Barter as I am sure everyone knows is swapping one item for another directly, without using a medium of exhchange or money at all. so...-
Barter??
Barter???!?!
Isn't that completely pointless and impossible? I mean who wants to trade half a goat for some chickens?!!!111
To which I can answer truthfully, "large scale barter still happens!" Rather winningly it's often referred to as the reciprocal trade industry. The reason that barter can still happen is that some people have a hell of a lot of goats and some other people have a hell of a lot of chickens. Once the barrier of divisibility is removed, then all that needs to be set between the barterers (terrible word, if I just made it up sorry) is a ratio between the items that they wish to swap.
Half a ton of steel for twelve tonnes of ionised water? Deal. 250 goats to a thousand chickens? Let's go.
The second barrier to barter is finding someone who wants what you have to offer, not everyone wants chickens in exchange for goats, which is why we have money in he first place. There is a possibility that technology can in some degree remove the need for a coincidence of wants, the internet and other technology can be used to close that gap.
Students already do this with textbooks, there are online barter systems for video games, DVD's and other items. Corporations use barter for larger transaction, artists barter their time for items directly.
The major barrier is the taxman of course. he doesn't like barter much and will charge taxes on bartered things based on a number he has pulled from his ass. The bankers don't like barter much - no arbitrage or other opportunities to make fake money from thin air. The government doesn't like it much because barter is more difficult to track than having being plugged into their system, it's much harder to regulate. There is also the problem of a most commonly bartered item arising, which would displace fiat. Ebay was investigated by international tax offices for such an item appearing at one point!
An interesting form of barter is time bartering. Three hours of a doctors time for eight hours of a stonemasons or sixteen hours of a cleaners. The ratio being set by agreements between the people in the system. Such systems are not difficult to set up in an emergency - they have been used after economic collapses in places as far apart from each other as Thailand and Argentina.
Next up - trade exchanging!
Saturday, 11 October 2008
Wednesday, 1 October 2008
Alternatives to Banking, Part 1 - Local Currency
"A south Devon town has taken a step towards having its own currency after a month-long experiment.
Three hundred Totnes pounds were printed in March for circulation only in local outlets.
Eighteen shops joined Transition Town Totnes (TTT), a new group campaigning for a more self-sufficient community.
The experiment, which has just finished, could be followed up by another print-run of 3,000 notes later this year. TTT based the idea on a similar scheme in the Southern Berkshire region of Massachusetts, US. There the alternative currency, Berkshares, can be swapped for dollars in banksIn Totnes TTT gave away 300 notes at a public meeting in March.
Marjana Kos, of TTT, said: "It's keeping wealth here. It's keeping local trade alive and supporting local businesses. Louise King, manager of the Riverford farm shop in Totnes, said: "We like our own products, so it just seems right to have our own currency."
What might seem like criminal activity is actually perfectly legal - the notes were copies of a pound note last in circulation in 1810. Paul Hall, of Colourworks, which printed the notes, said: "We thought it was a little bit strange, printers aren't usually asked to produce currency, but once it was explained that it was a reproduction of a Totnes pound as opposed to a Bank of England pound, we were happy to do that.""Full story and video here - http://news.bbc.co.uk/1/hi/england/devon/6692755.stm
-----------------
And a link for the transition towns project -
http://www.transitiontowns.org/
Self explanatory, so I'll just say "hello."
"Hello. "
Have a good one,
Injin.
Wednesday, 24 September 2008
Ben and Hank Want Godhood....
Todays big story is that Ben Bernanke and Hank Paulson are trying to get a $700bn blank cheque from congress in order to bailout their criminal friends on Wall Street. Understandably, this isn't going down too well with the american taxpayer. It's a lot of money to be paying the interest off on for the rest of eternity.
It's a lot of money to put your own children and grandchildren into debt for. Many commentators are outraged at the proposal, senators are huffing and puffing about it, the blogosphere has gone purple with rage, Mr. Denniger the ticker guy has put his best suit on, other bloggers have caught trains to DC to go and protest in person. The outlook is uniformly negative from almost all sections of the population that aren't bankers.
So - likely outcomes from all this -
1) They get the money and dictatorial powers. The senators will get bribed. The media will get distracted by some other event. The ardent protestors will get told to DIAF. People will be very, very cross indeed....but what are they going to do?
This means hyperinflation - how do you make money in hyperinflation? Well you don't, you aim to lose less than everyone else. What you do is hold non taxable assets until it's all over and then liquidate them and reinvest. It will also mean hyperinflation pretty much everywhere on earth because the dollar is the worlds reserve currency.
2) They don't get all the money and they don't get all the dictatorial powers or the senators add some dictatorial powers of their own to the proposal. Some minor aspect of the bailout plan is allowed by congress - they cycle "only" a few hundred billion dollars at a time, Hank Paulson gets only partial immunity and some scant oversight of his actions is done.
Same as 1), really but will take longer, because the powers once granted in a limited fashion will expand quite quickly by degrees.
3) They don't get the powers and bailout money. I hadn't actually considered this as all that likely until doing this list. What this means is that they will be asking for the powers again in a few days time and so on until they get them. As the crisis deepens, the lack of alternatives offered will mean that the powers will probably be granted out of panic.
If they never get them, then the banks will fail, including the Fed. Again this means assets you can hold onto and waiting for calmer times.
4) Incredibly unliklely imo - the outraged taxpayer gets a day in the sun. The proposal is rejected, the banks are made to confess all, bad banks go to the wall, there are no insider bailouts, the senators do the decent thing, the legal tender law is repealed, fractional banking is put back on the law books as fraud.....the good guys win.
Banking system implodes. And same again - assets you can hold onto until the world makes sense again.
5) Something really random happens, like an amazing new technology is invented that reduces the need for money or aliens invade...a black swan. With a black swan...who knows?
What's going to happen in all circumstances bar the black swan?
STATE FAILURE
Hyperinflationary, deflationary..banks survive, banks go under...central banks survive, central banks go under..all roads lead to a state failure. Not that the state will completely vanish, but what it will do is shrink to a fraction of it's current size. It needs to steal to live and it lives to order people to obey it's whims.....and currently it steals and gives orders at very low cost via the banking/inflation paradigm.
Remove that and it will have to go back to robbing people in person - higher risk, more cost, lower reward. This means a much smaller but more vicious government, less regulation, less control..the seeds for the next boom in fact!
Personally I think hyperinflation is the preferred method - the plans are all in place for a highly militarised rump state (Patriot act, civil contingencies act) that can protect the wealthy from the poor and hyperinflation will wipe out a lot of systemic debts like entitlement programs, pensions, healthcare promises, foreign debts......in fact I am convinced the whole thing has been planned that way.
'Course none of my stuff is investment advice, nor can I see into the future. I just extrapolate from past behaviour and can do basic math.
It's a lot of money to put your own children and grandchildren into debt for. Many commentators are outraged at the proposal, senators are huffing and puffing about it, the blogosphere has gone purple with rage, Mr. Denniger the ticker guy has put his best suit on, other bloggers have caught trains to DC to go and protest in person. The outlook is uniformly negative from almost all sections of the population that aren't bankers.
So - likely outcomes from all this -
1) They get the money and dictatorial powers. The senators will get bribed. The media will get distracted by some other event. The ardent protestors will get told to DIAF. People will be very, very cross indeed....but what are they going to do?
This means hyperinflation - how do you make money in hyperinflation? Well you don't, you aim to lose less than everyone else. What you do is hold non taxable assets until it's all over and then liquidate them and reinvest. It will also mean hyperinflation pretty much everywhere on earth because the dollar is the worlds reserve currency.
2) They don't get all the money and they don't get all the dictatorial powers or the senators add some dictatorial powers of their own to the proposal. Some minor aspect of the bailout plan is allowed by congress - they cycle "only" a few hundred billion dollars at a time, Hank Paulson gets only partial immunity and some scant oversight of his actions is done.
Same as 1), really but will take longer, because the powers once granted in a limited fashion will expand quite quickly by degrees.
3) They don't get the powers and bailout money. I hadn't actually considered this as all that likely until doing this list. What this means is that they will be asking for the powers again in a few days time and so on until they get them. As the crisis deepens, the lack of alternatives offered will mean that the powers will probably be granted out of panic.
If they never get them, then the banks will fail, including the Fed. Again this means assets you can hold onto and waiting for calmer times.
4) Incredibly unliklely imo - the outraged taxpayer gets a day in the sun. The proposal is rejected, the banks are made to confess all, bad banks go to the wall, there are no insider bailouts, the senators do the decent thing, the legal tender law is repealed, fractional banking is put back on the law books as fraud.....the good guys win.
Banking system implodes. And same again - assets you can hold onto until the world makes sense again.
5) Something really random happens, like an amazing new technology is invented that reduces the need for money or aliens invade...a black swan. With a black swan...who knows?
What's going to happen in all circumstances bar the black swan?
STATE FAILURE
Hyperinflationary, deflationary..banks survive, banks go under...central banks survive, central banks go under..all roads lead to a state failure. Not that the state will completely vanish, but what it will do is shrink to a fraction of it's current size. It needs to steal to live and it lives to order people to obey it's whims.....and currently it steals and gives orders at very low cost via the banking/inflation paradigm.
Remove that and it will have to go back to robbing people in person - higher risk, more cost, lower reward. This means a much smaller but more vicious government, less regulation, less control..the seeds for the next boom in fact!
Personally I think hyperinflation is the preferred method - the plans are all in place for a highly militarised rump state (Patriot act, civil contingencies act) that can protect the wealthy from the poor and hyperinflation will wipe out a lot of systemic debts like entitlement programs, pensions, healthcare promises, foreign debts......in fact I am convinced the whole thing has been planned that way.
'Course none of my stuff is investment advice, nor can I see into the future. I just extrapolate from past behaviour and can do basic math.
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