#113.10: The Proposal - How It Works - Part 10

On this blog, we have discussed participation by members in the Valun exchange network or VEN; those who presently have regular employment, those who work for a large corporation (even when their organization cannot be a B member) or large private business, a partnership in a professional organization (LLCs which can join as B members), even those who work for governments (none of which may be B members).

But probably by far the majority of most possible B members would be self-employed. Self-employment is the heart and essence of PRIVATE free enterprise, which this blog is really all about. This piece discusses the accounting the proposal requires for the self-employed B member. We reiterate the fact that money is not only the circulation of monetary tokens, whether they be coins, notes, checks or cards. The core of the monetary machine is always the accounting. There is no other proposal for alternatives to THEIR money that considers the importance of the details of the accounting that is the inescapable component to any monetary system.

The self-employed B member is always and foremost an A member and each A member has an A member account. A members get to issue Valuns, B members do not. We have our 80% rule that limits how many Valuns each A member may issue. For those A members with jobs, they are limited to 80% of what they already earn in THEIR money; merely take a look at your pay stub, determine what those dollars, etc. would be in Valuns and further determine what 80% of that would be. But we are really talking about the self-employed A member. What about those starting out in business for the first time? What about those who have successfully operated a business and have been self-employed for many years? That experience would help as we shall see.

Each member account has three balances. We recognize that for many people, dealing with one balance on any of their financial accounts is already enough. We would therefore encourage a spirit of helpfulness among our members; those who understand the intricacies and reasons for our accounting can assist others to get started. So, for A members, the balances are called Issuance, Income and Escrow. For B member businesses, the balances are Equity, Income and Escrow. What do these balances signify and why do we want them? It does relate back to a basic accounting equation:

Assets = Liabilities + Capital

For A members, the Issuance balance is their asset and for the B member, the Equities balance summarizes their assets. Liabilities, debts, particularly of the recurring kind, including all payroll, are the Escrow balance. Income is always revenue and is, under present law, subject to taxation, in THEIR money of course.

Every A member starts with account balances that look like this:

Issuance balance = V200

Income balance = V0

Escrow balance = V0

Every A member is entitled to open as many B member accounts as they can fund. The B member account remains open and viable as long as one or more of the balances has Valuns in it.

So, let's say we have an A member named Cody. Cody has V200 but he wants to start a B member business account. Cody wants to determine how many Valuns he may earn from this business. Cody could begin by funding this B member account with some of his V200, but what else does Cody own that can be valued in Valuns, particularly anything related directly to his intended business?

Let's begin with Cody's education. He has a high school diploma. He doesn't see the need to continue his education at the moment and would in any case rather spend his time building his business. For our purposes, we will determine that a high school diploma is worth something, but of course nobody's education can be sold to anyone else. Cody cannot sell his diploma to anyone else, it is a non-fungible asset. But we will grant Cody the right to value his education at V1,000. As part of his contract for opening his B membership, Cody will list his education and any tools he owns, supplies that he has fully paid for and all inventory waiting to be sold for Valuns.

Cody has a few tools worth $650 and some supplies worth $300 and he doesn't yet have any items for sale. He takes the present value of a Valun, $2.43 as of December 26, 2019 and begins building his Equity balance. $650 = V267.49 and $300 = V123.46. Cody has these four lines in his B membership contract under Equities:

High School Diploma = V1,000

Tools = V267.49

Supplies = V123.46

Equity balance = V1,390.95

Cody opens his B membership with a “doing business as” (a DBA) from his local county clerk, for tax purposes. This DBA allows Cody to open a regular bank account in one of THEIR banks, for tax purposes. It also allows him to open a B member account at his local Valun exchange. This DBA will also come with a name, usually something different from Cody's name. We'll call it Cody's Building Services, since he intends on going for jobs in small scale construction.

Before going forward, Cody can't sell his high school diploma, but he can sell any or all of his tools and supplies. Perhaps someone would offer Cody the opportunity to sell his business. What would be the offering price before he even gets started? In this case, the answer is V390.95 (three hundred ninety Valuns and 95 cend, cento, fen). Of course Cody's regular bank account that came with his DBA would be closed or reopened under the new owners' name(s) and whatever else is required to get a DBA in the names of the new owners including cases where the buyer already has an existing DBA. Of course any buyer would also have to be an A or B member as we aren't concerned with any transfers of property beyond the confines of the Valun exchange network.

There were, are a series of recorded transactions that were executed to build Cody's Equity balance and fund his business. These transactions are all at no charge to Cody because none of the transactions involves transferring Valuns from one account into another.

But as we do for the Equity balance, we also do for his income balance. To begin with we give an estimation of first yearly income in Valuns and that also goes into the contract Cody uses to open his B membership account. Let's say that Cody anticipates bringing in about V200 per month, so that's V2,400 the first year. He may or may not reach that amount. Now his B member balances look like this:

Equity = V1,390.95

Income = V2,400.00 (except that this amount never actually appears on his account. It appears in his contract to open the account under Beginning Est. Income)

Escrow = V0

Now the question, how much does Cody get to earn from his business starting out? Recall our 80% rule that Escrow balances can never get higher than 80% of the sum of the other two balances. That's V3,790.95 x .8 = V3,032.76 or V252.73 per month.

What could drive this figure up or down? Income greater than anticipated or supplies and tools added to his Equity balance. More significantly, what's Cody's liability for income taxes and how does he cover this? That's what that regular account at one of THEIR institutions is for. As Cody contracts for work, he determines what the invoices will show in payment of dollars, etc. as well as Valuns. If Cody decides to charge 25% of what he would charge in Valuns in dollars, he would take the dollars and deposit them in his regular bank account and deposit the Valuns into his B member account. Of course Cody would also be wise never to comingle any dollars from his business into any other regular personal account he might already have with one of THEIR institutions.

As Cody contracts to do business, a straight rule of thumb would be for Cody to consider the value of V100, day in and day out and consider what 25% of this is in dollars. So for a V1,000 contract lasting 4 months would be V250 per month, which is right under his limit of V252.73 per month. But 25% of V1,000 is V250 which right now on 26 December, 2019 is 250 x 2.43 = $607.50. Divided by 4 gives $151.88. So for every month of his V1,000 contract, he must also have $151.88. You see that V1,000 is always at least twice as heavy as dollars and frequently more, so contracts might be considerably less. We're just developing the ideas from examining the possible maximum income from a self-employment situation.

What people require of THEIR monetary system is that it be flexible enough to allow them to operate flexibly within business. Let's consider what Cody might do if he suddenly discovered that he had a particular knack and interest in repairing gardening and landscaping equipment. He begins acquiring equipment that he intends to sell. Eventually certain areas of his space become devoted to that particular activity exclusive of all other activities. Demand for his services becomes such that he already has income generated in dollars, but due to whatever might be happening with THEIR money or just because it's time to break free of THEM as far as possible, Cody decides to open a second B membership account to cover this activity in Valuns.

He goes to his local county clerk and gets a second DBA for tax purposes and opens an account at his local bank for his new business. He calls it Cody's Yard Gear.

On Cody's B membership contract for Cody's Yard Gear, he builds up an Equity balance using the inventory he plans to sell and whatever tools he uses exclusively for this business. He does not monetize his education twice. I'm sure you can all see why this is true. But we may have something like Goodwill that we will include in B member contracts that rewards people for being in business. After a year of being a B member, we may determine some mechanism for determining what the goodwill value of Cody's business might be and that is added to the Equity balance for that business.

Monetizing our members in this way allows a new set of lines of supply and demand to be developed in Valuns. Using these accounting details, new economies to scale can be built alongside those funded by THEM using THEIR money until all that ultimately fails. Starting simple, giving an easy to comprehend example, consider yourself as an asset to yourself and begin to develop ways to monetize yourself within the Valun exchange network. The contents of this paper are probably the most powerful and important part of all the material presented concerning this proposal on this blog to date.

There was a pause in posts to this blog as you can see that the original example featured Valuns at their late December, 2019 exchange rates. The precious metals, which figure in our estimate of the day to day exchange rates for the Valun, have risen in price against the dollar. Should gold rise above our initial bid price of $2,160 an ounce, the Valun's purchasing power goes up, never down and stays up! So if gold reaches a bid of $3,000, the Valun moves from $2.16 to $3 and it will never be lower thereafter. If the price of gold then falls, the Valun will get even heavier. If the price of gold marches relentlessly up, say to $5,000, the Valun goes to $5 and never lower. The kinds of V-Checks one might see under these circumstances might be V1/4, V1/2, V1, V2, V5 and V10. You see folks, the tokens are relative to their usefulness in conducting business, not relative to the intrinsic value of ANY commodity since the Valun measurement is always fixed. The only reason exchange rates would change is because the markets for THEIR money operate that way.

We have told you the truth on this blog and anyone with any common sense can easily verify what we've been teaching; the tokens are as Riegel remarked a matter of superstition, and that superstition was always intended to lend an aura of mystery to money so that its users could continue to be swindled by THEM, the owners of all the money. We've described who THEY are too. This proposal is not about displacing THEM, countering THEM, defying THEM or having further to do with THEM. It is about leaving THEM, embarking on our own independent futures, empowered by our own money. Eventually, there need never be any more war or famine, as long as we are able to build our wealth and measure it using our own money, not just THEIRS.

David Burton

dpbmss@mail.com