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Money Delusions

Dissects deluded views of what money is

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Category: Money Creation

Posted on August 25, 2017June 19, 2022

Wikipedia: Nash – Ideal Money

 MD: It has been suggested that we at MD study Nash’s “ideal money” as an assignment (presumably to see it disproves our case) … by someone who won’t admit what we describe here is indisputable … or even give evidence they have even read the less than 500 words that present the principles of “real” money. As usual the assignment comes from those who resort to just handing out reading assignments … rather than reading our simple 500 words. This one is of particular interest because it claims “ideal money”. The “proper” MOE process described here at MD maintains the only “real” money imaginable … so it “has” to be as ideal as anything out there or proposed to be out there:
  • It is in perpetual free supply;
  • it maintains perpetual perfect supply demand balance of the money itself (zero inflation);
  • it imposes no restraint nor interest load on responsible traders;
  • it is fair in imposing interest loads on irresponsible traders commensurate with their propensity to default;
  • it maintains perpetual perfect transparency of the creation and destruction of the money process itself;
  • it requires no resources (reserves) at all;
  • the cost of its operation is negligable;
  • it is measured using an unvarying scale (the HUL);
  • there is not money to made in operating it (as there is in insurance … i.e. investment income)
  • and its behavior is totally objective and the results easily provable;
There is “nothing” more ideal … so this should be interesting. Nash looks like an egghead … I presume he will think like one too. Expect lots of footnotes.

Ideal money

From Wikipedia, the free encyclopedia
This article contains too many or too-lengthy quotations for an encyclopedic entry. Please help improve the article by editing it to take facts from excessively quoted material and rewrite them as sourced original prose. Consider transferring direct quotations to Wikiquote. (April 2015)

John Forbes Nash, Jr.

Ideal money is a theoretical notion promulgated by John Nash (Nobel Laureate in Economics), to stabilize international currencies. It is a solution to the Triffin dilemma which is generally about the conflict of economic interests between the short-term domestic and long-term international objectives when a currency used in a country is also a world reserve currency in the meantime.

MD: “To stabilize international currencies”? Tilt!!! Real money is an inherently and perfectly stable process. It has the automatic negative feedback mechanism of immediately mopping up defaults with interest collections of like amount. Now, with a statement like that first thing out of the chute, we here at MD know its silly to read further. But we’ve been given the assignment. We trudge on.

“Triffin dilemma”? Conflict of economic interests? A “proper” MOE process has no sensitivities to such things at all. There is no difference between short term and long term. The time value of money is provably 1.0000. When a proper MOE process exists anywhere, there is no such thing as a world reserve currency. “All” monies either come from a proper process or they are competed out of existence in an instant. Thus all moneys exchange at a constant rate … 1.000 if denominated in HULs (Hours of Unskilled Labor). And no “real” money requires “reserves” of any kind whatever!

Contents

  • 1 Introduction
    • 1.1 How does the idea of Ideal Money appear
    • 1.2 Main value standard of ideal money
    • 1.3 Why gold can not be an ideal money
  • 2 Related factors mentioned in Nash’s lecture
    • 2.1 Welfare Economics
    • 2.2 Money, Utility, and Game Theory
    • 2.3 “Keynesians”
  • 3 Asymptotically ideal money
    • 3.1 Main idea
    • 3.2 Currencies may become (asymptotically) ideal money
      • 3.2.1 Euro
  • 4 References
  • 5 External links

Introduction

How does the idea of Ideal Money appear

“Money can be recognized as a technological development comparable to the wheel and of similar antiquity. Among the more recent developments in the technology that facilitates transfers of utility (in the sense of game theory) are systems like those of EZ Pass, by means of which vehicles traversing toll bridges or toll highways can pay their toll fees without stopping for the attention of human personnel manning the toll booths. In this lecture, I present remarks about the history of monetary systems and about issues of comparative quality or merit , along with a specific proposal about how a system or systems of ‘ideal money’might be established and employed.”[1]

MD: He describes a transfer system. The real money process is insensitive to the myriad of transfer systems employed in the money’s circulation. The process itself is only interested in its media’s creation and destruction and prevention of “all” leaks. He talks of a technological development. Exotic transfer systems are not it. There is nothing technical in addition and subtraction. That’s just simple accounting. I’m going to ignore all his noise about history. I’m just going to look for his solution to all the historical failings. We here at MD already know the best … and yet untried solution.

Main value standard of ideal money

Ideal money is working in the theory similar to the gold standard, but it is generally based on a Nonpolitical Value Standard. “A possible nonpolitical basis for a value standard that could be used for money would be a good industrial consumption price index(ICPI) statistic. This statistic could be calculated from the international price of commodities such as copper, silver, tungsten, and so forth that are used in industrial activities.”[1] John Nash said in his lecture.

MD: Tilt!!!   All money is a perception held by two traders at an instant in time. One has money. The other has an object they will trade for money. In the negotiation step (1) of a trade, they decide how much money is involved. In all our illustrations our money will be measured in units of HULs (Hours of Unskilled Labor). A HUL has traded for the same size hole in the ground for all time … and is expected to do so in all future time. There is no “standard” … .political or otherwise. If the trade is made using existing money, the trade is complete  for both traders. Promise to deliver (2) and Delivery (3) happen simultaneously on-the-spot. That trade is done. It has no impact on any other trade in the entire trading environment. It is just between those two traders. While the trade “uses” money, it doesn’t “create” money.

Money is “created” when one trader promises to do the trade over time and space. And we have all done that. We have bought a house, a car, a washing machine, or a steak dinner by creating money and then returning it a little bit at a time. Our trading promise is certified, the person with the house, the car, the washing machine, or the steak gets money (which we created on the spot). We then go about working to return that money and destroy it as we promised to do. If we are responsible traders (i.e. we don’t default), we pay no interest. If we have a propensity to default, we pay interest actuarially based on that weakness.

So Nash need not make this more complicated than it has to be. We can ignore references to anything “political” for example.

Why gold can not be an ideal money

MD: Not only can gold not be “ideal” money. It can’t be money at all. Anyone holding gold is doing just that … holding gold. They’re no more holding money than someone holding a ribeye steak.

The gold does not reach the standard of ideal money, despite its merits. The main problem is because the silver and gold do not have a constant value all the time.

MD: One gold star for Nash. Real money guarantees perpetual perfect balance between supply and demand for the money itself.

“To the undiscerning minds of the mass of men a pound sterling of gold, a silver five-franc piece, or a paper dollar, represents always a definite unit.

MD: So does a pound of ribeye steak. The pound is the unit … what it is a pound of can play no role at all. We choose the HUL as the best candidate for unit. It is related to time, which is unvarying, and what can be delivered in that time … which is relatively unvarying. Who knows how big a hole an ounce of gold traded for 100 years ago? Most don’t even know what it trades for today. But everyone can put a spade in their hand and in one hour make a hole that is one HUL in size. And they can know that their hole, for all intents and purposes, is the same size hole a HUL would have produced 100 or 5,000 years ago. We don’t need to search the Dead Sea Scrolls for proof.

It has not escaped attention, however, that a given amount of money buys much less at one time than another.”[2]

MD: May have to take back Nash’s gold star. A given amount of “real” money will always trade for the same size hole in the ground … always! It may trade for a different size car or different size ribeye steak or a different number of gold ounces … but that’s because of the supply/demand relation of those things themselves. The supply/demand for the money itself is perpetually perfect and plays no role whatever in the pricing.

in other words, people are used to measuring the value of goods by money, but due to some reasons the value of money itself changes, which causes the value of silver or gold changes. We can’t tell the constant value of the metal, and the fixed mind-sets can not easily be changed.

MD: What he says is only true of an “improper” MOE process like that run by the Fed and every other central bank which ever existed. if everyone does the same thing wrong, that is only one thing being done wrong. People thinking in HULs will never have this problem. Thinking in dollars, a HUL was $1.50 when I was one. It is about $8.00 for those who are HULs today. In both cases, it trades for the same size hole in the ground.

Related factors mentioned in Nash’s lecture

Welfare Economics

“A related topic is that of the considerations to be given by society and the national state to ‘social equity’ and the general ‘economic welfare’.

MD: But we at MD know that (welfare) has nothing whatever to do with money. So we should be able to skip this whole topic … but of course we can’t because we’ve been given this study assignment.

Here the key viewpoint is methodological, as we see it. How should society and the state authorities seek to improve economic welfare generally and what should be done at times of abnormal economic difficulties or ‘depression’?

MD: I don’t know and don’t care … as long as they don’t try to do it by manipulating the MOE process.

We can’t go into it all, but we feel that actions which are clearly understandable as designed for the purpose of achieving a ‘social welfare’ result are best.

MD: Best for whom? “real” money is not concerned. People can “use” it to do the things they feel are good. They can even “create” it to do so … as long as they also return and destroy as they promise to do. But they absolutely cannot “counterfeit” it to do the good things they want to do. That results in bad things for others … and a “proper” MOE process cares nothing about good or bad. It just cares about strict adherence to the process, thereby achieving the predicted and desired result … with zero outside meddling.

And in particular, programs of unemployment compensation seem to be comparatively well structured so that they can operate in proportion to the need.”[3]

MD: Unemployment compensation is no different than broken car compensation. If you can’t cover the risk through self insurance, you better be buying insurance. Regardless, that is no concern of a “proper” MOE process. Nash, this is oh so easy! Are you being paid to give these lectures?

Generally, the social welfare is what we always expect to be improved, and if there is really an ideal money, the whole economy would be influenced, including the social welfare.

MD: Why say the ideal money should do it? Why not say the ideal drug should do it. Or the ideal bullet should do it? “Social welfare” is not the business of money. Trading over time and space is the business of money.

Money, Utility, and Game Theory

MD: You gotta love it when they throw in game theory. Can string theory be far behind? How about global warming?

The concept of utility generally appears in the field of economics but it can be connected with the game theory in mathematics. In the game theory of economics, “utility” is a very important and essential factor. In the book (on game theory and economic behavior) written by the mathematician John von Neumann and the economist Oskar Morgenstern, a utility function is proved, which can be used to put the individual’s preference on the interval scale, and the utility is always preferred to be maximized. (More details can be found in Von Neumann–Morgenstern utility theorem.)

MD: And this is the exact same kind of nonsense Mises spends most of his really boring words on. When it comes to money, why traders make the trades they do is completely irrelevant. We see time and time again “buyers remorse”. It can happen in a day. Or it can happen over several years (e.g. in the case of a boat purchase … two days of glee, the day they buy it and the day they sell it … other than that, it’s just a hole in the water into which they throw money). That’s all irrelevant to the subject of money. But we have our assignment to study this nonsense!

In John Nash’s lecture about ideal money, he gave the opinion that we can through observing the changing relationship between the money and the utility transfer to see “how the ‘quality’ of a money standard can strongly affect the areas of the economy involving financing with longer-term credits.

MD: With a “proper” MOE process, quality is in the transparency and the efficacy of the process. The quality of the governor on a diesel engine is more complicated than that … its parts can break. The MOE process is either operating objectively as dictated … or it is not. Only in the former case does it have quality of any kind … and that quality is of the perfect kind.

And also, we can see that money itself is a sort of ‘utility’, using the word in another sense, comparable to supplies of water, electric energy or telecommunications.

MD: Absolute nonsense. It is never proper to think of money “supply”. A proper MOE process has media is perpetual free supply. There is always exactly as much there as is needed … no more … no less. Nash … no gold stars for you!

And then, if we think about it, money may become as comparable to the quality of some ‘public utility’like the supply of electric energy or of water.”[3] The game theory of economics is a good way to check whether the quality of a money is ideal or not.

MD: The way to check the quality of money is by observing its universal acceptance in use … and observing its trait (built in) of perpetual zero inflation of the money itself. The latter will enable and result in the former.

“Keynesians“

“The thinking of J. M. Keynes was actually multidimensional and consequently there are quite different varieties of persons at the present time who follow, in one way or another, some of the thinking of Keynes.

MD: “Multidimensional”? As in wishy washy? … yep … as in wishy washy.

A very famous saying of Keynes was ‘…in the long run we will all be dead…’”[3] Keynesian economics gives the opinion: in the short run, the change in economic output has a strongly relationship with the change in aggregate demand, the output is always affected by the demand.

MD: How about this from us here at MD: In the long run, inflation of real money will be zero; and in the short run inflation of real money will be zero. It’s more true than what Keynes said … some people die before the long run.

And look what they’re talking about: “aggregate demand”. Money doesn’t care about demand. It is in free supply. There is always in circulation the exact amount that is needed … or some trader is creating it as we speak.

If there is an ideal money which can be stable in a very long period, we do not really need to worry about lots of problems in the long run.

MD: Real money is perfectly stable … perpetually … as is a HUL and the size hole it trades for. It never worries about any problems … long run or short. It perpetually mitigates defaults experienced with interest collections of like amount and this is a stabilizing negative feedback loop.

Asymptotically ideal money

MD: OH PLEASE!!!!!

Main idea

Asymptotically ideal money is the currency close to but still not ideal money. In John Nash’s lecture, “Ideal Money and Asymptotically Ideal Money” focused on” the connection between fluctuation in inflation and exchange rates and the perceived long-term value of money”, he mentioned that: “‘Good money’ is money that is expected to maintain its value over time. ‘Bad money’ is expected to lose value over time, as under conditions of inflation.

MD: So money from a “proper” MOE process (i.e. real money) is “good money”. It (the process) guarantees it (the media) will hold its value in HULs over all time everywhere. It cannot be made to do otherwise without violating the process … at which point it is no longer “the process” … it is no longer “real” money.

The policy of inflation targeting, whereby central banks set monetary policy with the objective of stabilizing inflation at a particular rate, leads in the long run to what Nash called ‘asymptotically ideal money’ – currency that, while not achieving perfect stability, becomes more stable over time.”[4] That means if a currency has shown a trend to be more stable,it could become an asymptotically ideal money or even the ideal money in the future.

MD: A “proper” MOE process is subject to no such manipulation. Thus it can only produce “ideal” results. But the results are only ideal for the traders. They are far from ideal for the money changers or the governments they institute for their protection and force in applying their scam. And they are not ideal results for those in the business of finance. Their cherished and worshiped expression (1+i)^n from which they claim the time value of money … well, it always produces 1.000 … i.e. “real” money has zero time value. So those in the scam of finance need to find other work.

Euro

Currencies may become (asymptotically) ideal money

Euro

John Nash mentioned in his lecture that Euro might become an ideal money in the future, because Euro is used in a large range of places and has a good stability.

MD: We here at MD wished they talked to us when they created the Euro. We could have told them exactly how to do it to make it perfect “real” money (for traders that is). But the Euro was created by money changers to gain control over lots of countries at the same time. It is an open scam … and BREXIT is saying, we’re out … we want to run our own scam. Note, the Euro scam, like our own Constitution scam has no buy/sell agreement.

It is the currency used by the Institutions of the European Union and is the official currency of the eurozone which consists of 18 of the 28 member states of the European Union. In general, Euro has a macroeconomic stability, people in Europe owning large amounts of euros are “served by high stability and low inflation.” Moreover, in March 2014, Euro was commented as “an island of stability” by the head of the European Central Bank.[5]

MD: Every one of those individual entities in the European Union could have instituted their own “proper” MOE process. Ideally, they all would have adopted the HUL as the logical choice for unit of measure. If they had done that, all their money would be freely exchanged with a constant exchange rate … that being 1.000. Had they done that, there would have been no reason to “unionize”. And there wouldn’t be a European Central Bank; or 18 central banks; or 28 central banks. there would be “no central banks”. Just certified certifiers with transparent operations employing a “proper” MOE process. What’s not to love about the simple and the obvious?

References

  • “Ideal money”. Southern Economic Journal, 2002, Vol.69(1), pp.4-11 [Peer Reviewed Journal]. July 1, 2002.
  • “Is an Ideal Money Attainable?”. Journal of Political Economy. 1903. JSTOR 1820954. doi:10.1086/250969.
  • “Lecture by John F. Nash Jr. Ideal Money and Asymptotically Ideal Money” (PDF).
  • “Nobel winner Nash critiques economic theory”. April 27, 2005.
  1. “ECB boss Draghi brands euro an ‘island of stability’ despite sluggish growth and high unemployment”.

External links

  • Fordham eNewsroom on Nash’s 2008 lecture
  • Nash Equilibrium
Categories:

  • Monetary economics
Posted on August 16, 2017August 16, 2017

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

Posted on August 16, 2017 by Gary Christenson

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

Posted on August 15, 2017August 15, 2017

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

By

Kirsten Grind

Aug. 15, 2017 5:30 a.m. ET

82 COMMENTS

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.

Posted on August 11, 2017August 15, 2025

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 a 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

  • 1 Current ICA version of co-operative principles
    • 1.1 Voluntary and open membership
      • 1.1.1 Anti-discrimination
      • 1.1.2 Motivations and rewards
    • 1.2 Democratic member control
    • 1.3 Member economic participation
      • 1.3.1 Democratic control
      • 1.3.2 Limitations on member compensation and appropriate use of surpluses
    • 1.4 Autonomy and independence
    • 1.5 Education, training, and information
    • 1.6 Cooperation among cooperatives
    • 1.7 Concern for community

Current ICA version of co-operative principles

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 in no way be 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 processes 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 define 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.

Posted on August 9, 2017August 19, 2025

What role does money play in secession initiatives?

MD: Control of money is a real big deal in all things political. An “uncontrollable” money is therefore anathema to all things political … especially governments. But it is wonderful for traders … like you and me.

As you read this article, consider how it would read if the Catalans were to first institute a competitive “proper” MOE process before attempting secession. Virtually all of the issues this article cites vanish when a “proper” MOE process is in place.

Remember, such a process is immune to political interference. If you want to affect it, you have to use force. And if it’s in general use, you probably can’t come up with that much force. Traders are far more powerful than the populace in general … which is peculiar because traders “are” the populace in general … there are just no borders when it comes to traders.

Catalans Think Twice About Risks of Rupture as Jobs Return

By

Esteban Duarte
August 8, 2017, 11:00 PM CDT August 9, 2017, 6:44 AM CDT
  • Support for independence falls to 35% from 49% in 2013
  • Threats to their interests give separatists pause for thought
Carles PuigdemontPhotographer: Pau Barrena/Bloomberg

Joan Boix has been attending separatist demonstrations in Catalonia for at least five years and he contributes to the campaign for a split from Spain.

But as the regional government in Barcelona girds its supporters for a final push that it hopes will deliver independence, the 62-year-old executive is hesitating. Hardliners talk of setting up a rogue Catalan tax agency or a general strike in order to force the issue. But Boix has a company to worry about.

MD: Set up a “competitive” proper MOE process. Let people gravitate to it. If you set up a tax agency, you are just playing into the hands of a “replacing” government … predictably made up of people ultimately unfriendly to traders and general trade.

“Most of the businessmen I know have to make debt repayments so an indefinite strike is a hard sell,’’ he said.

MD: Ah … but what if that debt was promised in HULs (Hours of Unskilled Labor) rather than your competitor’s controlled money? Then this would not be an issue at all. And you would not be talking about a strike … let alone an indefinite one. You would already have the existing government and its money changers on the ropes.

Regional President Carles Puigdemont is trying to increase his leverage as officials in Madrid vow to block his plans for a referendum in October. But the potential costs of a collision with the Spanish state are become clearer for Puigdemont and his supporters.

Two of Puigdemont’s senior aides were interrogated by Spain’s Guardia Civil last month and Prime Minister Mariano Rajoy has warned Catalan officials they could face criminal charges if they use public funds to facilitate the vote. Even the Catalan police, who Puigdemont wants to use to oversee the vote, may think twice — most of their salaries are paid from Madrid.

Rajoy on Wednesday called for Catalans to show “common sense” and “isolate the extremists and radicals who are today influencing the regional government.”

MD: Extremists and radicals … i.e those who “are not us”.

In the end, money worries may tip the balance against dramatic action for many Catalans.

MD: And there you have it. If a proper and competitive MOE process is in place, money worries are already dealt with. Nothing dramatic can happen with the money.

Spain on the Mend

Despite its distinct traditions and language, the idea of breaking away from Spain had little mainstream traction until the economic crisis — and the corruption it uncovered — hurt Catalans’ finances and undermined their confidence in the Spanish state.

MD: Said as if that won’t happen again. Government “is” the problem. Institute a competitive and “proper” MOE process, and let the government do the scrambling for survival.

Support for independence peaked at 49 percent in 2013, as the Spanish economy was contracting for a third straight year and unemployment reached a record 26 percent.

But Spain is on the mend now. Joblessness is down to 17 percent and the economy is growing at a pace of more than 3 percent. After a decade of turmoil, Catalan moderates are nervous about putting the recovery at risk.

MD: Oh really? What caused the economic collapse in the first place? What caused it to go away? You can be sure government manipulation played a role in both cases … and the sense of both is probably more related to propaganda than to reality.

Just 35 percent say Catalonia should be independent, according to the Catalan government’s polling agency. That’s the lowest in five years.

Investors are largely discounting the risk of a split. The spread between Spanish 10-year government debt and German bonds is close to its narrowest in seven years, though the yield on the Catalan government’s thinly traded 2020 bonds has jumped by about 50 basis points since the start of July.

MD: What are the “Catalan government’s” bonds? If they can create and sell bonds, they can institute and support a “proper” MOE process.

Puigdemont said in an interview last month that anyone who thinks an uptick in the economy will dampen the separatist movement is making a mistake, and warned investors that the movement may roil Spanish debt markets this fall. Others argue that Spain’s attempts at intimidation, including a smear campaign against Catalan leaders, will ultimately backfire.

MD: If you remove government from the equation, what are you separating from? The issue “is” government. As long as it is there, you will have an issue.

“If they were winning the political battle they wouldn’t need such tactics,’’ said Manel Escobet, 63, a member of the national secretariat at the Catalan National Assembly, a separatist campaign group. “The dirty war being conducted by the Spanish state is just helping us to broaden the support for us’’

MD: If you’re in an “all out war”, finesse is not employed. You deploy all your weaponry. And such tactics are probably the most important weapon in the arsenal. People are putty in propagandists hands.

Corporate Concerns

But even some of those who would be willing to strike accept that their chances of achieving their goals remain remote. Pere Gendrau, 36, runs a pub in Berga, just over an hour north of Barcelona and in the late 1990s he was active with the fringe groups that went on to form the anarchist group CUP, which Puigdemont’s mainstream alliance relies on for a majority in the regional assembly.

Gendrau says that he and his employees would find a way to support a general strike, an idea raised by Regional Vice President Oriol Junqueras as far back as 2013. But, like Boix, he can see the problem for those managing larger operations.

MD: What are they striking against? Themselves? Institute a “proper” money process. Set up a minimal organization to deal with customary public issues … i.e. potholes … and then quit paying taxes to Barcelona.

“It could be the way to move forward, but we probably won’t reach that point,” he said. “I’m not so sure what the bigger companies’ reaction would be.’’

Boix’s company produces about 2 million wooden pallets a year for Catalan exporters and employs 130 people in the Bergueda region, where separatist parties got almost 80 percent of votes in 2015’s regional election.

The family history illustrates the sharp divisions that still lie beneath the surface of Spanish society. Boix’s grandfather, a Catalan mayor, died in a Nazi concentration camp at Mauthausen after fleeing to France during the Spanish Civil War. The French government has apologized to the family for the failings of the Vichy regime, but in Spain it’s more complicated, since Prime Minister Mariano Rajoy’s party was founded by a former minister from the Franco regime which governed for almost 40 years.

Historic Divisions

“In Spain it’s as if nothing ever happened,” he said. “Just in my family, 10 people fled across the French border, and only my mother and two others returned.’’

So the friction between Catalonia and Madrid may be as good as permanent. There are pockets of the region where almost everyone backs separatist parties. But the success of modern Spain since the dictatorship may be enough to keep the country together, and the economy growing, despite their differences.

MD: He who controls the money controls the playing field. Remove all control of the money and the playing field is level. Let the games begin.

Boix is happy to support a strike in favor of independence. But only so long as it doesn’t hurt his bottom line.

“If it’s being asked to stop for a day or two, that’s fine,” he said. “We’ll find a way to compensate by working through a public holiday.”

That’s probably not enough to force Rajoy into any dramatic concessions.

— With assistance by Charles Penty

Posted on July 30, 2017October 24, 2022

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?

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Definition of money

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.

With simple barter exchange (2) and (3) happen simultaneously, on-the-spot. Money enables (2) and (3) to happen over time and space.

Thus money is obviously “an in-process promise to complete a trade over time and space”.

The “proper” MOE process

The “proper” Medium of Exchange (MOE) process, first and foremost “guarantees” perfect balance between supply and demand for money … i.e. zero inflation of the money itself. Since this is the nature of every trade, that is easy.

The process “certifies” (i.e. documents) new trading promises .. transparently for all to see … no anonymity. That creates the money, first as a ledger entry. Later it may be exchanged for cash or currency … and back.

This money then circulates anonymously in trade as the most common object in every simple barter exchange. It loses all identity with the trader creating it. All money in the process is the same, be it record, currency, or coin.

The process then monitors in-process trading promises  for performance … transparently. On delivery, the money created is returned and destroyed. On default, that orphaned  money is reclaimed immediately when detected through interest collection of like amount.

To do this fairly requires actuarial techniques. The process is very similar to the operation of a Mutual Insurance Fund … but no money is to be made on investment income. There are no reserves … so there is nothing to invest.

Regardless of the operation,  the relation: INFLATION = DEFAULT – INTEREST = zero must be observed perpetually.

About This Site

The earth is not flat as everyone once thought it to be … before their delusion was removed.

Money is “not” what everyone has been deluded to believe.

This site exposes the delusions … instance by instance … and discusses the impact.

Rebuttal is welcome and essential.

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