Christmas Greetings from Samoa. According to the man who was supposedly born on this day some 2,000 years ago we should take up our cross and follow Him. In this post I share the idea that we only have the authority to speak, (thus the capacity to affect change) when we do exactly that – when we have paid or are prepared to pay the price, and that while Samoa seems like a lost cause to many, by humbling ourselves we can make a real difference. [Read more…]
Archives for December 2013
The FBI has published what appears to me to be damning evidence against Kim DOTCOM and his ‘Mega Conspiracy’ business. I’ve read all 191 pages of it and it raises some very important issues for business people – both ethical and technical. [Read more…]
For your good viewing pleasure – random photographs from a day in the life of a Samoan based voluntourism host, blogger, author, entrepreneur, tour guide and more . . .
The place is called Papapapaitai Falls, pronounced “Papa – papa – ee – tie” and it is a regular tourist stop for our guests and many others. A tongue twister until you’ve said it 100 times and it comes easily.
The uniform is a cross between a High Chief, a woman and a policeman (you can’t see the epaulettes in this photo though). One dude, a bank manager, reckoned it was a disgrace and informed me that I should be wearing something totally different, boring brown and like all other businessmen, but many comment on it favourably and like it. [Read more…]
Club Credits is a Mutual Credit currency and trading platform that I conceptualised in late 2012 and further developed into early 2013. I believe it has very good potential and is revolutionary in some regards.
In this post I explain more of the Cub Credits system and suggest that it should be viewed as simply a modern-day equivalent of tally sticks. As part of that description I explain the true nature of money – which is at its core a record of a half-completed transaction.
The easiest way to understand how I’ve structured Club Credits along the lines of tally-sticks++ is to visualise a deserted tropical island. A shipwreck puts five families onto it one day and they have no money or coins. Bartering coconuts for bananas or fish is fine for a while but as they develop systems of trade they need a form of money.
They use the things they have available at hand to record their transactions and redevelop the tally stick system of old (England). Cutting notches in a freely available stick to record debtor and creditor with a pocketknife could be done in seconds anywhere on the island. A buyer and seller would engage in trade using the tally stick as an accounting system. “I’ll buy 10x coconuts from you and in return give you a stick with ten notches” sort of thing. The ten-notch stick may be traded for five pineapples with a neighbouring farmer or three fish from a fisherman or even 15x coconuts in a neighbouring island thus achieving a trading profit for the trader. The individuals involved will decide this.
This hypothetical island scenario explains several components of Cub Credits:
- Extending credit is THE key that opens the door to trade. Except for direct barter the only question that we have to address is, “From where do we get the credit and what will it cost?” Mutual Credit is free. Extending credit, even that recorded in the mind requires a contract (an agreement of some sort) which is based upon trust.
2. Backing of the loan or advance is by trust alone. The sticks have no inherent value themselves. Once the trade is equalled out, the debt is paid, the stick is used for firewood or discarded. This is the nature of a Mutual Credit system. Club Credits is all about trust, with contiguous lines of trust; extending credit in the most trustworthy manner conceivable.
Money is essentially a record of a half completed transaction. There is no better description that I’ve found for it than this. Storage and measurement of value, yes and yes; medium of exchange, yes and much more but at its central core money (and thus Club Credits) is simply a record of a half completed transaction. Complete the transaction and money should simply cease to exist – disappear. Most do not realise this simple fact and get confused with the Gold Standard and other deceptions that are built on deception, self-interest and false assumptions.
- There is no banker, no central issuing system, no controls on people other than what they decide for themselves and thus there is zero influence from people ‘above’. This enables maximum personal empowerment, a vital biblical principle. “Going thin” is a phrase that I use to explain this principle of empowering others. I cannot conceive of a system thinner than Club Credits. If I could find a way to reduce overheads, simplify it or make it less onerous, then I would implement it.
- There is no interest. Mutual Credit by its very nature is interest free and whether or not the traders repay within one week, one year or longer is up to them, individually as they trade. Interest is contrary to clear biblical teaching (and in fact was a mortal sin within the Catholic church for over a thousand years until the issue was obfuscated) and enslaves. Most of us choose to pay interest and enslave because we want to. That we feel that we HAVE to is always a deception.
- The buyers and the sellers determine the value of the notch themselves. There is no central system to determine arbitrary value on the island thus you have social agreement one-on-one relationships at the point of sale with a system that works. This is a true floating currency not pegged to anything – not to legal tender currencies nor to labour, energy, precious metals or ANYTHING. This aspect is very uncommon in Alternative Currencies but it’s an essential, critical, vital component to the design of Club Credits – totally independent of manipulated, managed and artificial financial and value-measurement systems.
- Demurrage, the loss of value over time could be likened to a decaying stick. If it was agreed that a tally stick that had been eaten by ants, or rotted away meant that the debt was erased then this could be seen as similar to demurrage. Demurrage stimulates an economy as it is in participants’ own interest to trade, rather than to lose their asset. Club Credits demurrage at 1% of the last trading balance will cause total loss for inactive accounts within 100 months (almost ten years) and will gently right the economy to equilibrium when people abandon their Credits/sticks through death, changed circumstances or by choice. Note that demurrage does not prevent traders from storing value, rather it requires them to (currently) complete a trade at least once a year.
- The pocketknife used to cut a notch is the equivalent to the cell phone/computer/Internet system. It is the tool by which traders can generate a meaningful tally stick/Club Credit. Everyone on the island either has a pocketknife or can access one easily. Likewise with the modern technology that traders will need to have access to the Internet or have systems whereby those who do have access to the Internet can record their trade for them.
A floating Internet based (thus international) Mutual Credit currency that is Open Source, based on contiguous lines of trust is rare, mainly because people generally want to trade locally. The Community Currency space is growing strongly, particularly since 2008, but almost all are based on local currencies or units of labour (i.e. time banks) and they don’t float.
By their very nature they also all impose very thick systems with trading rules, arbitrary credit limits, management systems, the need for critical mass, marketing efforts and other obstacles that despite their best intentions frequently hinder the natural business process. They fail to meet the criteria for good money design, thus failing to meet the needs of a trader.
Barter organisations likewise fail in the sense that they generally confuse two separate roles (that of marketing and accounting) and protect their own commercial interests, rather than meet the needs of a trader. Most build their business model with commissions on trade volume as their source of income. While it is a valid model that has been proven to work by some, it is fundamentally flawed and is their Achilles’ heel.
Club Credits will likely be a major threat to any trade exchange that combines their role of marketing (facilitating trade between members) and that of accounting (developing a currency and recording transactions). Club Credits will however likely spawn newer versions of trade exchanges where the currency and accounting functions are outsourced to the Club Credits system and exchanges focus on the business generation and trade facilitating roles.
Club Credits is both a threat and an opportunity. Thought leaders in the industry should be thinking along the lines of, “What would happen to my business if my members heard about, or commenced using Club Credits as their currency of choice?” Preparing their business by restructuring or establishing new businesses to capitalise on the Club Credits opportunity might be wise.
Based on my fairly good understanding of the reciprocal trade industry I predict that uptake and growth will likely come from outside of the industry and there will be serious resistance to the Club Credits currency from within. After all it is more natural to defend an investment that is generating actual value today, than to engage with new ideas, concepts and technology.
All the above could be valid for any floating (international) Mutual Credit currency, but Club Credits has a unique design component, and that is the commissions paid on turnover to introducing parties. Inverting the Central Bankers’ model of charging interest on credit, to paying commissions on sale will likely have the effect of putting a Mutual Credit system on steroids.
I’ve based this idea on the highly successful Multi-Level Marketing industry and the power of self-interest. Ignoring the difficulties of dealing with negative press of MLM for the moment and focussing on the strength of the MLM business model, it’s clear that people are enormously motivated to do things when they get personal benefit. MLM Money (which in some respects what Club Credits actually is) addresses the underlying issue of the enormous challenge in marketing any Mutual Credit system. I addressed this earlier with the post Racing Past Zero (a little heavy and hard to read, thus a reason for this post).
‘Going thin’ by developing a system, technology and brand, and then giving it away is not the normal business conduct, but it will achieve my goals – a potentially ubiquitous system of trading that meets the needs of people the world over . . . individuals, Mom & Pop businesses through to international traders who want (and I believe in time will very likely NEED) to trade outside of the mainstream economies.
There are various alternatives currently available to those seeking ‘clearer air’:
- Direct Barter,
- Time banks,
- Barter and Reciprocal Trade Exchanges,
- Community Currencies and more recently,
Each of these options has their place in society but they all have serious weaknesses, especially when compared to the offering that the Central Banking cartel has for us.
As I’ve taken in feedback and suggestions from others, I’ve been able to structure Club Credits in a way that addresses ALL the major flaws in the other options currently available to my satisfaction and as yet nobody has been able to identify any errors in my logic. Please let me know if you have questions or doubts yourself though!
Direct Barter is the cleanest and simplest of trading. There is no need for credit, unless the barter transaction is spread over time in which Mutual Credit is required. An example of this could be when someone agrees to mow your lawns for the next month in return for payment of their university fees. You extend them credit, mutually agreed which is then erased on completion of the work. Direct Barter is limiting however and requires a ‘double coincidence of wants’ that is not always practical or realistic. Like other forms of money, Club Credits solves this problem.
Time Banks can be effective in smaller community-based labour exchanges where social relationships are strong. They tend to fail in usability however for larger transactions and over larger distances. They also have administrative overheads and scalability issues. Measuring the value of one’s time is also an issue for some, and while what I call ‘financial equivalence’ is a goal of mine personally, it is unrealistic to expect a high-value unit of skilled labour (such as a doctor or lawyer) to trade regularly with a lower-value unit of less-skilled labour (such as a garbologist, or other manual labour). At a higher level these may be viewed as equivalent in value, but at a commercial level they certainly aren’t. Club Credits does not influence HOW the Credits are used.
Barter and Reciprocal Trade Exchanges
I’ve spent extensive time trading within Barter organisations. There are serious issues with their business structure as I have already mentioned. They have their place and will probably continue to exist, but they will struggle to cope with the Club Credits concept when or if it arrives in their ‘patch’. What’s worse for them is that it will very likely be the top traders (in both volume and willingness to trade) who will hear about, play with, then use the Club Credits system as their currency of choice. As I said before though if barter or trade exchange operators restructure their business to separate the trade brokering and the accounting/currency functions they could actually USE Club Credits as as selling point and focus on their core strengths which are generally those of networking, making things happen, looking after people and well . . . bartering or trading! Watch this space, but don’t hold your breath though.
The Alternative Currency movement has seen extraordinary growth in the last few years as it seems every man and his dog wants to get off the money-go-round. I like this. I see it as a healthy sign. I’ve been involved in every complementary, alternative, green, barter or reciprocal organisation I have ever found since the first days of my business life . . . so I’m clearly supportive of trading outside the square. But they are what they call themselves, COMMUNITY currencies, and will generally always stay that way. Again as with traditional barter exchanges, they have their place but they will never make major headway against the system. If, or as I believe when the system crashes, they and a multitude of others will no doubt flourish – and good on them, BUT they are hard work and highly limited. Efforts are under way to network and facilitate cross-border trading with cross-platform technologies being developed as we speak. They are all good. Club Credits however has a fundamental difference in that it is purely a currency and a trading platform. It addresses the real needs of people to trade internationally without any reference back to current financial systems.
Bitcoin trail-blazed the way in this space and certainly opened the door to a range of currency options. Never in the history of mankind has a technological answer to a human relationship issue ever succeeded and it never will. Technology is entirely neutral in this space. Virtually everything that cryptocurrencies attempt to do, Club Credits does the opposite. Complexity, secrecy, establishing arbitrary values and limits, security and control systems all run counter to real-life needs, wants and problems. Such activities always end in human misery, heartache, inefficiency and loss . . . and more!
I know what I’m talking about here for a couple of decades ago I actually wrote the blueprint for the investment division of Personalised Plates in New Zealand. I gave Murray Thom the then owner a detailed breakdown of how I saw the investment market based on a few short months experience selling $5.00 pieces of pressed and painted aluminium for thousands of dollars a pop. At the time I had never seen money come out of the woodwork like it and was all based on greed. I struggled badly selling the fun plates but I mastered the sales process of selling to investors and as a result I helped make some people a lot of money, including myself. It was though all based on the ‘bigger sucker theory’, the idea that if you get on the bandwagon now, there will be a bigger sucker coming down the road. Think Holland, tulips and greed. They say that there’s nothing new under the sun!
Investing into any form of money, when essentially all money is by definition a record of a half completed transaction is nothing less than insanity. Many will make something and benefit from cryptocurrencies but more will lose. Club Credits actually answers problems and not creates them.
Joining the Elite
There is another alternative, and that is to establish your own bank, and join the mainstream currency system with all its various perks and dangers. Joining the [banking] ‘system’ however is not normally a viable option for those of outside the privileged few.
I don’t view Club Credits as primarily just another scheme, idea, business, trade exchange or even a clever currency which it arguably is. I see it as a very solid solution to a serious and increasingly important global problem that is based on sound biblical principles. I think it shows a very good understanding of money, human nature, the needs of traders and is a smart use of technology.
Over the next few months I’m hoping to take the project forward technically and then open the system to limited international trading in early 2014. As always I have been funding all development work myself and my commitment is total.
While the nature of money is not an easy subject to deal with, it is a VERY IMPORTANT one* and Club Credits is certainly worth a look.
* It is my belief that THE most important questions in life are the spiritual ones – “Who are we? What are we here for?” And specifically as Jesus challenged Peter, “Who am I?” But the second most important question that I see in life relates to money and the use and abuse of it, “What is money? Where does it come from?” and to truly understand the freedom and thus responsibility that we have to conduct our lives outside of the enslavement that the Central Banking cartel, along with governmental compliance, uses to consolidate their power and wealth over others. God has given us the freedom to choose; to conduct our lives as we so wish, but He also gave us guidelines and advice. Charging and paying interest to those who assume rights over us by using deception and then exercising power through our governments does not fit within those guidelines. ‘Reclaiming the Commons’ a phrase used to explain well the process of bringing the issuance of credit back into the hands of those who actually own it. To me, it’s a VITALLY IMPORTANT issue.
Why do they do it? Some people are just stupid.
Ex US Marine Matthew S. Andrews is one of them . . . stealing my entire web server data and then attempting to blackmail me. The guy’s an idiot!
All I can say is that people who are stupid generally get what they deserve eventually.
I didn’t just threaten Mr Andrews that I would blog about his blackmail attempt if he didn’t do the honourable thing – I promised him that I would, but now he even WANTS me to “blog away kid” as he puts it . . . so here’s the post! [Read more…]
Over the next few months I am completing a private investigation into the affairs of Australian businessman Daniel Evans (aka David Harlow) and his various Ormita companies.
The Ormita Report is an investigation into the conduct and performance of Daniel Evans, and the nature of his international business operation, Ormita – what he calls an international ‘commerce network’. It’s not a witch-hunt, more a continuation of an investigation that I started a while back and I will be publishing the findings on this blog.
Lord willing, I will be summarising my take in an eBook to be released in Q1 2014. In a nutshell, lots of people have contacted me about Daniel and there appears to be a trail of trauma following him around the globe. It’s definitely time to shed some more light on his activities, hopefully also hearing it from the horse’s mouth too, so-to-speak.