#57.15: Perspective - Local Exchanges and 80% rules

Did you know that nothing has gotten done in this world for the past, since forever, without money? Money had many forms as students of money know. In England, the era of the excheckers ended with the fire that destroyed the first Houses of Parliament. The Spartans used strips of stamped leather until they were FORCED to deal in Athenian silver. And so on. The tokens may change, the accounting is where all the money actually resides, which is why we've spent so much time explaining it on this blog.

Nothing got done without someone paying someone else to do things. So in particular at the present moment, it's basic knowledge that Karl Marx and his pal Fred Engles didn't just come up with it and spin it out there freely for “the masses” to grok to and understand “the progressive way.” No, Marx was no natural genius of the type at all. Neither was Engles. Marx was a creature of British intelligence as it was back then, as was Engles. They had come to the cabal's attention through the catastrophic events of 1848, which had been a banker attempt at out and out hegemony over society, later realized in the Third Reich, the USSR, China and to some degree followed today through the EU. 

Marx had an intelligence handler, which means he paid him, who was a good old boy Scotsman, of some minor league nobility. But as anyone would know, who really knows these things, just go back to the 1950s and before that and check the names listed as the boards of directors of most British corporations. For a long time, before the recent foreign influx, the names were predominantly either Jewish or Scottish. These days one sees many more that are of Near Eastern or South Asian origin. My point is that a hungry Scotsman with proper political and financial connections back in the mid nineteenth century could always find pay in “public service” from whence most of the weaponized venom comes from. It did then and it still does.  

Fair warning to ALL academics and their dutiful and brilliant students who reflectively pass along the ideas of their professors, you have all been had! You dutifully accepted the doctrines of the elite paraded about as the answer to poverty and wantonness in this world and you have been always and forever just their willing dupes. “Useful idiots,” they call you behind your backs. Marxism is nothing but weaponized ideology intended to overthrow society and overturn the American Revolution, the Constitution and especially the Bill of Rights. BTW, that makes all Marxists potential enemy combatants.  As well, the international banker imperium decides against any other sensible nationalist moves against them. These days we have the mockingbird mainstream media that fewer pay any attention to whatsoever. Other institutions have fallen sway to THEM. Anything from the UN down into your local communities has money, THEIR money, dangling from unseen chords of influence pandering and other inner circle deceits intended for absolute control. THEY invented the term “stakeholders” a while back to decide whose interests would take prevalence in THEIR scheme of things. There is no reason to trust that any of these people have your best interests at heart. All of that was just to make sure you were among the awake.  So, let us proceed.

What do THEY have that we don't have? MONEY and organization. The ability to organize people to do things for comparatively little money is an amazing thing. But is THEIR vision for your street, your neighborhood, your village or town, your city, your county, state or nation your vision or for that matter does it really have you in mind? Or is this another age old con job of someone with the money getting to dictate all the tricks? You bet it is! That's why we need to get off all the political bandwagons; let THEM do what THEY will do. Meanwhile, we need our own money and we need to organize ourselves sensibly in order to make that happen. 

I had a few conversations over the years with some that might have shown some interest, and they often asked me to describe what a local exchange would be like. Many thought that membership / ownership in a local exchange was sort of like joining a secret society. A secret society? No, a PRIVATE society! Yes!  Different. A members/owners have paid their dues of under $3 per year and they get an account with no one's money in it but their own. There is never going to be any risk placed upon any of it for backing loans, none of that. All of everybody's money is in the accounts! The public display tokens we use are short duration checks against a cash account maintained at the local exchange.  As the number of exchanges grows, we would see many different designs among the circulating V-Checks, all verifiable by the numbers on them, through a master list kept ultimately by IVES and distributed to every local exchange. 

This may seem an old fashioned approach, but we are discussing something that is at a relatively efficient scale of technology and has proved to work everywhere it has existed; paper instruments obey the substance of Gresham's observation, that when it comes to the circulating tokens representing money; the cheaper the token, the more easily it circulates. 

The local exchange is a PRIVATE business catering to PRIVATE members / owners. One can become an A member if one is recommended by two prior A members and is otherwise eligible. The premises for a place like this would best be wherever it is convenient to have offices, but they need not be very large and perhaps, as E. C. Riegel thought, there would be branch offices scattered around. These PRIVATE offices, open to members only, would also post ads for employment and offers to rent Valuns for needful finance handled by the exchange's B member business community. 

A business community implies a bunch of people who live and work in the same area and know one another. Pretty simple. From a business standpoint, the argument runs something like this: many businesses have cost overruns and other unforeseen abundance they cannot sell. This inventory becomes an instant asset capable of redemption in Valuns. A certain percentage of sales is sought. We apply standard accounting principles, the Assets = Liabilities + Capital (from a good old 1938 classic) and begin to construct a parallel and complementary set (NOT separate from the whole of the business's books) computed in Valuns with some indications of tax liabilities in THEIR money along the way. I'm sure there would be many open source software candidates to use for all of this. If it can be run on a laptop with thumb drives and away from the internet, all the better.

The complementary monetary system proposed by this blog means moving away from the internet, moving away from technology for its own sake without considering the surveillance always implied. Some termed it an “Andy from Mayberry” solution. But I was thinking about my fellow men and women, most of average intelligence who can at least count their money when they have it. I was thinking of the millions out there who not only don't want anything to do with computers or the internet, but couldn't properly benefit from contacts in that way at all. No. We must have reason and a place or a few places, where we can come to meet each other that isn't like a bank, but is in its way, more like a club, a place we ourselves would build up and enhance as we wanted. I mentioned a long time ago, that such premises were best situated in privately owned space.  Better if the people exchanges rent from are themselves members.

We have our 80% rules. They are made this way to make certain safeguards simple to grasp. 

Our first rule regards the number of Valuns one may issue if one already has a paying job in THEIR money. Our rule is that no more than 80% of your remuneration in THEIR money can be issued as Valuns by you. If you make $100,000 per year, we only allow you to issue up to $80,000 in Valuns. Right now, with a Valun at $2.54, that's V31,496.06 per year or V2,624.67 per month. Most will be issuing far fewer than that. We all must pay taxes on our income. Would this safeguard be dropped if income taxes went away? Perhaps. It depends on what happens with THEIR money. 

OK, really new concept for all businesses paying employees in Valuns; you don't pay them out of your money. They buy their jobs from you and based on performance, you pay them back using their money. That way everybody freely labors for whoever can afford them, to be explained, and none can ever claim that they were bought by another. This does not mean that the accounting for labor as a factor in costs changes very much at all. It is just applied differently. 

We said above that an employer would have to afford the employees whether he was paying them in his own Valuns or not. Elsewhere we described the procedures and transactions whereby someone buys a job. But how is the employer's job worthiness determined? The employer is faced with the following 80% rule: 

A B member business account has three balances; Equity, Income and Escrow. Equity includes inventories as well as capital assets belonging to the business. We require that the Equity balances contain any capital asset wholly appraised in Valuns not a percentage of some holding in THEIR money. The income balance in Valuns obviously pertains to the business's revenue in Valuns. The Escrow balance pertains to recurring debt obligations including payroll. The second 80% rule is that the Escrow balance can never rise higher than 80% of the other two balances. So if Equity plus income is your 100%, your total debts outflow for the same period can't be more than 80%. Understood? 

In helping B members, we will work ourselves backward through all the businesses we set up and construct for them balances in Valuns that make sense. In no sense are any of these businesses creating Valuns. To begin with they will not have any income in Valuns. E. C. Riegel admitted that a little free credit at the beginning is enough to fire the engine and get the rest running. We will approximate the comparable values in Valuns, set up these business accounts, ask them to buy advertising from us, because we need to cover the costs of printing our V-Checks. We remind them that advertising is a tax deductible expense. 

The other 80% rules apply to financial businesses organized within each local exchange. The people with the most Valuns to issue will be the elderly and retired segments of our population. Their Issuance balance is to be considered a personal estate asset that can be inherited by another A member within the exchange or eventually to another A member in some distant exchange, or divided up among A and B members, whatever the A member decides when he joins up. 

Anyway, these elderly A members with their thousands of Valuns they may issue, can rent their money to a financial business within the exchange and earn a modest income because the financial business will probably be charging more for carrying the debt. 

Example: Stanley is an elderly A member with V46,000 who can easily rent V20,000 to ACE Distributors for 2% per year, figured as simple interest not compounded, but is paid up front as follows: 

ACE Distributors Equity balance 

-V400 to

Stanley's Income balance

Stanley's Issuance balance 

-V20,000 to

ACE Distributors Equity account 

This results in a net gain in assets to ACE of V19,600. It's actually slightly less because ACE pays the exchange one tenth of one percent for moving the V400 from one account to another. That's V .40 or forty cento / fen more. Stanley pays more too as he pays for moving the much larger amount of money to ACE; he pays V20. So at the end of the first transaction to set up this loan: 

Stanley's Issuance balance 

V46,000 – 20,000 = V26,000 -V20 = V25,980

ACE Distribution Equity balance 

We don't know what its balance was before this transaction but it had something because rent for money cannot be paid but from already existing money.

-V400 + V20,000 = V19,600 – V.40 = V19,599.60

[8/10/19: I had to add this so there would be no misunderstanding.  Stanley's Issuance balance contains potential money, not actual money.  All money is issued to buy something.  What is Stanley buying?  He's buying a legitimate passive income opportunity and he's doing it through a credit contract with ACE.  Stanley's money becomes real when it shows up in ACE's account.  You will notice that there is always a contract involved with any Valun issuance.] 

Now here's the deal. A financial business or one having a financial branch handling their business in Valuns may borrow from other members within a community served by the local exchange, but 80% of that money must be loaned back into that community. Only 20% may be sent out of the community in hopes of earning higher rents. Of course all rents must be paid up front using already existing money. No financial business gets to issue any money. We don't determine the percentages for rent because we want the free market to determine these limits and respect various risk considerations. Obviously the riskier the deal the higher the rent will be, but at least with this 80% rule, the money stays active where it was generated. This can have tremendous benefits to every local area regardless of geography or population. 

BTW, at the end of the year contract Stanley has with ACS, he is paid his V20,000 back into his Issuance balance.  ACS must pay the V20 to perform this function which further adds to their finance costs, which means that ACS will of course be charging higher rents than they paid Stanley.  That's how finance must work.  But Stanley gets a little passive income and together with half a dozen or more Stanley's ACS has increased its Equity balance, from which to make loans.

I can imagine the exchanges of the future being like private clubs, perhaps with sports, concert or museum venue attractions associated with them. These places would be PRIVATE and allow people to hold PRIVATE meetings within. We need to form bridges to those areas of society with skills that need to be utilized for the smallest public investment possible. Pay them whatever in THEIR money, but add a percentage in Valuns and let a supplementary economy take root and take off. You are reading this here on the internet, but eventually we may not have it. What then? Will we be plunged back into one of THEIR ready made barbarisms? Or do we start NOW and decide the future looks a lot brighter for ourselves and our posterity if we actually owned the money we use? 

Best 

David Burton

dpbmss@mail.com

PS: I just heard a story about a certain 501c(3) organization that had trouble paying its employees. Yes, we will have A members that work for these kinds of organizations, which cannot be B members. The 80% rule still applies, but even so, consider someone who may be paid $5 per hour for a 40 hour week. That's $200 a week before taxes. Most people in these organization, but not all, are paid using regular wage and job descriptions and are given W2 forms at the end of a tax period. We would allow an additional 80% of their wages in dollars to be paid in Valuns. Using this example that's an additional $160 a week in Valuns. Right now, with a Valun = $2.54 it works out to be V62.99 or V63. Again, an A member begins with at least V200 in their Issuance balance. The V63 is paid into their Income balance and at the end of each tax period, a 1099 is issued to cover this additional income, always reported in THEIR money of course. In many cases the combined remunerations from their employer plus what they issue in Valuns, is going to total so far under the yearly income requirements, that income taxes may not require filing and anything paid in may be subject to remittance to the employee. But we are only considering a local exchange's legal obligations for operating a complementary monetary system in the United States. Essentially though, the more people we can get as members, the better.