Right at the moment you can ring up the Perth Mint and order a kilo of silver. Last time I looked you could get a kilo of silver for about $540 AUD and it will take about four or five weeks to get to your place. The cost of the metal will be about 20 AUD above spot. The postage will be about $17.50. The insurance about $1.80 for the trip. Thats a pretty good price. The silver price will go up. But still its not worthwhile for someone like myself to buy these things on my credit card. Particularly as the interest is not tax-deductible and they will probably hit me for a tax if I offload it at a higher price.
But for those of you who are not in debt I suggest that accumulating some of this gear every few months is probably a good thing. As our country might be arm-twisted into following similar inflationary policies as the Americans are about to. The good news is that our man Stephens, though by no means perfect, is something of an inflation hawke.
But this thread is about how we would likely behave if we were going to do the right thing, phase out fractional reserve ponzi-schemes in all their forms, and phase out from fiat-cash to 100%-backed commodity-money.
My proposal is simply to have a tax exemption for any revenues gained in the provision of 100% backed commodity-money. That means that if you have a product, that can be monetized, you can avoid the company tax, the excise tax, and interest on loan contracts when it comes to mining, refining, shaping, selling, lending, distributing or storing this commodity.
At the same time, when this is in place, we want the fiat money costs to be recovered by the users of fiat-cash. We of course want to be phasing our fractional reserve, and adding cash to prevent monetary contraction, but then we want to be phasing that same cash out. And the banknotes are provided in such a way as the costs are not user-pays. They are expensive to maintain. But I believe they are maintained out of the Reserve Banks ill-gotten inflationary gains.
Nobody is taking up liquified-coal as a money if there is even the remote possibility of providers pyramiding on their holdings. All such ponzi-schemes have to be made illegal or utterly impossible. Because it would be a great shame if we cannot take up other alternatives apart from gold and silver since to take up gold and silver alone will be to inflate the price of gold and silver above their economic price.
This is not what we want from the monetization process. What we want is people slowly trading in their fiat for commodity-money, but only at a rate that stops the price of that commodity from falling into its lower-range. We don’t want people monetizing at a rate that drives any commodity into record highs.
Let me clarify that. Obviously if we could change to gold and silver 100% backed money tomorrow I would accept that and be happy for it. Even if it drove silver to $100 per ounce and gold to $5000 per ounce. I’m not saying I don’t support a very fast changeover. What I’m trying to show people is the perfect cost-free changeover that will save us resources rather than cost us resources.
And for that we need people accumulating a wider range of commodities and for this to be manifested in a lot more storage of these commodities.
Now I’m saying the best outcome would be if the majority of the slack over the next thirty years or so was taken up as stored diesel or liquified-coal. Its not that we would want this outcome mandated. I just hope that business finds the way around the costs involved with storage and that this is the outcome. You put the tax-exemptions in place and outlaw and phase out any pyramiding and you accept whatever outcome there would be. But I would want to go over what a magnificent outcome it would be if the majority of peoples cash holdings were taken up in diesel/liquified-coal.
Now as I’ve explained, we neither want people going into debt to accumulate commodity-money. Nor do we want them blowing out the price of any one commodity money into new highs. Rather we simply want the accumulation to go ahead whenever the commodity goes below what is believed to be some sort of mid-range.
Now that silver is around $9USD and gold is below $800USD and there are shortages and time delays, clearly gold and silver are below their long-term mid-range and it would be a good thing, if we were transitioning to commodity-money, for people who were not in debt to buy into these dips at times like this.
It is precisely for the already mentioned reasons that we would want other commodities to take up the slack. But if we can get this accumulation happening with liquified-coal it can help us through the hard times of energy-deprivation and corrupted markets that we face over the next twenty or thirty years.
Under these proposed rules the monetization of a particular commodity would allow the making and distribution of that commodity to be tax-free. Right there we have a way of boosting our production of liquified-coal and developing an independence from the totalitarian regimes that we are currently dependent on.
Previously I have explained how monetization amounts to the ideal in resource management. Taxing a resource impoverishes the supplier, and reduces supply, even as it reduces the amount consumed. Whereas monetization increases the amount produced but also increases the investment in substitutes. It reduces the amount consumed during what would otherwise be times of very low prices. Yet it will lead us to avoiding these large run-ups in price which comes with sudden shocks to supply.
Liquified-coal is produced by getting material that is chock full of carbon and using heat and hydrogen to break those powerful carbon-to-carbon bonds, adding carbon-hydrogen bonds, until such time as the solid hydro-carbon becomes a liquid-hydro-carbon.
The Fischer-Tropsch process is well-known. But the paths by which almost any organic material can be turned into liquid-fuel are likely a great more flexible than that. We could have a nuclear electricity production facility providing electricity for the grid, and on the off-peak times this electricity could be used to produce hydrogen for the liquification process. As well as the nuclear reactors for the nuclear plant, the liquification process itself might use heat provided for it by a nuclear reaction.
We see here that the monetization of liquified coal will increase the demand for coal and help fund the following:
1. The growth of nuclear-electricity.
2. The mining of uranium.
3. The building of nuclear reactors.
4. The building of coal liquification plants.
5. The substitution from coal to other materials for the purpose of producing “liquified-coal”
It will also help us by:
1. The breaking of any attempt to embargo us or to force a high price for imported fuels upon us.
2. It will help stop the price falling to ridiculously low levels (like now) via outrageous market manipulation.
If pyramiding is outlawed and there are no price controls its pretty easy to see what monies will win out.
It will be silver or digitized gold that you and me will think in. Most likely silver. The rich guys and international traders will most likely think in gold.
What I’m saying is that we can think in silver but that if we have the opportunity to we may well choose to accumulate cash balances in other commodities. If we feel that the current gold and silver prices are ahead of their long-term price and the current liquified-coal price is lower than its long-term price we may well choose to accumulate our cash balances in liquified-coal.
Now even as we do so. Supposing we go to the shop. Since under a situation of no-pyramiding and a lot of gear in storage, we would expect prices to be quite stable….. Well we could have several thousand litres of liquified-coal in our debit card. We go to get some groceries. We are thinking in silver. The grocery prices are listed in silver. But we take the money out of our liquified-coal account.
Transactions between 100% backed commodities are very cheap as the e-gold company has proven. We can draw funds out of our liquified-coal account, it is converted to silver, than the silver changes ownership to the grocery-store. All this can happen instantaneously and for much less transaction fees than the banks currently charge.
Now there is no reason to suggest we cannot get to this brilliant state of affairs that would have all sorts of spin-off benefits. But good money doesn’t just happen and never has. It only happens through INTENTION.