Monday, February 25, 2019

#113.8 The Proposal - How It Works - Part 9

I selected this picture to let friends of mine know I am still paying attention to what they are posting.
Before getting started, we felt it was a good time to reiterate that our proposal is about you having OWNERSHIP of OUR monetary machine, for a nominal yearly dues in THEIR money, that anyone can afford. What is offered is the opportunity, for once in you life, to OWN something that will actually be YOURS and expresses one of your fundamental human rights as best understood by the Bill of Rights; the first ten amendments to the US Constitution and by natural law; your right to contract and through that right, the exercise of your will (fiat) to issue your own money.

It must also further be more fully understood and appreciated that this proposal must succeed only as allowed by local law and that this proposal is not a money laundry nor a tax dodge. Everything must function under existing law. That means that wherever any locality has outlawed any but THEIR money, that you have direct evidence that you are living under a tyranny which you must either agree to endure or seek lawful residence elsewhere. 

The organizational design involves a private tax paying for profit entity; IVES (the international Valun Exchange Society), the service organization for all the associated network of local exchanges and in which each A member has ownership along with ownership in a local exchange. IVES provides us with the standards. These standards are to be manifested in a set of rules for all the local independent exchanges. These would also be tax paying for profit entities. We call them exchanges because that's what E. C. Riegel called them. Each local exchange does the accounting and the advertising drives among it's B members. IVES also conducts audits when required to do so and would be empowered to settle certain kinds of disputes. 

This proposal can best be described as essentially an assembly or association of PRIVATE and privately owned accounting businesses (serving a physical geographical area, not an internet oriented Valun exchange). Each exchange also seeks local advertising revenue to use to produce our circulating paper currency, the six month duration open V-Checks. These would be available in denominations of Valuns (international standard value units), beginning with the Half-Valun, One Valun, Two Valun, Five Valun and Ten Valun. (Ten Valuns is $26.59 @ 2/25/19) 

Currently, these measures follow the laws which in the United States disallow anything circulating as money with a value less than a US dollar or longer than six months. That's fine with us, because as we shall see, THEIR money is to be reserved for those things which must be paid with it, beginning with taxes. 

Our membership consists of eligible A members. B member businesses may purchase advertising from their local exchange and advertising expenses are tax deductible. These ads appear on the reverse sides of our V-Checks and so this information is passed among members so they can know who trades in Valuns. We buy and sell among ourselves and progressively (truly so) begin to form our own economy and have less and less to do with THEIRS. 

Why are we doing this? Because THEIRS is FAKE, PHONY and FALSE, even when it claims to be based on precious metals, as THEY will inevitably turn us back to a “sound” or “hard backed” money, whatever THEY claim for it, since it is all THEIR money and precious metals are merely the other end of THEIR dialectic; either THEIR credit or THEIR gold. Understood? AND, do you think for a split second that THEY will stop lending money THEY don't have (fractional reserve lending) even if THEIR money is supposedly “sound” or “backed”? Of course not. But many die hard gold bugs continue to ignore this inevitability. Again, to accept anything from THEM is slavery. We need our own money.

Yes, reiterating this: Dues paying A members would OWN these exchanges, so each owner would have one vote in all elections for officers, etc. both for IVES as well as each local exchange. These proposed independent local exchanges (sites where the accounting for each area are conducted) would be PRIVATE for profit tax paying institutions, whose primary mission is the advertising and promotion of local businesses that would belong to each exchange, as well as conducting as much as required of the necessary accounting for our complementary monetary machine. 

Local B member businesses would be attracted and formed and begin joining too and eventually our new and attractive V-Checks would soon be seen in our wallets and around our local neighborhoods. Eventually we will be dropping them into envelopes and sending them around the world in fulfillment of orders. These will be cleared through the exchanges at both ends. Believe me, trade will find a way, especially when THEIR system finally falls, and it will.  

The system at present may not be merely sick, or even terminally ill. It might actually be dead and may be at the moment kept alive in a comatose state. Remember, we have shown that approximately 97% of all the financial assets in the world are in the hands of the top 5%, perhaps as few as the top 2%, and the rest of us are expected to subsist on the remaining 3%. And one can examine hours of videos on abandoned properties to see the destruction of wealth and the death of money. Can any of these places be repurposed? What would it cost? Why are such monstrosities virtually worthless even when so much was spent on their construction or maintenance? Too much “build it and they will come?” Too much leverage, deliberately exploiting momentary economies of scale which couldn't have even been considered without extraordinary financing? Such it is, until it is not and in any case none of you out there has any control.

So part of this proposal is to recognize this situation squarely for what it is and to start again with we ourselves, as people and as individuals as well as groups of people engaged in income producing businesses. 

In case anyone has not been paying attention to recent events, the future is certainly not with globalism and will be with populism, localism, regionalism, nationalism, greater economic redundancy and more genuine competition, where innovation is naturally put to work, where meaningful efficiencies to scale produce quality results. 

This is a proposal that places a firm grip on technology for its own sake. This proposal could be built using very common open source technology. As we have pointed out consistently throughout this blog, money is accounting, therefore the meaning and purpose of enabling exchange using this accounting machine of ours is based on our ownership of our money in our accounts. If some people would rather cash out and rely only on V-Checks, and run into the exchange to get replacements every so often, because the cash is still in the cash account, it hasn't moved anywhere until the V-Check is deposited into another account, we certainly don't mind, because the owner has paid their dues and as long as they do, they have an account in one of our exchanges.  [7/15/19: These cash accounts belong to the members of each exchange not to the business entity each exchange will represent.  Each business always has its own asset cash account, separately from all other business and subject to the rules and laws defining each kind of business entity.  The transaction fees would flow into each exchange's own cash account, not into the member owned cash account each exchange will maintain, with oversight when required by IVES.]

In the developing Valun economy, B Member businesses are the engines of wealth; that which produces income. All these businesses, if they already exist, conduct business in THEIR money, especially the collection of taxes. Any new businesses that decide to conduct the majority of their business in Valuns, will still need to collect whatever taxes apply in THEIR money. 

In the beginning, a business would elect to sell a certain percentage of their inventory or service hours or whatever are the terms of sale, in Valuns. It may be as low as 10% at first. But as the Valun economy takes off, these percentages would naturally rise. 

It will be the responsibility of each business to account for their sales and inventory sold in Valuns and to supply that transaction information to the local exchange. Since the dullest pencil is still sharper than the best memory, pre-printed standard pages might be used. In any case, the transaction details would include the date, the taxes collected and the percentage tax rate. Since all B member businesses within the United States would get a standard 1099, which determines tax liability for Valun transactions in dollars, this would demonstrate that taxes were actually collected. 

We are not anywhere near the place yet, where we can presume that our rents and utilities can be transacted in Valuns, so whatever THEIR money, enough has to be brought in to cover these overhead expenses, until they can be conducted in Valuns instead. This is where E. C. Riegel's idea of a complementary money takes up the slack. There may be opportunities to produce product or service in excess of the amount of THEIR money available. Should taxes rise or other basic costs continue to rise, and we should all expect that they will, because that's what happens with THEIR money, we would naturally need to bring in more of THEIR money to settle these things. But more and more transactions can and would be conducted in Valuns, because among other things, prices in Valuns would remain more stable over the long run and are not impacted by the usual sources of inflation. 

As an example, if anyone wants to suppose that in order to support say the price of a pound of butter at V1 (one Valun), then places more distant from the supply might pay slightly more and those closer less, but eventually word gets around; a particular place has a greater need for butter than another, etc. and prices find their places. We all recognize that those willing to buy more of anything usually get a discount. So whatever terms any business decides, and can satisfy, is strictly a local and private affair. No outside planners or commodities speculators are required and in fact are discouraged, because we simply wont have the financing available for those activities. So yes, there will be realistic limits to production for each business, based on the very real diminishing returns to scale law as it naturally applies differently to all businesses. 

The structure of a B member account is the three balances are previously described: 

The equity balance 
The income balance 
The escrow balance 

We have already said that the equity balance represents what the organization would be worth in Valuns if it were an asset to be sold to another member, whether that be an A or a B member. Usually those wholly owned material assets that the organization sells along with the business, are given comparable value in Valuns and accumulated and accounted for in this balance. 

Another use of this equity balance is to account for any inventory intended for sale. For instance, if a dairy wants to sell 1,000 pounds of butter at V1 a pound, a transaction of V1,000 is added into this balance, without fee too, because the Valuns don't exist until they are paid/sent into another member account for some good or service. Then, when a sale is made, someone buys ten pounds of butter, the requisite V10 is deducted from the equity balance as the same sum is added to the B member's income balance. 

Let's look a little more closely at this: The inventory of butter is a thousand pounds to be sold for Valuns at V1 per pound. A transaction is made to account for that inventory by adding V1,000 to the dairy's equity balance. The inventory is also probably identified by some symbol that is the same used when completing a sale. When the dairy B member comes in with sales slips and Valuns, the transactions are each constructed to reduce the inventory in the equity balance and increase the income balance by the same amount. Any business may elect to alter their inventory at any time. So some things that might have been offered for sale might be removed from the inventory or their prices changed by the business owner at any time. There would be a prearranged provision to let the B member know when their inventory fell below a certain number. 

We've also already said that any equipment that would be included in this “asset ownership” balance would also be determined in Valuns and may be subject to a Depreciation Allowance Contract or DAC. The same might actually apply to inventories as well since almost all inventories depreciate. 

The only money flows that face taxation are inflows to a businesses income balance. These transactions are listed and a report is supplied, probably quarterly, to each B member business. After all these transactions are acknowledged by the B member, at the end of a tax year, a 1099 (in the US) is provided for the business to settle its taxes. 

Some have asked whether when a business operates in both dollars and Valuns, whether two sets of books are involved or implied. The answer is a resounding NO! A book of entries computed in a complementary currency is always an extension of any businesses existing books. What any business gains through expanding their business or merely shifting percentages of it to trade in Valuns, is still a part of their total business and asset accounting; not another set of phony books to fool the taxman, but an expanded set of the already existing accounting. 

We expect to hear from business owners who have specific ideas that they would like the proposed Valun system to cover. We are encouraged by the number of visits this site continues to get. I have changed my e-mail address and shall change all references to the older address in the next few weeks. 

David Burton