Wednesday, March 9, 2016

#70 It's The Money, Stupid!

Today, what everyone needs to know is that the money in your wallet is not fundamentally or really yours; it doesn't belong to you, you only get to hold it for as long as you don't spend it. Your name is not on any of it, though you are considered a debtor to the people behind the money anyway, through many public laws the owners of the money have enacted to protect their unique position. It says right on it to whom it belongs. All US dollars ultimately belong to the Federal Reserve, they are “notes” which means they are representations of debt (note = a credit contract, 1 to 7 years).

By now, if you have been reading this blog, you'll know that there is no way that money could represent anything other than debt, since all money represents unsettled barter transactions. Now, we haven't even considered, as some others have, that where huge amounts of money end up in certain people's hands, it is presumed that their money still represents unsettled barter transactions, that they have done something or sold something that somehow entitles them to purchase/possess a comparable amount of some other commodities, products or services. Consider the evidences/validities of all that as you will.

However that may be and nonetheless, none of the money in your wallet was issued by you or anyone else you know. It was all issued as a debt instrument to the government whose name is on it. In case of US dollars it says The United States of America, since at least 1871, the name of a known corporation, legally separate from the country and its people, capable of borrowing into existence its own money. This was solidified into a money monopoly in 1913. 

Oh, who or what “backed” any of that money? Well the man who knows more about the dollar than anyone else is clearly Edwin Vieira and the reader is advised to consult his works, but it really all boils down to the 1792 silver dollar as described by Congress as something like a coin containing 3/4 of an oz. of silver. Now the problem we have of course is that in 1792, that “dollar's worth of silver” might have purchased some quantity of goods or services, some index of what it was capable of being exchanged for in the marketplace of that time. Now, march forward to 1875. What will that same amount of silver buy at that time? How has it changed? Clearly a simple ratio would likely have developed to find out what that chunk of metal would have purchased over a span of 83 years. We call that purchasing power of the commodity (silver in this case) posing as money.

You see, the problem with a chunk of silver as money is precisely that it is worth something as a commodity in and of itself. If anything has any intrinsic value in a trade, then its value will determine the ultimate price. The value of precious metals is determined according to speculators who are not part of any deals where precious metals coins are customarily used as money, who nevertheless determine what the price of something in metals will be. The hottest trades are always on the perceived upside of precious metals prices, and sluggish when the metals are perceived to be moving down.  

Most of the money with someone's name on it that isn't yours, is “public” money, intended for the public to use by the state that went into debt to issue it pledging you and your children etc. to pay off their debt. You should really let that sink in for a while, see how it feels, etc. This “public money” is issued by the governments to buy things they want; more powerful surveillance and weapons systems, more military personnel, etc. This spending does “trickle down” through the economy and eventually really does arrive in our wallets, really our bank accounts.

Another way the government spends money to prop up the existing system is by subsidizing the poor. This is known as socialism or more properly “state” socialism, since all socialism requires some state. Very well then, we'll explain how our proposed solution addresses this, but at this point it's fair to observe that the poor spending money at least does “trickle up” into the economy and those excess dollars, euros, yen, etc. should end up in the wallets of the most competitive producers.

We've observed that the costs of the present system are entirely any interest payments (instances of usury), since interest must come from the existing supply of money, as it was never created. Usury always creates an imposed scarcity that is not natural nor required and is in fact inhibiting to business since the supply of money with which to retire all existing debt is curtailed.

There was a posted explanation that time allowed the usurer to get away with his frank stealing (as it can't be accurately explained as anything else) because after all not all of it was asked back at one time. I find arguments like this highly ingenuous, don't you? If a practise is no good, does it improve it to extend it out over time? We have identified the kinds of contracts that can be devised that require no usury and still provide a return to the money lender.

Generally those who have come to the realization that the problem with the present world order is precisely the money, have championed many solutions. We'll consider all of them.

Other solutions - Lincoln greenbackism and gold/silver backed private money:

Lincoln greenbackism changes nothing over the present system except usury at the point of issue. Usury and fractional reserve banking are probably allowed anywhere else down the credit line. Instead of a Federal Reserve banking system, the proponents of a system like this propose government issued fiat money at no interest, something the present Constitution does not really allow, that flow from the Treasury Department by act of Congress, signed by the President, etc. The government would spend into existence and tax back this money and eventually the government would retire its debt, etc.

Our arguments against this proposal are simple: why make the government the first buyer in the economy? Why have the government decide where the first issued money is to be spent? We maintain that issuance of credit for bare sustenance are right in there with any other civil right one can imagine, though we maintain that this credit only has meaning within a community of those accepting tokens in the same credit clearing system. This means that forfeiting that right to any state or corporation, as it is being done right now everywhere, is a thing we would not want in an honest monetary system based on an international standard value unit or Valun. 

The “Austrians” claim to present to the world a real alternative to Keynesian economics, but they do nothing but extol the virtues of usury and a return to a gold standard, while they don't criticize fractional reserve banking, only its excesses. We've seen this before; a little of it wont kill you, but a lot of it will. Baloney. None of it is the only real solution. The fiscal policy Keynesian wonks on one side or the “hard money” or “Austrian” inspired crowd on the other are just two sides of a banker's dialectic – don't fall for any of it.

Wealth without Income is not Wealth:

This one is among the hardest for most people to get because they still tend to think of wealth as mere stuff or property. This blog maintains that wealth, true wealth, is not just stuff, but stuff + human labour capable of producing or participating in producing an income. We site commonwealth as a notion of all that a community possesses capable of providing its residents with an income, a living. We'll consider the concept of income on a monthly basis as it is usually done anywhere. So here's a new perception:

Everyone's skills make them wealthy and potentially the more exchangeable monetized effort their expertise can command, the wealthier they are.

We encourage everyone to begin asking themselves just how many dollars, euros, pounds, yen, whatever you think you're worth in monthly income terms, because we're going to begin answering that basic question within a proposed E. C. Riegel inspired monetary system; just how much “free money” do we allow to be created? Oh, everyone wants to know that one. So, we'll come up with some examples of just how to conduct demographic surveys to determine the potential number of Valuns issued. 

Work and Trade within a Private Community:

The age of the “peer to peer” network and “affiliate marketing” is here and these methodologies are going to affect trade for a living, manifesting ones' wealth in terms of generating income. But in all cases involving money that is yours (Valuns), that you issued based on your labour, or traded for goods, etc. it is understood that one is essentially bartering for goods and services. All money, while you have it, is debt. BUT Settlement of a transaction involves you taking back money that you issued. If you worked 10 hours for 3 Valuns an hour or 30 Valuns, then you spent those on goods you really wanted; food, clothes, tools, whatever, you traded your time for what you bought with your money. It was a barter of your time worked for whatever that amounted to in goods and services.

Basic credit clearing begins with the issuance of money. If you buy something with a V5 V-Check and later are willing to accept someone else's V5 V-Check, then the money you received cancels out the money you spent, you have closed a money circle. Closing more of these circles reduces the potential for inflation, so that any increase in prices, temporary or permanent, reflects the true relative scarcity of that commodity, product or service. I hope everyone sees that for exactly what it is meant to convey; that under the present system where the money itself is just another commodity used to measure the relative value of all other possible commodities, goods or services, much can and is being done to that commodity money supply and where it is channelled, so that it does not actually always reflect the true value of things.

We assume that acceptance of their money is as much as anything a matter of FORCE as much as they attempt to project otherwise. So, acceptance of your own money is a matter of choosing to align with those who agree with you that you and they, everybody, has the natural right to issue their own money.

We have described how one might be paid in Valuns while holding an existing job being paid mostly in dollars. We could describe many sideline jobs that could be done were there adequate money for them, all kinds of local building and infrastructure maintenance jobs, etc. But more than anything else we want to prepare people for the techno cottage industrial age of the future. We believe that the proposed supplementary monetary system is better suited to sustaining and prospering the coming “back to the land” reversion to the small and local.

Now, our answer to state socialism is simply that we take care of our own. Within our own communities, anyone on Social Security or other pensions already has the understanding that the proposed monetary system intends to allow them to issue monthly as many Valuns as they are valued in comparable dollars. They are however only credits until they are spent into the system as money. They are not income, as they are literally issued out of the A member's assessment of personal wealth; as though they were selling part of themselves into the transaction/barter arrangements via money for things or services. To clear the money they issued, they might decide to work or sell something to accept back money that they spent. Most above the poverty line will do this. But what about the poor?

What were the membership requirements? You had to be approved by two other A members and have a legal right to live in the area served by the IE, usually a county. Let's say you are retired or indigent. The IE would likely look at any statement you get from any public income source. If you have a statement from some government agency, they'd make a determination as to how many Valuns would be the equal of the dollar amounts and you'd be guaranteed the right to issue that many Valuns per month. The money you spent for things among the other members of your community would tend to accumulate as savings among those who were the most productive in the community.

We also said that everyone would get V200 for opening an account. Right now with the Valun at $2.74, that's $548.00 purchasing power per A member. Putting it more graphically in terms of actually generating potential purchasing power to start a monetary system:

1 member: V200 = $548
100 members: V2,000 = $5,480
1,000 A members: V200,000 = $548,000
5,000 A members: V1,000,000 = $2,740,000
10,000 A members: V2,000,000 = $5,480,000
20,000 A members: V4,000,000 = $10,960,000
50,000 A members: V10,000,000 = $27,400,000
100,000 A members: V20,000,000 = $54,800,000 

Concerning that bit in Riegel's system that seems to get the most attention; how much “free money” do we allow, one way of bonehead analysis might consist of considering indigent monthly subsistence as determined by each state based on their public laws regarding each state's minimum hourly wage times a standard 40 hour work week. We present a table for the United States containing figures in dollars and current Valuns:

State – min wage – $ week's pay – V min wage – V week's pay

Alabama - $7.25 - $290 – V2.65 - V106
Alaska - $9.75 - $390 – V3.55 - V142
Arizona - $8.05 - $322 – V2.94 – V117.60
Arkansas - $8.00 - $320 – V2.92 – V116.80
California - $10.00 - $400 - V3.65 – V146
Colorado - $8.31 - $332.40 – V3.03 – V121.20
Connecticut - $9.60 - $384 – V3.50 - V140
Delaware - $8.25 - $330 – V3.01 – V120.40
Florida - $8.05 - $322 – V2.94 – V117.60
Georgia - $7.25 - $290 – V2.65 - V106
Hawaii - $8.50 - $340 – V3.10 - V124
Idaho – $7.25 - $290 – V2.65 - V106
Illinois - $8.25 - $330 – V3.01 – V120.40
Indiana - $7.25 - $290 – V2.65 - V106
Iowa - $7.25 - $290 – V2.65 - V106
Kansas - $7.25 - $290 – V2.65 - V106
Kentucky - $7.25 - $290 – V2.65 - V106
Louisiana - $7.50 - $290 – V2.74 - V109.60
Maine - $7.50 - $290 – V2.74 - V109.60
Maryland - $8.25 - $330 – V3.01 – V120.40
Massachusetts - $10.00 - $400 - V3.65 – V146
Michigan - $8.50 - $340 – V3.10 - V124
Minnesota - $7.25 - $290 – V2.65 - V106
Mississippi - $7.25 - $290 – V2.65 - V106
Missouri - $7.65 - $306 – V2.79 – V111.60
Montana - $8.05 - $322 – V2.94 – V117.60
Nebraska - $9.00 - $360 – V3.29 – V131.60
Nevada - $8.25 - $330 – V3.01 – V120.40
New Hampshire - $7.25 - $290 – V2.65 - V106
New Jersey - $8.38 - $335.20 – V3.06 – V122.40
New Mexico - $7.50 - $300 – V2.74 - V109.60
New York - $9.00 - $360 – V3.29 – V131.60
North Carolina - $7.25 - $290 – V2.65 - V106
North Dakota - $7.25 - $290 – V2.65 - V106
Ohio - $8.10 - $325.60 – V2.96 – V118.40
Oklahoma - $7.25 - $290 – V2.65 - V106
Oregon - $9.25 - $370 – V3.38 – V135.20
Pennsylvania - $7.25 - $290 – V2.65 - V106
Rhode Island - $9.60 - $384 – V3.50 - V140
South Carolina - $7.25 - $290 – V2.65 - V106
South Dakota - $8.50 - $340 – V3.11 – V124.40
Tennessee - $7.25 - $290 – V2.65 - V106
Texas - $7.25 - $290 – V2.65 - V106
Utah - $7.25 - $290 – V2.65 - V106
Vermont - $9.60 - $384 – V3.50 - V140
Virginia - $7.25 - $290 – V2.65 - V106
Washington - $9.47 - $378.80 – V3.46 – V138.40
West Virginia - $8.75 - $350 – V3.19 – V127.60
Wisconsin - $7.25 - $290 – V2.65 - V106
Wyoming - $7.25 - $290 – V2.65 - V106

Another set of figures describes what the yearly outlay looks like:

State – min wage - $ year's pay – V min wage – V year's pay

Alabama - $7.25 - $14,516 – V2.65 – V5,300
Alaska - $9.75 - $19,500 – V3.55 – V7,100
Arizona - $8.05 - $16,100 – V2.94 – V5,880
Arkansas - $8.00 - $16,000 – V2.92 – V5,840
California - $10.00 - $20,000 - V3.65 – V7,300
Colorado - $8.31 - $16,620 – V3.03 – V6,060
Connecticut - $9.60 - $19,200 – V3.50 – V7,000
Delaware - $8.25 - $16,500 – V3.01 – V6,060
Florida - $8.05 - $16,100 – V2.94 – V5,880
Georgia - $7.25 - $14,516 – V2.65 – V5,300
Hawaii - $8.50 - $17,000 – V3.10 – V6,200
Idaho - $7.25 - $14,516 – V2.65 – V5,300
Illinois - $8.25 - $16,500 – V3.01 – V6,020
Indiana - $7.25 - $14,516 – V2.65 – V5,300
Iowa - $7.25 - $14,516 – V2.65 – V5,300
Kansas - $7.25 - $14,516 – V2.65 – V5,300
Kentucky - $7.25 - $14,516 – V2.65 – V5,300
Louisiana - $7.50 - $15,000 – V2.74 - V5,480
Maine - $7.50 - $15,000 – V2.74 - V5,480
Maryland - $8.25 - $16,500 – V3.01 – V6,020
Massachusetts - $10.00 - $20,000 - V3.65 – V7,300
Michigan - $8.50 - $17,000 – V3.10 – V6,200
Minnesota - $7.25 - $14,516 – V2.65 – V5,300
Mississippi - $7.25 - $14,516 – V2.65 – V5,300
Missouri - $7.65 - $15,300 – V2.79 – V5,580
Montana - $8.05 - $16,100 – V2.94 – V5,880
Nebraska - $9.00 - $18,000 – V3.29 – V6,580
Nevada - $8.25 - $16,500 – V3.01 – V6,020
New Hampshire - $7.25 - $14,516 – V2.65 – V5,300
New Jersey - $8.38 - $16,760 – V3.06 – V6,120
New Mexico - $7.50 - $15,000 – V2.74 - V5,480
New York - $9.00 - $18,000 – V3.29 – V6,580
North Carolina - $7.25 - $14,516 – V2.65 – V5,300
North Dakota - $7.25 - $14,516 – V2.65 – V5,300
Ohio - $8.10 - $16,200 – V2.96 – V5,920
Oklahoma - $7.25 - $14,516 – V2.65 – V5,300
Oregon - $9.25 - $19,500 – V3.38 – V6,760
Pennsylvania - $7.25 - $14,516 – V2.65 – V5,300
Rhode Island - $9.60 - $384 – V3.50 - V140
South Carolina - $7.25 - $14,516 – V2.65 – V5,300
South Dakota - $8.50 - $340 – V3.11 – V124.40
Tennessee - $7.25 - $14,516 – V2.65 – V5,300
Texas - $7.25 - $14,516 – V2.65 – V5,300
Utah - $7.25 - $14,516 – V2.65 – V5,300
Vermont - $9.60 - $19,200 – V3.50 – V7,000
Virginia - $7.25 - $14,516 – V2.65 – V5,300
Washington - $9.47 - $18,940 – V3.46 – V6,920
West Virginia - $8.75 - $17,500 – V3.19 – V6,380
Wisconsin - $7.25 - $14,516 – V2.65 – V5,300
Wyoming - $7.25 - $14,516 – V2.65 – V5,300

We remind everyone that the proposed Valun is a heavy monetary unit relative to most currently in use. Prices in this money will appear to be low, but the unit used holds at this point 2.74 times the purchasing power of the present US dollar.

What we're suggesting here, are the suggested maximum requirements in Valuns we would intend on allowing each indigent adult A member in any IE to issue each month based on where the IE is located within the United States. Again, it is not we who make such decisions, these decisions are made for us by public laws in each state. They provide us with a basis to determine other matters of aggregate availability of Valuns in a community where we expect the initial numbers of indigent A members to be larger than eventually they will become, because through the Valun system, it is intended that they will be able to improve their circumstances and gradually attain a means to provide a higher standard of living and real livelihood for themselves and their families. 

As we said and shall say again, the reason for implementing our own monetary system is to be able to provide what their system does not. It is not another mere “love of money” for its own sake idea. We are generally all aware of what their money does, how it works and why it's illegitimate. If you have already gotten that far in your understanding, then you should consider this alternative because ...

1) The present money is not yours and it will fail. What then? Will you just slavishly accept that some or even most of your life savings may be swept away with the reinstatement of some new fiat monetary system that you had no say in? We want you to remember that it is fiat, but that it is THEIR fiat not yours that brought it into being. Being fiat had nothing to do with it. If the money you get together with your community and decide to issue came from you, then it is by your fiat that it comes forth. What would be wrong with that? We regard your fiat issue of money as your natural right to access the barter network represented by money. Giving that away to anyone else diminishes your own power. Most of us gave it away without even knowing we did so. Other people in other quarters regard our complacency as acceptance whether we signed away anything or not.

2) We hate to break it to a few of you out there, but money as an invention, mechanism, system, itself is not evil. It is a natural invention intended to be used to split barter so none of us ever has to return to the inefficiencies of whole barter. Money can become the vehicle to bring a real commonwealth to all that participate in using it.

The next steps would be:

1) Do the research to determine what your state allows as a complementary money. If it will not allow our proposed system, perhaps it will allow an hours system (Ithica, NY) or a discount system (Berhshire, MA). You have to walk before you can run. We seriously think there's no reason why alternative monetary systems that presently exist shouldn't be trading directly with each other. The problem could be merely advertising. 

2) Canvas an area for a preponderance of people with a balance of businesses capable of operating within a local network to provide basic necessities of life; food, shelter, clothing, etc. Consider anyone licenced to practise a particular trade as an independent business; the proprietor as an A member and his business as a B member, whether he hires anyone to work for him or not.

3) Determine who to send to the first formative meeting of the proposed IVES organization. Begin to design and implement a simple data processing model that will operate on a laptop and stores data on a thumb drive. Thumb drives sent between counters and IE's with exchangeable data for further transfers when needed farther afield, are planned and even implemented.  

4) Some kind of announcement in the form of a Manifesto is presented to the public at large. By this time we should have representatives from 3/4 of the US states and a few foreign countries. The document outlines the entire monetary system and presents it to the public as an alternative way forward. 

5) Business commences using Valuns.

David Burton

Current Hypothetical Value of a Hypothetical Value Unit

[14 March, 2016: I apparently didn't make as much of the position the proposed international standard Value Unit or Valun would have with precious metals. It's among the oldest topics on this blog. Starting here.

So basically it gets down to this: if anyone has any other currency or anything commonly denominated using that currency; items of personal or real property, services, etc. in order to exchange your money for ours, you'd tender your currencies and we'd buy gold and silver that would go into the vaults of the local independent exchanges, and in exchange you'd get Valuns, always on account, one that would always be yours and available as V-Checks which could be spent locally or sent anywhere around the world, as the value or Valun exchange network or VEN would be international.

What of the gold and silver? First and foremost, this exchange provision would remove from circulation as much precious metals exchanged for other currencies, which we cannot hold, as they are debt instruments and property of corporations, other businesses, etc. The process should reduce the amount of circulating gold and silver until its possible use as money is rendered more closely to the actual industrial worth of the metal. We could see thousand dollar an ounce gold very easily. They control the mines and markets for gold, not us. But if anyone wants real money; ours, based on our own intrinsic wealth, our ability to produce an income, etc. then they will have to pay for Valuns in equivalent gold and silver, which changes daily while the Valun itself remains perfectly stable, allowing minimal wobbles in pricing, perhaps maybe as little as plus or minus 5%.

As the prices of gold and silver continue their slide, despite the recent burst in prices, the Valun proceeds up from $2.16 to right now $2.75. It could and probably will breach $3.00 and stay above it. It's been above $3.00 already on 12/17/15.

The proposal would eliminate most, not all, of the current problems with present monetary systems. With current technology being as cheap as it is, a vast monetary system could be run using laptops and thumb drives. We're thinking about some of the features of this system already. How much should we reveal? There are always those out there who copyright everything, thereby giving a slice of their own pretended profits to the capitalists in money that is not even theirs. Stupid, unless you have decided that you really are just a slave and like kow towing to some people who always assume they're better and smarter and richer than you, etc. and that if you worked hard enough or wormed hard enough, that they'd let you into their club.

No, these ideas are at the cutting edge and meant for our children and grandchildren, if we ourselves don't decide to do something about them. Meanwhile, it can be shown that the proposed alternative money, the Valun has held onto its purchasing power since its inception in 2011. It has in that clear regard; how much purchasing power is required to perform an exchange of goods or services, held its own over all currencies and gold and silver since inception. It does so because it was designed to perform that way. I hope this is all understood and taken to heart.]

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