## Monday, October 26, 2015

### #64 The Calculation of the Valun

We present an example of how the calculation for the proposed international standard value unit (Valun) is made:

On 10/22/15 the closing spot price for an ounce of gold was \$1,165.65 : our acceptable bid price was as high as \$1,457.06 : the closing spot price for an ounce of silver was \$15.85 : the acceptable bid price for an ounce of silver was as high as \$19.81. We'll call our acceptable bid price of \$1,457.06 the Current Bid Price or CBP.  On the day of Valun inception, 11/2/11, that same amount of gold would have been \$2,160. We'll call this the Inception Bid Price or IBP.

So, all one needs do is divide this CBP by the IBP. One gets a figure which one then multiplies by 1,000 and that's the current number of Valuns one gets for \$2,160

\$1,457 / \$2,160 = 0.674565972 x 1,000 = 674.57   Understood?

This 674.57 indicates that \$2,160 on 10/22/15 buys only 674.57 Valuns compared with 1,000 on the date of inception 11/2/11. This represents a deviation from inception by 33%. Your dollars have lost approximately 33% of their purchasing power against the proposed Valun since its proposed inception on 11/2/11.

What was the thousandth part of \$2,160 on the day of Valun inception? It's \$2.16 and this serves as the lowest point that any proposed Valun would fall in value measured in dollars regardless of how many Valuns are currently issued, which cannot be known -and does not matter- because the numbers of issued Valuns are cancelled as soon as the issuer takes back the Valuns he/she has issued. This is a key element to the “credit clearing” nature of this monetary system. We'll call this the Valun Inception Price or VIP.

So then, the CBP to IBP relationship allows us to get the following figures:

The thousandth part of the CBP is \$1,457.06 / 1,000 or \$1.46 which represents the amount of inception dollars in the current Valun or the portion of the current Valun represented by inception dollars. This does not represent the value of a current Valun. We'll call this the CGP or Current Gold Portion because we based our initial transaction on a particular date in a fungible ounce of gold bullion set equal to 1,000 Valuns. We know that the Initial Gold Portion or IGP would be 1 representing 100%.

The CGP represents the deviation from 100% as the dollar price of gold continues to fall. If it goes over 1 (which it has done briefly during our multi year experiment) the proposal is that the initial inception value be raised to whatever becomes the new high for gold. Should gold go stratospheric, everyone will know that the dollar is finished as viable money. But the Valun would have glided right up there with gold and remain perhaps quite hard compared with any other currencies, should any still exist if that gold apocalypse were to happen. The Valun's inception price would start at \$2.16, but could be raised as gold were to rise to \$4 and \$5 dollars or even higher and what this would do is cause all Valuns anywhere to instantly preserve their purchasing power with the rest of the world.

We do not believe that gold going stratospheric is likely as there is plenty of gold circulating as it is. We do think that should gold become unobtainable in dollars, that such an event would likely collapse the dollar. We do not see any other currency surviving such an event. We seriously doubt the viability of Bitcoin under such a catastrophe as that is a commodity based monetary system the basis of which is entirely wrong as has been long proved throughout recorded history. Our proposal remains, as E. C. Riegel would have wanted it, to be a parallel monetary system to the existing ones. It is hence required to have the proposed Valun make sense in both the precious metals and all the other principal currencies, else no one would have any idea how to price things in Valuns. There are no tricks having to do with commodities at all in any really honest monetary system. The commodity based money systems that we all must live with operate under the basis of wagering, corruption, agendas, commodities monopolies or transport, trafficking in hot items such as human beings, arms, drugs, etc. etc. as well as all the useful purposes for which we all need money.

From a CGP at \$1.46 it can be determined (CGP / IGP : \$1.46/\$2.16) = .67 : 1 - .67 = .33) that a 33% deviation from inception has occurred. The .67 we'll call a CD or Current Deviation and we'll call the 100% at inception the Inception Point or IP.

You also have the IGP of \$2.16 which begins with the IP of 1 for 100% or no deviations from inception. If one divides 1 by \$2.16 one gets .4630 or the relationship between 1 Valun and 1 dollar. \$1 buys less than half a Valun or .46 cends/cento/fen etc. This mirrors the relationship between 1,000 Valuns and the initial \$2,160 to purchase a fungible chunk of one ounce gold bullion on 11/2/11.

For 10/22/15 one divides the CD by the IGP (.67 / 2.16 = 0.3123) and one gets the current value of \$1 in Valuns, down to less than a third of a Valun. \$100 would get you 31.02 Valuns. Consequently one just turns this relationship around and one gets a value of \$2.86 for one Valun on 10/22/15. Two of them would have gone for \$5.73 current value, five for \$14.31, ten for \$28.63, etc.

The following represents a history of comparable variables by year from inception to the present.

11/02/11 *** Valun Inception ***
AU closing spot price: \$1,738.09
AU acceptable bid price: \$2,160.00
AG closing spot price: \$33.79
AG acceptable bid price: \$42.24
AU 1K oz: \$2,160,000.00
1 AU (gold) oz.@\$2,160.00 buys 1,000.00 Valuns (The basis for the entire system, a single transaction on which everything else is based, especially its trading relationships with any other current trading currency and silver and gold, all of which are commodities, whilst the Valun shall never be a commodity, though as affluence among the general public increases and poverty is eliminated, it is likely that the actual number of Valuns in circulation at any time will probably attain a certain regular relationship to world population.  The implication is and always has been that reducing population reduces not only opportunities to attain wealth but wealth itself since all real wealth must provide some suitable income, usually measured by the month.)
1 Valun = \$2.16
1.00 (100% (no deviation at inception -described as the unique Figure 1 by E. C. Riegel)
CGP (Current gold portion of a Valun): \$2.16 (same number as the dollars in each Valun at Valun inception)
\$1 = 0.46296 Valuns
\$100 = 46.30 Valuns
1 AG (silver) oz = 19.55 Valuns: \$42.24 (1 oz Ag) / \$2.16 (V1) = V19.55
1 Putin Crimea Medallion (silver) = 628.67 Valuns (V19.55 x 32.15)
1/2 Valun = \$1.08 (may meet the US and state minimum guidelines for an alternative currency as circulating alternative money - the only circulating forms of Valuns would be checks, the most certified form would be the proposed V-Check which would have an independent exchange specific obverse side and an advertisement for one of the member businesses on the reverse side, these V-Checks obtainable directly through each local independent exchange.  Each V-Check would circulate for no more than 6 months and would upon expiration either be deposited or replaced by then, again all of which may meet present regulations)
1 Valun = \$2.16
2 Valuns = \$4.32
5 Valuns = \$10.80
10 Valuns = \$21.60
20 Valuns = \$43.20
50 Valuns = \$108.00
100 Valuns = \$216.00
500 Valuns = \$1,080.00
1g AU (gold) = 32.15 Valuns

11/01/12 *** 1st year from inception ***
AU closing spot price: \$1,712.60
AU acceptable bid price: \$2,140.75
AG closing spot price: \$32.18
AG acceptable bid price: \$40.23
AU 1K oz: \$2,140,750.00
\$2,160 buys only 991.09 Valuns (an oz of gold buys fewer Valuns than at inception)
1 Valun = \$2.18
Deviation: 1% in favor of Valun
CGP: \$2.14 (note the difference of .02 from inception based on the fall in prices of the precious metals - therefore more precious metals would be acquired to make up for the loss of purchasing power of both dollars and precious metals against the Valun which must be held stable to its initial transaction basis)
\$1 = 0.45884
\$100 = 45.88
1 AG oz (silver) = 18.45 Valuns
1 Putin Crimea Medallion (silver) = 593.17 Valuns
1/2 Valun = \$1.09
1 Valun = \$2.18
2 Valuns = \$4.36
5 Valuns = \$10.90
10 Valuns = \$21.79
20 Valuns = \$43.59
50 Valuns = \$108.96
100 Valuns = \$217.93
500 Valuns = \$1,089.63
1g AU (gold) = 31.59 Valuns

11/01/13 *** 2nd year from inception ***
AU closing spot price: \$1,310.88
AU acceptable bid price: \$1,638.60
AG closing spot price: \$21.86
AG acceptable bid price: \$27.33
AU 1K oz: \$1,638,600.00
1 Valun = \$2.68
Deviation: 24% in favor of Valun
CGP: \$1.64
\$1 = 0.35121 Valuns
\$100 = 35.12 Valuns
1 AG oz = 10.20 Valuns
1 Putin Crimea Medallion = 327.93 Valuns
1/2 Valun = \$1.34
1 Valun = \$2.68
2 Valuns = \$5.36
5 Valuns = \$13.41
10 Valuns = \$26.81
20 Valuns = \$53.63
50 Valuns = \$134.07
100 Valuns = \$268.14
500 Valuns - \$1,340.70
1g AU = 19.65 Valuns

11/03/14 *** 3rd year from inception ***
AU closing spot price: \$1,170.15
AU acceptable bid price: \$1,462.69
AG closing spot price: \$16.12
AG acceptable bid price: \$20.15
AU 1K oz: 1,462,687.50
1 Valun = \$2.86
Deviation: 32% in favor of Valun
CGP: \$1.46
\$1 = 0.31 Valuns
\$100 = 31.35 Valuns
1 AG oz = 7.05 Valuns
1 Putin Crimea Medallion = 226.66 Valuns
1/2 Valun = \$1.43
1 Valun = \$2.86
2 Valuns = \$5.71
5 Valuns = \$14.29
10 Valuns = \$28.57
20 Valuns = \$57.15
50 Valuns = \$142.87
100 Valuns = \$285.73
500 Valuns = \$1,428.66
1g AU = 16.46 Valuns

11/01/15 *** 4th year from inception ***
AU closing spot price: \$1,140.78
AU acceptable bid price: \$1,425.98
AG closing spot price: \$15.53
AG acceptable bid price: \$19.41
AU 1K oz: 1,425,975.00
1 Valun = \$2.89
Deviation: 33% in favor of Valun
CGP: \$1.43
\$1 = 0.31 Valuns
\$100 = 30.56 Valuns
1 AG oz = 6.72 Valuns
1 Putin Crimea Medallion = 216.05 Valuns
1/2 Valun = \$1.45
1 Valun = \$2.89
2 Valuns = \$5.79
5 Valuns = \$14.47
10 Valuns = \$28.94
20 Valuns = \$57.88
50 Valuns = \$144.70
100 Valuns = \$289.40
500 Valuns = \$1,447.01
1g AU = 15.84 Valuns

The near current value of the proposed international standard value unit (Valun) is presented here and is updated from time to time.