At
the heart of the proposal is how most Valuns are issued. They are
issued based on will (FIAT) as described previously but by far the most will
be backed by work accomplished and take the following form:
→ The employee issues the Valuns to the employer as a loan at 0% interest.
→ The employer pays the employee back his Valuns over a period of successive pay days until the loan is retired.
We refer to this throughout this blog as the “self-financing of labor.” The concept was introduced here, here and here. This is accomplished using a Labor Contract that informs the local exchange what accounting functions to perform, what accounts are affected and when to transact them. Members are rewarded for completing contracts and the information is always available to members only.
Let's begin with something simple; V1,000 over six months. Now this being 16 August, 2017 the exchange for a Valun is $2.73 so V1,000 = $2,730 divided over six pay days would be $455 paid on each pay day. (V1,000 / 6 = V166.67 and V166.67 x $2.73 = $455. QED.)
Oh, and at the end of the fiscal tax year, each A member gets a 1099 (no specified hours are ever required) and in this case the $2,730 (minus transaction fees) would be liable for income taxes. For B member businesses all financial transaction fees are considered expenses of doing business and are deducted from taxable income. The 1099 would be issued as though you worked for the local independent exchange, which because you are a member, you also OWN. This is not a tax dodge. We apologize (not really) for the pernicious nature of the tax code, but that is none of our affair as long as we pay THEM what THEY require … until THEY require it no longer! Understood? This discussion is essentially about the terms of barter expressed in Valuns and its accounting and taxation unfortunately is the cost of living in FORCE by the state. We can't and wont do anything at all about that as it is not really our concern. So, let's go on. In our example,
Jack is the employee and Jill is the employer (LOL!).
Jack using his FIAT to issue money, buys his entire job from Jill for V1,000 for the entire six months of the contract. Jill is obligated to pay Jack back V166.67 each monthly pay day. Here's the accounting:
Labor Contract commences (Jack's first day of work)
V1,000 Jack's issuance balance → Jill's escrow balance
Jack's issuance balance is –V1,000
Jill's escrow balance is V1,000
Everything else is going to be routine, but the beginning of a Labor Contract that results in the issuance of Valuns requires that a few things are clearly understood:
A basic E. C. Riegel concept is that money only springs into being in the act of somebody buying something. So does Jack actually have Valuns in his issuance account? NO! He was allowed to exchange his WILL (his FIAT) for work (defined as we consistently do) expressed in Valuns. So Valuns do not exist as money until they appear in Jill's escrow account. Jill got those from Jack to buy his job to be paid off in hours worked at whatever rate they agreed to; it could be a job requiring whatever hours and when the two of them agree to. The schedule might be ad hoc or subject to change. It would always be accorded the same as someone working as an independent contractor for another, what a 1099 represents. The hours worked could be as ridiculously little as only 3 hours total work out of Jack's time over six months and that would be a ridiculous amount of pay at the equivalent of $910 an hour. Plus taxes have to be paid in THEIR money, so any considerations are limited by that fact of life. There are a few others too. After all, why couldn't Jack just as well buy himself a V10,000 job payable over six months? There are limiting factors to consider as we shall examine further.
Secondly, there really is a negative balance of -V1,000 in Jack's issuance balance. It wont remain there, but for the sake of clear accounting, it is made to look that way until offsetting transactions are made as indicated.
1st Pay Day
Jack's income balance ← V166.67 Jill's escrow balance.
Jack's income balance → V1.67 Exchange transaction fee.
Jack's issuance balance is –V833.33
Jill's escrow balance is V833.33
2nd Pay Day
Jack's income balance ← V166.67 Jill's escrow balance.
Jack's issuance balance ← V166.67 Exchange credit offset.
Jack's income balance → V1.67 Exchange transaction fee.
Jack's issuance balance is –V666.66
Jill's escrow balance is V666.66
3rd Pay Day
Jack's income balance ← V166.67 Jill's escrow balance.
Jack's issuance balance ← V166.67 Exchange credit offset.
Jack's income balance → V1.67 Exchange transaction fee.
Jack's issuance balance is –V499.99
Jill's escrow balance is V499.99
4th Pay Day
Jack's income balance ← V166.67 Jill's escrow balance.
Jack's issuance balance ← V166.67 Exchange credit offset.
Jack's income balance → V1.67 Exchange transaction fee
Jack's issuance balance is –V333.32
Jill's escrow balance is V333.32
5th Pay Day
Jack's income balance ← V166.67 Jill's escrow balance.
Jack's issuance balance ← V166.67 Exchange credit offset.
Jack's income balance → V1.67 Exchange transaction fee
Jack's issuance balance is –V166.65
Jill's escrow balance is V166.65
6th Pay Day
Jack's income balance ← V166.67 Jill's escrow balance.
Jack's issuance balance ← V166.67 Exchange credit offset.
Jack's income balance → V1.67 Exchange transaction fee
Jack's issuance balance is V00.02
Jill's escrow balance is -V00.02
Now over the terms of the contract, Jack has received V166.67 every month for the past six months for a grand total of V1,000.02, the 2 cend rounding error is corrected by returning Jack's 2 cends to Jill.
Jack's issuance balance → V00.02 Jill's escrow balance.
Jack's issuance balance is V0.00
Jill's escrow balance is V0.00
This rounding error clearing transaction carries no fee and closes (retires) the contract. Both Jack and Jill get credit for completing a contract. The more contracts you complete the higher your credit worthiness rating within the system. This data set is free to all members only. All such contracts can be renewable, if that is the intention of both employer and employee and different terms can be arrived at for each successive contract.
The summary of all credit offsets in an exchange determines how many Valuns are actually issued using Labor Contracts in that exchange (Ooh boy! I can see all the commodity speculators out there rubbing their hands together with savage glee!) and these are to be open data sets that will be made available to all local exchange members only.
We will not stand for or tolerate any outside speculating on the future value of Valuns or any debt instrument denominated in Valuns as a Valun will always exchange for all other money to be reduced to silver or gold, for what we say it is on the dates of contracts based on the present value of the initial transaction that established the Valun. If you feel like speculating of this kind, try arbitrage or perhaps betting on the future delivery prices of lots of gold and silver bullion.
Notice also that a total of V10.02 in transaction fees ($27.35 at 8/15/17) were subtracted from Jack's total remuneration of V1,000 for a net gain for Jack of V989.98 or at today's exchange rate of $2.73 or a comparable total of $2,702.65 net gain for Jack. This would also be the sum reported on the 1099 Jack will get at the end of the year. Taxes are a fact of life and we live under THEIR laws and law is FORCE. Understood?
Now Jack caused the Valuns to be issued and was repaid with his own money. Being paid with your own money is the means of issuing new money into the system and makes sure that from here on out, no one is ever bought entirely by THEIR money. We also intend to make it much more attractive and remunerative to get out there and work for less of THEIR money and more of your own.
OK, students! We've shown you how most of the money in our proposed alternative monetary system enters the system. So how does money leave any monetary system? How specifically is money destroyed? What incidentally is the actual reason most inflation doesn't grow to Weimar meltdown (or Venezuelan) proportions?
Anytime you bought something you can't sell back to someone for what you paid for it, money is lost and gone forever. This right here should prove the “hard money” or “sound money” crowd a bunch of knave lunatics who can't understand a simple fact of life; without replenishment, all money eventually disappears. What this means for repayment of debt instruments can be catastrophic. But the econometric crowd still claims all its planning and speculation and hedging are actual work, when they are the equivalent of stealing value (since money can be traded for real things) from the rest of the working society.
So that new thing that loses its resale value, so that it depreciates, causes money to be lost forever. If you can't sell it for what you paid for it, the difference is lost money, never to return, not to you or anyone else within the system. Think about it if you think you disagree or that I might be mistaken. Don't worry, I'm not. Although there are quite a few trying to talk you and everyone around you out of examining the obvious, no, usually your senses and your mental acuity don't fail you. If you bought something for $10 that you can not sell for $5 then $5 clearly went somewhere. Yeah, it's gone. It left the system, never to return. Unless, your item is discovered to have belonged to someone famous. What then? You discovered it for sale at $10 and may reap (from some sucker) perhaps $100 in which case you were able to add value simply by coincidental discovery into the purchase. But come on, incidents of this sort are rare. They don't happen every day, because after all, let's say it was a T shirt. So what, it's still just a T shirt. OK?
So someone buys a new car for $40,000 and as soon as he drives it off the lot, what he paid for it can no longer be recaptured through immediate sale. Even a few days or weeks later for a car could be several thousand dollars lost value in future sales revenue. So maybe after the car has been used for a year or so, it is sold to someone else for $36,000. What happened to the difference; the $4,000 between the price as new and price as used? It went nowhere but remained in the car, in depreciated value never to return.
Multiply these situations for everything you can think of that needs to last and have a useful life measured in months or years. Then consider these cases by the millions and you see that whatever the beginning of any product flow happens to be, if the market is to remain healthy, not only must depreciation be allowed to run its course, as the same car might change hands half a dozen times from brand new to ready to be scrapped, but some new cars need to be produced and sold into the market at the top end to provide benefit not just to those who can afford to buy brand new cars, but for those a few years hence that will need cars but can't afford to buy brand new ones. Depreciation of assets is where money is irretrievably lost with each and every transaction from brand new all the way down to the scarp yard stage.
Now, there might be some instances where things having little or no sales value could be restored, repurposed, etc. and gain trade value. But that doesn't mean all resources are similarly situated. Not all old value can be repurposed or turned into something that will sell for more than it would have prior to adding value to it in terms of useful performance or features.
Some machines are of this kind, some materials that were previously used may be in this category, but generally speaking, there are various grades of dry goods and staple products, which are priced based on newness, freshness, etc.
Anything used is usually incapable of being sold for the same as something brand new. So continual inflows of money are an absolute requirement for healthy economies and basically it boils down to working for your living rather than accepting that some state or some “public” stock corporation is going to provide a living for you.
Now, this “self-financing of labor” component to our proposal has tremendous accounting implications for all business. Since labor does not have to be paid for by the employer, the enterprise is free to devote scarce monetary resources to where they can make the most difference in the materials and design elements of the products or services offered to achieve sales revenue – income; proof of wealth.
For members having jobs for which they want to be paid in additional Valuns, we do not anticipate that remuneration in “public” money would be reduced, but then again, that has always been and is THEIR stated intention anyway, except for THEM of course, since they live by capitalism (the making of money on money without work). But the obvious consequences of this key component of the proposal catching on would probably result in lower wages in THEIR money anyway, and believe me, we're actually fine with that, because it will hasten the overturn of THEIR rotten system more quickly.
What happens when economies grow and whatever money forms the basic unit of trade in that economy, the energy of all economies, actually circulates among the most people where it naturally belongs? Generally living conditions improve, people grow to be healthier, stronger, happier, etc. and populations tend to stabilize as well. This has absolutely nothing to do with whatever pet political ideology one may have bought into. It should likewise be pretty neutral with reference to any theological or religious convictions.
Our proposal defeats usury, and monetary speculation, by setting our initial transaction as
1 oz Au bullion = $2,160 / 1,000 = V1 = $2.16 on
11/2/2011
This is the basic unit of purchasing power for all of our money, expressed in day to day exchanges as the present value of that unchanging transaction; something that doesn't change; literally we expect prices stated in Valuns to become more stable than in any other money and resistant to price inflation and therefore more capable of determining actual indexes of supply and demand from region to region, place to place, etc. than any of THEIR money including precious metals.
See, we do not require speculation on commodities at all to determine their future value for some huge range of customers which enables those who know the tricks to make money on money without doing any actual work; none of what they do contributes to any product or service and their expense to contract business with are usually combined with the excessive overhead and waste that natural economic redundancy and smaller scale for all enterprise would immediate resolve.
Now Jill has from the start of this contract with Jack V1,000 sitting in her escrow account. What are the limiting factors that might prevent Jack from buying a V10,000 job from Jill or a V20,000 job?
We have these 80% rules. Jill is operating this contract through her A member account, which she is capable of doing as long as the escrow balance is never more than 80% of the combined totals of Jill's income balance and issuance balance. So if Jill has only the minimum V200 in her issuance balance, she would need a total of V1,250, so she'd need at least V1,050 in her income balance.
That's no problem for Jill, because she already has a job and has a labor contract of her own earning Valuns with her employer who happens to be a government service organization. Wait! What? No governments are allowed membership, right? Right. But Jill has a job that at least 2 sponsors thought required that she be allowed to earn additional money for her work in Valuns and at the time she contracts with Jack, she has at least V1,050 in her income account.
Now a statement about Jill's work. If you are a government employee of any kind and you are sponsored by two members and you fit all the rest of the requirements, then the Labor Contract you fall under is between you and the Valun exchange community itself, rather than the actual government agency. As long as you fulfill your obligations to do your work and you are paid on a regular basis, the exchange will allow you to receive Valuns for your work along with “public” money, so that you are paid what you want rather than what little THEY deem worthy to give you. The Valuns will be yours, issued by you to the exchange which holds the contract and pays you back your Valuns. The exchange will set up a dummy account representing the government job to handle all these transactions. Notice please that all of the Valuns that enter the Valun exchange network (the market where Valuns are used) this way are backed explicitly by the labor that brought about their issuance.
But where's the 80% rule? It's really simple, you take your take home pay in “public” money and convert it to Valuns and then take up to 80% of that and that is the amount of Valuns we'll allow you based on your “public” money salary. You could give yourself up to an 80% raise if you were willing to bear the extra taxes in “public” money of course. Taxes being what they are and Valuns not being promised tax exemption (I would hardly expect that ever to be possible under existing tax laws), the number of Valuns that you decide to earn alongside your present remuneration is up to you.
We are particularly interested in getting as many members of law enforcement and the military and veterans as members, because these are the men and women that our society has so used and misused the most and they perhaps more than anyone else, deserve our help as we deserve theirs as well. We would handle all parallel earnings in Valuns just as described.
As I said quite a few posts back now, the best strategy imaginable would be to canvas an area for veterans, retired people, police officers and their grandmothers and get them all to participate as founding members of an exchange. We also need to canvas each area to find and enlist all the really significant business leaders in each local community as we intend upholding them against the onslaughts of THEM and THEIR agendas and THEIR money.
Best,
David Burton
dpbmss@mail.com
PS: These days, not everyone has work, you know, what we say it is here, time out of the rest of your life that you get paid for in money to barter for the things that you need and want to sustain your life. And there are many with skills who would like to work if they could get paid to work. But there's no money. It's all been speculated away or depreciated away and because of outsourceing, offshoring, and all the rest, the money stays where the work is, except or unless you are one of THEM in which case, you jolly well claim you are above all law, a “citizen of the world,” etc. while you go about more making money on money without any real work.
And then we also made mention of what some Germans (anyway at some point in the recent past) referred to as die Werke. Now this would be something that one is compelled to do, like a personal calling, a unique gift, something you can't help but want to accomplish, etc. You'd do it whether you got paid or not.
Some know the stories of tremendous works of art or architecture that came into being which were never paid for or inadequately paid for. Patronage, the source of funding, money; that which actually enabled these things to continue and flourish, was necessary or they would not have been produced and perhaps we'd all have been best, the way things are happening nowadays, had we never left the stone age, as a great many seemingly resolve to remain as thoughtless, careless and ignorant as possible, as if somehow doing so, they can't or wont then be blamed for what happens to them; it will all be somebody else's fault.
But Wilhelm Reich was also correct about the fates of the majority and the work that must be done by the minority of those who resolve to make a contribution to positively affect the destinies of those who would benefit from their work. Listen Little Man is a short harsh book and yes everyone should read it. It's almost essential reading, especially these days); die Werke for those who have it to do, drives them on with a force as if called unto from the depths of Nature and of Nature's God as Tom Paine might say. Take a look at all that this website has in it. None of it was paid for by anyone. It was based on a mission, which led to a discovery, which led to the present state of this blog. And yet, as if such a seemingly revolutionary idea couldn't get any traction because people are just too scared, or too dumb or they already have whatever it is they are destined to have or want, etc. etc. So many excuses.
I'm not disheartened. I expected an alternative money would be a hard sell. Anyone who envisions anything like this is taking on tremendous risks. But there are some things one does because one is destined to be the one that does them. Yeah, I'm looking for those who are willing to take this proposal seriously.
Current Hypothetical Value of a Hypothetical Value Unit
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