Deviant Investor: Debt, Dollars, DOW, War, Silver and Shirts

MD: The Deviant Investor is a gold salesman. He will do whatever it takes to make a market for his gold. It is easy to find the delusions in his articles. In fact, he “knows” the truth … he just has too big a stake in the delusion to admit it. He won’t pass my comments through his moderation. That was one of my principal motivations for creating this site. It gives me a chance of mitigating the blocks “all” the Mises Monks throw up against me. If you’re dealing in the truth, you don’t have to block anything. The truth always prevails.

Let’s see what kind of delusions … and propaganda … this article contains. It’s always fun.

Debt, Dollars, DOW, War, Silver and Shirts

Yes, they are connected.

Dollars are created as debt. More dollars in circulation = more debt.

MD: He gets it right. Notice, he hasn’t said dollars are money. They obviously “are” money … but from an “improper” MOE process. They obviously do represent “in-process promises to complete trades over time and space”. And all of them created by government promises are counterfeit … and indistinguishable from all others in circulation. That’s why we have inflation … 4% per year compounding.

More debt means consumption is “pulled forward” from the future so consumption can occur now. This usually ends badly.

MD: Fallacy number 1: A trading promise spanning time and space says nothing about consumption. If I create money to build a house and engage a contractor, I cannot consume that house until the contractor completes it. The contract can be written so I give him a certain amount of money when the contract is agreed to; a certain amount along the way; a certain amount when he delivers the house; a certain amount sometime after that when I confirm he has met the terms of the contract in his delivery … none of which assumes consumption. And it hardly ever ends badly.

But he says consumption “can” occur now. That too does not end badly. Most people buy a house that already exists. They move in and make monthly payments. It is far and away the minority that default on this trading promise spanning time.

Commercial banks and central banks have created trillions of new dollars. Each new dollar devalues every other dollar currently in circulation, in savings, and in pension accounts. Prices rise!

MD: No bank of any kind has “ever” created money. In “all” case, it is a trader who creates the money. The banks have just reserved for themselves the privilege of certifying that money … and the privilege of collecting tribute on that certification … to the tune of 10x the amount of their “so-called” stake in the creation … which after two years is provably zero.

Wars are costly, kill people and produce little. Governments like wars because they create demand for production of war materials.

MD: Governments do not profit from production of war materials … only the money changers do. Governments are instituted by the money changers … not by the people. They “protect” the money changers privileges … first by laws … then by force. They also use this force to expand the money changers privileges … by empire-building wars. The money changers retain hold on the reins at all times All but two of the central banks in the world are controlled by a single family … the Rothschields.

Further, governments are sustained by inflation. “All” taxes collected go directly to the money changers in the form of tribute. Neither governments nor money changers can function without inflation. They need their cherished (1+i)^n to give them a value greater than the 1.00000 a proper MOE process guarantees. They call it the “time value of money”. And they get away with it.

More production means a higher GDP (even if the concept means little). Politicians point to higher GDP and claim it is good. More production creates employment. Everyone wins, unless the bomb fell on you. Unless the drone targeted you. Unless you live on a fixed income and prices continue to rise. Unless you are a soldier and were injured or killed.

MD: GDP is unmeasurable … as is inflation. A “proper” MOE process cares nothing about GDP … and it “guarantees” zero inflation of the exchange media itself … it doesn’t have to measure it.  It cares nothing about employment. It cares nothing about prices but the zero inflation guarantee assures any price changes are strictly associated with the supply/demand balance of the object of the exchange … not the supply/demand of the money itself … which is always perfect at 1.0000.

As dollars are devalued, prices rise for most goods and services. Yes, televisions are less expensive, but have you checked the price of beer, medical care, cigarettes, cars, Whisky, college tuition, food, and 101 other items we need?

MD: Irrelevant to a proper MOE process. Further, a proper MOE media would ideally be in units of HULs (Hours of Unskilled Labor). The value of a HUL has never changed. Today it trades for the same size hole in the ground as it ever did or ever will. And we have all been HULs at one point in our lives, so we can all identify with them and hold them in perpetual perspective. This certainly isn’t true of an ounce of anything.

As dollars are devalued, the price of silver rises. Each dollar buys a smaller piece of silver. Wars burn many dollars, many ounces of silver, and consume other commodities, which rise in price. Demand for silver increases, dollars buy less, and supply increases slowly, if at all. Prices for silver rise because of supply, demand, and devaluation.

MD: Which is a straw man red herring argument when it comes to a “proper” MOE process … and “real” money.

The DOW is higher because each dollar buys less. Central bank “printing” of many extra dollars supports the DOW. Wall Street hype helps also. Regardless of the hype, a good crash occurs every decade or so, and after the crash the stock market rises again. Most people buy high, watch it crash, and sell low. How many people will take profits near the top in this market? BUY SILVER!

MD: When you take measurements with a rubber band … that constantly stretches like our inflating money … or constantly contracts like gold and its foolish copier Bitcoin, you add a degree of freedom that just makes life difficult for traders. But we have always seen this variable added … because it enables the “controllers” to take their pound of flesh from the traders. DI wants that pound of flesh … and so do the money changers. But then again, DI is just a money changer. It just needs to stir the pot.

As prices rise, shirts cost more.

MD: Ok. For what follows, DI is going to describe what to it is “rocket science”. To we here at MD, we know it is just the obvious result of “improper” MOE process practices … and thus irrelevant to a “proper” MOE process. Read it and smirk. Scan down to my next comment if you don’t need a dose of this levity.

Debt, dollars, DOW, war, silver, and shirts are connected. They rise and will continue to rise, two steps higher and one lower, as long as we use debt based fiat dollars.

Examples:

Money supply and debt increase. Look at official national debt since 1913. Can you think of a single reason why it will reverse a century-long exponential trend (debt doubles every 8 to 9 years) and turn lower?

Wars will continue and prices will rise. The helmet for an F-35 will cost $400,000. The price for a World War II P-51 aircraft was $52,000.

Silver prices have increased for 90 years and will continue to increase.

The price for shirts is higher, much higher. Dollar devaluation increases prices.

This dress shirt is currently available from Nordstrom for $175.00

Debt, dollars, DOW, war, silver, and shirts are connected.

MD: Ok, I’ll break back in here. One thing I failed to note was another obvious attribute that a “proper” MOE process cares nothing about … that being the “money supply” … and that being the associated manipulation they call “monetary policy”. Everyone here already knows that nonsense for what it is … irrelevant nonsense. “All” money in circulation (created by traders … not supplied) represents “in-process trading promises”. It doesn’t exist before the trading promise is made nor after delivery is achieved as promised … unless there is defaulting and counterfeiting not mitigated immediately by interest collections of like amount. The “unless” results in INFLATION … and that’s what little Gary is describing. It need not exist. But if he has his way we will have DEFLATION (with his gold-is-money by edict nonsense). And that will strangle trade. You’re not going to part with any of your money today when tomorrow it will trade for much more stuff. Zero is obviously the only right value for inflation … and gold can never deliver that value, let alone perpetually guarantee it.

Option One:

Reduce Federal government expenditures, declare peace, balance the budget, let it crash … and DREAM ON!

MD: Institute a “competitive and proper MOE process” in competition with the current money changer instituted “improper” process … and watch money changers and governments wilt. No dreaming and no legislation required. The process is totally transparent so no regulation is required. The process is totally decentralized and can have any number of participants … just like Mutual Casualty Insurance Companies. The most competitive ones giving the best service to traders prevail.

Option Two:

More of the same. More debt, dollars in circulation, continuing wars, and higher silver prices. Shirts will cost $500 instead of $1.00 in 1934 and $175.00 today.

Option Two – so what?

Taxes increase as dollar devaluation continues. Can you afford higher taxes? Will your income rise enough to meet your increased expenses and higher taxes? Will Social Security and your pension pay you in mini-dollars, or micro-dollars? Can you live on pension payments denominated in micro-dollars?

MD: Did you ever stop to think that 3/4ths of the fruits of your labor already go to taxes … and that of the 1/4th that remains, most goes to money changer tribute and insurance companies.

You retain almost none of the fruits of your labor … right now! It goes like this: You start with things like 8% sales tax; then add federal tax … then state tax … then taxes and fees on things like gasoline and your phone and your beer and the lottery (if you’re stupid enough to play it) and everything else you touch. It is not a difficult exercise at all to see that you pay 50% in these “sort of” overt taxes.

But then look at every product and service you buy. The entity producing it is paying over 50% too … and they’re passing that on to you. So of the 50% you have left after paying your taxes, you’re buying products that have 50% taxes in their price. That takes you to 75% (i.e. 3/4ths).

And remember that 100% of these taxes go to the money changers in the form of tribute (they call it interest). “All” the services you think these taxes are buying are actually coming from INFLATION (a designed in leak which the money changers feign targeted at 2% and deliver at 4%).

That’s what “all” government lives off of … inflation. They make trading promises (create money) just like you and I. But they never deliver. They just roll them over. That is counterfeiting. And all money, defaults or counterfeits, that is not reclaimed by “legitimate interest collections” … not by money changer tribute … causes inflation by the operative relation: INFLATION = DEFAULT – INTEREST.

DI cannot dispute anything I have just presented … so they don’t even try. My comments don’t even make it through their moderation.

CONCLUSIONS:

 

  • Debt, dollars, DOW, war, silver, and shirts are connected.
  • Prices for food, housing, transportation, clothing and most other items will increase. Believe the “low” consumer price inflation myth at your own peril.
  • The future may look like the 1930s – where debt killed. Or, more likely, it will look like the 1970s – continual price increases, stagflation, weak economy, rapidly rising gold and silver prices, and increased global stress.
  • My bet is 1970s inflation and worse. Do you own due diligence but remember dollars will be devalued further and higher prices are inevitable.
  • Do you own enough silver?

MD: If you own any gold and silver and you’re not a jeweler or dentist or electronics manufacturer, you are a fool. And “I” admit to being a fool. I drank the coolade and bought quite a bit of the stuff before I realized the truth. I can’t sell it because it’s doesn’t even trade for the dollars I gave up for it … let alone the dollars I need to cover the inflation. Luckily, I also bought land in a low tax, low services county in Texas, which gives me a sustainable retirement.

What I really hope we achieve is “iterative secession”. But it’s not going to happen in my lifetime … and it’s not going to happen with people like Gary Christenson spreading confusion and delusion like this.

Gary Christenson

The Deviant Investor

More Borrowers Are Defaulting on Their ‘Green’ PACE Loans

MD: Here at Money Delusions we know that money is not a “social tool”. Ithaca Hours and Baltimore BNotes are obvious instances of social money … that just plain doesn’t work. Every attempt to use it as such will be counterproductive. It is unfair to all concerned … especially traders. It enables interlopers to manipulate economies and to favor one class of trader over another.

With that in mind, let’s see what delusions this article contains and observe and predict the impact.

More Borrowers Are Defaulting on Their ‘Green’ PACE Loans

One of America’s fastest-growing loan types was designed to help homeowners make eco-friendly upgrades.

MD: Why would it be so fast growing? Offer these traders zero interest loans in a zero inflation environment and they will love you for it. This is just social manipulation through money … money “creation” in this instance. It is banished from any proper MOE process … through plain old common sense. We have to say “old” because there doesn’t seem to be any common sense in these newer times.

Property Assessed Clean Energy, or PACE, loans are issued by private companies, but the balances are attached to homeowners’ property tax bills.
Property Assessed Clean Energy, or PACE, loans are issued by private companies, but the balances are attached to homeowners’ property tax bills.
MD: What does it mean to attach a balance to a property tax bill? Using taxes to manipulate the economy is also a no-no … unfair especially to traders.
Photo: Michael Nagle/Bloomberg News

Loan defaults in a popular program meant to finance energy-saving home upgrades have increased substantially, despite lenders’ claims that few borrowers have missed payments.

MD: If money creators … i.e. traders making trading promises spanning time and space (and borrowing is just the money changer term to mischaracterize what is really going on) are not missing payments, they are obviously “not” defaulting!

The small, high-interest-rate loans were made as part of the Property Assessed Clean Energy program, or PACE, a nationwide initiative designed to help people afford solar panels, energy-efficient air-conditioners and other “green” appliances. PACE loans are among the fastest-growing types of loans in the U.S.

MD: Small loans? High interest loans? What’s up with that!!! In these overwhelming corrupt times, it appears traders will do virtually anything to escape the money creation controls of the money changers … even when they play right into the money changers hands as described here.

Private lenders in the PACE program have told Wall Street investors, as well as local and federal government officials, that borrower defaults are rare and that no homeowners have gone into foreclosure as a result of the program, according to investors and public officials.

MD: They write … in direct conflict with the title of their article?

But a Wall Street Journal analysis of tax data in 40 counties in California—by far the biggest market for PACE loans—shows that defaults have jumped over the last year. Roughly 1,100 borrowers have missed two consecutive payments this year through the tax year that ended June 30, compared with 245 over the previous year. That means they are in default, and could potentially have their homes auctioned off by local governments within five years.

MD: That says nothing if the number of traders involved has increased four-fold as well. In all their wisdom, have they increased interest collections accordingly to recover these defaulted trading promises?

The lenders, including Renovate America Inc., Ygrene Energy Fund and Renew Financial Inc., say the overall default rate of less than 2% provided by the Journal’s analysis is in line with the average percentage of people who miss property-tax payments.

MD: 2% of what?

A spokeswoman for Renovate America said the partial data gathered by the Journal is more negative than what the company is seeing.

MD: “The company” should be seeing instances of defaults instantly. And with a proper MOE process they would be making immediate interest collections of like amount from new traders with a similar propensity to default. It has a negative feedback, self stabilizing, bubble containing effect.

Rocco Fabiano, the chief executive of Ygrene, said in a statement that “Ygrene’s PACE delinquency rate remains far below that of average property tax delinquencies in California.” A spokesman for Renew Financial said property owners in its CaliforniaFIRST PACE program “have similar delinquency and default rates as all other property owners.”

MD: So this is a property tax?

In the PACE program, private companies make the loans and the balances are placed on a homeowner’s property tax bill. Local governments are responsible for collecting the payments and, in the event of a default, potentially seizing the home to recoup the loan amount.

MD: Right… government collecting using their unique tools of force (i.e. by taking the trader’s property … and usually turning it over to the money changers for a song). While private companies get the interest … right? Right out of the money changers playbook isn’t it!

The average PACE loan is about $25,000. But unpaid balances get bigger quickly; they accrue additional interest at the rate of 18% annually. Under California law, homes can be auctioned off in a tax sale in up to five years if the homeowners don’t pay the balance.

MD: 18% annual interest? That suggests that over the term of the average trading promise, nearly one in five will fail to make any repayment at all! Money changers? What’s not to love about that? Nothing like raising interest rates to get people to stop being deadbeats. Note, this is imposed on people who have already committed to their trading promise. Not to new ones making new trading promises. This is exactly the wrong way for an MOE process to operate!

“For us to be the heavy hand and make [borrowers] go through the tax sale process is onerous on us,” says Jon Christensen, the tax collector in Riverside County, where 227 PACE borrowers are in default.

MD: Who designed this system? They should be hanged. If we had a proper MOE process, this nonsense wouldn’t even get started … there would be no need for it!

Wall Street is hungry for bonds made from PACE loans. In July, asset managers and pension funds piled into a $205 million deal from the largest PACE lender, Renovate America. It was the company’s 11th securitization since its 2008 founding.

Investors are attracted to the bonds’ relatively high yield of about 4% and the loans’ priority structure. If a borrower defaults, PACE lenders are paid back before mortgage lenders. The deals have received high marks from rating agencies, which have said the program is too new to predict future defaults.

Still, some investors are getting nervous.

“If we can’t get more data, it’s going to limit our ability to take the risk,” says Dave Goodson, the head of securitized products at Voya Financial Inc., noting that monthly updates on the PACE bond deal he has invested in don’t include default rates. Mr. Goodson said he has shared his concern about lack of delinquency data in the PACE program to lenders.

MD: Take what risk? The money changers “never” take a risk.

Indeed, such performance data are hard to come by. It is up to local tax collectors to track default rates. “No one is even collecting all the data,” said John Rao, an attorney with the nonprofit National Consumer Law Center.

MD: Such performance data hard to come by? With a proper MOE process it is totally transparent. Anyone can view it … in real time!

The Journal analyzed data from the California Association of County Treasurers and Tax Collectors, which collected the information from local tax collectors and from counties. The association is advocating state legislation to increase consumer protections in the PACE program.

MD: Boy … talk about checking the barn door months after the horse has left!

The data, which only offer a limited view of overall PACE loan performance, show that the average default rate has climbed to 1.6% from 0.9% last year.

MD: If it is just 1.6%, how do they justify charging 18% interest. In a proper MOE process, interest collections are exactly equal to defaults experienced. They are made by new traders … not existing traders. It is a natural negative feedback system … resisting new traders when existing traders are experiencing problems. Throw the penalty on existing traders and you make their plight worse … plus you don’t restrict new traders that just inflates the bubble. How stupid can they be?

The default rate is lower than the average credit card default rate of roughly 3.5%, and higher than the first mortgage default rate of .6%, according to the S&P Dow Jones Indices.

But the PACE default rate doesn’t capture borrowers whose missed payments are covered by mortgage escrow accounts, which appears to be a common occurrence, according to borrowers, banks, real estate agents and attorneys.

MD: In other words, the instrumentation sucks … by design I’m sure.

Last year, California tax collectors reported that roughly 1.1% of homeowners missed property-tax payments, according to the tax collectors association.

MD: How can they miss property tax-payments when they are required by the government to escrow those payments? It can only be because the money changers are grabbing their tribute first.

Rockdale Principles

MD: For some time it has been obvious to me. If we should be a nation at all … and I think we would be better off if we were not … we should be a nation, not of men, not of laws (40,000+ new ones each year proves that); but of principles.

Turns out my views are not new. I tripped over Rochdale Principles today while researching electric cooperatives. Since and Medium of Exchange process is a cooperative process, lets see what we can learn from what is already known.

Here I annotate what Wikipedia has to say on the subject.

Rochdale Principles

From Wikipedia, the free encyclopedia

The original Toad Lane Store in Rochdale, United Kingdom.

The Rochdale Principles are a set of ideals for the operation of cooperatives. They were first set out in 1844 by the Rochdale Society of Equitable Pioneers in Rochdale, England and have formed the basis for the principles on which co-operatives around the world continue to operate. The implications of the Rochdale Principles are a focus of study in co-operative economics. The original Rochdale Principles were officially adopted by the International Co-operative Alliance (ICA) in 1937 as the Rochdale Principles of Co-operation. Updated versions of the principles were adopted by the ICA in 1966 as the Co-operative Principles and in 1995 as part of the Statement on the Co-operative Identity.[1]

Contents

The Rochdale Principles, according to the 1995 ICA revision, can be summarised as follows.[2]

Voluntary and open membership

The first of the Rochdale Principles states that co-operative societies must have an open and voluntary membership. According to the ICA’s Statement on the Co-operative Identity, “Co-operatives are voluntary organisations, open to all persons able to use their services and willing to accept the responsibilities of membership, without gender, social, racial, political or religious discrimination.”

MD: One might question the wisdom of allowing deadbeats (like governments) to be part of a Medium of Exchange, but a “proper” MOE process automatically excludes them anyway. When a trader is irresponsible, the interest load he must bear on his promises can preclude him from getting his promises certified as money.

This would be the case for “all” governments. They make promises but never deliver. They just roll them over.

Further, it brings up the question: Should any entity except individual traders be allowed to create money? I think not. Further, all traders creating money should be transparently authenticated and uniquely identifiable.

Anti-discrimination

To discriminate socially is to make a distinction between people on the basis of class or category. Examples of social discrimination include racial, religious, sexual, sexual orientation, disability, and ethnic discrimination. To fulfil the first Rochdale Principle, a Co-operative society should not prevent anyone willing to participate from doing so on any of these grounds. However, this does not prohibit the co-operative from setting reasonable and relevant ground rules for membership, such as residing in a specific geographic area or paying a membership fee to join, so long as all persons meeting such criteria are able to participate if they so choose.

MD: Setting ground rules “is” a form of discrimination. Singling out deadbeats and exposing them as such in a proper and transparent MOE process is a necessary method of maintaining the integrity of the process. Most “poor” people would be classified as deadbeats. Hopefully, with a proper MOE process, there would be few reasons (and excuses) for being poor.

If someone is willing to make a trading promise and deliver on it, they should be in no way inhibited from doing so. Further, if they default, they should be able to make up their default over any period of time (money having no time value in a proper process with guaranteed zero inflation) and completely clear their record … again becoming a responsible trader in the eyes of the process.

Motivations and rewards

Given the voluntary nature of co-operatives, members need reasons to participate. Each person’s motivations will be unique and will vary from one co-operative to another, but they will often be a combination of the following:

  • Financial – Some co-operatives are able to provide members with financial benefits.
  • Quality of life – Serving the community through a co-operative because doing service makes one’s own life better is perhaps the most significant motivation for volunteering. Included here would be the benefits people get from being with other people, staying active, and above all having a sense of the value of ourselves in society that may not be as clear in other areas of life.
  • Giving back – Many people have in some way benefited from the work of a co-operative and volunteer to give back.
  • Altruism – Some volunteer for the benefit of others.
  • A sense of duty – Some see participation in community as a responsibility that comes with citizenship. In this case, they may not describe themselves as volunteers.
  • Career experience – Volunteering offers experiences that can add to career prospects.

MD: This is a little too social for me. First, there is no such thing as “altruism”. Everyone, without exception, acts in their own self interest … all the time. Some just have little clue of what their self interest really is or should be. Further, the idea of a “sense of duty” is a con. It’s how you get people to enlist as cannon fodder as the elites play their global “war of worlds” game. Finally, I don’t agree with volunteering. Anyone who delivers a service should be compensated for it … if that service is worth something. A “proper” MOE process with media denominated in HULs (Hours of Unskilled Labor) makes the score keeping accurate, transparent, and fair. Notice that the above enumeration has elements of self interest sprinkled throughout.

Democratic member control

The second of the Rochdale Principles states that co-operative societies must have democratic member control. According to the ICA’s Statement on the Co-operative Identity, “Co-operatives are democratic organizations controlled by their members, who actively participate in setting their policies and making decisions. Men and women serving as elected representatives are accountable to the membership. In primary co-operatives members have equal voting rights (one member, one vote) and co-operatives at other levels are also organised in a democratic manner.”

MD: This doesn’t speak to the issue that democracy doesn’t work with more than 50 people involved. I favor representative control, where representatives are chosen by small groups comprised of no more than 50 people. If those people cannot deal with an issue, their representative is sent to the next lower level to a collection of no more than 50 people to deal with it there. At the layer directly below, 2,500 people are democratically represented (50 groups of 50). With this organization, the entire world’s population can easily be represented with just six layers … two times the current 6+ billion world population.

Member economic participation

Member economic participation is one of the defining features of co-operative societies, and constitutes the third Rochdale Principle in the ICA’s Statement on the Co-operative Identity. According to the ICA, co-operatives are enterprises in which “Members contribute equitably to, and democratically control, the capital of their co-operative.

MD: In reality this is nonsense … and unnecessary. Most people who “use” a MOE process media (money) don’t give a thought to how that money came into existence (though most have actually created money themselves).

At least part of that capital is usually the common property of the co-operative. Members usually receive limited compensation, if any, on capital subscribed as a condition of membership. Members allocate surpluses for any or all of the following purposes: developing their co-operative, possibly by setting up reserves, part of which at least would be indivisible; benefiting members in proportion to their transactions with the co-operative; and supporting other activities approved by the membership.” This principle, in turn, can be broken down into a number of constituent parts.

MD: Setting up of reserves is an actuarial concept. It is an inventory control concept … like safety stock. It’s just a technique … not a principle.

Democratic control

The first part of this principle states that “Members contribute equitably to, and democratically control, the capital of their co-operative. At least part of that capital is usually the common property of the co-operative.” This enshrines democratic control over the co-operative, and how its capital is used.

MD: This is starting to look like social gobledygook.

Limitations on member compensation and appropriate use of surpluses

The second part of the principle deals with how members are compensated for funds invested in a Co-operative, and how surpluses should be used. Unlike for-profit corporations, co-operatives are a form of social enterprise. Given this, there are at least three purposes for which surplus funds can be used, or distributed, by a Co-operative.

  • “Members usually receive limited compensation, if any, on capital subscribed as a condition of membership.”
  • “Developing their co-operative, possibly by setting up reserves, part of which at least would be indivisible;” in other words, the surplus can be reinvested in the co-operative.
  • “Benefiting members in proportion to their transactions with the co-operative;” for example, a Consumers’ Co-operative may decide to pay dividends based on purchases (or a ‘divvi’).
  • “Supporting other activities approved by the membership.”

MD: This again largely doesn’t apply to a proper MOE process. There is nothing to own. It’s not like a mutual insurance company where each insured shares the risk of all the others insured; when CLAIMS = PREMIUMS but money is made on investment income.

Autonomy and independence

The fourth of the Rochdale Principles states that co-operative societies must be autonomous and independent. According to the ICA’s Statement on the Co-operative Identity, “Co-operatives are autonomous, self-help organizations controlled by their members. If they enter into agreements with other organizations, including governments, or raise capital from external sources, they do so on terms that ensure democratic control by their members and maintain their co-operative autonomy.”

MD: There can be any number of “proper” MOE process in existence at any time. They are only proper if they have transparency attributes and controls that make them proper. And thus, as money creators, they are all equal. They are only distinguished by their efficiency. In practice they would all be denominated in units of HULs (Hours of Unskilled Labor).

Education, training, and information

The fifth of the Rochdale Principles states that co-operative societies must provide education and training to their members and the public. According to the ICA’s Statement on the Co-operative Identity, “Co-operatives provide education and training for their members, elected representatives, managers and employees so they can contribute effectively to the development of their co-operatives. They inform the general public – particularly young people and opinion leaders – about the nature and benefits of co-operation.”

MD: No education is needed. Any 3rd grader can easily grasp the concepts of a “proper” MOE process … if they don’t have to unlearn our “improper” MOE process first.

Cooperation among cooperatives

The sixth of the Rochdale Principles states that co-operatives cooperate with each other. According to the ICA’s Statement on the Co-operative Identity, “Co-operatives serve their members most effectively and strengthen the co-operative movement by working together through local, national, regional and international structures.”

MD: The concept of exchange doesn’t exist … it is 1.000 for all instances. But “discrimination” will be among the major tools each instance uses to be competitive. Thus discrimination is not only allowed … it is necessary for efficient and competitive operation.

Concern for community

The seventh of the Rochdale Principles states that co-operative societies must have concern for their communities. According to the ICA’s Statement on the Co-operative Identity, “Co-operatives work for the sustainable development of their communities through policies approved by their members.”

MD: A proper MOE process has no concern for community. It has only concern for perpetually delivering the attributes that defines the process: Transparency, authentication, free creation, mitigation of defaults immediately by like interest collection. That’s it.

It should be noted that “improper” MOE processes like Baltimore Green and Ithaca Hours are clueless when it comes to a “proper” MOE process … as is the Federal Reserve.

What is money?

WHAT IS MONEY?

Definition: Money is an “in-process promise to complete a trade over time and space”

Proof:

Examine trade: (1) Negotiation; (2) Promise to deliver; (3) Delivery.

In simple barter exchange in the “here-and-now”, (2) and (3) happen simultaneously, on the spot. Any exchange of “value for value” (e.g.corn for piglets;  gold or gold backed exchange for other stuff; etc.) is in this category and does not involve money.

Money enables simple barter exchange over time and space. Thus, money is obviously “a promise to deliver”. It can be nothing else. It doesn’t exist before the promise is made nor after delivery is made”.

Money is only created by traders (like you and me buying things over time). It is not created by banks nor the governments they institute. In fact, “all” governments are just traders. But unlike you and me, they never deliver on their trading promises which create money. They just roll them over. And that is DEFAULT. And purposeful DEFAULT is COUNTERFEITING.

Banks sustain themselves on tribute collections (and all your tax payments go to the banks as tribute collections). Governments sustain themselves on counterfeiting. You give them sustenance through the INFLATION their counterfeiting generates.

We have never had a proper Medium of Exchange (MOE) process. But it is trivial to institute one. And anyone, or any group of traders, can create a “proper” MOE process. And multiple processes can co-exist and compete (by minimizing costs).

DESCRIPTION OF A PROPER Medium of Exchange (MOE) PROCESS:

The trader sees clear to make a trade over time and space and chooses to create “money” to effect the trade. For example, you or I choose to trade 360 monthly payments for a house, which we can take possession of and live in now and over the whole term of the promise and beyond.

The trader gets his promise “certified” (now bankers make you come hat-in-hand begging for what they fictitiously call a loan “of their capital” … that’s the scam). “Certification” means the trader’s identity and the terms of his promise are recorded and performance on the promise are transparently displayed to all lookers.

The certificates … first in the form of a simple ledger entry that creates the money and then transfers it to the seller … then circulate as the most common object in “virtually” every simple barter exchange. We know it as money (it may be a ledger entry; coin; or currency … but only one at a time).

The dollars we use everyday come from a “nearly proper” MOE process run by the banks and their “association”, the Federal Reserve. It has a leakage goal (i.e. INFLATION) of 2% and delivers 4% INFLATION on average. It gives its members privilege to create 10x as much money as they have … earning 4%x10 or 40% annual return … doubling “their” money in less than two years. Thus “a capitalist is simply two years”.

“A proper” process monitors performance on the promise (e.g.: did the trader make his monthly payment). If he did, all is well in paradise. If he didn’t, the process “immediately” makes an INTEREST collection of an amount equal to his DEFAULT … reclaiming the money as if he paid it back.  This guarantees perpetual perfect balance of the supply and demand for the money … it guarantees perpetual zero INFLATION.

The operative relation is: INFLATION = DEFAULT – INTEREST = zero.

Who pays the interest? Non-responsible traders do.  An existing well known model is the Mutual Casualty Insurance Company. Here INCOME = PREMIUMS – CLAIMS = zero. The money is made on the investment income and works to reduce premiums actuarially. Another distinction with the money process is that “all” members of the insurance group pay PREMIUMS. With a proper MOE process, responsible traders  (i.e. traders like you and me who never DEFAULT) experience zero INTEREST load over the duration of their promise.

Note: For any given money creating trade, no money exists “before” the trading promise is certified, nor “after” final delivery (delivery returning the money which is then destroyed). And since “all” money is created in this way, “all” money in circulation is an “in-process promise to complete a trade over time and space”.

With a “proper” MOE process, banks are “competed” out of existence. A “proper” MOE process could be instituted right now (unless the governments they institute outlaw it) and banks would have to change or go out of business. And since INFLATION is perpetually zero, the governments “must” sustain themselves only on tax and fee collections. They cannot counterfeit. Irresponsible traders are drummed out of the marketplace.

What could be simpler and more obvious?

What hoax could be larger than that leveled on virtually all of us by the banks and the governments they institute?

Why did WTC7 fall down?