if it gets really bad -promisory notes? (Full Version)

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LadyEllen -> if it gets really bad -promisory notes? (10/7/2008 5:17:56 AM)

I was thinking about what could we do if things got really bad - no one could get credit, the official currency became worthless or unobtainable, the financial system in general broke down, that sort of thing.

My thoughts turned to the idea of negotiable instruments in the form of promissory notes we could use as currency. Instead of handing over cash or charging a purchase to a card, we would either write out a promissory note or hand over one which we had been given to us by someone else who had bought from us.

There are cashless transactions occurring like this already in some communities, where instead of paying money, one promises to provide one's labour at a fixed rate per hour in return for goods or services. Whether the notes exchanged in these situations are negotiable - ie one could use the two hours the plumber promised you to buy something else and the plumber's obligation passes to your supplier in turn - I dont know, but subject to geography they could be?

Because this is the big problem with such negotiable instruments - at the end of the day they have to be based on something which has actual value, so that they can be redeemed against something of actual value. Basing them on the official currency would be a no-go if the currency is in free fall and has no actual value, basing them on something like gold is impractical when its unlikely most will have anywhere near enough gold on redemption day, so it makes sense to base them on something that people do have, which is the same real value regardless of market conditions and which can be redeemed easily - like people's time and skills.

Thoughts? Observations?

E




BossyShoeBitch -> RE: if it gets really bad -promisory notes? (10/7/2008 5:25:35 AM)

Are you talking about IOU's and a barter economy?
That's be awesome cuz if you collect enough IOU's from the same person, they could be your indentured servant.. YAY!




pahunkboy -> RE: if it gets really bad -promisory notes? (10/7/2008 5:32:37 AM)

Lady E.  BINGO. Way to go gf!

That is what is coming.

unfortunately, it is illegal.

IOU, isnt that WHAT money IS?

so an IOU for an IOU for an IOU.

So I was thinking. The 700bn bail out. It is like a car with 4 tires.  One tire is flat.  For 700bn we bought a donut tire.  

;-0

I note here on the mess.  In a market economy - you need a buyer and a seller.  But not necessarily a go between or middleman. So it Wall Street once it sees it is losing its spread, will by honorable means or otherwise will claw to get its market back.   Same thing with banks and the fed reserve. If they are not adequate, people will "vote" with their feet.  Hence a barter system in some form.

Anyone who has ever been desperate, can work this.  Trade some soda for some coffee, beer for cigarettes, speed for valium. ooops. jk. but not really. You get the idea.






LadyEllen -> RE: if it gets really bad -promisory notes? (10/7/2008 5:35:20 AM)

quote:

ORIGINAL: BossyShoeBitch

Are you talking about IOU's and a barter economy?
That's be awesome cuz if you collect enough IOU's from the same person, they could be your indentured servant.. YAY!


Hi BSB

I can see plenty getting themselves into debt with you with just that aim in mind LOL!

No - the idea is that you use the notes given you by person A to pay for goods from person B - and so on. Just like money really, but based on something other than the official economy

E




MadAxeman -> RE: if it gets really bad -promisory notes? (10/7/2008 5:43:43 AM)

I expect many are familiar with freecycle. In my area there are links to a barter community called LOTS I think. If everything goes nips up, I can't see the moneychangers having much to offer. Promissary notes have a place for long term contracts. Unlikely to be fluid enough for the day to day. Perhaps even after an economic collapse the existing technology could come up with a digital balance carried by the individual. This would soon accelerate into a new currency and we're back where we were. The current crisis is really about confidence and it's effect on numbercrunching. Equilibrium will reoccur, even if it costs a great deal of paper.




pahunkboy -> RE: if it gets really bad -promisory notes? (10/7/2008 6:04:45 AM)

hmmmmmmmm Mad, I thought "I" was abstract---------





xXLithiumXx -> RE: if it gets really bad -promisory notes? (10/7/2008 6:15:33 AM)

The idea of promissory notes works really well from person to person, but what happens when you have to deal with corperate america...say the electric company and the water company and the cable company? You know those guys that Bush decided to bail out? Or say Kroger or the local IGA places that are owned by bigger companies that are owned by the government...?

Hm...if the government owns all the big companies that provide us with owns everything....how much closer does that bring us to the Communists/socialists we have spent all this time fighting?





kittinSol -> RE: if it gets really bad -promisory notes? (10/7/2008 6:32:13 AM)

quote:

ORIGINAL: xXLithiumXx

Hm...if the government owns all the big companies that provide us with owns everything....how much closer does that bring us to the Communists/socialists we have spent all this time fighting?



I like the idea of a non-profit making entity owning essential goods and services.




MadAxeman -> RE: if it gets really bad -promisory notes? (10/7/2008 6:38:30 AM)

We used to have essential utilities owned by the government, but the Conservative Party sold them to their friends.




kittinSol -> RE: if it gets really bad -promisory notes? (10/7/2008 6:40:55 AM)

I remember, I was there when it happened [&o] .




corysub -> RE: if it gets really bad -promisory notes? (10/7/2008 6:41:30 AM)

quote:

ORIGINAL: BossyShoeBitch

Are you talking about IOU's and a barter economy?
That's be awesome cuz if you collect enough IOU's from the same person, they could be your indentured servant.. YAY!


That is already being done in the USA.  The description is not indentured servant...it's called "husband"!!
Just kidding... :)

Seriously, sounds like a great idea but than you put yourself in the same position as Wall Street facing "counter-party risk". What colateral do you have with the promissory note to insure that the other side of your transaction will be there if called?





kittinSol -> RE: if it gets really bad -promisory notes? (10/7/2008 6:42:59 AM)

Trust will regulate itself.  




LadyEllen -> RE: if it gets really bad -promisory notes? (10/7/2008 6:45:22 AM)

quote:

ORIGINAL: corysub
Seriously, sounds like a great idea but than you put yourself in the same position as Wall Street facing "counter-party risk". What colateral do you have with the promissory note to insure that the other side of your transaction will be there if called?




Thats the core problem Cory - what to base it on that will retain its value if/when redeemed.

The only thing I can think of that meets the requirement is personal time and skills.

So for instance, a note worth five hours of unskilled work might be equivalent to a note worth one hour of professional work and so on.

You only call in the work (redeem the note) when you need the particular skill

E




pahunkboy -> RE: if it gets really bad -promisory notes? (10/7/2008 6:51:35 AM)

quote:

ORIGINAL: xXLithiumXx

The idea of promissory notes works really well from person to person, but what happens when you have to deal with corperate america...say the electric company and the water company and the cable company? You know those guys that Bush decided to bail out? Or say Kroger or the local IGA places that are owned by bigger companies that are owned by the government...?

Hm...if the government owns all the big companies that provide us with owns everything....how much closer does that bring us to the Communists/socialists we have spent all this time fighting?




In effect, you and I own the empty house down the street.  There is a law that federal property that is disposed of must be made available- or offered to a homeless nonprofit.  soooooooooooooooooooooo??

But yeah-  now the masses of common folk are stuck with he clean up.

and with bushes new America where there is no dissent, why DID we fight the comunists?  And if the American century does end- are we worse off??




xXLithiumXx -> RE: if it gets really bad -promisory notes? (10/7/2008 6:54:19 AM)

quote:

ORIGINAL: kittinSol

quote:

ORIGINAL: xXLithiumXx

Hm...if the government owns all the big companies that provide us with owns everything....how much closer does that bring us to the Communists/socialists we have spent all this time fighting?



I like the idea of a non-profit making entity owning essential goods and services.


Intresting, but wouldnt you still have to pay for it? To pay for it processing the materials needed to create electric and water and natural gas?




kittinSol -> RE: if it gets really bad -promisory notes? (10/7/2008 6:59:29 AM)

quote:

ORIGINAL: xXLithiumXx
Intresting, but wouldnt you still have to pay for it? To pay for it processing the materials needed to create electric and water and natural gas?


Public ownership.




xXLithiumXx -> RE: if it gets really bad -promisory notes? (10/7/2008 7:06:36 AM)

quote:

ORIGINAL: kittinSol

quote:

ORIGINAL: xXLithiumXx
Intresting, but wouldnt you still have to pay for it? To pay for it processing the materials needed to create electric and water and natural gas?


Public ownership.


FR...since I have two parent teacher conferences....

So tell me again...how is this different than communism?





kittinSol -> RE: if it gets really bad -promisory notes? (10/7/2008 7:18:58 AM)

Really, you don't see the subtlety? If I remember correctly, very succintly, communism is an egalitarian ideology that promotes the nationalisation of all means of production and the dissolution of private property. There has never been a communist government.

Public ownership of energy supplies and healthcare, on the other hand, fit in a free market economy. It means that people can afford to pay their electricity, gas and phone bills [&:] . And that healthcare is free. Because hey, that's what they pay taxes for. Imagine that. Do you know where your taxes go today?

Besides... you said 'communism' like it was a bad thing [8D] .




TreasureKY -> RE: if it gets really bad -promisory notes? (10/7/2008 8:47:00 AM)

quote:

ORIGINAL: LadyEllen

... My thoughts turned to the idea of negotiable instruments in the form of promissory notes we could use as currency. Instead of handing over cash or charging a purchase to a card, we would either write out a promissory note or hand over one which we had been given to us by someone else who had bought from us.

... Because this is the big problem with such negotiable instruments - at the end of the day they have to be based on something which has actual value, so that they can be redeemed against something of actual value.


Well... we did used to have something like that.

Silver certificates

Gold certificates

Of course, as you point out, that likely wouldn't work these days.  [;)]




Termyn8or -> RE: if it gets really bad -promisory notes? (10/7/2008 10:02:41 AM)

There is a barter based group in Lake County, Ohio. A bunch of businesses trade services. However everything is still taxed, even though no money changed hands. I think that's wrong. If I engage in barter I would never even consider telling the government. Are you crazy ?

Their ability to tax comes from us using their money, and yes it is all their money, at least in the US. I have all of the pertinent statutes and codes involved in it, that basically states that the government owns everything, and we are but users in good standing. It is their own law, their own words and a matter of public record.

Now for example I could see that a TV shop putting a picture tube in the mechanic's TV, or the mechanic putting a transmission in the TV truck, the part would be somehow taxable. When the part comes from a place that pays taxes though, it is already taxed, but the installer has used his sales tax exempt status to get the part.

However when they get to the point where they tax labor, that action is assumptive that they own it. That means they own your labor, your sweat and blood, which in turn means they own you.

Property cannot own property. They have obfuscated that fact in many ways, but it still remains true. When you buy a house you get a title deed, not a deed. The only people with a real deeds are those who inherited a survivorship deed for land that has been in the family since before the depression. I know such a person, and to get a loan on the property he had to convert it, basically inCORPorate it into this unseen public trust of sorts.

It is likely you have never owned a car in your life. In Ohio you don't even get a title, you get a certificate of title. I knew someone who actually owned a car, well a Jimmy, which for those over the pond is basically an overgrown station wagon that almost qualifies as a truck. He actually had what's called the MSO for it, and there was never an Ohio certificate of title. He has been dead now for a few years, and that Jimmy still sits at the junkyard and cannot be scrapped, EVER. Why? Because when there is a certificate of title the state can go to court and just take it. Because he had the Manufacturer's Statement of Origin, they can never ever legally dispose of that vehicle, no matter if the storage charges add up to millions of dollars.

One state in the union would, I heard up until around five years ago, issue license plates on a car with an MSO. Only one. Not sure if they do anymore.

So when you barter, is the government going to have people watching you, and if you trade a bunch of tomatoes for someone to fix your gutters, will they step in and demand a few tomatoes for taxes, and possibly something from the gutter fixer, like a few feet of gutter or something ? You betcha believe they would if they could.

I firmly believe that the avoidance of money is of prime importance in toppling this regime of mattoids who run the world. However, if you think they are going to let that happen easily, you are quite mistaken. I said it before and I'll say it again, we are not playing with kids here.

As has been mentioned as well, there is a certain amount of actual currency, fiat or not, required to maintain our lifestyle. We like having electricity, internet, heating and cooling. Stuff like that, not to mention city water and sewage for some.

And even in ideal conditions, the gov really does need something if we expect to drive on roads.

Now the promissory note thing, either it is money or it is not. It's like writing a check in a way. It is promised to be good, but only by one person. Money is actually the same thing, so are we actually printing money ? If you write "I owe Joe Blow One free plumbing job (supply side only) for doing brakes and a ball joint on my truck" there is no money mentioned.

The "official" barter system in Lake county forces people to assess a dollar value to everything for tax purposes. In a way it is self policing, you can't state too low, you can lose, you can't state too high otherwise the taxes eat you up.

Don't get me wrong, I am all for the idea of barter, free of taxes, but there are some big problems in implementation. The biggest of which is assessing the value of said goods and services. For example changing a hot water tank is not equal to mowing the grass, well unless the yard is very large, I mean huge. Fixing someone's PC is not equal to a new kitchen or bath. A haircut is not equal to an overhaul on your car engine.

How do we determine these values ?

Credit hours ? Register your skills and then it is determined how many credit hours you get per hour of work ? That sounds plausible. Let's say there is a scale. Lowest on the totem pole so to speak would be general, not strenuous labour. For example cutting grass. The scale would be 1.0. For meticulous work, the trimming and whatever, perhaps 1.2. Then what ? The plumbers and electricians get 2.65 or something like that, or higher if the work is hard or complex ? Then there's the guy who fixes furnaces, would he get a better rate in the winter than the summer ?

The point is, using a standardized modicum of exchange has, in large part determined these rates now. I remember DA, who said he is not going to pay a plumber forty bucks an hour to solder a couple of joints, I agree, but what happens when it comes time to get your main drain snaked out all the way to the street ? 

Interesting to note, in the plan I envision, the only people who would get credits less than 1.0 would be politicians and bankers. Can you imagine telling them to take their money and stick it where the sun don't shine ? It COMPLETELY removes their power.

Because they were born into money, as long as we are addicted to money we are in their power. If we don't want their money, it is the same thing as if they did not have it. Something to ponder.

Tell you what right now, I will trade you one TV repair for three 200GB IDE (Diamndmax) harddrives. One repair, if parts can be had on a CRT based projection or direct view.

Now see I could have foot in mouth right now. That repair could run anywhere from a hundred bucks to about three. You know what the HDs cost. I don't know what the repair would cost, therefore I am taking a gamble.

Another example, you remodeled your mechanic's kitchen, and he happens to have the transmission you need for your car laying around. Now you don't have to buy the (expensive) part. That changes the equation.

So it would cost you 600 FRNs to get it, now how is that negotiated. Does something like that default back to currency ? If that happens then a dollar value or something has to be placed on each hour's labor, indexed of course by skills and abilities, as well as the job being done at the moment.

That's another point, what if someone highly skilled does a lower skill rated job ? What if a plumber or something, normally classed higher, had no work at the moment and decided to take a nearby task of mowing someone's grass ? I don't think he should get his plumbing rate for that, however there is the possibility that he might get a call and have a time conflict. What happens then ? (LE, you are probably an expert on time conflict in that business).

I would like to expound and expand here, this is one of the keys to the People taking back power, and I want to explore it. Given the OP this is in no way a hijack, what I am saying is, how can we make a barter system fair ? The only way to make it fair is to get alot of input from all sides.

Now this thread is costing me money, but I know there are more important things than money. Thing is, make it fair. The system we have is not fair, and we have the results.

First of all, I would say make certificates for each hour of work. Of course make fives and tens, but they must be filled out. If the issuer is a plumber and it is 100 credit hours, but because he gets a higher rate it is not the full 100, say it may be 40 hours supply side work or 20 hours drain side work, how do you give change ?

Or would a new promissory note be written ? I think that leaves the system open to alot of abuse, because in case some haven't noticed, there are some nasty people out there. All politicians may be crooks, but not all crooks are politicians.

Any ideas ?

T




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