Wednesday, March 25, 2015

Alternative Currencies

You could not present me a more painful opportunity.   Now capitalism has had it, the worm has turned, as anyone who reads this blog regularly knows I believe credit deflation will be as dominant the next forty years and credit inflation was the last.  Credit inflation is evil, and deflation is the corrective.  This means the action of credit deflation will regress to the mean, that is to say go much farther that back to normal in its correction course.  in short, the exploiters who grew in credit inflation are going to lose more than they gained in the game.

Further, credit inflation was programmed in and managed.  Those playing that game for the last 40 years did quite well materially.  Sadly, it concentrated buying power in ever fewer hands, while crowding out the good that might have been, absent the malinvestment and misallocation of credit inflation.

But credit deflation is unmanageable.  The powers that be can do nothing about it.  You can force people to borrow by having a half-dozen conspirators cut a $4 billion bond deal to try to cut a useless tunnel through mud under Seattle, but a some point there are no buyers for the $4 billion in bonds, since the income stream to repay the bonds is doubtful.  We are there.

Unable to crush small businesses by cheapo EZ credit on long terms to buy massive quantity, and extend expensive credit to customers, McDonalds can no longer expand, nor can IKEA, or Best Buy, Walgreens or Lowes or Office Depot.  Walk through any of the above, and you can spot the problems - look how they are spacing product, the selection, and to the degree shopworn.  These stores have the wrong architecture, wrong computer systems, wrong location, wrong employees, and wrong business model for what is coming up.  Look for yourself, store closings, 2014 and 2015 already.

Look who is becoming big business: coffee and sandwich shops, liquidators and auto parts (DIY repair) and note how much the depend on overseas openings.

All this destruction at such a broad and deep swathe will create a vacuum into which small business can grow.  With credit deflation, the necessary vacuum at the small business level needs banking to match the opportunity, and even the savings and loans are out of the question...  we need a private credit (not monetary system) independent of the hegemon's lockdown, capitalist-exploitative system.  It needs to be usury (interest-free).  It needs to be focussed on members, and support manufacturing, quality construction, specialty services, the very victims of credit inflation.  it would be a good idea, but presently such initiatives are extremely marginal, like Kiva Zip and community sourced capital.

Are such efforts scaleable? Yes!


Small business, independent credit, interest-free...  founded in economic hard times...  counter-cyclical...

According to the article, interest-free for the first 18 years...

WIR was founded in 1934 by businessmen Werner Zimmermann and Paul Enz as a result of currency shortages and global financial instability. A banking license was granted in 1936.[1] Both Zimmermann and Enz had been influenced by German libertarian economistSilvio Gesell;[2] however, the WIR Bank renounced Gesell's "free money" theory in 1952, opening the door to monetary interest.[3]
The article does have some questions...

Is the WIR Franc Interest bearing or interest free? The article says: "the WIR Bank renounced Gesell's 'free money' theory in 1952, opening the door to monetary interest" and then later says: "These WIR obligations being interest free have a cost of zero" Thanks! --
Is the WIR Franc Interest bearing or interest free? The article says: "the WIR Bank renounced Gesell's 'free money' theory in 1952, opening the door to monetary interest" and then later says: "These WIR obligations being interest free have a cost of zero" Thanks! --Lbeaumont (talk) 14:52, 23 January 2014 (UTC)
But that is the thing.... If you are a young scholar interested in finance, make this your phd study... as Wayne Gretsky said, "just be where the hockey puck is going next" so if you are interested in banking, study this.

For those of us in business, here is a working model we need to adapt in the USA.  This is all free market stuff, and in capitalism it is mostly criminal since the patterns and practices are against freedom, economic justice, peace and prosperity.  Just look around.

But proceed we must, and see how far an independent credit system within the hegemon's borders can go.  WE can have everything good without the hegemon's credit inflation scam, we just need freedom.

Feel free to forward this by email to three of your friends.


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