc. the participation in which more and more ordinary people would like nothing further to do with.

Those who have been tricked into beliefs that money has a store of value in and of itself, or that a time value for a store of money is a valid point of departure for structuring investments, are ultimately left with the incontrovertible fact that any money they have made from these activities has been stolen from the productive uses that money might have served in developing or moving goods and services or buying and selling of real assets.

We have every intention, in establishing our Valun Exchange Network (VEN), to throw to the sidelines any and all speculative activities that cause huge stores of capital to be built up on nothing more than clever financial gimmicks. I suppose there will always be those who prefer gambling to real business. They certainly have no business being funded by the finance businesses within the VEN.

VEN Finance 

Recent questions received have revealed, not too much to my surprise, that issues concerning finance are very important to those seeking to benefit from participation in the VEN. Let's begin by establishing a clear understanding of what finance really is. It's very simple:

By “finance,” we mean that which enables someone who can't afford something on the date of purchase to be able to buy it. The Austrians say the buyer is exercising his "time preference."  In all cases he's paying extra for it too.

We will give examples of the models for finance that will be acceptable in the VEN. The significance of these financial models derives from the understanding that nowhere is any new money created which has not already been created elsewhere in the VEN.

1. The Down Payment Model

This works for all those who will have saved up the money to pay a down payment for the money required to make the purchase. It is suitable for all residential real estate, the purchase of a vehicle or even a specialized piece of machinery. Terms of such loans could also be structured to purchase a business. 

An example:

The sale price of a home: VU 100,000.00

The down payment:           VU 10,000.00

The seller has title to the home and exchanges it for 100,000 Value Units from finance sources in the VEN; B members engaged in short term or long term finance businesses; VEN finance. Now VEN finance has the title and owns the home and sells it to the buyer on the instalment plan with the down payment serving as the transaction fee. The buyer pays nothing back to VEN finance but the principal and there is no compounding of interest. When the buyer has successfully paid back the loan, VEN finance gives the buyer the title.

[19 July, 2015: Just how mush in dollars is VU 100K today?  Due to the continued fall in the prices of the precious metals it now takes more to purchase a Value Unit (Valun).  Our experiment is working perfectly well.  It beats both dollars and precious metals in holding its value.  Currently at $2.90 that works out to VU 100K = $34,482.76]  The monthly payment schedules could be set up for any number of monthly payments, but would normally be settled in 10, 20 or 30 years. The significant savings to the buyer are in all usual interest charges which would not be part of any financial agreement between a buyer and VEN finance.

Payment schedules might look like this:

10 year mortgage: VU 10,000 per year, VU 833.34 per month.
20 year mortgage: VU 5,000 per year, VU 416.67 per month.

30 year mortgage: VU 3,333.34 per year, VU 277.78 per month.*

* In VEN finance, any accrued fractions are paid back to the buyer because they do not belong to VEN finance. 

2. The Fee Bundled Model:

This financial model is really identical to the first one, except that it bundles the finance charge into the instalment plan. This method would be suitable for certain categories of individuals who would be entering into credit contracts with VEN finance, in order to secure financing for a home, farm or property that they have already purchased with existing financing. The effort here is for VEN finance to pay off the existing loan and secure financing for the reminder of the equity.

This finance model would also be suitable for certain people who cannot come up with a down payment. This VEN finance model implies that the financier would be in a position to offer such a buyer a “lease to buy” schedule.

Let's look at an example of each: 

Example 1: A buyer with an existing property requiring re--financing. 

Initial selling price: VU 100,000.00 

Equity = amount buyer has already paid: VU 35,000.00

Amount remaining to be financed: VU 65,000.00

VEN finance transaction fee: VU 10,000.00 **

** We will determine what these transaction fee schedules look like based on risks associated with the potential loss to the VEN financier. The intention is always going to be to keep all VEN transaction fees stable, predictable and easy for the average human being to understand. 

In this example, the total to be financed would be 75,000 Value Units. 65,000 would be used to pay off the creditors and secure the title which would be held by the VEN financier until the buyer successfully paid off the loan.

Payment schedules on 75,000 Value Units would look like this:

10 year mortgage: VU 7,500 per year, VU 625 per month. 

20 year mortgage: VU 3,750 per year, VU 312.50 per month.

30 year mortgage: VU 2,500 per year, VU 208.34 per month.**

Example 2: A buyer without a down payment wants to buy something.

In this example a buyer wants to buy a home with no down payment. The risks involved here are such that the VEN financier would enter into a “lease to buy” contract that would be simple for everyone to understand.

The sale price of a home:             VU 100,000.00     100,000 Value Units
The VEN financier transaction fee  VU 10,000.00       10,000 Value Units

The VEN finance business buys the home from the seller and retains the title and attaches the transaction fee as part of the scheduled payments. Rather than considering this an interest charge, it is better to describe this as the price one must pay for not having the money to buy it outright. The buyer leases the property from the VEN financier agreeing to a repayment schedule. When all the payments are made, the title is turned over to the buyer.

Provisions to protect the VEN financier from default would include the understanding that failure to pay back the loan results in either one of the following:

1. Ownership of the property is retained by the VEN finance business and the buyer / lessee forfeits rights to habitation or use of the property or

2. The lessee must refinance what remains of the loan with the VEN finance business which would subject the buyer to another transaction fee.  

We assume that there will be far less default and foreclosure required in the VEN because the whole system fosters more business than the present banking models and does not produce less money than it asks borrowers to pay back.

Both of the models presented here would have their various applications in financing all kinds of purchases, with fee structures that will be stable and make sense to the average human being. Just knowing what to expect when a prospective buyer interacts with the VEN finance business should veritably fire the imaginations of many prospective entrepreneurs, inventors and businesspeople worldwide.

It should be noted that in all the examples covered so far that no new Value Units are created that are not paid back and that no further Valuns must be grubbed from others to pay back what was never created. Usury is removed from the system.

Permissible VEN Financial Contracts

Finance by way of Trust - This is a partnership between the a VEN business where the business borrows money from the VEN financier in exchange for the financier's share of the business profits based on a predetermined ratio. These contracts normally involve lines of credit established by something Riegel was familiar with, the natural ebbs and flows of money through a business that is based on a predicted schedule of activities related to production, most notably in agricultural, dairy or livestock operations, but available to other legitimate business activities based on similar production schedules. 

Such contracts require the VEN financier to trust the business person to responsibly and faithfully run his business profitably. Should the business fail, the VEN financier loses whatever was not repaid. We do not condone the common practice of real assets used as collateral for loans of money. However, this may be required under circumstances involving the credit history of the lender with VEN finance businesses.

In this regard, it will be difficult for a bad risk to skip from one Independent Exchange (IE) to another because all credit histories within the VEN will be a matter of universal record. Recall that being essentially private, and bound by private agreements among its members, each IE has the responsibility of ensuing its protection against unwarranted losses and fraud. Within the entire VEN, we will already be spreading the costs of giving the “red inkers”; the poor, pensioners, the elderly and disabled the money they deserve as their sole right to create it under Riegel's visionary observations. But we will as far as possible, avoid being cheated by those who believe themselves entitled to cheat others for whatever whimsical reasons.

It should be noted that all the returns to the VEN finance business in this kind of contract come from money that was already created, there is no scrounging after that which was never created to pay any interest. Likewise the credit extended to the business must have already been created and paid into the VEN finance business as transaction fees over and above its own operating expenses.

Normal lines of credit are extended and paid back over regular time intervals. Sometimes the lines of credit may need to be greater and sometimes smaller based on fluctuations in business activity. Many of these kinds of contracts will require the advice of professionals familiar with various kinds of businesses. Where insurance may be required to offset the variations in prices, due to natural fluctuations in supply and demand, especially in agriculture, the VEN finance businesses may assist in establishing such insurance programs, as we will certainly want this function to operate in an honest manner, not subject to abuse as has happened notoriously in the present corrupt and dishonest system.

[19 March, 2014: Now, in addition to regular credit contract features, we have crowdfunding or crowdfinancing, where individuals in a community pledge small amounts of their money and together put forth enough to float some venture, cause, etc. Once this gets going, we anticipate participation of many people in the VEN who will have accrued sufficient “stores of liquidity” that they would be willing to place some of their money at risk in the service of finance; to earn a modest reward on their idle money.

What? I thought you were against capitalism. But let's back up a little bit. Let's say there are within the VEN a few chances to earn honest money through financing that imply:

1) The businesses engaged in financing understand their market, the risks involved, etc. They bear the brunt of any losses, etc.

2) There is some reasonable limit to a single finance business's appetite for sources of liquid capital outside of itself. We'd begin with a ration of no more than 50% of a business's funds for finance may be drawn from outside sources within the VEN. These would be in a form of credit contract between A members and the B member finance businesses in the form we'll call a bill, if it's paid off within a year, more likely a note, which can extend out to seven years.

3) Crowdfinancing would imply that posted somewhere at each IE office might be ads for short term notes, which would seem most like bank CD's to the average investor. In all cases the amounts paid would be small, but sufficient. All the money to pay for any finance comes form the buyer, so in effect the partners who run each VEN finance business would be sharing up to 50% of their profits with the crowd. Hence though competition for yield in this way would be intense, the rates would tend to be low.

4) This would not break the rules in that the partners running the finance business bear the responsibility for their judgement and that also goes for the crowd assessing the potential reliability of these notes. If the business fails, the results may be bad, but the system itself is secure from the kinds of potential domino effects that could cripple or disrupt the present monetary system.

[21 March, 2014: I have read your blog extensively and believe I understand where you're coming from. Your Valun proposal would provide the hardest money on the planet. It's the kind of thing that would provide price stability over many generations. You've built in enough opportunities for any member to have adequate credit. You don't want to ruin it by allowing finance organizations to float any excessive bond issues for which they may not have ready need for the funds. I understand you intend to operate under 100% reserve lending. You're going to assume that a finance organization would be set up as a partnership. Each partner would get a percentage of the profitability of the concern over expenses. With what would such an organization back any bond issue, except the credit contracts of its customers? Your suggestion amounts to hypothecation: the practice where a borrower pledges collateral to secure a debt or a borrower, as a condition precedent to a loan, has a third party (usually an affiliate) pledge collateral for the borrower. This invariably creates a chain of promises to clear debt that leads to the same problems afflicting the present system. You really don't want it. I trust that you recognize that most of your finance businesses, when and if they catch on, will be NVO's operating in the “public” money markets as well as the VEN. The only feasible way to make it work would be for interested parties to buy profit sharing partnerships. I trust that all of these would be private affairs. That would mean that while a company projects a certain face to the ”public” world, they would adopt a VEN favourable face for all VEN operations. That VEN face is the partnership arrangement between your B member finance business and the A members that own the partnerships. You'll need a separate kind of contract to handle them. I should think it would be similar to an S corporation. George, Nebraska

All duly noted George. Thank-you for your contribution.] ] 

David Burton

dpbmss@mail.com 

[22 March, 2014: I was just wondering, you said somewhere that you expected debt instruments to trade somehow within the VEN, but you are clearly hostile to corporations, so I suppose you'd be against equities trading. Could you elaborate? 

Partnerships are among the oldest forms of business organization. Depending on the kind of business it is, there might be many partners. I hadn't thought about any upward limit, but if we're to be strictly honest, a partner would have to bear a certain amount of meaningful responsibility for something the company actually does.

Debt instruments, the various “evidence of debt” determined by how long they take to pay off, are specific things with their repayment streams always attached. Equities as they are commonly understood are “evidence of absentee ownership” of the kind we want to eliminate, as we maintain that such schemes are actually fraudulent. Why? Because they attempt to defy natural law.

Specifically, they complicate ever being able to determine the true value of anything about a corporate business. The fiction is that at any time, the combined value of all the extant stock equals the value of the entire corporate enterprise. But then there is the “blue book value” which is what it would supposedly take, in today's dollars, to purchase the basic material, including these days everything included in intellectual copyrights, etc. to create the existing corporate structure. The stock value might be many times the blue book value. Who is telling the truth when it comes to stock values? Only their market knows, and of course they are all manipulated.

If one really wants to make money in the VEN, one would most likely be willing to purchase or work toward purchasing a partnership in a small or medium sized going concern. We do not expect corporatism or statism to last forever and it will ultimately be necessary to have some means of taking care of ourselves and each other without them. That was one of the motivations for this blog.]

[31 March, 2014: Mr. Burton. What do you call a company that takes in other people's money and makes loans with it? A bank! I know you'd like to consider various points of view but not everyone can be right. Some just think they're clever coming up with an idea like “crowdfunding.” If someone is going to lend someone else money so they can buy something, that person has to buy the item first and sell it back on time to the borrower. Anything extra the buyer pays is because he didn't have the money at the time of sale. Also if someone paid more than market for anything, and then sells it back for whatever they can get for it, all that extra money he paid for the item is destroyed. This happens quite often. I think it's one of the problems with this economy. People decided to buy something they couldn't really afford and they'll never get back what they paid for it. Selling to someone else causes anything they paid over what they sold it for to be removed from the circulating money supply. K. C. Indiana

Yes, we get the message. The connection in any finance organization between risk and actual cost of anything should be borne entirely by the partners. They make a percentage of any profit. How many people could really bear the risks of making certain kinds of loans? 5? 10? 50? 100? These are important questions that will need a lot more input from others. Thank-you for your contribution.]
 

#57.1 Perspective

 

I didn't even know that alternative currencies existed in 2010. I had never heard of E. C. Riegel. A year later I heard Laurence Gilbert on the radio and shortly thereafter dug into Riegel's works. My reaction was astonishment. This was easily the most daring economic thought I had ever read. I had spent the greater part of the past 25 years working within the financial system. All that time I was seeking to understand what made the system fail, thinking that there must exist somewhere effective rational remedies to an aged but vital system.

Well of course, I was mistaken. Riegel was clearly telling me, from the grave, from a time corresponding to my infancy and the time of the post-war period; that No, the present system couldn't be fixed. One could however try to set up an alternative monetary system that would be based on some fixed measure of value, although he'd have hated to have it put exactly that way, because he was fussy concerning a proper definition of money. This alternative monetary system could run in parallel with the existing one until such time as “public” money imploded as it inevitably does, and takes the present banking and financial system with it. Then the alternative monetary system would be left standing and people would use it as their mainstay. To me, it was a radical proposal.

I found the lengths Riegel went to describe the paperwork, the val-dol checks, all the rest, to be incredibly cumbersome. Some of the ideas seemed antique to me. It was a great idea, but he had given really only a pencil drawing. It was now the early 21^st century and a lot had changed, though much had remained essentially the same at its core.

But I had been a foremost exponent of banking. I thought I really understood the rhyme and reason of it all and actually never saw its essential flaws until they were pointed out to me. “Oh well, that's just the way it is,” would often be the accepted rationale. Before my “professional” career was over, I had experienced mentoring by a prominent money manager, attainment of one goal I had once set for myself; to manage money and trade stocks. Before it was all over with, I was familiar with many simple strategies involving options.

I had at one time been absolutely blind to the vulnerability of the US dollar (or for that matter any other “public” currency). I had viewed precious metals as an arcane and ancient religion of defunct economics. I had accepted the common mainstream, middle of the road gospel of “buy and hold” securities investing.

That all changed in the summer and fall of 2007. I began to see things I'd never seen before in the “safe” markets involving municipals. Something was very very wrong. I had a number of deep contacts then, some going back to times when I was actually living and working in New York. I had been watching gold. Though I never had been a gold bug and wont be one now, it was clear to me that behind everything else, trade among people who at the top have a keen hatred for each other, sometimes only barely hidden under a thick veneer of public shows of respect, would still carry on trade as long as payment was made in gold. The sheer variety of items and commodities purchased this way internationally was one of the big secrets. One began to hear slogans like, “the golden rule; those with the gold make the rules” and “gentlemen carry silver, princes carry gold” in reference to their purses. Yes, gentlemen used to wear small draw string purses for their coins. Now we use wallets. Words of my father returned to me, “in the future, perhaps during your lifetime, people will be using these” -paper money- “to buy these” -silver coins. 

I was waking up. I had long since realized that politics was as much show business as anything out of Broadway or Hollywood. I ceased paying much attention, except as anything happening “upstairs” might be affecting the common man and woman on the streets. I had based my business education largely on understanding how to set up and run corporations. My distrust of corporations as valid entities had been an early prejudice supplanted by researching the orthodox explanations for the necessity of corporations and I had convinced myself that they were in fact valid and constructive institutions so much so that all I was doing by participating in the securities trading business was aiding corporate capitalism, which so I thought at the time was also a good thing. Modern economics takes the existence of corporations completely for granted. No downsides to them are ever taught.

My change of mind had nothing to do with working for the corporations themselves. Nearly everyone likes that. I certainly did. You feel secure. You feel you're part of something. There's even a “culture” each company has. I was a product of the Thomas Watson, Walter Wriston, Lee Iacocca mythos of entrepreneurial corporate management, which to some extent was an acceptable form of hero worship for many. People follow leadership, even if some of it is largely fictional, as is their authority, though I was to find that out much later.

My view of corporations really began to change as I encountered the typical run of fussy, imperious and spoiled corporate investors and sleazy investment “pros” who lived by merely speculating on the probable actions of others, contributing absolutely nothing of value themselves. Here one sees in broad outlines the narcissist and the sociopath in one of their mutual attraction dances. The narcissist investor is driven by greed and fear. The sociopath stock operator is delighted to take down another victim.

Meanwhile, whatever mysteries lay behind 2008, 1987, 1929, 1907, etc. they had nothing to do with anything done by the average man or woman on the street. But the results affected them just the same. These grotesque financial convulsions, which destroyed savings, decimated businesses, caused living standards to fall, etc. were all caused by “the bigs” playing around with the money. These events all certainly had to do with concentrations of power, with aggregates of liquid capital formation (economic potential energy), and attempts to “game the system” to achieve certain results for those at the top.

I began to look more closely at the symbols on the back of a dollar bill. Yeah, they had always seemed weird to me, especially the pyramid with the creepy eye on it. What was that supposed to mean after all? It certainly wasn't the benevolent eye of God, so whose eye was it? (As children, I vaguely recall being told that that eye watched to see who stole the money from the table where it was left to pay for the milk.) I was working to get these weird pieces of paper, just as was everyone else, working under that eye in the pyramid.

I took a look at the words on the bill. “In God we trust?” That's always been a lie, even for those who believe in God. And what is Legal Tender? Well, it means that basically, if nothing else will do to settle a debt, these printed pieces of paper with mostly dead presidents on them damn sure will, including paying taxes. “Hey, if we can use them to pay taxes too, then they must be all right.” It began to dawn on me that none of these belonged to anyone but to those whose name was printed on every one of them, the Federal Reserve.

E. C. Riegel certainly had no intention of attempting to displace dollars with Value Units or even bother wrestling in any way with the powers that be. He was acutely concerned about inflation. He reasoned that no contemporary monetary system was legitimate, honest or immortal. What is the immortal monetary system, the one that surfaces at all times when the du jour “public” or “national” monetary system fails? I had seen it in the belly of the Federal Reserve while I was there. My deep contacts always talked about it. What survived the onslaughts of the murderous 4^th century of the common era? Gold, of course. Silver too along for the ride, as gold is by weight a relatively dense form of value representation. I had not realized exactly why Riegel's basis for Value Units could no longer be the dollar. Private and public sources were telling me, “the dollar is not forever.”

The key issue in Riegel's quiver of ideas is the fixed basis of value measurement; the key question, what shall be the basis of the Value Unit? He would have chosen the dollar, but that's out. There are those out there who seriously intend trying to base something as important as this on a basket of commodities, or with reference to the available GDP data of record, all skewed to begin with. What a lot of confusing and irrelevant trash! You people honestly don't know anything. You're clowns!

The obvious choice is precious metals, specifically gold. We are not going to fall for the idiot's notion that it is possible to set up yet another paper money creation based on faulty statistics, weird adaptations of mathematics, or other confusing junk economics. No thank you. When it all comes down, only gold and silver will survive (tried by fire, all else burns up, silver and gold endure), period, end of story! Anyone who really knows anything is aware of this. It's a matter of seriousness. Money is serious business. Precious metals are serious. Suggesting any other basis that would actually get people to have any long term confidence in your alternative makes you look like a clown!

Therefore, I started the experiment on a date that I could remember, a palindrome, 11/02/2011. It was a good place to begin as it was close to the top of gold's price. Using the same date, a comparable inception point was set for silver as well. If the Valun is any good it will preserve purchasing power against both paper and precious metals, or why bother! To date, it has.

I reflect back on the times Laurence Gilbert appeared on RBN sometimes near the appearance of the people representing the American Open Currency Standard.

At the time, his attitude toward them was adversarial and competitive. I told him that we would need these people. We obviously had a difference of opinion. There will be nothing won by such conflict! Nothing! You cannot win with paper alone, or ledger books or computers, all of which are capable of representing money without taking precious metals into account. Ignoring them will give any enemies just what they need to defeat us.

This blog was never intended to be a memorial to pure E. C. Riegeldom. It was intended to describe a real 21^st century means of attaining a Riegel inspired monetary system. It is to be set up as a set of ready made monetary lifeboats that shall inflate and be ready to go as the “public” system collapses. The Titanic, she is going down. Lifeboats anyone?

This blog had other purposes too. It's time most of us got a real education. For instance, I divide people into two camps when it comes to knowing anything about what's really going on; those who have read Tragedy and Hope by Carroll Quigley, and those who haven't. It's 1,310 pages long. Bill Clinton read it. Quigley was his teacher. Richard Grove and others have read it. It's one of those books that opened my eyes.  If you're serious, you'll read it.

There is movement out there. Change, real change is possible. But it wont be coming from the usual places anymore. I predicted 20 years ago that the long term trend would be a merger of education, entertainment, computing and business and the internet would serve as the vehicle for this transformation. It would mean the birth and death of institutions and the transformation of culture. I saw cell phones eventually becoming so powerful that people could take movies, lectures, music, news, whatever with them wherever they went, while commuting, riding a train, etc. Podcasts and videos are replacing scheduled shows. Attention network producers and administrators around the web, scheduled programs and programming may become a thing of the past. More often than not, if people can't download podcasts to take with them, they'll just skip the service!

Among the changes are renunciations of many ideas associated with faulty philosophical underpinnings. Solipsism is going to be better understood and avoided. In the end, only the truth will matter and since means exist to know it, it shall be more widely known, whatever it turns out to be. The truth may be impeded today, tomorrow, a year from now, but eventually it will get out. The joke was on you, puny man. You try hiding from the truth and the mere act of hiding only serves to bring on your downfall.

Now that a sufficient number of papers have been posted here giving more outlines of the kind of organization intended to support the proposed Value Unit (Valun), we will shortly be moving forward to the next stage.

David Burton

dpbmss@mail.com

-> #57.2 The Present Moment.

[8 June, 2014: You had some past association with the Federal Reserve. Would you mind explaining this relationship?

In the 1980's, I was on contract, hired as a technician / consultant, to the Federal Reserve's operations department; computers and their operations, running schedules of programs, etc. for approximately eighteen months. My particular area involved applications using IBM's relational database product for mainframes. At no time was I ever involved with anything to do with bank policies, economics or anything like that. Those subjects were, even back then, a long time ago, part of a body of personal research into fields I hoped to enter after doing whatever I was doing at the time. I didn't even do any programming, though I occasionally helped debug programs. I also presented on quality assurance concepts, as they were known at the time, to the department.]

#0 Wealth Inequality in America

Wealth Inequality in America

#0 Gold Bugs See This

 

Selling 1 Oz Gold Coin for $25 (when it's worth over $1,500)

Did You Hear We NUKED China Last Week?

College Students Sign Petition to Imprison All Registered Gun Owners!

The Left Handed Screw Driver

#0 Who Owns You?

  Who Owns You? 

#0 George Carlin

George Carlin was a prophet and yeah all the really great comics are cynical prophets, which is why people laugh, because they know they're being told the truth, even if they hate what they're being told. Carlin's messages are relevant to the purposes of this blog.

The Best of George Carlin:
Exposing our government and fall of humanity one joke at a time

George Carlin ~ The American Dream

George Carlin: Brain Droppings

#56 VEN Money Flows

A representation of 10.5 Valuns in V-Checks

“The fact that only those without money can be money issuers shows that the adequacy of money circulation requires adequacy of issuers, and that the supply can never be adequate for a healthy economy when the number of issuers is restricted.”

E. C. Riegel – NAF Chap. 4

The Value Exchange Network (VEN) is a name for a private market. The monetary unit in such a market is the international standard Value Unit or Valun.

Value Units Enter the VEN

Valuns enter the VEN in three ways:

1) Valuns are created by the impecunious (the poor). We all begin with “red inked” accounts in this market; we begin with what we'll call from now on “operating overdraft”

Operating Overdraft – within VEN parlance shall be those Valuns each A member has the permission to issue. Each and every A member starts with 200 Valuns

2) Valuns are bartered into existence by exchange of all other currencies using precious metals (gold and silver bullion) as an intermediary.

Those bartering dollars or any other “public” currency for Valuns receive the equivalent number of Valuns as described here.  Currencies are used to purchase precious metals, which stores shall be the custodial property of each local independent exchange.

3) Valuns are issued in the process of being paid for work. This shall be where the lion's share of new Valuns come from. The process will take the form of self financing of all employment; all Valuns ultimately paid for work done will have previously been created by the A member employee as part of the terms of the contract under which he is paid. Again, in case someone isn't getting it, yes as a fiat issue from nothing. We have called these contracts “Labour Contracts” in all cases, but perhaps we shall come up with a better name for them.

B members are businesses usually made up of A members; they may have employees who are not affiliated with the VEN as A members. Each A member can enter into a contract with a B member for employment that specifies the amount of Valuns to be paid to the employee on a schedule of specified pay dates. At the beginning of the contract, the B member business automatically gets Valuns equal to the entire contract to use on a float basis until the employee must be paid. This is true for all A member employees from the director to the least paid worker. This forms the basis for trust between employees and employers. Knowing what one is worth becomes more important too as a business would like to have that float, particularly if the pay date is scheduled three or more months in advance. Right now, running in parallel with the existing system, with nothing to redeem for Valuns, they have the status of potential stores of purchasing power; savings

Wouldn't it be possible for someone to loan themselves a tremendous amount of Valuns in a business they run?

No, because every business has to “pay its own way” (See our definition of Profitability below). If it were to excessively pay someone more than the sales they took in, obviously they would go bankrupt and fail. We expect that something like this might be going on in globalist corporatedom on a mega scale, but the subject doesn't even concern us.

It should be understood that these Valuns spring forth from the A members themselves, not from the local IE, not from IVES and certainly not from the B member employers or anywhere else. At the beginning of a contract involving work, the business gets the money on the first day of the employee's work and pays it back to the employee on specified pay dates. The transactions for doing all of this are scheduled by these contracts and the IEs carry out the transactions as part of their regular instructed duties. Riegel's complicated, excessively burdensome ideas for implementing the parallel payments in Valuns were perhaps one of the chief reasons his ideas went nowhere. No business wants to be burdened with more paperwork or bothered with anything more they have to do for someone outside their business. They want to pay attention to running their business. So, the technicalities of all these parallel payment arrangements will be handled by each local independent exchange.

This float might not mean anything right now, since there is no organized VEN, but we can't say that will forever be the case. We expect that all we need do is provide the means and a lot more will result.

Value Units Leave the VEN

1) Taxes. You simply can't get away from them and where they are due and payable, in their money not ours, we make provision for it. The A member submits an applicable tax bill and the IE takes the equivalent number of Valuns from the A member and sells the required precious metals to raise the tax money. The corresponding Valuns are destroyed in the process.

There are some out there with what may turn out to be a valid argument concerning income taxes. We're open to any informed opinion here. They say that since all money earned through employment within a VEN is actually created and lent to the businesses before this same money is paid back to the employee, that the income stream to the employee isn't really taxable income, but amounts to a short term loan at no interest to the business from the employee. We note that money lent without interest, without more than the exchange in time worked to get it back in pay, as the business enjoys the “time preference” value of the float, may turn out to be the most revolutionary idea in E. C. Riegel's quiver. This may turn out to be more significant in savings for both employees and businesses than any can foresee right now.

2. Money always disappears into things that were bought, especially anything paid off on time. For instance, let's suppose you buy a refrigerator for $400. But you paid that price due to “exercising your time preference” and buying that refrigerator now rather than waiting until you had say $200 which is what the refrigerator cost for those who had the cash. Two identical refrigerators. The one on the left cost $200 while the other cost twice as much. Where did $200 extra go? Some of it certainly ended up with the person who bought the refrigerator on the right at or perhaps even below the cash price and sold it to the customer on time payments. Both refrigerators are depreciating in value from point of sale. The one on the left could be sold the day after it was bought for perhaps 90% of its value, the one on the right sold a day after the last payment was made, could obviously not be sold for what was paid for it. It has automatically lost at least half its value compared with the left hand refrigerator.

The same concept goes for anything including capital goods, land, buildings, anything. So what gives value to anything? The work done to make whatever it is productive and then profitable; able to pay its way.

Profitability - within VEN parlance shall be the ability for a B member business to pay its way; to cover all expenses and retain a portion of what they earn to cover emergencies.

  

A members become “black operators” when the amount of money they earn tallies against the amount of money in their Operating Overdraft, cancelling all money created out of existence. Anything more that any A member earns is clearly money he received for work done.

All businesses suffer emergencies and most businesses are chronically under capitalized. There will certainly spring up around each IE those businesses that can and would engage in finance activities to help businesses out. We expect a lot of crowdfunding techniques. We'll certainly be discussing this entire area. But we'd prefer to see strong and sturdy small and medium sized businesses of kinds that may be run year in and year out at a certain predictable level, providing regular employment for a certain number of people. These kinds and sizes of business are at present almost impossible to get started. We'll explain exactly why much of this is so and how to begin to think and work our way out of it in a future post. We've set in some of the groundwork for that discussion here.

3. Money that is issued by any A member is destroyed when that same A member accepts the same amount in return for goods or labour sold. We have two instances of this:

a) An poor A member who may decide to either sell something or get a job takes Valuns back. All Valuns he is paid cancel out any he has already issued and spent into the VEN.

b) A regular wage earner supplements his earnings in “public” money with a parallel stream of Valuns that he had previously lent into existence and loaned to his employer interest free until he is paid.

The same Valuns issued are redeemed by the issuer in a monetary circle that may involve many changes of hands. Much of this was discussed here. 

What you're describing is a loan at zero interest that is paid back as work is paid for. I don't see any way that any government could interpret such a situation fairly as a taxable event. Have you perhaps stumbled upon the solution to income taxes?

They'll contend that the money was created out of nothing (when all theirs is just the same) and therefore that the loan is a fake. But between an employee's first day of work and his first payday, the business gets to buy something it needs with those Valuns from anyone in the VEN, so it really is a loan at zero interest just as you say. Nevertheless, until we get more informed advice on this, we have to proceed with caution.

Working Capital

Working capital is tied up in businesses, but everyone needs savings because there are always emergencies. We hope and trust that Valuns will be a sufficient savings vehicle that sufficiently preserves its purchasing power over time, that can in fact rest idly to be called to action when needed.

Trading within and among IEs

This figure depicts three IE's (A, B and C) and shows that each has a specific interface to settle transactions (AB, AC and BC). These areas describe bundles of transactions. Yes, each transaction has three parties, the buyer, the seller and the bookkeeper. People talk all kinds of nonsense about two party vs. three party sales. So, we'll state it as frankly as we can: All sales involving precious metals are three party transactions too; the buyer, the seller and the metals dealer. Oh, they'd love to exclude him. It makes their pleas for nothing but gold and silver sound better to more gullible and lazy people who don't even know exactly why they're buying precious metals. When there are time payments involved for any sale there are perhaps four parties to the agreement and perhaps more. Anyway within each area are transactions involving members of these IEs. All of the shaded areas represent the VEN. It could begin as simply as IEs starting up in three adjacent rural counties. Some states, California for instance, might very well have three IEs within a single county. Each IE and its businesses are depicted on the V-Checks they issue. They all have designs accepted by IVES. The descriptions of all transaction processing is also under the administration of IVES.

 

This figure depicts three IE's, each hosting (for want of a better term) several Valun counters. VCs are the external people interfaces of each IE, they may be separate businesses (B members) sharing transaction fees with the IE or they may be run as subsidiaries of the IE.

Here, we see two clusters of IEs separated from each other and operating through non VEN operators.

Non VEN Operators (NVO) – within VEN parlance an NVO shall be non VEN member businesses doing business with VEN members.

Note that all NVOs in the illustration have relationships with one or more IEs in each cluster. To some, the idea of a VEN (the transactions of one or more IE's) could be adapted to mean the total transactions of each of these clusters. But we want to get across that the money and its value structures remains the same whether clusters of IEs are separated from each other by distance or some other artificial consideration. Of course conditions based on supply and demand modify this somewhat from region to region. Trade should normally flow freely among IEs, unless some abnormal pattern of transactions is detected, in which case IVES is notified and a VEN wide bulletin might be issued. Each and every IE can decide to suspend dealing with any IE that falls beneath standards, so penalties for breaking rules will be quite severe. The rules are simple and benefit everyone in operations involving trust. Why shouldn't they be as severe as being thrown out of the VEN for a considerable period of time, etc.?

We note that all money in the VEN created by poor members and not cancelled by them by taking back any money for goods or labour, is fair game to any business operator willing to attract and use it. We further note that were all employment to be by contract as loans at zero interest, regardless of the tax implications for the employee, that the business from now on takes an entirely different view to labour costs. If the business is not strictly speaking paying for its own labour, then all that needs concern them are all other expenses except labour and the retaining of earnings as savings against emergencies. This is a recipe for making very strong independent businesses.

David Burton

dpbmss@mail.com

[11 March, 2014: So Valuns really would be our money since we would be issuing them for any work we do.

Yes. They are an expression of a legitimate extension of each individual's private property.

Can you see a time when people might demand to be paid in their own money?

LOL, yes. All one needs is to experience more inflation, stagflation, recession, depression, etc. to know that the present monetary system and its so called economic planners have always been at the same game; pilfering from the public, etc. Of course along with this, from time immemorial, they have also planned wars, which are their harvest.

By a business “paying its way,” you're using standard balance sheet accounting?

Yes.

Do professional partnerships qualify under proposed IVES rules?

Yes. Partnerships are as old as time. They are always acceptable business structures. Each partner is considered a part owner in the enterprise even if various partners own disproportionate percentages of the whole business. Such businesses in fact should make up the majority of all qualified VEN businesses.

Will there be any age limits for opening accounts?

No, well only one. Recall we require for new A memberships:

1) Domicile: you have to have lived in the area where the IE operates for one year and possess the right under local law to live there.

2) You need to have recommendations from 2 A members. 

Any child of two A member parents is eligible as a one year old. There aren't any limits on the other end either. Assuming one remains sensible into great age, there is no reason why they wouldn't be allowed an account.

You mention venture capital. Let's say someone out there really thinks once this gets going he'd like to convert some huge amount of money, like a million dollars, into Valuns. How would he make money?

His objective would have to be home in the VEN, actually making and being a part of it. You'd only be doing that by owning and running a real business. We are about ultimately renouncing the present system, not trying to make any more money using it. I did not mention any way out of this system back to their system except paying taxes ... or selling something made within the VEN outside it for dollars or something else. Hence, this is not to be just one more “get more rich quick” scheme for plutocratic psychopaths. With sufficient funding, many businesses can transfer away from their “public” money base and eventually to a full VEN status.

What would you say are the best ways for capital to participate in the VEN?

When the VEN gets going, the best opportunities are going to be refinancing businesses out of the present system into the VEN. The same goes for residential real estate. We aren't taking dinosaurs though, the too big to fails, corporations, governments.

Have you given thought to public employees? Since governments would not be members of the VEN, how would Valuns be paid to them?

We're thinking about another set of contracts for them that involve the IE itself, except that the IE would have no purpose in using any of the float that would normally be generated. Otherwise the contract would look the same; a parallel set of transactions would deposit Valuns in their accounts on each pay day. Such contracts are really between someone doing a job considered essential by the members of each IE. Such matters would require a vote of at least 2/3rds of the members of each IE to become active policy. Three IE's deciding to do the same thing would raise the issue to IVES and if the majority agreed, it would become VEN policy.

You have this thing you call domicile. If I get to be an A member in my area, can I move to another area and retain my A membership?

Yes, you can. Your domicile (home) IE is the one where you are an A member. The rule only applies to new A members. It would normally be a good idea to establish yourself where you are if you can, unless it was always your intention to move somewhere else for which you had a previous preference. When you move, all member accounts will be transferable between IEs, but you can only be an A member in one IE. You can choose to retain an account at your former IE, but you'd be a B member there and would have to maintain profitability; “pay your way.”

Most people decide to move based on deteriorating conditions where they are or opportunities elsewhere. Over time there would tend to be far fewer differences in basic living standards from one area to another.

What would be your long term prognosis for price levels generally under the Valun system?

When prices find their own level within the Valun yardstick of value, they will tend to move less violently up or down and over time may remain nearly flat, subject only to differences in local supply and demand. Actually we would anticipate that the Valun price structure would provide a far more accurate appraisal of the relative value of goods and services in each unique area.

If you were to choose between buying an ounce of silver every month or an ounce of gold which would you choose?

Silver has outperformed gold.

How has silver performed in your proposal

At inception, one ounce of silver would have bought 19.44 Value Units.

Now we're at 11.94 Value Units, which means silver buys less than it did in 2011; 7.5 Value Units to be exact or down 38.58% against the Valun. Remember we're talking about a piece of purchasing power defined by a thousandth of a single transaction that would have occurred at a particular point in time. That piece of purchasing power does not change regardless of what the bullion brokers decide the trade in “public” money would be. Since our system measures gold and silver independently of each other, gold has fallen only 23% against the Valun since inception. Though this indicates that silver has fallen farther than gold, we expect long term that since every currency on the planet naturally inflates by design, that buying any gold or silver on a regular basis is a wiser investment strategy than almost anything else. Of course, we have established -at least in abstract experiment- something better than precious metals or any other currency, else why would we be advocating it? That vehicle is not yet in existence.]  

[12 March, 2014: Was intrigued by your description of NVO's. At the beginning wouldn't every business be an NVO? 

Indeed they would be. The illustrations were merely to give people the idea that one might function between clusters of IEs, but right now we consider any business organized as a sole proprietorship, partnerships, and even situations where people are limited partners operating under direction of a general partner are fair game for our message. If they wish to remain in business, if they wish to escape from the present system, which we maintain is shaky and will come down eventually, then we offer the best alternative to secure independence. 

I also saw somewhere you mentioned IE's not being able to keep dollars, etc. 

Under current legislation here and elsewhere, through intellectual copyright law, they have the right to interfere directly in your business. Obviously we don't want any of that. This was but one more reason for our Valun proposal. 

Do you think they would care if we made side deals in local currencies? 

They really wont care as long as taxes in their money are paid. Businesses make sure they know the valuations in the alternative currencies they allow and determine the taxes in “public” money. They tend to save their “public” money for paying taxes and anything else that can't be paid in alternative currencies, but gradually over time they wean themselves from reliance on “public” money, including refinancing their real estate in alternative currencies. Public authorities would still be determining taxes based on prices in “public” money.

We'd further remind our readers that the Valun proposal is for a universal standard of commercial value measurement that stands apart from alternative currencies that use the “hours” or “discount” basis with reference to their “public” based currencies. The other alternative currencies will go up and down with the dollar, the Valun will not.] 

[13 March, 2014: It seems to me that you are making a profound observation in your proposal for Labor Conrtracts. They are Labor Contracts, but the reverse of what everyone thinks of. People go to work for other people but the people who pay them normally decide the pay and hours, etc. Under this proposal, labor is your own resource that you lend to the employer for its full value prior to working to get the money repaid to you. It's an entirely different concept. It should be tax free, but I'm not an expert.

Thank-you, we'll just have to see about that. We'll need for all Labour Contracts to be described, recorded and operate basically as the reverse of Credit Contracts. A Labour Contract under VEN rules allows the employer to the float on the entire value of the employee's time, repaid on a schedule of pay days. All the money issued is cancelled upon payment. A Credit Contract under VEN rules allows the buyer to have his “time preference” for what he buys, repaid on a schedule of pay days. All money involved in these must have already been created. These are the two building block agreements that run the whole system. Together they re-emphasize a “work to own” mentality, that is a basic cornerstone of civilized society.]