Complementary currencies for Drupal

Alfred Palmer Pistons February 1942"Aluminum casting. The heads of these heat-treated pistons must be spotted prior to Brinell hardness testing. Young women are employed for this job by a large Midwest aluminum foundry now converted to war production. Aluminum Industries Inc., Cincinnati, Ohio" Ilargi: Right. So Fannie and Freddie have now been delisted from the New York and Chicago StockIlargi13095412481562945788

RHD’s Equal Dollars increases in value

Submitted by:Resources For Human Development

Posted: Jul 06, 2010 – 12:50 PM EST

PHILADELPHIA, Jul. 06 /CSRwire/ – Philadelphia’s Equal Dollars complementary currency has decided it won’t be so equal any more – at least with the U.S. Dollar.

The central banking committee of the 12-year-old Equal Dollars system says it will no longer match the value of the community currency to the Federal Reserve dollar, as of January 2011.

The reason? The government greenback’s continuing erosion in worth, due to inflation and other effects of U.S. monetary policy.

“The principle underpinning of Equal Dollars is its stable value, year after year,” said Bob Fishman, chairman of the currency’s central banking committee and CEO of the currency’s sponsor, national human-services nonprofit Resources for Human Development. “While the U.S. Dollar fluctuates in value over time, gradually losing purchasing power, the Equal Dollar will remain balanced: What you bought with Equal Dollars yesterday, you can buy tomorrow at the same price.”

The “equal” in the community currency’s name refers to the community’s agreement to pay the same fore everyone’s labor, Fishman said, and was never intended to describe its relationship to the U.S. dollar.

Even so, Equal Dollars has never undergone a revaluation until now.

“We realized we needed to reaffirm Equal Dollars’ purpose of providing stable value over time,” said Deneene Brockington, director of the Equal Dollars system. “Other currencies, including the U.S. Dollar, may have valid reasons for fluctuating their worth, but Equal Dollars are meant to represent the same value year after year.”

In January, Equal Dollars will increase it value relative to the U.S. Dollar by 3 percent. That means that a member with 1,000 Equal Dollars in their account, for example, will see 30 more Equal Dollars as a result of the revaluation. Conversely, a member who owes 1,000 Equal Dollars will experience a 30-unit adjustment that results in a new debt of 970 Equal Dollars.

Equal Dollars accounts, whether money on deposit or loans, are interest-free.

In addition to the 3 percent revaluation, the currency’s banking committee also is setting a “minimum wage” of 12.40 Equal Dollars per hour of labor.

“We needed to be clear about the minimum value of somebody’s time,” Brockington said. “We weren’t aware of any abuses, but we want to make sure there aren’t any going forward. It’s a preventative measure that reaffirms the respect and dignity that everyone in the community deserves.”

Brockington said that while the January adjustment is the first in the currency’s history, it won’t be the last.

“We’re going to do this every year, if necessary, so that the worth of Equal Dollars in 2010 is the same in, say, 2030 and beyond,” she said.

Equal Dollars boasts nearly 600 members and 20 organizations. Nearly 200,000 Equal Dollars are in circulation.

About Resources for Human Development
Resources for Human Development is a comprehensive human services organization based in Philadelphia, Pa. Its mission is to empower the most vulnerable and marginalized members of society as they build the highest level of independence possible. RHD oversees and supports more than 160 locally managed programs in 14 states. These innovative and effective programs specialize in helping people who have mental illnesses or developmental disabilities, homeless individuals and families, people rejoining society after incarceration, and people with histories of substance abuse so that they may all build better lives for themselves, their families and their communities.

For more information, please contact:

Kevin Roberts Communications Specialist Phone: 215-951-0300 ext 3714 Fax: 215-849-7360

For more from this organization:

Resources For Human Development

Fast transitions to resilient communities that offer energy independence, food security, and thriving local economies will require a new approach.  Resilient communities need to be sold as an investment (there's tens of trillions in investment capital currently on the sidelines).  An investment package that makes it more attractive than the alternatives.  That shouldn't be hard, the alternatives are in terrible shape:

• The financial markets are now casinos, a place where only inveterate gamblers feel at home.  Rampant uncertainty and distrust have turned investments in stocks, bonds, and real-estate into the equivalent of lottery tickets.  
• Existing economic security is evaporating.  Our governments are approaching default, and with them the viability of the social safety nets they provide.  Real estate is in ongoing free fall.  Incomes are in decline, caught in the buzz-saw of global outsourcing.  Pensions and benefits are vanishing through fraud, organizational bankruptcy or forced shifts to contract work.  
• Worse, the social decay, corruption, crime, and widespread violence experienced by other countries in economic circumstances similar to our own, looms on the horizon.  We will all soon live in corrupt hollow states.

How to package the RC as an investment

There are three ways to package resilient communities as investments that will attract significant capital.   These are:

• Consortiums, businesses, and co-opts that retrofit existing communities with resilient systems.  Typically, this is focused on existing residents.  As in, make it possible for people to shift their retirement funds or buy into something that they can immediately benefit from.  The Mondragon model should work well here.
• Resilient community technologies.  Businesses that focus on enabling local production of everything from energy to food to products.  Think in terms of collaborative finance from places like kickstarter.  
• New developments that build resilient communities from the ground up, designed with last mover advantage to survive future dislocation.  Sell this as a hedge against the future, a speculative play in future economic failure, or a way to personally escape potential chaos.

These investments may become the only investments worth having as the developed world declines.  Package them correctly, and people will invest.

This video with Dan Pink summarizes recent behavioral research that blasts the myth of homo economicus totally away. Once basic needs are met, what motivates people in performing complex cognitive tasks is NOT more pay, but autonomy, mastery, and purpose. Watch it. – t.h.g.

Angela Merkel's crackdown on speculators may be the beginning of a terrifying scorched-earth policy

German efforts to seize back control of the European debt crisis were met with snorts of derision in London. Investors could not decide whether the ban on short-selling was an ill-conceived gaffe, or a desperate piece of political posturing. But German chancellor Angela Merkel may have the last laugh.

Tuesday's late-night announcement from Frankfurt regulator BaFin did nothing to calm the markets. The ban applies only to speculators trying to bet against eurozone debt in Germany. With most of the action carried out in London and New York, and other European regulators failing to fall in behind, it looked doomed from the start. Instead, the euro took the strain again, falling to new lows. At best, the move was dismissed as a political red herring, designed only to shore up domestic German support before a vote on the Greek bailout plan. At worst, many viewed it as a naive misunderstanding of how the market really functions.

To an extent, the European emphasis on blaming the speculators is misplaced. Talk of a "wolfpack" of traders and credit rating agencies hunting down the weaker members of the eurozone ignores the fact that these are the same people indebted nations need to persuade to lend them more money. Attempts to prevent them from short-selling seem based on a misconception that governments can simply demand the confidence of investors. What next, asked the City wags; will Germany ban other teams scoring goals at the World Cup?

But a closer reading of what Merkel has said on the matter suggests something more significant is going on. In language more confrontational than any yet used by European leaders, the chancellor first pointed out she wanted to "ensure that banks cannot extort the state anymore". Extortion is a strong word in any language, but reflects mounting anger over the way financial markets have emerged from the world's three-year banking crisis with an even greater hold over nation states than when they went in. The unspoken threat is that Europe's biggest economy has had enough and is preparing to take its ball away.

Lest anyone think this is an idle threat, Merkel called on Europe to "develop a process for an orderly state insolvency" – in other words work out how to let countries such as Greece, Spain and Portugal simply refuse to repay their debts. It might sound obvious to those on the outside, but this flies in the face of everything Europe has been trying to do and would set in train colossal losses for banks, pension funds and investors everywhere. There is no guarantee it would make life any easier for the Greeks either. Instead of having to bring public spending in line with tax revenues slowly, a decision to effectively turn its back on the financial markets would mean having to balance the books overnight – a huge wrench for a country already in the grips of a deep recession.

But Merkel's comments do at last begin to acknowledge what many observers have been saying for weeks now: lending yet more money to Greece and other over-indebted nations can only ever be a temporary sticking plaster. The IMF and EU austerity plan already envisages such sharp falls in Greek GDP that an extreme solution may not longer look so intolerable.

It would also explain some of the appetite for the ban on short-selling shares in German banks. If Merkel really is preparing to hit the market with a Lehman Brothers style default that would rock banks across Europe, the last thing she wants is for lots of speculators to get rich in the process. Those patronising voices in London need to remember similar measures were put in place by the Financial Services Authority and the US Securities and Exchange Commission in New York during the banking crisis. To many the notion of an "orderly insolvency" is an oxymoron, but to those who believe the global debt crisis is entering its final stage, it is perhaps the best that can be hoped for. The emphasis on "orderliness" may simply be the German way of trying to keep the eurozone together in the process.

For many investors, the French approach of pouring more and more money on the problem looks the more appealing – promising years of volatility and trading opportunities at the expense of taxpayers. A German scorched earth policy could prove a lot less attractive.

Return of the crane

Meanwhile, back on fantasy island, the City is booming again. Property group Land Securities declared the construction slump officially over with a strong set of figures and plans to restart mothballed building projects across the Square Mile. A fresh outbreak of cranes on the skyline of London would chime with the hiring spree reportedly seen in many trading rooms, but watching what's on their screens, it's hard not to feel it's all a bit premature.

• European debt crisis
• Short-selling
• Europe
• Germany

Dan Roberts
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Dan Roberts

Most analysts (at least the ones that are worth reading) contend that the sovereign default crisis (Greece, Portugal, Spain, etc.) in the EU is about the collapse of a system that created monetary union without a political union.  It isn't.  That's actually a narrow, parochial view.  Instead, the current sovereign debt crisis is about something much more interesting:  it's another battle in a war for dominance between "our" integrated, impersonal global economic system and traditional nation-states.  At issue is whether a nation-state serves the interests of the governed or it serves the interests of a global economic system.

Who's winning?  The global economic system, of course.  The 2008 financial crisis, the first real battle of this war (as opposed to the early losses in skirmishes in Russia, Argentina, the Balkans, etc.), generated a very decisive outcome.  It was a resounding defeat for nation-states.*   The current crisis in the EU will almost certainly end with the same results.

When this war ends, and it won't be long, the global economic and financial system will be the victor.  Once that occurs, the nation-states of the West will join those of the global south as hollow states: mere shells of states that serve only to enforce the interests of the global economic system.  These new states, more market-states than nation-states, will offer citizens a mere vestige of the public goods they offered historically.  Incomes will fall to developing world levels (made easy to due highly portable productivity), and wealth will stratify.  Regulatory protections will be weak.  Civil service pensions will be erased and corruption will reign.  The once dominant militaries of the West will be reduced to a small fraction of their current size, and their focus will be on the maintenance of internal control rather than on external threats.  The clear and unambiguous message to every citizen of the West will be:  

You are on your own.  You are in direct competition with everyone else in the world, and your success or failure is something you alone control.  

For those that think that this will bring about a surge of peaceful economic vigor, you will be wrong.  It will fragment society and lead to perpetual stagnation/depression, endemic violence/corruption, and squalor.  For absent any moral basis (a social compact), stability, or (widely shared) prosperity: new sources of order will emerge to fill the gap left by the hollowing out of the nation-state.  These new sources of order will be first seen in the rise of the criminal entrepreneur, whether they be the besuited corporate gangster or the gang tattooed thug.  For in the world of hollow states (without a morality that limits behavior) and limitless connectivity to the global economic system, these criminal entrepreneurs quickly become dominant, violently coercing or corrupting everyone in the path to their enrichment. 

As this occurs, you have a choice.  

1. You can stand alone and do nothing.  Thereby suffering the predations of this new criminal class.  
2. You can join them and prey on your former compatriots, enriching yourself in the process.  
3. Or finally, you can build something new.  Resilient communities and independent economic networks based on freedom, prosperity, and a new moral compact.

*  An ambush that yielded:  excessive debt, endless deficits, state guarantees (against financial system failure), and moral ambiguity/corruption.   

I read Thomas Greco's 'The end of money and the future of civilization'. He talked about mutual guarantor groups, which are common in microcredit loans. This idea had natural appeal because it's more about trust in people than arbitrary formulae, and it has predecessors in many cultures and works very well.

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• Weak ECB statement on debt crisis undermines euro
• Report of $16bn US trading error adds to market chaos

Wall Street was gripped by a fresh panic tonight as fears spread that the Greek debt crisis will trigger a new catastrophe for the fragile global banking system.

The chaos was compounded as one major bank was said to have made a big trading "error" by trying to sell a huge number of shares by mistake.

The blue-chip Dow Jones index briefly fell almost 1,000 points, or 9%, dipping below 10,000 points for the first time since early February, before halving its losses in the next 30 minutes. It closed 348 points, or 3.2%, lower at 10514.

The confusion over prices in a dramatic half-hour of trading will alarm regulators. One report said a bank's computer had attempted to sell $16bn of shares instead of $16m. An inquiry is inevitable.

Shares in Procter & Gamble – a blue-chip household name – fell from $62 to $39 in five minutes before rebounding. Shares in Apple and Accenture were also affected. It was unclear whether any trades were executed at the lower prices.

Even before the drama, world stock markets were falling after the European Central Bank gave a statement that investors dismissed as a "do nothing" response to fears of wider contagion from Greece.

The sell-off on Wall Street will cast a long shadow over the City of London, already nervous about the result of the general election. Shares in London – where trading closed before the mayhem in New York – were down, with the FTSE 100 index finishing 81 points lower at 5261, making a near-10% decline since mid-April. Futures markets were flagging big falls on Friday.

Currency markets were also rocked. The euro fell more than two cents against the dollar to $1.26. Sterling lost almost three cents to trade at $1.48.

The European Central Bank governor, Jean-Claude Trichet, said Spain and Portugal were "not Greece", and that the ECB governing council had not discussed injecting extra funds into the eurozone to boost demand and economic growth.

His comments, made as the Greek parliament passed a package of cuts in public services, failed to prevent the euro dropping to a 14-month low. Spain was forced to pay sharply higher interest rates on its debt as investors appeared to dismiss the ECB view that the eurozone was secure. Trichet said: "Greece and Portugal are not in the same boat and this is very visible when you look at the facts and the figures."

Yet leading economists such as the Nobel prizewinner Joseph Stiglitz and Nouriel Roubini, who accurately predicted the credit crunch, have expressed doubts over the survival of the euro in the light of the ECB's rigid interpretation of its remit to maintain low inflation, regardless of the consequences of low growth and rising unemployment in countries forced to take deep cuts in public spending.

Roubini and Stiglitz are sceptical that governments can or should squeeze their spending to fit constraints laid down by the ECB and eurozone rules. Professor David Blanchflower, the former Bank of England monetary policy committee member, said it was "crazy" for highly indebted countries such as Greece, Spain, Portugal and Britain to enter a "death spiral" of spending cuts that would lead to lower growth and more cuts.

"All anyone is talking about is austerity, but all you get is more unemployment and low growth. Then you find yourself in a spiral of debt as low growth forces you to cut spending further," he said.

Analysts also said the ECB was closing its eyes to tensions in the single currency zone.

"The ECB seems more concerned about cracks to its credibility than cracks to monetary union," said Christoph Rieger, co-head of fixed-income strategy at Commerzbank in Frankfurt. "This approach can be considered consistent with the ECB's principles. But it risks that the market will still force the ECB's hand before long."

Spain managed to raise €2.35bn (£2bn) in its latest government bond auction todayyesterday, but had to promise a yield of 3.58% – a fifth more than the rate it paid two months ago. Investors also pushed up the cost of insuring Spanish debt against default, despite assurances from the country's prime minister that it could meet promises to pay down debts.

The yield on Portugal's 10-year bond, which serves as an indicator of the risk of investing in the country's loans, increased by six basis points to 5.95%.

"Investors are genuinely confused and concerned about the level and growth of sovereign indebtedness and what it means for the market," said Luke Spajic, head of European credit at Pimco, the world's largest bond investor. "It's not that the market is testing one country – it's very anxious about the sustainability of debt in general."

• Debt crisis
• European Central Bank
• Euro
• Greece
• Spain
• Portugal
• Europe

Phillip InmanNils Pratley
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Phillip Inman, Nils Pratley

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Wall Street is flooding Congress with lobbyists seeking to curtail key parts of the sweeping regulatory bill

America's major banks are pouring millions of dollars into an apparently successful attempt to weaken Barack Obama's finance reform bill, currently stalled in Congress by Republican opposition.

In the face of deep public anger over the financial crisis and government bailouts, banks have flooded Congress with lobbyists seeking to curtail key parts of the sweeping regulatory bill – such as provisions to create an office for consumer protection and more strongly regulate the vast derivatives market.

JP Morgan Chase is at the forefront of lobby spending with $1.5m (£980,000) in the first quarter of this year alone – a sharp rise on the same period in 2009 – followed closely by Citigroup. Credit Suisse and Goldman Sachs have also spent more than $1m on lobbying Congress this year, more than double their previous spending.

The banking industry is second only to healthcare interests in the amount it spends on political lobbying.

Last year, America's eight leading banks and finance houses spent $30m to influence legislation. The broader financial industry has more than 2,600 lobbyists registered with Congress.

The battle over the finance reform bill is principally driven by politics, with Republicans making a unified stand against it in an attempt to inflict an embarrassing defeat on Obama – or at least force a climbdown – ahead of the mid-term elections.

But Dave Levinthal of the Centre for Responsive Politics (CRP), which monitors the flow of lobby money, said that the influence of lobbyists swarming over Capitol Hill can be seen in the fate of individual elements of the legislation.

"It's remarkable that in a year in which the economy was in tatters that financial institutions would be spending more on lobbying than they ever have," he said. "We can tell that there are things that are not in the bill that would have been there if it wasn't for the concerted lobbying. Robust consumer protection for instance. It's very watered down."

Christopher Dodd, the chairman of the Senate banking committee who is a prime mover behind the legislation, in February criticised the "refusal of large (banking) firms to work constructively with Congress."

"Too many people in the industry have decided to invest in an army of lobbyists, whose only mission is to kill the common-sense financial reforms that we are working so hard up here to try to achieve," he said.

In parallel with the vast amounts poured into direct lobbying, the finance industry has also steered funds to individual members of Congress in campaign contributions, albeit with mixed results.

According to the CRP, major donors gave more to Democrats than Republicans, with JP Morgan Chase again at the forefront. Foreign-owned banks are also involved. The Royal Bank of Scotland has made $111,650 in political donations so far this year, the vast bulk of it to Democrats.

The single largest recipient of banking donations is Dodd, who has taken a total of $1.2m for his campaign fund.

Levinthal said individual campaign donations buy access even if they do not always have the intended influence over the outcome of legislation.

During his presidential election campaign, Obama received $39m from the finance and insurance industry, including nearly $1m from Goldman Sachs.

• Banking
• United States
• US politics
• Financial crisis

Chris McGreal
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Chris McGreal

President's gloves-off speech condemns Wall Street as a moderate Republican moves to support financial transparency

Barack Obama travelled to Wall Street's home turf today to deliver a rallying call urging banks to put "cynical politics" aside by working with the White House on a broad package of regulatory overhaul that is finally gaining momentum in Congress.

In a full-throated assault on intransigent attitudes in the financial services industry, Obama accused banks of contributing to the global economic meltdown by trading complex derivatives "in ways that defied accountability or even common sense".

During a speech in New York to an audience of 700, including top names from the financial services industry, Obama said he was fed up with Americans being "duped" by predatory behaviour from financial institutions and accused banks of losing touch with broader society. "Some on Wall Street forgot that behind every dollar traded or leveraged is a family looking to buy a house, pay for an education, open a business or save for retirement," he said. "What happens here has real consequences across our country."

Expressing frustration at financial "innovation" that led to the invention of ever more esoteric derivatives, Obama said dealing must take place on open markets, in the light of day: "Many practices were so opaque and complex that few within these companies – let alone those charged with oversight – were fully aware of the massive wagers being made."

Combining combative language with calls for co-operation, the president described Wall Street reform as an essential part of a foundation for recovery: "Without it, our house will continue to sit on shifting sands, leaving our families, businesses and the global economy vulnerable to future crises."

His reforms include a fee on banks to recoup the cost of the government's $700bn (£455bn) bailout programme, the creation of a "consumer financial protection" agency intended to stop predatory lending and the enactment of the "Volcker rule" that would ban banks from operating hedge funds or indulging in speculative trading with their own capital.

Republicans have branded the package as "flawed" and have alighted on a proposed $50bn resolution fund intended to meet the cost of winding down any future failed banks as a backdoor "bailout" provision. Senate minority leader Mitch McConnell last week said the measure "not only allows for taxpayer-funded bailouts of Wall Street banks, it institutionalises them".

JP Morgan's chief executive, Jamie Dimon, last week bemoaned Obama's proposed fee on banks as a "punitive tax" and banks argue that the type of trading prohibited by the Volcker rule did not cause the credit crunch. The financial industry has unleashed a massive lobbying effort in Washington vigorously contesting the White House's measures.However, there have been signs of movement in Congress, with talks resuming on bipartisan co-operation. The Democrats only need support from one Republican senator to stop delaying tactics and, in a potential breakthrough, a moderate Republican, Chuck Grassley, lent his support in a legislative committee to rules forcing derivatives to be traded on a transparent market.

Last week's prosecution of Goldman Sachs provided a fresh reminder to the public of Wall Street misbehaviour and has given fresh impetus to reform. Obama has denied that the securities and exchange commission's action against Goldman was timed for politically gain, saying he only found out about the lawsuit when it was reported on television.

His speech, at Cooper Union in downtown Manhattan, was billed as a set-piece attempt to rally support for what the White House views as the most urgent topic on its legislative agenda, following the successful passage of healthcare reform. Critics, including many in the union movement, want the administration to take a tougher line on multimillion-dollar pay. Obama and his treasury secretary, Timothy Geithner, have refused to set any caps on remuneration but do favour British-style "say on pay" votes at annual meetings.In his address, Obama was careful to frame criticism of compensation as an attack on rewards for failure in the run-up to the credit crunch, rather than an assault on ongoing payouts: "Americans don't begrudge anybody for success when that success is earned. But when we read in the past about enormous executive bonuses at firms even as they were relying on assistance from taxpayers, it offended our fundamental values."

• Banking
• Barack Obama
• US economy
• Credit crunch
• Goldman Sachs
• Timothy Geithner
• Financial crisis

Andrew Clark
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Andrew Clark

Sue Lowden, the Republican front-runner to win a Senate seat in Nevada, says chickens make great health insurance

Meet Republican politician Sue Lowden, a wealthy casino owner. According to recent opinion polls, she's likely to be the next US Senator from the state of Nevada, thanks to a double-digit lead over the Democratic incumbent Harry Reid. At least, she was the main contender for Reid's seat – until she started propounding her chicken-based healthcare plan.

On Monday Lowden appeared on a local TV programme, where she was asked about a mildly eccentric suggestion she had made that patients should haggle and barter with their doctors to save money on their medical bills. As you can see from the video clip above, she replied:

"You know, before we all started having health care, in the olden days, our grandparents, they would bring a chicken to the doctor. They would say I'll paint your house.... In the old days that's what people would do to get health care with their doctors. Doctors are very sympathetic people. I'm not backing down from that system."

Washington Monthly blogger Steve Benen was one of many who responded to Lowden's plan with an open mouth. "This is one of the dumbest things I've ever heard from a candidate for statewide office," wrote Benen. "If there wasn't a video, I might not even believe it." Harry Reid's campaign was more blunt, sending out a statement headlined: "Has Sue Lowden lost her mind?"

The Democratic party was also quick to respond, reports the Las Vegas Review-Journal:

Phoebe Sweet, communications director for the Nevada State Democratic Party, and a few of her barnyard friends who shall remain nameless stopped by Lowden's campaign headquarters.

"I tried to trade this goat for some health care, and my doctor looked at me like I'm crazy," Sweet told a receptionist as she carried the 25-pound goat into the headquarters with a local TV crew tracking her. "So I was just curious if you had any information on her barter plan."

"No, thank you," the unidentified receptionist said politely.

The Democratic Senatorial Campaign Committee has put together a handy website, complete with list of ailments (rickets, scurvy, swamp fever) and possible bargaining chips (including "best ranch hand") with which to barter for healthcare. "Do you need medical care? Write a letter to Sue Lowden with your ailment and what you're willing to trade, and we'll make sure she gets it. It's just like the good old days!" is the gloating copy.

Over on Twitter a "LowdenCare" meme has sprung up. "Under #LowdenCare do we pay urgent care facilities in McNuggets?," wondered one tweet. "Crap. My doctor's a vegan," tweeted Duncan Black, the blogger Atrios.

Even the normally cerebral Economist bloggers joined in with some hilarious – well, hilarious if you are a reader of the Economist – jokes about chicken-based collateralised debt obligations:

For example, payment in kind would eliminate many of the risky innovations that led to the financial crisis. It would be virtually impossible to structure a chicken-based CDO; sure, you could find buyers for the breast tranche easily enough, but who would take all those necks and feet? Leverage rules become much less necessary when you can only hedge with items that actually exist; it's hard to imagine the notional value of chicken-based hedges greatly exceeding the number of actual chickens on the planet. And all this could be accomplished without any new taxes.

It'll be interesting to see what happens to Lowden. She is currently the most likely candidate to win the Republican primary on 8 June, according to recent polls. But of course, one should never count one's chickens till they are hatched.

The real shame is that Lowden isn't running for office in Kentucky.

• Republicans
• US healthcare
• Nevada
• Twitter
• US politics
• Democrats
• United States

Richard Adams
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Richard Adams

Here's a chart (below) that depicts the growth of the financial oligarchy.  Of particular note is how quickly the financial oligarchy has looted its way back to previous highs in profitability.   How?  It has used control fraud to hike taxes on the real economy.  As with most forms of control fraud, our loss will far, far exceed their gain.  

What makes this looting possible?  Costless debt (from central banks), a free pass on usury, subsidies (bailouts), government collusion (no arrests, investigations, or meaningful new regulation after the crisis), mark to make believe valuation (a mechanism that allows banks to avoid realizing losses on worthless assets), government purchases of bad assets, and government guarantees (on all of the new bad "assets" of too big to fail banks).  

How to read this chart from Deutsche Bank:  It shows comparative growth (and not absolute valuations).  Everything is baselined at 1970.  

NOTE:  We've built a totalitarian global parasite and it can tax you into poverty.

Imagine a monetary system where the amount of money you own does not matter anymore, since it is of no value to own money; you can’t even own it, just like it does not make sense to own centimeters, inches or Volts. Mutual credit systems are like this. A mutual credit system track of and shows you your current promises towards the community or vice versa.

What does matter in a mutual credit system is the number of times you touched zero when trading (either or not changing sign), since at precisely that moment you have contributed to the community the exact value as the community contributed to you. You are in balance with your environment—that serves you so good and abundantly.

Every time you touch zero, your ‘trustspace’ increases, since you just proved to balance your consumption with your contribution.

To avoid kartels and free riding, the trustspace is parameterized by your turnover until now, a damping factor and a connectivity index derived from the relative number of others you traded with. Just like with flow money, your trustspace diminishes, decays, over time. So you need to stay active and add value to your environment to keep up your trustspace.

The trustspace are the ‘credit’ and ‘debit’ limits for safe trade. Of course, if you like risk, you can go beyond someone’s trustspace, but you know that you risk losing your extra investment.

It’s just like scaling up micro credit to meso and macro credit. With our current technology level, it is a piece of cake to implement a global digital giral spreadsheet system—which is all we need; mind-boggling cheaper than all these expensive banks and their emplyoees who don’t even understand their own products anymore.

This non-monetary but value-based balance is essential on all scales as well. Just as the individual needs to balance receiving and giving to the community, the import and export of countries should enjoy a dynamic (chaordic) balance.

Overshooting in either direction or not touching zero for longer time destroys your credibility als a good citizen or global player. Too much import increases your ‘debt’ or promise to other countries, your promise to do something back. Too much export hoards employabilty, depriving other countries from adding value and wealth to the world at large.

The balance and trustspace are similar to energy economics.

In short, let:

1. trustspace = credit limit – debit limit;
2. trustspace = spending space + saving space;
3. zero touch be the number of times you’ve changed the sign of your balance: ifsign(current balance) ≠ sign(previous balance): + → 0, + → –, – → 0, – → +, + → – or – → +;
4. trade diversity be the number of unique legal entities you have traded with;
5. average turnover be the total value of net profit – gross profits divided by time—a synonym for average revenue (or in certain contexts, sales).

From 1) and 2) follows that:

• credit limit – debit limit = spending space + saving space.

While trustspace is calculated as:

• trustspace = damping factor × zero touch × average turnover × trade diversity.

MUTUAL CREDIT

Money is created at the moment of transaction, and not by some central authority. When Mary buys something from John for 100, Mary’s balance goes down 100, and John’s goes up 100. In this system, it is okay to be ‘in debt’. In fact, everyone starts at zero, thus the very first transaction, of 100 say, implies that one will end up at –100 while the other ends up at +100.

Dynamic Trustspace—Just like with microcredits, you get the growing benefit of the doubt. It’s okay to have an outstanding promise to the community or society (be ‘in debt’), but within limits. These limits, plus and minus, are your trustspace. If you are a good citizin and compensate your debt by prviding a service to someone else, your debt will be lessened, and you might even flip to the positive side of the balance, thereby showing your trustworthiness.

In fact, balance is key here. The most important thing. Your trustspace grows when you touch or cross zero. Your turnover is a measure of your activity, hence your trustspace can grow as a fraction of your turnover. For example, if your turnover is 1,000 and your trustspace is 20, and as you touch zero, your new trustspace grows to 22, say.

Since trustspace includes the average turnover over time, it decreases if you sit idle for too long. In other words, you trustspace keeps fresh and fit as you continue to add value and trade.

You may even consider that when a shrinking trustspace becomes less than credit limit – debit limit, the excess is trimmed off to a commons fund and your new limits are set to the current trustspace. So when you are inactive for too long, you’ve left the system, say, you’re effectively ‘squeezed out’ of the system, relasing any debit to the commons. If your balance was in debit, though, the commons fund needs to repair your promises by ‘funding’ your debt. It is a loss brone by the community at large. You, of course, lose your trustworthiness and credibility.

Question: How do you elegantly avoid or choke when two malafid friends agree to pump up their trustspace by a large number of fast transactions between the two and at maximum trustspace.

Just like an engine that runs smoothly when stationary, but as soon as you push down tha gas throttle, it chokes, even turns off.

My quest is to find:

• the extremely elegant formulas that take any financial transaction log and calculate the trustspace within which a player can safely trade;
• how to connect two ecowebs that have so far been developing independently and suddenly touch;
• design an immune system that keeps the system as a whole healthy, even when (severely) attacked;
• the distributed, decentralized, peer-to-peer layers of software, infrastructure and humanstructure that make it feasable and completely self-everything (organizing, healing, supporting, etc.); and
• the way to have a holarchy emerge that use a cascade of flow money for ever larger commons activities, up to the global level, while embellishing local wealth and unfolding.

I look forward to your candid constructive critique.
Source: Aardbron » Trustspace.

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