If it's a tacit understanding that something is not written about by the Press and MSM , does that make it a secret?
Correct me if I am wrong, but the fact is that what the Press - with one exception - and politicians have been writing and saying about Northern Rock bears no relation whatever to the truth.
The point is that 99.999% of the population are unaware of the reality of banking.
Are you aware of it, or do you simply see nothing wrong with it other than the risk management?
And note here that I am making no judgment in relation to the ethics or morality of "fractional reserve" credit creation.
My case is that the Internet renders current banking obsolete, and that straightforward alternatives to credit intermediation are not only possible, but absolutely necessary for a sustainable financial system.
I am sure you will continue to follow the path you know, but don't be surprised if the policies you advocate prove to be unworkable.
And 99.999% are unaware of the reality of money. Money, ultimately, is about trust. Using for "money" units of something that has intrinsic value (say, portable energy) is notvery practical; using something that signifies value, or gives you access to goods with intrinsic value is a lot more practical, but depends on an entity being willing to swap that interpediary good for the real thing. How do you know that entity will do this long into the future?
Thus banks. And thus governments (or maybe the other way round, or maybe not).
Disintermediation will still require someone somewhere to guarantee that swap. Your credit unions are just a safe, unleveraged way to do that. It works, but it's very basic. Maybe that's what's needed after our recent period of money being despoiled, but it's not soemthing new, and it's not something very sophisticated. In the long run, we're all dead. John Maynard Keynes
And 99.999% are unaware of the reality of money.
In fact, they are unaware of the reality of the money - created as Debt - that we use.
Jerome a Paris:
Money, ultimately, is about trust.
Indeed. And the true value (which I am the first to acknowledge) that Banks provide is "trust" in the form of their implicit guarantee to borrowers' credit generally. They back this implicit guarantee with a pool of proprietary capital, as set by the BIS.
Using for "money" units of something that has intrinsic value (say, portable energy) is not very practical
Agreed. It has not to date been practical, but I believe that in fact it is feasible using new legal frameworks, and intend to prove it in Iran. All a punter needs to know is that the Unit he is holding is redeemable in exchange for something - like electricity or gasoline, that is widely acceptable or "fungible".
using something that signifies value, or gives you access to goods with intrinsic value is a lot more practical, but depends on an entity being willing to swap that interpediary good for the real thing.
Now, there's the rub: because if I give that piece of paper to a bank, all I get back is ...errr...another piece of paper.
The current system inextricably confuses value with a claim over it = "time to pay".
While money may be credit, it need not be, and IMHO should not be.
How do you know that entity will do this long into the future?
Indeed. That's why the necessary Custodian (of a guarantee fund) entity(ies) must involve the system users - ie those who extend and receive credit - not middlemen, who would become service providers who no longer put capital at risk. A consensual framework agreement/protocol then links the Custodian (s) and participants across borders.
Treasuries (probably decentralised) and/or Mints, yes. Banking intermediaries, no.
Disintermediation will still require someone somewhere to guarantee that swap.
Yes and no. It's the credit that is being guaranteed but some say that that this is simply a swap delayed by the period of the credit.
ie Money is implicit in a "split barter" transaction.
I advocate an exchange network ("Clearing Union") subject to a collective guarantee within a partnership-based framework, and backed by a "pool" of "money's worth" being provisions collected from the buyers and sellers.
This was almost exactly Keynes' International Clearing Union/ Bancor approach at Bretton Woods, where he advocated that both positive and negative trade balances should be subject to charges. And of course, a top down, intermediated solution.
Your credit unions are just a safe, unleveraged way to do that. It works, but it's very basic.
Regrettably, it works only in a very limited way, IMHO. Sure it moves existing money around, and also the "money's worth" of value being generated by a mature (developed) economy - where Japan comes to mind.
What credit unions do not do is create the new credit necessary for development.
I would (I did, In New Zealand) advocate to Credit Unions that they link up with local businesses and issue interest-free (but not cost free) "credit cards"/ "Guarantee cards" to individuals and then manage the system.
The ex-bankers I met who run the Credit Union trade association (and keep credit unions off banks' turf) thought I was the anti-Christ, I think.
Maybe that's what's needed after our recent period of money being despoiled, but it's not soemthing new, and it's not something very sophisticated.
New is needed. But look where sophisticated got us..... What's needed are simple solutions, for sure.
Are you sure there isn't something....?
;-)
I think the key is the "business community". If your ideas are right (or heading in the direction of right), then they should make sense to wise brains in not-driven-for-profit companies: certainly not only not-for-profit organisations (for me they have their own reasons for being NOT-for-profit, whatever they may be)--I mean, why wouldn't a designer of wind turbines, a buyer of windturbines, and a financier of wind turbines want to come together under the mutually beneficial system you are promoting?
As I understand it, Jerome says: the builders want their cash up front. If it doesn't work for you, tough.
But--why build something that won't work? There should be continual conversations throughout all processes; nudges and pushes and pulls always aiming NOT to more profit (and THAT is the key, the maximising of profit is what you DON'T propose--for reasons to do with something-from-nothing-doesn't-work;
So I see a wrong parallel. If the builders won't commit into the future (e.g. taking energy credits as part-payment), then--are there NO builders who will?
Starting small--I think community (collective!) wind turbines are a great idea--sold to specific communities, the prices explained, all the benefits--
and with a promise (legally binding) to fix all problems (that legal document should, for me, look something like paul spencer's LLC--in it's accuracy in key points and understanding of people)--and also...
to deal with the UPGRADES!
So...a long-term deal. Work for decades. Work for the generations--jobs, careers, all the knock on effects.
heh....I'm still trying to paint the picture! Don't fight forces, use them R. Buckminster Fuller.
I mean, why wouldn't a designer of wind turbines, a buyer of windturbines, and a financier of wind turbines want to come together under the mutually beneficial system you are promoting?
Indeed.
And I am merely pointing out the increasing use of these models, albeit not necessarily yet the "full monty".
eg this yesterday....
Fishy Glasgow LLP
rg:
If the builders won't commit into the future (e.g. taking energy credits as part-payment), then--are there NO builders who will?
Builders wish to receive something which has a value in exchange. Currently these are IOU's issued by credit institutions, and builders accept them because they are confident that everyone else will.
If (say) land rental value units were widely acceptable, then the builder would accept these, too, and he would probably prefer these to IOU money, because he would know that these units would hold their value by reference to land rental values. Unlike IOU's, which would not.
Within an "Open Corporate" LLP or LLC framework there is no profit and no loss, but there is mutual creation and exchange of value.
The idea is that you may cover your costs, if you need to, right now, but anything more than that constitutes an "investment" giving you a piece of the production or revenue flow - if there is any of course...
That way you have "skin in the game" and an interest in the outcome...sharing the development gains, if there are any....
Starting small--I think community (collective!) wind turbines are a great idea--sold to specific communities, the prices explained, all the benefits-- and with a promise (legally binding) to fix all problems (that legal document should, for me, look something like paul spencer's LLC--in it's accuracy in key points and understanding of people)--and also... to deal with the UPGRADES!
The future I see is not a "transaction model" at all - Buy, Borrow, Build and Bugger Off - but a service provision/ Trusteeship model, where the asset is placed in the hands of a Custodian and the resulting production value shared equitably.
There is then an interest in building to good standards of quality and energy efficiency because this cuts the cost of use over time, and therefore maximises the return over time.
ie essentially an "evergreen" lease. Naturally the builders/ manufacturers themselves would start examining if and how their "costs" may become partners.
