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I see why you'd call Prepay "The Last Big Thing;"  it's the final leveraging and completely circular.  If we inflate a bubble with Prepay, it's collapse won't just cause a hole, it will pull the hole in after itself.  Two questions to resolve: 1) How will it be marketed, in order to mask any Enron taint, and 2) will it be allowed, since the only purpose Prepay has for end parties is a way to cook their books?
by rifek on Tue Dec 18th, 2012 at 07:47:30 PM EST
In my view, Prepay is an optimal (which is why it is the Last Big Thing) instrument in the way that it enables the flows of value from:

(a) the capacity of people to produce goods and services; and

(b) the use value of productive assets over time;

to be monetised.

There are two key regulatory requirements however, neither of which was present in the case of Enron then or the Saudis now (who have inflated crude oil prices as a consequence of using pre-pay opaquely almost certainly with the connivance of J P Morgan).

(a) Transparency - so everyone in a market can see how many Units are in issue; and

(b) Quality Control - ie a 'Monetary Authority' who may act to review the true productive capacity which stands behind units in issue.

"The future is already here -- it's just not very evenly distributed" William Gibson

by ChrisCook (cojockathotmaildotcom) on Wed Dec 19th, 2012 at 08:54:15 AM EST
[ Parent ]
Those are two, very big ifs, especially since the neo-libs have done an amazing job of avoiding the blame for their antiregulatory stance being a significant cause of the present mess.
by rifek on Thu Dec 20th, 2012 at 04:42:59 PM EST
[ Parent ]
Prepay will lead to:

(a) Geographically acceptable/fungible currencies - ie prepay units of land rentals sold forward at a discount;

(b) Global acceptable/fungible currencies - based upon the value of pre-paid energy (initially natural gas).

These asset-based currencies will be exchanged against people-based value on credit terms by reference to a standard unit of measure for value (a unit of account) which will in my view be an absolute unit of energy.

Note here that disparate energy currencies are not the same thing as the energy standard unit of account by reference to which they may be exchanged. One can no more run out of units of account than one can run out of kilogrammes or metres.

These exchanges of value require a suitable 'Guarantee Society' framework of trust.

Through adopting the necessary agreements/protocols and instruments we will transition from a dollar economy to an energy economy, and to least $, £, € cost accounting  to least energy cost accounting.

The end game is for the $, £, and € to go onto an energy standard in the same way that the Euro nations fixed their currencies against an abstract (and literally worthless) €.

See my recent presentations to the Schumacher College's 'Banking on Ourselves' course.

Flight to Simplicity

Resolution

Transition

"The future is already here -- it's just not very evenly distributed" William Gibson

by ChrisCook (cojockathotmaildotcom) on Wed Dec 19th, 2012 at 10:11:48 AM EST
[ Parent ]
How do we get governments and financial institutions to relinquish all this control over the currency?
by rifek on Thu Dec 20th, 2012 at 04:46:27 PM EST
[ Parent ]
Governments and financial institutions no longer have any control over the currency since Central Bank monetary measures are entirely useless.

It is completely open to anyone to accept some-one else's IOU. What has been lacking is a consensual framework within which such credit creation may take place.

"The future is already here -- it's just not very evenly distributed" William Gibson

by ChrisCook (cojockathotmaildotcom) on Thu Dec 20th, 2012 at 07:37:08 PM EST
[ Parent ]
Note the Minsky quote.  Only sovereign IOUs issued in the sovereign's currency can be used to pay the taxes owed to the sovereign (which ultimately is the problem with the euro).  And if an IOU can't be converted into a form that can pay other IOUs, it's going to face rapid depreciation.  Only a sovereign can put on its currency "This note is legal tender for all debts, public and private" and make it stick.  Governments control that, financial institutions are their clearing houses, and neither will give up that power without a serious fight.  And as for the former, they make the laws and dictate what you can do to them.
by rifek on Fri Dec 21st, 2012 at 01:19:19 AM EST
[ Parent ]
That's soooo Last Century, rifek.

Power seekers in public Government intermediaries are just as obsolescent as are private rent-seekers.

In the same way that risk intermediaries have an interest in dis-intermediating, since it minimises the need for risk capital, so it is that governments have an interest in doing so, because it minimises taxes.

If people come together and self organise to fill the vacuum left by the intermediaries - and that is what is happening - they may use consensual 'co-operative of co-operative' framework agreements, and currencies are among the outcomes.

"The future is already here -- it's just not very evenly distributed" William Gibson

by ChrisCook (cojockathotmaildotcom) on Fri Dec 21st, 2012 at 06:22:33 AM EST
[ Parent ]
hi chris,

in these two slides, can you explain how the Pool maintains enough "insurance" funds to pay Sellers for defaulting Buyers?  and how does the System ensure that too many free-riders do not participate (and presumably bring it down)?

http://www.slideshare.net/ChrisJCook/3-banking-on-ourselves-transition

http://www.slideshare.net/ChrisJCook/3-banking-on-ourselves-transition

Point n'est besoin d'espérer pour entreprendre, ni de réussir pour persévérer. - Charles le Téméraire

by marco on Sun Jan 6th, 2013 at 07:55:47 AM EST
[ Parent ]
they were slides 9 & 10 in that presentation.

do you have any document that articulates what you presented in text form?

Point n'est besoin d'espérer pour entreprendre, ni de réussir pour persévérer. - Charles le Téméraire

by marco on Sun Jan 6th, 2013 at 09:21:42 AM EST
[ Parent ]

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