Saturday, April 2, 2016

#74 Why Free Enterprise is the Backing

I have often been asked, “what backs the Valun?” My answer has always been the same; on the obverse side of all Valun monetary “tokens of exchange” either as V-Checks or eventually as Exchange Notes, it will identify which people and where they are that “back” their money.

But “in what” do those people collectively identified “back” their money? Again there can only be one answer; the measurable actions of the people back their money. This “backing” as it relates to the proposal, is usually synonymous with “labour” or in the case of the indigent, their subsistence - yes, their subsistence, their right to issue it, “backs” the money they use to pay for their subsistence. In the proposed Valun based monetary system, those extra Valuns end up in the pockets of the most productive as extra cash and they thereby might even grow rich.

We have also established that we will always take silver and gold in trade for our Valuns (since by law we could not be holding dollars or any other central bank issued currency as that belongs to them) and we would allow their markets to determine what that exchange rate would be. Of course we're talking about where an A member visits their local IE or counter, always on some private property not open to the general public, and there dollars, euros, yen, whatever are exchanged for Valuns. The IE immediately uses the “public” currency proffered in trade and buys gold or silver bullion. No IE can legally hold currencies “on account.”

Just how many Valuns this exchange between their currencies and ours actually amounts to might eventually become a considerable amount of the Valun supply, however these proposed caches of precious metals would never in any sense be “backing” in the sense commonly understood as employed in traditional goldsmith/banker fractional reserve banking models.

We make an appeal to the independent business men and business women, everywhere to come together and decide to make this monetary system a reality, for it is all the members of each local IE that will truly back their own money. But before launching into that, we want to get a few terms clear as they would be understood under the proposed solution: 

We contend that there is a striking difference between free enterprise and capitalism. We intend forthwith to name the differences and make clear the ramifications. It may seem to some that the confusion between the two concepts has been deliberate in order to create the acceptance of one along with the other. Whether that's likely so or not, others than we have made it their business to research these matters in greater historical detail. As with this blog's unique limited concept of wealth, which is bound up with wealth's ability to produce an income, we make certain demands of our minds to accept that capitalism and free enterprise are ultimately not the same and in fact have diametrically opposed interests. To wit, a few definitions:

Wealth = that which is capable of providing an income, a living wage determinable in money, usually measured on a monthly basis. Hence, mere stuff and property by itself does not constitute wealth; a vacant strip mall does not constitute wealth. Hence any political strategy involving merely redistributing stuff accomplishes nothing except the usual destruction of whatever possible wealth might exist. By our limited and quite revealing definition, anytime natural income streams are destroyed by any means, competitive or not, wealth is destroyed.

Wealth may also be built up in many ways besides capital outlay. The facts that one may have remained in business a good long time, during whatever economic conditions, mere survival in business brought one success: this is a kind of built up wealth usually called “good will” that also can be lost causing great harm to the income stream. Therefore the confidence of the community that would patronize a business is part of that business's wealth and that part is called its “good will.” We hope to demonstrate that this “good will” is exactly what we want to showcase on our money, as advertisements for the participating real engines of society and economy, the key privately owned and operated farms and businesses scattered throughout local communities stretching around the world. These businesses, as they may exist, continue to thrive and may grow, right up to their diminishing returns to scale, a very evident and natural economic law that banks, governments and large corporations continually flout to their eventual demise, even as “too big to fails.”

Maybe reasons exist for certain political agitators, down through the centuries, to advocate the redistribution of stuff. But this solution always produces unwarranted confusion and social chaos. Our more limited and precise definition of wealth suffices to accuse the elite (essentially all capitalism) of deliberately destroying wealth as they have destroyed income streams by shifting jobs overseas, etc. Ample evidence exists elsewhere to substantiate this.

Capitalism = an idea ultimately bound up with usury in its many forms, resting on the idea that “idle” money is somehow deserving of, entitled to (this is literally the mother of all entitlements, folks), or allowed its due in terms of “earning” something over time, something that can be succinctly described as any activity where it is possible to make money on money without working for it. Capitalism advertises to “the masses” how to attain the means to a life without effort, where it is usual to be paying for it directly in any barter related to themselves; by encouraging them to engage in exchanges using money usually called “investments,” without any labour being involved, sometimes without very much of anything of intrinsic consequence changing hands. We'll have more to say about this later as we focus on the real intentions of capitalism, which are essentially parasitic

The ultimate way of “fast money” is of course to win it at betting on something and where there is money -cash-, by historical accounts stretching back into antiquity, there is going to be gaming, betting, gambling, speculating, guessing the future prices of things and placing money bets on them, all of it in its many forms. Economists usually condone, explain away, the activities of commodities speculators as instrumental to keeping prices stable. In the mainstream press, whatever explains away making money on money with no real work is always acceptable and even looked upon with some frank sense of awe, because most of society really does not know what they do that entitles them to so many more monetary tokens than even the most hard working rugged individualist entrepreneur, this money being of course instances of claims upon society for real resources, goods and services, etc. Let that sink in real well too. All of that financial stuff involving interest payments, buying and selling instances of debt, taking bets on future prices of things is essentially capitalism, an ism, an insidious disease of every modern economy, not its salvation. By comparison ...   

Free enterprise = an idea about the ultimate and ordinary acts of going into business each day by working at either occasional work or a regular job, however it is that one is performing a certain set of skills in an economy, undertaken as a consciously activated right. The idea includes your right to enter, exit, move sideways, change jobs, do whatever you can and want with your time and talents to provide yourself with an income denominated in money. Doing so by any means proves that your innate wealth was related to the time you spent working on something which brought you money as income that in turn could be exchanged for useful things and services; shelter, food, clothing, etc. - money serving the means to split a barter transaction.

We think at this point it should be obvious just where one is a capitalist and where one is exercising his/her right to free enterprise, which we also rank a human right deserving reasonable consideration right alongside each individual's fundamental right to issue money. 

We would also like to plead for all our potential members to stop trembling within themselves concerning this idea. Money is a human invention. It does not need to be imposed on society under either a monopoly of usurers with all usury's problems, or under a monopoly of precious metals run by most of the same people. It certainly is not the best idea to vest the issuance of money in any government. No, if you want a real solution, sometimes you have to “think outside the box.”

Now, it was suggested in this blog that three people agreeing could set up an independent exchange (IE). We remind our readers that we have successfully settled the matter of two and three party exchanges using money; if you use precious metals, the precious metals dealer was your third party. We also suggested it would take three people to agree to membership in an independent exchange; the new A member and two A member sponsors who are already members. For the moment think of the three people who agree as willing to trade using Valuns. Each time two of the three of them engage in an exchange, the third stands witness. What does this accomplish? It means that the Valun is accepted as a vehicle of exchange as witnessed by a third party.

Extend this three person network to one a hundred times the number. Now you have 300 members and any two of them at any time may engage in a trade using Valuns. In fact, those using V-Checks will not otherwise identify themselves, except that the member who takes them understands that the people that tendered them for a good or service got them from a member or were members themselves. The anonymity aspect of cash was where it was understood that people would like to be able to deal with others using an impersonal tangible instrument.

For our new monetary system there'd have to be an IVES (the proposed International Value or Valun Exchange Society) and this organization would determine the official exchange rate of the Valun and perform other services for all the independent exchanges. Others who have attempted to describe a Valun based organization, referred to a comparable group as a “board of governors.” That's using the same language as present banking institutions and in any case IVES role is as a servant of all, not a “governor” of any. IVES would be a B member of all IE's.

Each exchange is responsible for its own primary oversight. Money is a system that is far more than its visible tokens. It always takes people to operate a monetary system. Therefore a real honest monetary system must represent something essential about all people. Our proposed system does that. The present monetary system clearly does not.

I have heard “so, how do I cash out of my Valuns?” By “cashing out” you think it's because their money has official FORCE to back it up, so you would be cashing out into slavery as well as their bullying. Great, isn't it? You entered life with a real noose around your neck, that somehow you owed your living to some particular others. Who gave them the monopoly on something each of us has a natural right to? Just how it happened is of historical significance and just how some “facts of life” became so well concealed and in plain sight, stands as among the greatest swindles in all human history. But others do a far better job documenting and describing it than we have ever intended to do here. The Peace Revolution series, which starts here should contain more than enough information to convince you of the soundness of an alternative money solution.

So no, you don't cash out of the ultimate cash. Gold and silver reserves that build up whenever anyone wants to exchange some other currency for our money are used to pay taxes and any other legitimate fees they may impose on us. After all, they still have the FORCE to do as they please, right up until the time they don't.

Valuns that would be represented as actual paper cash is still as far away as people refuse to bring it about. It takes many steps to get there from here. First, you must get as many people as you possibly can to acknowledge their true rights as people regardless of where they are. Each of us has certain, as they say, “inalienable” rights, which means they cannot be assumed by anyone else, can't be bought by anything, can't be given away, they can only be taken away by tyrants and people with that “little god” concept inside, polluting their best judgement, making them believe they have the right to order other people around and determine what their lives should conform to as “sustainable” or some other silly word to cover for their bullying and tyranny. Guess what people? They do have that power: they do rule over you only because you gave that power to them. As we said before, all most people everywhere want is their ability to perceive and live under conditions of SANITY and the REASONABLE EXPECTATION of continuing peace. What is the normal response when someone has fooled you and has taken something from you that is essential to your life, participation in which is yours by natural right? What do you do?

The ramifications of capitalism are that there must be something of supposed value for capitalists to trade in, from which any changes in price offer them the opportunity to make money. These are the so called “securities” which are either debt instruments or equity shares of the various “public” corporations. “Public” here means these businesses are all registered at the state level, creatures of the state, supposed to have taxable assets, etc. This feature of capitalism allows those who did not start or even run a business to become its owners. This too is a fundamental difference between capitalism and free enterprise, where one certainly may decide to sell their business and do something else, but under capitalism, where persons who otherwise have no “hands on” experience can by their money alone, end up actually owning the company out from under its original owners. 

The goal of capitalism might best be described as economic monopoly, or at least the setting up of a few monopolies that have this or that primary resource nailed down and in their control. That means they intentionally try and drive their competitors out of business. That means that as their so called definition of wealth concentrates, more income is destroyed, until their regime becomes as grey as full blown communism, all entirely due to the same ignored diminishing returns to scale law.

As capitalism nears its inevitable Waterloo, eh, precipice, there is only free enterprise left or civilization itself really does begin to disappear. We're talking major death rates and devastation here, yes, of “Biblical” proportions, and oh yes, it could easily come to that. At that point, perhaps all is lost, at least for a very very very long time, which is as good as forever ... and anyway there's still Fukushima. 

But what if the people suddenly said, “No, we don't want that as our inevitable future. We're sick of listening to all you morons with no real solutions but peddling more fear, envy, and let's see, all the other deadly sins. We're sick of our DEATH as a solution to THEIR problems!” ???

We know all about that too and others do a better job explaining it, etc. Our job here is to outline a solution so that more and more ordinary people can “come out of her, my people” and have something and somewhere to come out into. To many, it will seem like coming out of the Matrix (the movies) and that may be too much for some people.

One of our biggest problems is that we have been talked into some ways of thinking that extol the rugged individualist above all possible reality. We see this as a deliberate strategy on the part of the elites. It's a filtering process whereby they attract all their natural enemies like fly paper. Oh, we still like the rugged individualist and if we have our way there will be more who are able to live that way. But we notice a trend and we never ignore the reality that nothing appears on TV without someone PAYING for it in THEIR money of course. 

For instance, there are many TV shows trying to get more people to think about what it takes to live in the wild. But this is all either an intentional smokescreen to get people to look away from the real issues; an income, a job, a future improving standard of living, or some idealism intending to further splinter people into factions that want to “live in the wild while civilization collapses” or those who will stay and help the advancing police state.

What's missing from all this is the certainty that most things simply cannot be accomplished without other people's help. We need each other for the basic necessities of life. Frankly, without the curse of the present monetary system, most people would probably starve to death, even though food in various stages of production might be adequate to the people's needs. Whole barter or the trading of something for something without money is something everyone assumes will happen naturally and is beneficial. But it clearly is not. Time is wasted as well as standards of living falling farther behind. We simply can't go back to whole barter and still retain a civilization. 

If you want and value a civilization, one that offers many people the ability to offer their skills and products into the market for those skills and products, then it is customary to communicate these ideas and hopefully they will take root. If someone finds out about something, they usually tell others. Advertising is telling more people about something, Now, when someone acts on the advertising and decides to deal with the business to acquire what's advertised, that too becomes an essential of free enterprise. Free enterprise certainly requires people who are willing to help each other through bartering products for services, services for services or products for products ... and that's where the idea of using something as money comes in, to split barter among people using it.

In dealing with what people need in a community, people network in each local neighbourhood that consists of people who are self employed entrepreneurs who create something to sell or have a service to offer. To participate in the future market in Valuns, advertising would be carried out through local publications of each IE, certainly not ruling out the internet, but there may be other methods devised by then.

There may be no sense in allowing the fun and games whereby money is made on money without working for it. We call that capitalism, and we consider it a social disease like any other ism, because it tends to make society believe that this is a better use of time, skills and resources than actually doing something productive. Even cleaning up a space or a house for “repurposing,” is more economically productive than what any capitalists do.

We have also pointed out that all instances involving borrowing money where the interest was never created are ultimately theft. Usury certainly causes an artificial scarcity in their money supply and makes it impossible ever to clear all the debt out there denominated in their money. Now recall that we said before that money is an instance of debt and represents uncleared barter transactions. What do we say of a monetary system that runs out of tokens before all debts are able to be paid off, especially national debts? Oh, they explained that away because they said not all debts would be paid off at once. Disingenuous at best. Well, what of all the other instances of unsettled barter transactions represented as money that have some nebulous provenance? I think we'd have good reasons for considering the institution itself as parasitic on the economy it supposedly serves.

So at the present moment, we already know that nothing really “backs” any of their money but FORCE. This is one unconscious message we get from that creepy eye on the pyramid on the back of each $1 bill. We also know that choosing some arbitrary precious metal as a new backing for a purposely scarce money, since that's what some morons think constitutes preservation of value when it clearly has always been just the other end of the banker's dialectic; either you get credit in the form of a government fiat BORROWED currency or you get their gold and silver solution where THEIR speculators determine the eventual price, hence “value,” of whatever gold or silver you happen to use in a trade. Your barter under precious metals might be:

You work for some of their money. You buy some gold or silver coins with their money. You bought your precious metals on a certain day at a certain price and certainly your dealer made something on the deal in their money, because no one buys gold and silver at their spot prices. You find someone to exchange your gold or silver coins for items that you bartered your time for. Your barter transaction is closed: you worked a number of hours for whatever you really needed or wanted that your precious metals acquired in the trade. Your precious metals tokens involved the third party of the dealer, and besides him or her, the people in those far away cities running their special markets for precious metals that set the spot prices for these metals in all the other currencies.

To repeat - for any transaction involving precious metals, this metals dealer becomes your third party and that is so for any transaction involving the metals you bought from him, that “real money” you eventually use as money to buy something else. 

At some point in the future you use your precious metals to buy something. Perhaps the person who sells you something will take your metal, perhaps not. If he decides to give you something in trade for your metal, then he probably knows, or guesses, that the price of metal will be going up, otherwise he might not take your metal. 

“Not take our metal?” the gold bug shrieks. Well, rest assured, once we get under way, any IE would take your metal at what they say it's worth on the day of the exchange and give you the equivalent in Valuns. Prices in Valuns may seem lower than you could have expected, but right now V1 = $2.78 (3/31/16) and so the proposed money would be “heavy” by comparison. 1 cend or cento in the Valun system is currently the same as three cents American.

The people behind any precious metals based monetary system, who are many of the same that operate the debt and credit paper finance operations in today's system, believe that since their tokens are made of something durable and rare, that somehow real value in actual trade for other goods or services is preserved. This can easily be proved flat out false to anyone who bought an ounce of gold when it was high (2011) and has ever attempted to get in dollars what they paid for it later. Clearly gold and silver may be worth “some thing,” but other people, not you, always determine what any precious metal will buy.

Precious metals backed money with a certificate circulation of 10 to 1 and greater has been tried before and failed before many times. Such schemes are based on the false idea of fractional reserve lending. If someone takes advantage of someone else simply through a time advantage, does that enable them to get away with what would otherwise be deemed fraud and theft besides? We certainly don't want any of that underhanded double dealing baloney to be perpetuated in a Valun based system. Therefore in the proposal, all finance operations are separate operations (separate businesses) that use the common exchange operations of the independent exchanges, where all the money is in accounts that belong to whoever owns them, not the IE, nor any of these financial businesses. If any of these financial operations fails, the rest of the exchange operations and the money itself is not affected.

The major point of this particular post is to alert and advise those who own independent businesses of any kind of their real position relative to the rest of society, much they likely already know. But first: Are there any of you left? In what professions, occupations, skills offered, do you operate? In what regions of the United States or anywhere else are you?

Wherever you are, you are the “John and Jane Galts;” without your experience, expertise and enterprise, your community would be diminished in some significant way. We are used to hearing lately (over the past 40 or so years, mostly as a message from the United Nations) about living our lives as if the environment itself were doing us a favour merely to live. Even those who still knock themselves out making sure whatever they do is the best humanly possible are surely aware of these cultural counter-currents, all the attempts out there to somehow make you feel guilty for merely existing. Surely there are some who deem themselves worthy to go wherever they want, do whatever they want, spend whatever they want, ask the world for whatever they can pay for etc. Meanwhile there are vast numbers of people waiting to have a life, all because they have no money or are so far in debt without a compensating income, that any movement forward in basic living standards is thwarted.

All that said, let's move closer to this post's message: It was usual in times past for money to be issued by a combinations of merchants. We take the idea of pieces of paper being exchanged for goods being the equivalent of universal coupons, redeemable for any goods for sale by any of these member merchants. We extend this notion to all businesses that would be B members of any IE; that their advertising would appear on the reverse sides of our V-Checks and later of our Exchange Notes. But the money itself would issue from each A member. We trust that it is the case that many if not all the employees of a B member business are A members of the same IE. We further understand that there would be simple one page Labour Contracts between A and B members in such a business and that a certain amount of their goods and services would be surrendered for Valuns.

As we all surely know, all money, whether it be notes, coins, checks, securities or letters of credit denominated in them, must have confidence to use it; if anyone accepts it, they expect there are places they can spend it or they wouldn't accept it and that even goes for pieces of metal made of silver and gold.

It is in everyones' very best interest that more commerce would be settled using the proposed Valuns. The more they are used, the stronger they become. It will be the responsibility of the presumptive International Value (Valun) Exchange Society or IVES to set the exchange rates for all Valuns, and that these rates are regularly reported to all those using them.

Now let's talk for a moment about internal costs:

E. C. Riegel's suggestion was that each time money changed accounts a transaction fee should be charged and that the member initiating the transaction would pay it. Riegel suggested a fee of one tenth of one percent. Let's examine this:

What does it cost to move V100 from my account to yours? One tenth of one percent, or one hundredth of a percent of 100 is .1 or ten cends. V1,000 may be moved for V1 paid to the IE and so on. We really want to make acquisition of V-Checks and eventually Exchange Notes as painless as possible and might consider eliminating the fees to move Valuns in and out of tangible instruments. Now, in an earlier paper we discussed how already existing public law allows us the easiest method to determine an A member's indigence anywhere throughout the United States. So let's take a look at two examples

Example 1: Somewhere in Texas. Your community lies in a state where V2.65 corresponds to a minimum wage and that equals a yearly income of V5,300 = the fees to move V5,300,000!

Example 2: Somewhere in Nebraska. Your community lies in a state where V3.29 corresponds to a minimum wage and that equals a yearly income of V6,580 = the fees to move V6,580,000!

Converting using 2.74 to 1 as it was back on 3/9/16 gives us:

Example 1: Texas - a minimum wage of $7.25 and yearly of $14,516 = the fees to move $14,516,000!

Example 2: Nebraska – a minimum wage of $9 and yearly of $18,000 = the fees to move $18,000,000.

What I'm suggesting here is that it takes real commerce, real work, real products and services, real life, to animate (give life to) a new monetary system. These would have to represent the minimum cash flows through any typical IE to begin to justify the effort.  We have seen many alt/comp money ideas floated on the internet. We just looked at two of them; Ven and CES and the latter was trying to con people into believing that transaction settlement outside of whole barter isn't money.

I'm well aware of the snowing that goes on concerning money in general (all of it THEIRS) and now with alternatives you usually get mostly the same thing, either because in some way or another the proponents have fallen for the typical academic economists frauds or they simply don't know any better. Perhaps it's occurred to you that if it's something complicated, where the intention is to keep you from understanding, then something probably shady and underhanded was afoot and that may be so. We'll let others try and explain why an alternative to the present money is a sound idea. Our intention here was always to present the best idea and eventually those out there that recognized it would do what's required to bring it into being.

I'll repeat it again so more can get it: the proposed Valun is the present value today of a thousandth part of a transaction on 11/02/11 for an ounce of gold bullion at $2,160, that being $2.16. Right now, because they determine what the prices of gold and silver are, in fair trade for a Valun, you'd pay the equivalent of $2.78 (3/31/16).

With all due respect, most people who actually would benefit most (well everyone would benefit) are far too busy working, etc. to bother reading anything posted on some obscure website. So, before long, we'll begin setting up local meetings in our area. After all, if you can get it to work somewhere, you'll probably get it to work everywhere. In any case, what backs a Valun? The people identified on them would back them. That too is a form of advertising.

David Burton
Current Hypothetical Value of a Hypothetical Value Unit

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