Saturday, July 13, 2013

#45 Some Questions & Answers

Source: Rethinking our Centralized Monetary System, the case for a system of local currencies, by Lewis D. Solomon ©1996

Q: Why do we need paper money (or money represented as scrips and slugs) rather than just precious metals coins ?

A: Gold and silver (and copper) are commodities whose prices are determined by brokers who operate in far away cities. These brokers have (or claim to have) more gold and silver than anyone else, therefore they “make” the market for gold and silver (and copper) worldwide.

Any monetary system based solely on precious metals is determined by the values arbitrarily chosen by these brokers. Therefore any advocacy of such a system implies an advocacy of the power represented by these brokers, which is the same as that of the bankers; they are the deliberate preselected sides of their monetary dialectic.

The same people control the banks, the markets and the mines. You are cautioned not to think outside their box, therefore accepting their authority (just because they say so), rather than accepting the only authority for anything; the truth. There is no truth in their banking model or the risks they always take with credit to make money on money, uses of leverage, etc. The truth can be known and determined by rational means and will remain the ultimate authority. States, banks and people may come and go, the truth is eternal.

B: Paper notes and coins are objects people easily recognize and know how to use and they require no extra learning. People are NOT used to hoisting around bags of precious metals coins, nor for that matter are most very interested in dealing in a strictly on line currency like bitcoin. Most people have wallets or pocket books and understand how to use notes and coins. Most people also know about checking accounts and how to write checks. People are getting used to swipe cards too, seemingly unaware or rather unconcerned, that every transaction using them is not guaranteed privacy. Of course, people are being conditioned all the time to accept and expect less privacy. It's part of their background agenda to maintain political and economic control.

C: Other forms of money, like checks, will be accepted within the VEN (our own design) as representing money too. A check is certainly easier than depositing a sack of silver or gold coins with a seller for his goods or services. You can also send one through the mails (public or private) to a distant seller as payment. Silver and gold don't fly.

If you think that swipe cards represent money in the 21st century, that checks did so in the 20th, that notes and coins did so in the 18th and 19th, you'd have to go all the way back to the 16th century to see a society that ran on nothing but precious metals coins. And that was the century with the 100% inflation in less than 100 years that no “gold bug” ever dares discuss, as it demolishes their whole concept of stable value based in precious metals. The cause of the inflation? The importation of gold and silver from the New World into Europe. Simple as that. Where did all that gold and silver go? To the bankers, spent by the various monarchs on wars, the usual story, over and over and over again.


D: The next form of money may be an embedded chip. Those without one are forbidden to buy or sell. Think it can't go that far? Take a look at the news (Nigeria is considering it). If you were a slave to the present system, and unless you're among those at the top you are, if you were just as much a slave without using swipe cards, and since you use their cash you are, would you be any less a slave under precious metals? Try getting anyone to pay you for your labour in precious metals for openers. Perhaps they would have in the 16th century, but it would be unusual to see anything like this happening now without a total breakdown in civilization itself, a return to times where life was “nasty, brutish and short.” We are trying to offer the public a realistic alternative from either “chipping” or barbarism. We believe that our proposal is currently the only realistic alternative to be put forward to date.

Q: Why do you advocate veterans and grandmothers with pensions starting fake accounts in your fake money?

A: Because this new machine will require some fuel (potential money) to get it running and we advocate EVERYONE with any kind of pension to begin doing this with other members of their local communities. As for our money being fake, let's take a look at your JEER. First off, the money you hold in your bank accounts, that does not have a physical form, is considered “fake” by every “gold bug” out there. They even consider your government issued “scrips and slugs” fake. They only care for gold and silver and consider these the ultimate measure of value, against which all else is to be assessed for sale.

So it gets down to just “for what” the buyer would be willing to part with their gold and silver. For since these have intrinsic value, they are less likely to be bartered away, unless the buyer is under stress to pay having no other means. Now this may indeed come about, as currencies enter their Weimar meltdowns, but in any case your “public” money is fake!

Ah, but of course people will take your money in exchange, so it works as money, whereas right now mine does not. But someone invented those pieces of paper with those pictures of dead presidents or crowned heads on them for use as money and they were FORCED on people to use by governments. They represent your slavery to them, not to the governments, for they are enslaved as well; oh no, you are slaves to the creditors of the governments and of everyone else in the system. You think gold and silver are different, but the same people have control of the values of those too. Everything about your money is therefore just as arbitrary and “fake” as you claim mine is.

The only difference is, and as it turns out it's a big difference, people are forced and enslaved by the money they use, whereas they can use mine (which would really be their own since they would be issuing it) for free!

Didn't someone say that “you would know the truth and it would make you free?” Yet you hear the phrase all the time that “freedom isn't free,” with the implication imparted that freedom must be struggled for, worked for, died for, etc. Such a phrase wouldn't have a grain of truth to it if there weren't in fact people out there whose mission in life was and is world domination. The idea behind such phrases as “freedom is not free” on the common popular mind is to suggest that someone out there has in mind taking your freedoms away, and they are out there and they do intend taking your freedoms away so they can do you harm. But meanwhile you are hoodwinked into using their forms, their institutions and their money, which enslaves you to their system and their ideas, which includes what they think of you and more importantly what you think of yourself. So, you still think all this is not important?

Q: Oh, but there's so much wrong with that, real money has to represent something of real value, like gold or silver.

A: Really? And how much did that ounce of gold buy last year that it doesn't buy this year? If you expect to use it as money, it has to circulate as money (and it doesn't and it will not unless there is nothing else) and considering what the brokers have done to the prices of these metals, last year's gold would have bought more than this year's, simple as that. You gold bugs out there have a wobbly table to work from, simply because you refuse to see the obvious; that someone else controls the price of your gold and silver and copper too, not you.

Q: But mere paper, you can print as much of it as you want.

A: As a matter of fact we can't. (For one thing we can't afford it, after all we'd have to pay a fortune in their money, to print ours) But even if we could, it would destroy the machine we're attempting to build to replace the old one. As for the present “public” money, most of it isn't even in physical form, it's in electronic records on computers. We attribute inflation in ANY public currency directly and entirely to government spending of unbacked money that they could not back with gold or silver in any case and could not back with taxes adequate to recapture as much as they spend. We brand anyone currently unaware of the direct relationship between a money being “fiat” and “government issued” to be profoundly ignorant of the facts. All fiat money systems fail BECAUSE they are all government issued and for NO OTHER REASON.

If you forced governments back on the gold standard, as they have done in the past under conditions of severe economic depression, you would still have unbacked money, because the government is not a seller of anything anyone willingly wants to buy. 

Public” paper money (and their coins) is what everyone agrees to say it represents in the marketplace (usually limited to only a few countries) for exchange of goods and services large and small. Legal tender laws exist to FORCE people into using their “public” money.

Gold and silver (and copper) are what a few dealers in far away cities say they represent in the market (worldwide) for exchange of these commodities, and in so doing determine the exchange rates among all the other “public” currencies. It can be demonstrated by facts, that a favourable relationship existed for many of the last 20 months between the Japanese yen and euro in trade for gold and silver. In certain situations it would have paid to exchange dollars or renminbi or rubles for yen or euros to buy gold and silver as you'd have gotten a slightly better deal. The more you bought, the better would have been your savings too, since cash is king.

Who buys the most gold? Central banks. We can perhaps see a connection between the need of the banking cabal to keep the Bank of Japan and the ECB flush with gold before the general crash that came about from May onward, which we see as a last ditch attempt to keep the paper stock market up (the bond market, at least three times larger, has already fallen). Ultimately when the mainsprings on the machine finally break, the currencies may swing wildly up or down, gold and silver may do the same. Of course our proposed Value Unit remains where we put it back at 2 November, 2011.

Where the gold bugs see a Weimar meltdown around every corner, it's far more certain that we face deflation perhaps followed by hyperinflation as all the debt is monetized back into the market. When a monetary system fails it behaves wildly at first before it expires, taking any measure of value it may have represented with it. All that's left after the game is over is the gold and silver and whoever has any of it gets to buy up the rest of anything at prices they determine, and then the whole process of huff and puff banking gets going again. Which is why we need a NEW machine, not just a patch up of an old one and why we need to start getting it set up right now while the old machine is still up and running.

The proposed international standard Value Unit has remained just where it was initialized on 2 November, 2011 and measures value, retaining its ability to do so as easily predicted by E. C. Riegel, whereas even silver and gold have fallen in market value, however computed or contrived. The practical result is that the scale of value measurement represented by each of these variants on money has shrunk by up to 30% in some cases, from those of the Value Unit.

Q: But isn't inflation related to how much money is in circulation? Couldn't someone just crank up the printing press and crank out as much of your money as they wanted?

A: Inflation is the result of having more money in circulation than there are products or services available for sale. Inflation usually produces a business boom as it starts, but all the building for business doesn't mean that business will be forthcoming, especially when the consumers are loaned up and are using all the “public” money they can to pay off their debts. After paying off past debts, most are reluctant to assume more debt. These days, the economy is dominated by the corporations and government. Ordinary people do not see much opportunity to earn money from their labour as independent operators, as the markets for that are increasingly licensed, thus pushing entry costs beyond reach of any who would most like to enter the workforce. Small businesses, which used to provide most of the jobs, are being squeezed out.

When it is realized that all this building to do business did not result in more business, there is a bust and the former boom becomes a bubble that has burst. The bankers sit pretty, because win or lose, whatever the government does, by spending more money into circulation daily -to the tune of $40,000 a second, their account books just show current dollars whether they were last year's dollar or today's dollar, which have different purchasing power.

Now we know that there has been a lot of “quantitative easing” going on, but why has inflation remained lower than we believe it should be? (It is actually much higher already than they say it is) Very simple. All this extra money is NOT strictly speaking in circulation. All this money is being syphoned into things the “too big to fails” want paid for. Were it to land in the typical family budget through universal raises in wages, then we'd begin to see the inflation really take off.

You see, it isn't just the government spending money on projects that nobody wants that matters, like some multi-million dollar complex built in some foreign country where we don't belong, that they know will be torn down anyway, it's the holding back of that money or depositing it to the Federal Reserve, etc. to earn interest. This money is not in circulation in any local marketplace, therefore it doesn't contribute to noticeable price inflation, though it could be preventing price deflation, which is the inevitable result of lack of money in circulation. Inflation and deflation are like high and low blood pressure. Eventually either will kill an economy.

Q: So what's to guarantee that your money would circulate?

A: There are no guarantees. But for the record, we have set up something by which all other values could be measured in all matters associated with money and trade. It is exactly the same as establishing an international standard for any other measurement. A Value Unit is not a commodity, nor does it represent any outside measurement based on the price of any commodity at any level or in any market. Once recognized and established, it works exactly as Fahrenheit's thermometer.

But whether it circulates depends on the will of the people. It seems to me that when you offer Value Units for trade for only silver or gold, that sooner or later more wealth accrues in the direction of those using them. But that will depend on the market that is “made” by those capable and willing of providing the finance capital in these same Value Units for real estate and other large capital projects. The more of this activity that gets organized, the more likely it is that this money will circulate. Finance and circulation are directly related issues. It's astounding how many researchers in this field do not understand this.

Q: What comes first?

A: Getting people paid in Value Units comes first: the simple labour contract as proposed is a terrific vehicle for making this happen. After enough time has passed and people have sufficient funds in the new currency and haven't spent them all, they begin to think of ways to make more of them, to extend their yardstick to measure larger and more expensive items. That's where finance begins.

Q: If you're going to issue a paper money, it has to be done by the US Treasury (or whatever comparable government agency in your country).

A: Was that a question? Look on your money as it is. It bears the signatures of the Secretary of the Treasury and the Comptroller of the Currency. That weird Latin phrase on the back of a $1 bill speaks of a New World Order, and that my friends is on the reverse side of the so called great seal of the United States. So, let's say you decide to jettison the Federal Reserve and give the currency issue directly back to Congress. They still do not have any Constitutional authority to issue any paper money, a practise Lincoln began. Lincoln, a lawyer, broke the law, but otherwise there wouldn't have been a “civil” war and things wouldn't have proceeded as they did.

All the organic US Constitution says the government is allowed to do is coin other people's precious metals for use as money. Edwin Vieira Jr. did a superb job establishing that, from a Constitutional law standpoint, a real dollar would be 371.25 grains of silver. That turns out to be 0.7734375 of a troy ounce. Right now, on writing this, spot price for silver is $19.79 and our bid would be $24.74. Today's Bid Price (TBP) = $24.74 and the weight of a Constitutional dollar being less than a troy ounce makes that comparably $19.13. Today's Value Unit Exchange Price (TVEP) is $2.76 (gold and silver have risen in price a little) so that means your Constitutional dollar would fetch 6.93 Value Units on 11 July, 2013. Yes, that's less than the value expressed (measured) by three pieces of our paper (only two if there's a VU 2 note as seems more and more likely).

So anyway, point being, those who ask that the government get into the business of issuing its own paper money directly without interest are asking the government to break the law (the original organic Constitution) and would further subject us to the effects of unbelievably wasteful and preposterous government spending; the idea would of itself do nothing about the problem of inflation.

Q: But I would have to carry around two kinds of cash, it would be annoying.

A: Really? You probably carry around right now various cards that can't be used just anywhere, that are only good at certain places or in certain circumstances. Back in the not so distant past, before the euro, most Europeans carried around money from various nations in their wallets so they'd be able to use them and get around the continent and do business. Some of us remember those days. Nowadays they use cards and if the currency changes, the card company does the exchange and charges those fees to you as well. For every convenience there lies the potential for enslavement. Nevertheless, we are hopeful that some form of swipe card may be developed for the Value Unit. It will seem inevitable that “public” money will come to represent money that is used to “pay unto Caesar that which is Caesar's” while Value Units will be used for everything else.

Q: But don't you have the problem of how to figure and settle taxes? 

A: As a matter of fact, technically we don't, but taxes shall be settled on our terms not theirs. First of all we accept as a given that ANY government anywhere is going to want to tax (to take by FORCE) a portion of our labour, our capital gains, etc. for governments and their minions are “the useless eaters,” not us. Taxing authorities use FORCE to gain what may not even be recoverable and so when they can't lay their hands on cash in their own money, they try and confiscate real property and assets. It will only be a matter of time before the people who work for these universally hated taxing organizations (which are merely appendages of the central banks looking for their 11th marble of uncreated interest) either wake up to their true role as operators against the people and leave working for these universally hated organizations, or they will inevitably become the targets of reprisals if and when civil unrest turns violent. You are receiving your warnings daily, “come out of her, my people” lest you share in her crimes!

We have given people the opportunity to “come out of her, my people” by informing them that the truth will not be silenced forever, that enough people know for a certainty that this and for that matter every other government has been commandeered into serving the long term interests of the banking cabal against the people of every country on earth. These same powers have built the framework for a worldwide governance without gaining any popular consent (the United Nations, World Bank, IMF and all the NGO's are a dictatorship and furthermore, just who are these people who demand that we listen to them, that we do as they say, etc.? What basis in truth rests their authority? It's all based on FORCE not reason.).

Were a measure put before the public asking whether your nation should secede from the United Nations, it would pass by a commanding margin as everyone automatically assumes that the UN, World Bank, IMF, etc. are foreign to the local people and their desires and decisions.

But the question was taxes: Income earned through Value Units is computed back into dollars for the particular tax year and the dollars raised to pay the taxes must come from the only available source to raise dollars (etc.) and to pay taxes; the gold and silver in the accounts of each independent exchange. All the IE member does, after computing his tax, is to advise his local IE that he owes a certain dollar amount to some taxing authority, and the member gives the exchange officer charged with the responsibility for such matters, a withdrawal for tax purposes notice, that allows the comparable amount of Value Units to be retired (to be destroyed) and for comparable gold or silver the IE holds to be sold for dollars (or whatever) with which to pay the taxes. The member usually gets a check from the gold/silver retailer/dealer associated with the IE. Now whether the member takes those dollars (etc.) of “public” money and pays their taxes with it is their responsibility, not that of the VEN or any of its IE's.

Q: Do you see any problems with other laws set up to prevent competition with the national “public” money?

A: Yes, we do. Of course we have the “legal tender” laws, which grants a monopoly to the purveyors of “public” money. These stand against common law as well as the organic Constitution. They are restrictions on the right of contract, which is related to the right to private property, which are inalienable rights. The preponderance of opinion among the peace, liberty and preparedness activists is that these statutes must be challenged and repealed in due course.


But if Federal regulations weren't bad enough, every state has its own set of restrictions on complementary currencies, some more liberal than others. For instance, it grieves me to have to report to any of my readers in Virgina and Arkansas, that due to their states' stringent guidelines, it is unlikely that we would be able to get an IE off the ground in either of these states. These are matters of politics in each state such that if you believe that the Federal governments are corrupt, and they are, then you can just as well assume the state governments are just as corrupt in most instances. Even local governments are prone to corruption, especially these days under the auspices of the United Nations and its Agenda 21. But this is just one more instance of their meddling in things which governments should never have been given power to decide.

In matters of complementary currencies, it turns out in most states that a complementary currency may be issued as paper notes as long as none of them intend to represent values of a current dollar or less. Let's examine what this implies by reference to a quote by F. A. Hayek when describing how an alternative money would gain acceptance:

“an issuer would clearly also have to provide fractional coins, and the availability of convenient fractional coins in that currency might well be an important factor in making it popular. It would also be the habitual use of one sort of fractional coins (especially in slot machines [sic], fares, tips, etc.) which would secure the predominance of one currency in the retail trade of one locality.”

So it turns out that our proposal would pass through far fewer obstacles if we just issued notes, the smallest of which would never fall in value lower than $2.16, rather than a complementary coinage that is prohibited by Federal law and not so far contested, going back to an 1864 Act (during Lincoln's administration). This Act should be repealed, or ousted as unconstitutional, except for those instances in Article 1 Section 8 where the founders IN ERROR AND IGNORANCE gave the powers to coin money to Congress, where it does not belong. They also failed to head Thomas Jefferson's warnings against allowing the Federal government to borrow money, which by the way was the entire reason for the US Constitution to begin with. The Bill of Rights was attached to make the whole package easier to gain ratification.


We'd also like to point out that while commemorative coins in silver and gold with values above $1 are permitted, others circulating or contemplated, made of copper which may trade for under $1 may not be legal. In particular we'll call your attention to this one.


As long as they do not carry the word “dollar” (or some other known “public” currency name) or intend to imitate or compete with “public” money for purposes of fraud; trying to pay taxes with a replica of a dollar rather than an “authorized” dollar, a commemorative coin may be sold for anything more than $1 and even if used in terms of barter, is considered legal. But a 1 oz. copper medallion where the imprint is a copy of another well known American coin, sold for under $1 intended for use in trade, may have all sorts of problems associated with it. To avoid any possible conflict with existing coinage laws, most retailers would be advised not to sell these coins for anything less than $1 and should probably offer them for sale for well over a dollar.

Q: And what by the way would a 1 oz copper coin really be worth?

A: The 1 oz coin is in troy ounces and the spot prices for copper are by the pound (lb), which is 14.583 troy ounces. So if the current price is $3.1522 [12 June, 2013] per lb, each bid price is 25% higher or $3.94 per lb, or each troy oz of copper is 1/12th of that, so $0.33. Now, if you buy one of these medallions at $1, you are paying a 200% premium over bid for a copper medallion that cannot carry any less value in a complementary monetary system than $1 without breaking some law.

Q: So you don't recommend buying them?

A: I do not. It makes far more sense to find someone with genuine pre-1964 American silver coins and buying them for their equivalent quantities at spot, if they'll make you such a deal.

Q: Isn't that like buying old money with new money?

A: That's exactly what it is, and furthermore my father warned me that it would come to this. I'm wondering how many other men of the so called “Greatest generation” told their sons something similar? I expect that many in fact did so. There was the feeling back then, that being able to trade real silver between people was somehow more honourable. However that may be, we regard this regard for real silver and gold tokens of exchange as a superstition. People feel emotionally about a lot of things that don't deserve the energy or effort. Money should really be one of those things people feel relatively nothing about.

Q: So, if the first step is to get more people paid in your money, what's the next step?

A: Getting people to see that the Value Unit does not move against everything it prices for sale at any given time and therefore getting more businesses to use them. The more businesses that use them would discover right away that they have a far more stable means of measuring value than by using any of the inflation prone “public” currencies. Matters of market manipulation and speculation are reduced to what a local consumer base would pay for any item. There may be differences between regions for various kinds of production, but there are anyway under the present system. As indicated in an earlier paper, if speculators want to start a futures market using Value Units, they would have to do so outside the VEN, as we consider their business model nothing short of gambling for profit (making money on money, operating a game of chance) and would not offer them membership. They would have to acquire sufficient Valun cash to operate and since leverage and other gimmicks are part of their game, their abilities to actually produce valid Valuns would make their businesses prohibitively expensive; it would no longer be worth anyone's time or effort to try and concoct schemes to defraud other people of their property based on “fool's paradise” promises of a return based on no effort.

Q: So do you anticipate a “return to Mayberry” scenario playing out in America and elsewhere?

A: I believe to some extent it's inevitable. Furthermore, just taking the United Nations' Agenda 21 as an example, doing exactly the opposite of everything they propose is probably going to save the world. Their choice leads to war and genocide. If the governments get into mass killing of their populations, it's democide. For the average person, it matters to them to acquire basic skills, learning how to hunt, grow food, build and maintain things, etc. These are worthwhile pursuits. People who had in mind getting an education to work for either government or some corporation may be jumping aboard a sinking ship. The future is not to them. Beginning to think in more local terms, of how to provide for yourselves among those who are near-by more than those who one does not know, somewhere around the world, is how to procede. Getting familiar with the real estate around you and how it is used and who owns it, etc. is also a key responsibility someone with the interest must assume. A future paper will focus on refinancing real estate within the VEN. The concepts are simple, it's the details that must be worked through.


The goal of a true monetary system is its success, that it brings about the prosperity of all that use it, as a voluntary and private decision, not sanctioned by some state FORCE. We are describing the building and operation of a machine, a proposal for the ultimate replacement of an aged and corrupt machine. We have to have the hearts of statesmen but the minds of engineers. After all, this is the 21st century.

David Burton
dpbmss@mail.com

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