Pacific Reserve Digital Currency

"No project would be too big…as long as the human talent and skill could be found."

Well enter thermoeconomics.
How about considering the New Zealand energy credit backed by renewable energy produced by New Zealand’s own power stations. It is created by the power stations as a credit, or fraction of future energy production. It is spent, by redeeming for electricity or passing the credit on to someone else to spend, in a similar fashion to traditional currency. But it is not fiat, it is essentially a resource backed currency.
If nothing else, the energy could be used to mine bitcoin, or pay for telecommunication services (which might include gaming), but I primarily envisage it as a UBI for the poor for electricity, fuel, and food. Did you take a look at the research at steadystate.org? Or kilowattcards.com? Or http://www.archive.org/stream/TechnocracyStudyCourseUnabridged/TechnocracyStudyCourse-NewOpened?ui=embed#page/n173/mode/2up )?
My much misunderstood poll is up here:
https://www.loomio.org/d/m8CNKAvR/that-the-carbon-tax-does-not-address-the-real-value-we-put-on-the-environment-and-we-need-a-sustainable-energy-credit-instead

I understand you are interested in changing our reserve currency. Well, that in my opinion is secondary to making a New Zealand energy credit. After all, we're so indebted to the IMF if the value of the US dollar goes tits up its only easier to repay! I think the importance of fiat is going to decrease as we enter the realm of big projects only governed by thermoeconomics and environmental concerns.

@jamesabbott "After all, we’re so indebted to the IMF if the value of the US dollar goes tits up its only easier to repay!"
That is definitely true, however in the mean time we will be continuing to purchase more devaluing US $.
Idea, How about using maritime ThermoHydro power stations to produce electricity which in create Hydrogen And refuel at the powerstations PanMax style tankers. Instead of backing the currency with gold we back it it with hydrogen at world prices.

@colindavies Have you seen the Hydrothermal technology described at http://marshallhydrothermal.com ? Just one platform will generate the electricity equivalent of 4 nuclear power plants, with 100% safety and greenness. I have proposed this as the best energy solution for New Zealand, as we have all the elements necessary to take advantage of it.

@marcwhinery @colindavies @davidnoblet Great ideas folks! Actually any enegy source could serve as the basis for an energy credit but I believe in legislating a moral imperative for renewable and environmentally friendly and sustainable generation to be legal tender. Hydrothermal and hydrogen is worth investigating as is harnessing the immense currents (pun intended) in Raukawa, Cook Straight with a turbine of some sort. The two technologies might work well together, the key is the thermoeconomic principles and scientific understanding to motivate innovative, efficient, productive technologies over archaic ones protected by fiat currencies

Don't agree with part 3 using price of gold as measure, as this price can be manipulated. Why can't we just treat 1 kiwi coin as 1 NZD legal tender, exactly the same as a physical 1 dollar coin.

The problem with the idea as presented is that in order to issue a currency in sufficient quantities to act as a global reserve, the NZ government would need to acquire a massive amount of gold, so there would be a huge initial investment that would, I expect, be beyond the government's capacity to meet even with ruthless economising.

Having given this and other associated idea some thought, feel that though this idea may seem good, if IP adopted it we would be unelectable. Plus, I'm not sure it is a good idea.

It seems just too huge a change for our country, our economy. However, I do think that introducing an official digital currency would a be brilliant idea.

@davidjohnston I agree that a digital currency be introduced. I also think that people with significant software experience in related fields be seriously consulted, along with people who will discuss the matter in great depth. This forum has been too general and lax IMHO when evaluating the presented alternatives, quickly throwing things out after cursory looking at it. I for one, with significant software engineering experience of several decades, spent a great deal of time evaluating the BitCoin idea, and identified many problems with it when put into service on a wide scale. I see it as a hobby-quality invention, and what I’ve been designing is an enterprise-level crypto-currency system with security and corruption detection designed into it. I only ask that we as a party refrain from locking ourselves into any particular method of doing crypto-currency until the various methods are laid on the table, and qualified technical people rigorously evaluate them.

@davidwong I agree with your comment on Gold manipulation. Also objectionable about gold is that the actual quantity is limited. Gold can be dropped.
However when or if other countries were to buy into this and produce there own reserves it would be easier if there was some form of yardstick, similar to how the trick dick Nixon petrodollars worked between SaudiArabia and USA.

@kennethkopelson
Maybe you have a bit of a similar background to me,
I also see problems for Bitcoins future , Although maybe they will be resolved, by greater minds than me.
Example. Who will be responsible for the merkel tree pruning. Will they expect a fee for this.
Eventually bitcoin.Info will be the size of infinity-1 bytes, so how many nodes will be capable of conducting transactions. Will these nodes then become the equivalent of transactional banks of the future?
Also when will the check-pointing become truly distributed?
I see so many questions in bitcoins future, I personally
don't wish to see my countries future reliant on it, although I'm happy to use sotachis for my own purchases.
But the consensus based crypto currency protocols are a good basis to develop a national digital currency.

@colindavies COlin I agree with all your questions about bitcoin, and really hope that others will look deeper into this before jumping on the bitcoin bandwagon.

The bitcoin bandwagon has already bolted with the horses. It is looking to be the world reserve crypto-currency whether we like it or not. Governments around the world are unable to stem the uptake of Bitcoin, neither will any counter-coin effort here be ultimately successful in countering this pan tribal, pan country movement against Government controlled currency.

@terangikaiwhiriake I think you are mistaken. It may appear like that will happen, but once it is attempted to use it in any wide-scale fashion, the inherent flaws in its design will become quite apparent. It is mainly being used by speculators at the time, and not for any real heavy-duty economic purposes. There are only 21 million possible coins, and this limit will soon become a serious problem. Also, the block chain will grow to such a massive size that it will be unworkable, and then you will have the contention that will come when people try to prune the chain, and archive it. Who will do it? Who will control the piece that is archived? These any many other problems will begin to surface as the uptake increases.

Also, I fully agree with Warren Buffet that Bitcoin is not a currency. It is an investment vehicle, and as such will never be used as a general currency. When a single coin is trading at $100,000 dollars, you will see exactly what I mean...try to use it to buy some milk :)

http://upstart.bizjournals.com/money/loot/2014/03/04/why-warren-buffet-laughs-at-bitcoin.html

Here is another good article that outlines some of the Bitcoin problems:

http://guardianlv.com/2014/03/bitcoin-demise-imminent-or-impossible/

@terangikaiwhiriake a major problem with Bitcoin, as confirmed by this article, is the fact that coins are completely untraceable. That is in stark contrast to my crypto-currency system which is fully traceable, while also being generally secure to all users.

http://www.weeklystandard.com/blogs/bitcoin-dead_784187.html

As a political party, WE MUST not fall into a trap of backing a crypto system that was originally designed to thwart governments, and to undermine them. There is a THIRD choice to the two extremes of 1) no security for the public, and 2) total security for individuals, even for criminals. Both options are repugnant to a free society, where the first makes the public susceptible to government abuse, and the second makes the public susceptible to criminal abuse.

This THIRD way that I'm referring to is the leveraging of anonymity protocols, electronic police crypto-warrants, and separation of powers for data collection and data utilisation. Several years ago I began this project of designing an integrated society governance system, all in anticipation of it someday being required. It now seems that that day has arrived, and so this is what I've been discussing in the policy forum, and in this incubator.

Its a known fact that Bitcoin has pseudo-anonymonity, Organisations like the NSA could potentially track most bitcoin transactions to their users, because they have oversight over the majority of the internet. My point is an aside to all of that, its as I stated, the world is moving away from Government controlled currency. If its tracing transactions to transacters, then that is where the time and effort needs to be spent.

Bitcoin is designed to be a digital reserve currency which is why it has the limitation, a finite reserve. The blockchain size argument is the usual argument that is thrown around that does not take into account some of the innovations taking place right now around dealing with those issues.

Both Paypal and EBay are about to accept Bitcoin, Facebook is now accepting some altcoins. These businesses used all the same arguments over the past 2 years, but have now conceded to the inevitability of this worldwide movement.

My point again, is that the horse has bolted on this issue.

@terangikaiwhiriake and my point is that there is not just one horse who can win. "Reserve" currency is just that...reserve. It is not the money we use for day to day, and that term only has applicability in a fractional reserve banking context. With my currency+economy proposal, there is no need for a reserve currency, since money is simply money, and it's all crypto-currency. The whole concept of "reserve" implies that you need to keep something in the bank as reserve, so you can create bank-credit-capital to lend out in excess of that reserve. My system gets rid of that idea by turning the whole thing on its head, allowing the government to safely create all the money it wants POST-FACTO for work already done, without having any inflationary effect.

And @terangikaiwhiriake, if you bothered to read the article where Warren Buffet accurately points out that Bitcoin is NOT a currency, simply because of these limits. You talk about a "finite reserve", but do you really know what you are talking about? A finite reserve ensures that the value of each coin would go up, up, up the more they are traded. So, if one coin is trading at $100,000 each, how will you use that coin to pay for your electric bill? It will have the exact same problem that gold has...try using gold to pay for groceries and see how far you get. If currency has an investment value in itself, it cannot function well as a currency, which ideally should ONLY be a medium of exchange. That means that money should not have a high intrinsic value, such that people collect money for money's sake. Money should only have value because it allows you to exchange it for things that DO have intrinsic value.

Anyhow, unless a person has a sound understanding of economic forces and motivations on a wide-scale they will make mistakes in evaluating how well an economic system will work.

@terangikaiwhiriake also, the very notion that a viable currency can exist en masse without government support and involvement is naive. It is clear that Bitcoin and other currencies like them were developed as a type of anti-government revolt. I applaud those efforts, and think they send a very loud message to existing governments. That being said, I do not believe that anything like them can endure for long, and that once a better system is introduced, people will bail out of Bitcoin type currency practically over-night. From what you have said so far, I see your statements to be purely of a fearful perspective, and not based on true deep understanding of how these technologies actually work. You are appealing to "those out there" who are developing solutions to the problems that are fundamental and inherent in the way those systems work. You can't fix fundamental flaws. I should know, since I design systems and redesign systems for a living, and have done so for quite a long time. What I am proposing IS a fix for those flawed systems. Why do you think I worked on it? I looked at Bitcoin, and even looked into used it. Me being unusually familiar with complex software systems, however, allowed me to see fatal flaws in the very conceptual foundations. It was this that spurred me onto designing something better.

For New Zealand, if we present a better system, people will switch from Bitcoin to Value-based, wanting to benefit from the improved qualities. Bitcoin will likely continue as an investment vehicle for some time, but my prediction is, it will fade away, just like 8-track, betacam, floppy disks, and Friendster did...

Thanks for the 101 on reserve currency.

"if you bothered to read the article where Warren Buffet"

I read it, I just don't agree with him.

"You talk about a “finite reserve”, but do you really know what you are talking about?"

Do you, its simply an intended deflationary tactic built into the bitcoin application.

"So, if one coin is trading at $100,000 each, how will you use that coin to pay for your electric bill?"

I am amazed you do not know the answer to that.

Gold bars cannot be chopped up by your average consumer, and if one was to present a shop keeper with a 10c coin cut in half, it would not be accepted as a valid coin, bitcoins on the other hand can be divided down to 0.00000001 BTC

At $100,000 per BTC, you merely pay 1.5 mBTC - or 0.00150000 bitcoin, on your $150 power bill? ...or did you forget that bitcoins like all crypto-coins can be divided in that manner.

"also, the very notion that a viable currency can exist en masse without government support and involvement is naive."

The very idea that it isn't already viably existing and evolving is where the naivety exists.

"I do not believe that anything like them can endure for long, and that once a better system is introduced, people will bail out of Bitcoin type currency practically over-night."

I will guarantee you this, any crypto-currency that replaces Bitcoin will have at its core the same intrinsic idea of removing power from governments around issues of currency.

Governments will have to wake up to that reality at some point, large corporations are at the point right now. Both China and Russian have woken to it and are trying to block its uptake and failing epicly, and the US state legislators have also awoken to the reality of Bitcoin, and are initially trying to regulate it.

"I see your statements to be purely of a fearful perspective, and not based on true deep understanding of how these technologies actually work."

Funny. You hear unicorns, I hear horses. My assessment is that its beyond the point where Governments can ignore it although they are free to do so, and many do, if you firmly believe we can be saved from crypto-anarchy, good for you.

"You can’t fix fundamental flaws."

They are being fixed every day by the many hundreds of thousands of developers determined to make sure P2P crypto-currency work and receive widespread implementation. The version of the Bitcoin application you see now will not be the same as the one you see in several years time, and other alt coin networks are being built right now that address some of the intrinsic short-coming in Bitcoin.

On top of that, every aspect of the network is being attacked every day by just as many state and non-state sponsored attackers determined to either destroy it or rip it off. This is another aspect of crypto-currency that makes it the lasting model, its durability while under attack.

"....my prediction is, it will fade away, just like 8-track, betacam, floppy disks, and Friendster did…"

Crystal balling is fun, I do it all the time but I never make serious plans from those pie in the sky wishful predictions.

Bitcoins are traceable.
Your wallets bitcoin.info is 100% transparent.
All that is needed to be done is to match IP addresses to a pattern.
To confuse things you can try using some system like TOR, or you can use a mixer.
There are several examples of using bread crumb clustering to do tracing.
Also I wouldn't be surprised if some of the mixers were owned by the NSA or DEA.
I keep telling people, just because "you" can't trace them doesn't mean someone else can't. But this myth of untraceability persists.
Yes bitcoins are pseudonymous but that doesn't mean untraceable.
Bitcoins were designed to make use of distributed currency to all a decentralized protected trading system.
Any notion of untraceability is in the clompexity of the system.
An untraceable system would have to be centralized, which bitcoins definitely are not.

@colindavies The fact that OTHERS can trace transactions is precisely the problem. I want a system that is UNTRACEABLE for everyone, except for duly authorised police who have a court issued e-warrant. The warrant would be a digital certificate that would unlock ONLY the financial data that is applicable to the warrant. When I used the term TRACEABLE, I'm referring to something that will hold up in court for a criminal investigation. Using IP addresses is messy at best, and that is especially true when the massive block chain becomes pruned numerous times, and archived...who knows where? I'm also referring to the inability of unauthorised people from tracing anything. I'm also referring to a system is not capable of having money stolen from it, and as you know, Bitcoin has had coins stolen from the block chain on a number of occasions. Sorry, but this system is lacking in a lot of ways, and as a software expert myself, I can state categorically that WE CAN DO BETTER.

Here's a little article detailing the $500 million in Bitcoins that have stolen since 2010:

http://www.businessinsider.com.au/how-many-bitcoins-have-been-stolen-2014-3

@terangikaiwhiriake My crystal ball tells me there is a crypto-currency war on the horizon... Thanks for the interesting counter-info...I'll research what you've said, and respond in a day or so...

"Bitcoin has had coins stolen from the block chain on a number of occasions. Sorry, but this system is lacking in a lot of ways..."

Using that same analogy, since there are numerous security holes in Debian 1.0, therefore the latest distro of Debian is insecure...or, my online banking login was hacked, so therefore SHA-256 is broken.

The errors that brought about those heists, as with most crypto errors, was 1/ crappy implementation by wallet and pool application developers and 2/ the same developers not updating to the latest version of the Bitcoin application which had those issues fixed.

Mtgox for example wasn't tracking if the coins were freshly generated or what was the status of their height. Other flaws in their wallet application, which they had been warned about, 'caused' double spending, and so, like those others that did not patch their stuff, they lost their coins. When I say lost, I say that because most of the coins were not stolen as the hyped up media love to report, but were paid out multiple times to their own customers due to errors in the coding of their wallets.

wow- great to see this debate happening.

I say- forget any 'advantages' or ' strategic' 'first mover' type economic principles. What we need is to rid ourselves of the slavery we are under by the City of London controlled foreign baking cartel (and their Rothschild Bank/ RB headquarters) who all work in unison to pump and dump our markets on a cyclical basis (from property boom to bust, no growth with mass lending to high growth then collapse etc). Our focus in NZ should be on a domestic digital currency that allows Kiwis to trade among themselves without the bankers restricting and taking their cut all the time. Its $6 billion or more they steal from us every year, and no matter who you vote for, their profits rise. It is plainly obvious to anyone with a calculator who is running our Country - and its a slave system. My interest is in seeing people being able to trade, employ, grow and prosper without being limited by the money supply. Money is a means of exchange and a store of value- period. All else is fraud. This can easily be achieved by setting up a digital currency that is ALLOCATED to all Kiwis - and then let them choose to trade with it or not. Using existing platforms and technologies used by existing digital currencies. You simply go to the website, confirm your details and ID, and the money is yours. There will be hesitancy at first, but it would take off like wild fire. Transactions recorded to help calculate market value. We need to forget ALL the existing crap about interest, fees, profiteering, and existing banking models and simply design a currency that is allocated - no mining crap which excludes some people. Just register, get the money, start trying to trade with it. It is to help people and remove the power from the existing criminal bankers- that is all. Any debate about how to benefit for oneself, or profit from it, etc and we just recreating the same mess essentially/ eventually.

@cohenglass I agree with you in principle. I don't agree we should just wham-bam use whatever the heck is out there. This needs to be done, I agree, but unless we do it well and base our decisions on wisdom (and not just impatience-fuelled haste), we could end up causing a whole kind of mess. I'm a systems guy...that's why I do. I look at manual systems or existing automated systems, and I figure out their weak areas, and how to make them better, or in the case of manual processes, how to automate them in the best way. Let's just make the policies, and let the guys who spend their lives designing software stuff do their thing. Of course, once it's fleshed out on paper, those who are wanting to see how it works should have free reign. I'm just saying, let's get it done, but let's do it the best we can.

Hi Kenneth - points noted. We are seeing the foreign banking cartel all running ads currently for "great new" debt packages and services. This is because they know things are tight for many Kiwis right ow (due to all the other cartels raising prices- while the banks restricted money supply at the same time). This is violence being done to us as we "debate". I can see they will also move towards some extent of 'collapse' in the housing market this year, having already pumped that up with their policies over previous few years (with John Key's help, and to maintain some semblance of support for his regime). This will be more violence against Kiwis this year. My point being- regardless of politics, and the pending election and result- work should start on this project immediately. It is the single most important thing we could do to help take power back over our own economy, Country and future. Thus my sense of urgency- The Internet Party and Dotcom are investing huge resources in this campaign, and I can see many great ideas being discussed- but my view is that starting work on a digital currency that is allocated to all citizens should be prioritized, as it will have the biggest / immediate impact on all of our lives, for the better. Even if the Internet Party gains some seats- it could take years to force through any sort of bill/ act on this idea. We should use resources to go ahead now anyway- and make it happen. ASAP :) That's my take at least. The foreign banks clearly control the current system of Government, just look at their profits each year, regardless of who is in power. We need to proceed, in spite of them and this system of Governance (slavery) they control. Its key.

@cohenglass Just so you know Cohen, I've been working on the designs for these systems for the last several years. A small team of dedicated developers could roll out a prototype for testing in about 6 months time. So, the work has already started on all this...it's just now being talked about in a more public way.

@cohenglass If you'd like to discuss ways we could get this off the ground sooner than later, I'm quite happy to meet with you and whoever else would make sense to include.

I think- the release of an allocated digital domestic currency to citizens would put more power back into the hands of Kiwis than say, The Internet Party winning 15% of the election. If the goal is in fact to take power from the corrupt (foreign bank) run establishment, then I think the currency idea is more important than anything else we can/could do. And thus should be prioritized. :)

Kenneth- really happy to see and read all this- great work. Will keep a close eye. I can also understand why The Internet Party may not want to push the idea too much at this stage- as it would be the biggest threat to the establishment out there. They would damn near rather bomb us all into oblivion, or label us a "terrorist State" and try frustrate all International trade, than see it done. I suspect. They would fight tooth and nail, as the money supply is their means of control. If we are serious about 'evolving' though, it should be top of the list, and done regardless of the election - campaining and results. :)

Hi Kenneth, I am currently based in Otago. I would be happy to join a committee to prioritize and work on this, and would consider coming up and relocating to do so. If a basic action plan/group was put in place, I could make plans to come and dedicate some time to it. Can anyone run it past "the big guy" and see if there is any level of support available? From the Internet Party I mean. The plan being to proceed anyway- regardless of/ or in conjunction with the election campaign?

I dont think I have a good understanding of the mathematics needed. nor do I know much about Bitcoin model, but I suspect their needs to be more supply of the money available as things proceed. Initially however, I think you could almost do a "soft launch" were people are invited to go online to a website and 'claim' their initial allocation- even it was just "$100" or "$1000", transactions are databased and recorded with the option to keep certain details private and secure, and I think we would see rapid take up. The first transaction might be as silly as two mates betting on a football game at the pub, but would quickly grow into things more serious. Then role out more of the currency perhaps as thing develop. I guess I could be wrong, or fundamentally flawed on these ideas/ concept, but it makes a lot of sense to me and can genuinely see it taking off - and passing the banks in no time. As people gain confidence in it. Starts out almost like a novelty, but takes off like wild fire. I note also that www.kiwicoin.... has gone. That would be the best name.

i ran this idea past a few of my business clients today- and they were aghast i was even considering it. cash, they said, is our very last bastion of any real freedom from the criminals (Libor) that run the money supply. i see their point. there has to be absolute guarantees on privacy and non centralization. as well i would say as a paper based back up in case 'the lights go out'.

@cohenglass I had thought of this as well, regarding the lights going out...I actually watch the TV show Revolution, which is all about that scenario. My solution to that is as follows: each month, each e-bank prints a Tally Report, printed on special paper that is not easily forged. This report provides each person's balance at the end of the month. There is also a guaranteed minimum value of let's say $10,000 per person (or whatever makes sense so people can live for one month). This report is then stored in a special vault. If the lights do go out, the report will be used to give each person the amount of physical currency on the report, plus the minimum guaranteed amount.

While not ideal, this will at least get everyone onto a physical system pretty close to where they should be. Remember that my currency system works hand-in-hand with the Value-based Economy, which is really the BIGGER society freedom changer. The VBE can work with physical currency also, so no problem there. You just need a "mint on demand" capability, which is possible. You could use a script based IOU, which then gets converted to cash, should the bank not have enough on hand...kind of like checks.

Anyhow, it can be hard to convince others of something if you just came to see it yourself. I'm sure that I could answer any of your friend's objections. Remember, brand new ideas seem scary at first because people don't know how to navigate them yet.

It'd be funny if some tiny island nation fixed the world reserve currency crisis. There's no reason a few bank failures in one country should take down the world, unless the entire world ran on the one currency that one country used.

@colindavies "The US dollar is the major world currency at present for solely one reason; there is no alternative. "

Whatever. There are plenty of alternatives, ie. every single other currency in the world.

And people do use other currencies. Buying NZ goods, for example, uses NZ dollars.

@davidjohnston @marcwhinery
You are taking me out of context. 'Partly because I could have worded it better.'
I was using major world currency, where I should have said major world reserve currency.
And I'll stand by that statement as I have read it in various economics papers for years, and its never been disputed.
(A good primer from Forbes)[http://www.forbes.com/sites/billconerly/2013/10/25/future-of-the-dollar-as-world-reserve-currency/]

@marcwhinery

It’d be funny if some tiny island nation fixed the world reserve currency crisis. There’s no reason a few bank failures in one country should take down the world, unless the entire world ran on the one currency that one country used.

I think it would be hilarious. But to counter the said banking problem, what if we removed all the large banks and made the people all the banks.

Or we could expand the system so other cooperating countries joined the reserve currency under license. Similar to how the bank of Scotland, Bank of Ireland can all print money for the UK.

http://www.nzherald.co.nz/internet/news/article.cfm?c_id=137&objectid=11300912

Bitcoin is failing to take off in NZ.

The banks are making their move against the part of the cryptocurrency protocol suite that they have influence over, and that is when it is converted into NZD. It was bound to happen and is just a part of a tit-4-tat that will have the same results that we all saw when the music and film industries tried to use a hammer to break P2P file sharing.

Universal bonus income folks. Backed by renewable energy. The NZ renewable energy credit that is interest free, allocated unconditionally (backed by renewable energy at say 15% of forecast production), to increase domestic money velocity, and make New Zealanders rich again. And if it works here, it will work everywhere. Cohen Glass hit the nail on the head when he said "Money" is a standard of value and means of exchange only, anything else is fraud. A UBI denominated in NZ renewable energy credits (nz generacoin?) that eliminates banking profits, keeping value circulating in our country, might actually go viral. Renewable energy already has, and for good reason. We can think our way out of WW3.

@jamesabbott

A UBI denominated in NZ renewable energy credits (nz generacoin?)
Can you post some more detail of your thoughts please?

@colindavies @cohenglass @lailaharre https://www.loomio.org/d/m8CNKAvR/that-the-carbon-tax-does-not-address-the-real-value-we-put-on-the-environment-and-we-need-a-sustainable-energy-credit-instead?proposal=VMweXncC

The notion that a growing currency flow and rising incomes is dependent on, or is the primary cause of, increased resource usage is fundamentally flawed.

Changing the currency system is no silver bullet. It may well make things worse.

No, the flaw in fiat currency is usury when addressing income inequality with notion of debt, and consumption based growth when addressing sustainability and the environmental imperative. On a more philosophical level the problem is rewarding greedy behaviours. Efficiency as profit and productivity as growth, thermoeconomics and the environmental imperative for sustainability are colloidal silver for the financial system. The credit need not be spent only allocated, we incentivise more efficient and productive technologies rather than rewarding less efficient or productive ones at social and environmental expense. We are offering a parallel domestic currency so don't panic. Think of it as a universal domestic bartercard, towards a steady state economy. Investigate steadystate.org and the price system chapters of the technocracy study guide in the UBI link provided and get back to me.

There's some laudable goals there but I just don't get the monetary system fetish. The nuts and bolts of the system that we have just doesn't work the way they imagine.

All these groups view the system through the monetarist lens with all its flaws and misconceptions. As soon as I see the words 'money supply' used to infer a quantity value I switch off.

Fiat money is a flow, not a stock. And that is what people find hard to grasp.

Commodifying money is throwing the baby out with the bath water. It would be disastrous.

@johng1
Commodifying money is throwing the baby out with the bath water. It would be disastrous.

Yes if it done in an irresponsible way it would be disastrous. I am expecting a long term approach to this controlled by a responsible Government system.
For example as NZ has moved towards a cashless system, currency usage has dropped. By bringing in a digital system we need demand of usage to dictate what is minted. A bad government would mint what the Government demanded to resolve surpluses etc.

"By bringing in a digital system we need demand of usage to dictate what is minted. A bad government would mint what the Government demanded to resolve surpluses etc."

I don't understand what that means.

Probably didn't explain it well.
Lets take the US as an example.
The US$ is many things and could easily be described as a commodity, against all other currencies and commodities.
There is an active demand for that US$ throughout the world, especially now as many countries are being forced into dollarization of there own currencies.
If the US was responsible it would be creatting only the new money to match that demand.
However the US is creatting that money to match the US internal demands such as deficits and bailouts. Thus the Triffin dilemma.
In the future the US though has the ability to save itself by detaching its internal and external economies, leaving us with the dirty bathwater. (This is still some time off)
There are great opportunities for the first countries to move out of this system, and punishments for the last to stay. I suggest if we sign the TPPA we will be punished.

Who is being forced to dollarize?

There is a glut of US$ because the US runs a trade deficit. If you want to export you have to accept that you'll accumulate foreign currency.

Sovereign government deficits are a reflection of private and foreign sector savings patterns.

In net income terms:
Private sector surplus/deficit + foreign sector surplus/deficit + government sector surplus/deficit = 0.

@johng1 I wanted to like ur comment about money flow until you said commodifying money is throwing the baby out with the bathwater. This is not the case. A more accurate analogy would be running the baby a fresh bath, alongside the dirty fiat rinse (kilowatt hour credits are the commodity, energy can be neither created nor destroyed and has utility, and I am told even the old corn exchange model was quite successful). So when we have renewable energy as a digital currency to reward non greedy choices, we the parents can give our children a clean bath, Maui dolphins to swim with, and clean rivers while we're at it. The losers are the service sector and greedy banksters. UBI (my Universal Bonus Income) deals with the loss of job with improved technologies, and less people suffer. Doesn't everyone deserve a bonus? I'm not talking a gold standard or silver bullet I'm talking steady state economics and sustainability.

I don't agree with a UBI for similar macro reasons (plus a whole load of social reasons) that I disagree with commodity money.

The problems that we have are political.

The sovereign, fiat, floating exchange rate currency systems we have are perfectly fit for purpose. The trick is to get the political power to use them so.

Either way you're going to have to overythrow the powers that be.

Good to hear the problem is political, but I believe the power is evenly distributed (crowdsourcing of social capital, energy, opportunity cost New Economy) and I don't believe in overthrowing anybody we can work alongside. Let the systems keep each other honest, although I fail to see the mechanism in sovereign, fiat, floating exchange rate system that keeps anyone honest (spiritual?). Price system flaws exist (Technocracy study guide) if not for alternatives (Bernard Lietaer). Resourcing through honest combinatorial auction has been working in grid and cloud computing environments for some time. A UBI denominated in the New Zealand Renewable Energy credit won't break the bank but will help a lot of people.

If we are so far off using the current system effectively due to the political power of the rich now, how on green earth do you propose to completely rebuild the entire societal basis without overthrowing the whole kit and caboodle?

It's hard enough getting people to reject their monetarist, supply side conditioning about government spending and money.

Look at all these conversations about tax and the perceived need for the government to balance its budget.

It's nuts but that's how people are trained to think.

Simple, there is no reward for using the price system efficiently. Renewables are not just another resource, they are collectively, cooperatively, ours. Or should be. By making a renewable kilowatt hour another unit of currency we can reward productivity and efficiency without rich or poor bias and with climate incentive. We make people think slow, and optimise. Train 'them' to 'think different' and stop manufacturing 'shit' (Steve Jobs - Apple). We already had a vote on Universal Bonus Income and Technocracy in this incubator and the majority is with me. These are 'occupy' era solutions from the storyofstuff, technocracy, Chicago plan, oil drum, CASSE. It's a great place for these tax fiddling budget balancing or gold bug fanatics to start, storyofstuff.org

I really can't fathom why you think this system will achieve what you think it will. Unless you want to shrink the economy and the human activity within it.

Commodity money is mathematically certain to fail.

We have a good system now, we just need to get more people to understand it and get the political power to use it for public purpose.

Get rid of private banks by all means, but limiting credit to a centralised and artificially controlled central source is unnecessary and fatally flawed when it comes to meeting human need and innovation.

Lets be clear I support this:
@colindavies @cohenglass @lailaharre https://www.loomio.org/d/m8CNKAvR/that-the-carbon-tax-does-not-address-the-real-value-we-put-on-the-environment-and-we-need-a-sustainable-energy-credit-instead?proposal=VMweXncC
It's not money, it's energy, and it works. I don't know about mathematical certainty of failure, but I would argue most systems are mathematical certain to fail, like our current one (and usually with a world war). That's a reboot. Desperate times desperate measures and we tend to ignore the fact that our new car will eventually blow up when we drive it from the showroom - but sustainability and reducing scarcity thereby reducing conflict, is certain to succeed. Claiming that the current system hasn't already failed in the past and headed for failure again with certainty is what I don't understand. Containing an economy to the level of support afforded by the biosphere and qualitative growth are both good ideas.

The monetary system hasn't failed. Nor will it of its own accord.

The political system has failed. And it has done so because the neoclassical school has convinced the world that money is a commodity and that government spending must be limited by self imposed arbitrary restraints.

We have unemployment and poverty due to political choices. Not because of the currency system.

The currency system can be used by the government to solve unemployment and poverty. But the politicians don't understand that government finance isn't like a household.

Or they believe that more government money will cause Zimbabwe!!!

Re the edit. I don't agree with any commodity backing of money. It's an arbitrary restraint on government policy and human activity.

Money itself has no intrinsic value and it has always worked best that way.

The gold standard for example was a constant failure of revolving, ever widening crises.

People have forgotten what everyone discovered back in the 30s and the great economists have been overthrown for Austrian School and neoclassical hacks who are shills for finance capital/big business.

@johng1

The monetary system hasn’t failed.
Our Bretton Woods based monetary system failed on
August 15, 1971, only naïve stupidity has kept it working

The reason why the USA has the worlds lowest interest rates still is evidence that the rest of the globe is subsidizing the US existence.

Dolarized Currencies From Wikipedia
British Virgin Islands
Caribbean Netherlands (from 1 January 2011)
East Timor (uses its own coins)
Ecuador (uses its own coins in addition to U.S. coins; Ecuador adopted the US dollar as its legal tender in 2000.)[34]
El Salvador
Marshall Islands
Federated States of Micronesia (Micronesia used the US dollar since 1944)[35]
Palau (Palau adopted the US dollar since 1944)[35]
Panama (uses its own coins in addition to U.S. coins. This country has adopted the US dollar as legal tender since 1904.)[36]
Turks and Caicos Islands

Countries using the US dollar alongside other currencies[edit]
Bahamas
Barbados (Barbadian dollar pegged at 2:1 but USD is accepted)
Costa Rica
Belize (Belizean Dollar pegged at 2:1 but USD is accepted)
Bermuda (Bermudian dollar pegged at 1:1 but USD is accepted)
Uruguay[37]
Iraq
Cambodia (uses the Cambodian riel for many official transactions but most businesses deal exclusively in dollars for all but the cheapest items. Change is often given in a combination of US dollars and Cambodian Riel. ATMs yield US dollars rather than Cambodian Riel.)[38][39]
Lebanon (along with the Lebanese pound)
Liberia (was fully dollarized until 1982, when the National Bank of Liberia began issuing five dollar coins;[40] US dollar still in common usage alongside the Liberian dollar)
Zimbabwe
Haiti (uses the U.S Dollar alongside its domestic currency, the Gourde)
Somalia (along with the Somali shilling)
North Korea

.

Yes, Bretton Woods failed and we moved to fiat, floating exchange rate, non-convertible currencies.

But the thinking hasn't caught up.

I don't see that those are examples of countries being forced to dollarize.

"The reason why the USA has the worlds lowest interest rates still is evidence that the rest of the globe is subsidizing the US existence."

How so? They have ZIRP because of a demand crisis that politicians refuse to fix with fiscal policy. Monetary policy can never work on its own but the lunatics run the asylum and they think that government spending on the little people is evil.

I'm not a great economist I like to spend money on things that matter. However, ending Bretton Woods followed by Glass Steigl was the beginning of unrestrained madness and as long as NYSE and NASDAQ and oil is denominated and traded in USD the USD will rise due supply and demand at our expense. Ultimately Google knows what's going on and Google will decide what to do about it. I still find solace in that, because they have a chance to implement in the direction of Star Trek while you guys battle in a Star Wars universe.

@jamesabbott
mate I in a Dune universe .

Bretton Woods failed in 1971. Like any commodity backed system it had reached its resource limit.

Glass Steagall was repealed under Clinton and was a political act. A gift to Wall St.

Google is the ultimate state corporate entity. I wouldn't be placing any faith there.

Energy is a unique resource as can do more with less through innovation quite easily and is actually quite abundant eventually even post scarcity.

James Abbott
(Bernard Lietaer)

It just occurred to me who he is. He was one of the designers of the insanity that is the Euro.

So to me his name is as mud as Milton Friedman. These are people who work for the very, very rich and their main business is lying.

I'm told he has changed his tune and supports multiple local currencies since "Money and sustainability - the missing link" via Club of Rome as a result of his work with the Euro.

@johng1 Let folks make up their own mind http://en.m.wikipedia.org/wiki/Bernard_Lietaer
Perhaps you could elaborate on what you think we learnt in the 30's (or would have were it not for world war 2).
What have these guys done to you?

In every good lie there is an element of truth

James Abbott

Yeah well multiple local currencies sounds like madness to me.

The 30s brought about macroeconomics, sectoral balance accounting and the debunking of neoclassical precepts like the Quantity Theory of Money and other nonsense.

Unfortunately the neoclassicals made a comeback in the 60/70s and we've suffered from the madness ever since.

@jamesabbott
IMHO: Bernard Lieater is one of the few money thinkers who makes sense to me. Most of my ideas eg 'Pacific Reserve Digital Currency' are derived from knowledge I got out of stuff he authored.

I maintain that people are looking to blame the money system for political problems.

I think this idea has promise and the skills that Kim Dotcom has may be valuable here

This was definately an interesting thread. Thanks guys. Great topic. 5 years later 🙃