I’ve had a long-term privately-held desire to reduce my cash-footprint to zero (aka living simply, having no money etc). In this regard I’ve used Trade Exchanges, barter and suchlike extensively over the years.
I will still live well and pay taxes and do business and obey the laws of the land, but I now really want to remove my reliance on and use of the decidedly shaky and rather shady creation of the Central Banking Cartel. My desire has moved from ‘back burner’ to ‘front burner’ since I emmigrated to Samoa (as I’ve lived off capital for three years and spare cash has all but dried up).
Many of us, especially since 2008, are starting to really recognise that there is a big problem with a monetary system that appears destined to fail and that “feeds the few” at the expense of the masses. These are actually two separate issues but they are widely perceived as one problem. This is a fatal mistake. We must separate the SYSTEM from the PURPOSE before we can “get to zero”.
Let’s race into it . . . “zero” is waiting!
Like many, I firmly believe that our biggest problem is also our biggest opportunity.
Essentially the “Money Power” creates money out of thin air and lends it back to “us” making profits from the creation and use of that money. They use interest charges (usury) to do this. Leaving aside the ETHICS of this for the moment, the principle is that they have a SYSTEM that is marketed to a willing client-base that uses (buys) the created money; that in turn generates benefit, which of course the providers kindly profit from thank you very much!
This is a simple business model. For various reasons, many do not like this model (system) but because they feel forced or obliged to use it, they do.
That this system takes the benefit from many and gives it to the few is also widely perceived as a problem.
I used to think that this was all one big problem too. Now that I believe that I truly understand money, the underlying system is not a problem at all, to me. The fact is that at its core, the system is just a very simple business model.
For the moment though, I will go along with the rest of the Monetary Reform community and assume that this is all to be one a big “problem”.
Taking the “problem” then and inverting it to try and get a solution looks something like this:
Whereas previously the system was designed (the first SYSTEM) to provide a currency and system to enable trade (the first PURPOSE) and in the process generate profit and distribute it to the few (the second PURPOSE), we now aim to have a system that is designed to provide a currency and system (the second SYSTEM) to enable trade (the same PURPOSE) and in the process generates profit and distributes it to the few (the same PURPOSE but a different DESTINATION).
The point here is that if the purpose remains the same (a currency that enables trade) but only the desired destination of generated benefit changes, does it mean that the system needs to change? Not necessarily so.
Just because the purpose (the beneficiaries) changes does not necessarily mean that the system needs to change. Now if the system itself is destined to fail (as a result of poor design) that is fine, let’s all look at the system, but if it’s the inequality or gross profiting that is a problem then that is another issue.
The question is this, is it the system we have a problem with or the fact that some benefit from it at the expense of others? Logically they are two separate issues and must be addressed as such.
Benefiting from a system
Some say that they want NO PROFIT out of the system because making profit from money is not ethical or fair or desirable.
This is what I call a race to zero, and has a philosophical not a structural basis.
The proof of this is that if an economic system was stable and sustainable, the only issue to discuss would be WHO gets the benefit. If the bankers made a profit from a Mutual Credit system many would see no problem with the system. Many in fact do promote this as a desirable solution to the perceived problem.
If SYSTEMS combined with HUMAN ACTIVITY can generate wealth (probably more accurately described as “benefit” rather than wealth), it matters not from a structural, systemic, economic principle whether the generated benefit is generated and distributed to the few, or to the many, or even at all.
But we all have EXACTLY THE SAME potential to generate wealth from the creation and use of money – the challenge of course is HOW to do it and at a deeper level, on what basis those decisions were made.
So we have two separate issues with the “problem” – the system and the profit.
Understanding it all
We need to understand the principles, including the human and design components (of the system of creation and use of money) in order to invert the entire process properly.
Let’s work through the components in order.
- The driving force of the current system (problem) is essentially I believe, pride.
- The manifestation of this pride is greed, or self-interest.
- The need (the business opportunity) is to enable the conduct of trade.
- The solution is a system to create money and enable its use.
- The primary benefit to the participant is the use of money.
- The tool used to generate wealth for the owners of the system is interest.
That’s all that matters at a systemic level. Who the owners are, what the interest rates are, how much the system is used, whether the system is fair, ethical, destined to fail or not matter little structurally. The ethics, morality, efficiency or consequences of this system are all secondary issues.
So lets’ now invert the whole thing to get the solution to the perceived problem.
- The reverse of pride is humility
- The reverse of greed or self-interest is generosity or giving
- The need is actually the same
- The system need not change (although we may wish to change it somehow)
- The primary driving benefit to the user may not need to change either (but it may do)
- The reverse of charging interest is paying commissions
So what we have just established is that in order to have total inversion of the “rich-get-richer, poor-get-poorer” practices of the current monetary system logically everything in the system can remain exactly the same in principle with only one item in the system needing to change – the primary CAUSE, (the driving force).
All other changes are terminlogy changes or consequential changes – the TOOL used to create wealth is renamed from interest to commissions, but in effect they do the same thing – tax.
So when you boil it down to the root of the “problem” – there really isn’t a problem with the system. It’s a business. It is working and it can be made to work the way it is being run OR it can be made to work the inverse way.
Putting this into simple words . . . the system may be problematical to some (because it disadvantages themselves) but the system is working and will continue to work as it is designed to work.
This raises another aspect to the entire monetary discussion and it is this – did the people who designed and implemented the system make a mistake when they implemented one that is clearly not sustainable, or was it planned obsolescence? It is my opinion that the proponents of the current system know very well and knew exactly what they were doing. By implementing it they knew that they would be able to consolidate their wealth and power – yes, when it succeeds but even more so when it fails.
Club Credits took a deliberate conscious effort to design and implement. Benefit goes to the people whom I have decided deserve it and that was a conscious choice to give. Same thing for the Central Banking Cartel. They sit at the top BECAUSE they have some of the smartest minds on the planet. Economic theories and talking heads abound. Let’s be straight about it. The system was designed, implemented and is working as planned. I’ve always found any other explanation pretty wishy-washy thinking when I drill down to the guts of it.
In my view it is the CAUSE (either greed or generosity) that is the only thing that determines whether we use the system for our own benefit as the current bankers do, or for others (whoever we believe should benefit from the system).
In regards to the widely stated goal of equitable distribution of wealth generated by any system, the ownership of the system does not matter structurally, for it is possible for the designer of a system to be different to the owner and others yet again to be the beneficiaries of the system.
Any creator of a currency system that wants to give (to the masses) simply needs to develop a system that distributes any wealth generated (previously called interest, now called commissions) in an equitable way.
In the commercial world, receiving commissions on sale (in many various forms) is widely regarded as equitable. If you sell – you get a reward. If you sell more – you get more. In it’s simplest form: If you work – you can eat but if you’re lazy – you’ll be hungry.
The banking system does it too – if you borrow, they lend, you pay interest, they profit.
A Double Paradigm Shift
There’s a double miracle that happens right before our eyes when we invert the “problem” in this way. When we invert the current business model and the interest payable is turned into commissions receivable (for effectively the exact same service) a paradigm shift happens within the system – first, the humans change – secondly the outcome changes.
Whether you like it or not, self-interest and greed is a strong motivator of human activity. In a positive sense, just watch a young guy scrub himself up when a girl arrives on the scene, or see an entrepreneur’s eyes light up when there is opportunity put before him! In a negative sense think about the insurance we have, and look at the walls and security systems we have to protect our possessions and ourselves.
I’m not saying any of this is necessarily wrong, but the point is that when commissions are available on the creation and use of a currency used for trading, people become motivated to use and recommend any system that gains them benefit.
I don’t know of anyone (other than a banking sales representative with self-interest) that actively and seriously recommends going to a bank and borrowing at interest and getting ourselves into debt. I do however know of the extreme motivation that participants in MLM schemes have in asking me to join their programme, or the enthusiasm that a Life Insurance salesman has when he comes-a-knocking, or a used car salesman has when he knows I have the cash and am looking for a car that he may have on the yard.
The second “miracle” is that entire system changes from an unstable, unsustainable one to a stable, sustainable one.
That’s the theory anyway. Now to the practical.
I’ve recently designed and implemented a currency and trading system that I believe does all this exactly. Club Credits is owned by “the commons” and is a Mutual Credit (an Alternative or Complementary Currency) that actually pays commissions on the use of money the participants create themselves.
Participants effectively become “bankers” in their own right, looking after and extending LOCs (Line of Credits) from “the commons” to the people whom they introduce and trade with. Like the bankers do with their “use of money” (interest) charges, they benefit from small commissions on sales on their introduction’s trading. The important difference however is that income within the Club Credits system is generated at the point of a transaction – when somebody gets tangible benefit from using the credit – not on the issuance of credit money itself (usury).
It’s a subtle but important difference that totally inverts the traditional banking model AND spreads the wealth generated equitably.
I believe that Club Credits inverts the banking model so perfectly that it has taken us past the race to zero and will be of great benefit to many.
The above graph is an attempt to show the differences between the scarcity and abundance mentality applied to profiting from the creation and use of money. Inverting a problem always provides the solution.
About the race to zero
A large part of the CC movement focuses on getting rid of interest rates, setting them to zero. While it appears a noble goal it is actually reactionary, defeatest and essentially negative and totally misses the opportunity that there is to be positive in designing and implementing systems for the creation and use of money.
All I’ve seen so far is people trying to remove wealth generating opportunities from the elite, and the elimination of interest certainly at a systems level. Proponents of Community Currencies make a big deal about free money (and the evils of interest) and appear to be desperate in their “race to zero”.
The law of diminishing returns means that any effort to get to zero must always fail because it always takes an effort to GET to zero. The way to get to zero is to give. When you give more than you’ve got, you have to go past zero and you then have a chance to land there – if you want!
I compare this race to zero to my putting in golf. I don’t aim at the hole, I aim PAST the hole because if a putt is short, even .000001% short, I will never sink the golf ball into the hole.
Why do I not see people in the CC movement talking about actually creating wealth from the creation and use of money? We must go past zero and learn to give (sacrificially in fact) in order to achieve the goal.
I’ll put it from the perspective of a possible prospect . . . “You want zero interest and free money? Why would I buy into that concept? What’s in it for me? Sure I save paying interest, I get that part and it is good, but then you’ve only got me to zero. Cash is much easier. The cost, emotionally, socially and perhaps even financially is greater than zero so you are asking me to actually pay for a nice concept. I don’t mind investing (which is what you are really asking me to do) but only if I can get something in return.”
Traction will only come when you can give someone a compelling reason to do something. Self-interest is a huge motivator. So too is money!
In the process of working through the details of the Club Credits currency I sought feedback from a range of people, for which I am truly appreciative. One response from a valuable interchange discussing the likely impact of a profit generating currency included these words:
I think the problem is that the commercial money however dire its mismanagement, however rapid its depreciation, is a state-enforced monopoly – that’s what legal tender laws are for.
The thinking that “they” rule the world and have all the power is defeatest, negative and reinforces the deception that the elite throw onto the world stage. I live in a third world country where the leaders constantly say “The coffers are empty”. Of cash yes, but not of opportunity and human capital and much more.
Rest assured that if a government Minister in Samoa can save his department cash, collect more in taxes, employ more of his family or look good by using our system, then he will.
Profit, self-interest and benefit of many different kinds are powerful motivators. I believe that any currency that can generate benefit for a person, company or country will be used.
For me there’s been an interesting sideline running parallel to this currency development. It is that I believe that the Club Credits system aligns closely with biblical advice, in several regards, particularly the very strong condemnation of the practice of usury.
I’m actually pretty much over people who say you can or can’t do this or that because the bible says so. If not even the scribes could get it right with their litany of rules and regulations in the time of Christ, then there is sure as heck no way that any of us can “get it right” by following a million rules either – but the principle that charging interest on money is wrong, unbiblical or evil (and thus has negative consequences on the individual and the community) is very simple and clear.
In having designed a stable equitable currency, I am intrigued that the biblical teaching aligns with it perfectly. I definitely didn’t start off thinking “I’m going to design the perfect currency system as per the Bible” and follow the rules.
I simply had a problem to solve. Of course I knew the basic biblical teachings on giving, generosity, usury, wealth, work ethics, fairness, justice, reward and so on but I actually researched the issue of the nature of money and economics FIRST, recognised the key issues, and the developed a logical solution. It was a LOT of work and learning, but they do say however that all roads lead to Rome!
*Notes on the chart
1. Actual Impact. The impact of interest, as many well know, compounds throughout a supply-chain. I show an interest rate, and then a hypothetical impact, in this chart calculated with a flat factor of 2.5. I’m certain it will be more but others can tweak the figures for accuracy
2. Compounding Interest. My chart is a little simplistic in that the true impact of interest is actually compounded and not a straight-line, but I don’t have the mathematical skills to work out what that compound rate would be. Nor do I know how to use compound formulas in Excel. Sorry!
3. The purpose. The graph is primarily designed to demonstrate visually the difference between an interest chargeable currency that is a net cost to participants and a commissions payable currency that generates benefit to the participants. The figures are therefore indicative only.