Derivatives Market Bubble: Key news articles and top financial experts claim the $700 trillion derivatives market bubble is a time bomb.
According to many top financial analysts and the revealing news articles below, the $700 trillion financial derivatives market may be a time bomb waiting to explode with catastrophic consequences. $700 trillion is more than 10 times the GDP of the entire world and equivalent to $100,000 for each of the 7 billion inhabitants of our planet. These financial instruments have a legitimate place in hedging risk, yet the recent explosion of growth in the global derivatives market has created a huge potential for massive instability.
(My comment:) Some news on what the big banks are up to and how the economy is being sucked dry. Click on the headline to dig deeper.
There are a myriad of local exchange systems springing up, the reformers are busy. Yet, it is easy for all those efforts to be marginalized. For one, they are split into many small initiatives, none of them set to take on the juggernaut.
So I think something is missing: a universal standard for soft money that allows us to all work together seemlessly, regardless of distance, regardless of what we are putting our efforts into in our quest to bring about that new world, and that new economy.
A gift currency is a social symbol which can be used to encourage the flow of gifts between a group of people. These might take on many forms, but the most likely one is a simple promise to deliver a gift to the bearer. The promise can be issued on a piece of paper, e-mail, or perhaps even a tweet. Once issued, it should be able to circulate like money does. Rules might govern when it must be redeemed by, and who it can be transferred to – for example, the members of a particular group or scene.
Once issued, the promise of a gift can circulate much like the gift itself. An important feature is that gift currencies are not denominated in an abstract unit of account, like dollars or pounds. If that were so, the gift would inevitably become a mere means of payment.
Gift currencies are like money insofar as they act as a means of exchange and store of wealth, but they are deliberately not units of account.
There are a number non-interoperable solutions today; PayPal, Amazon Payments, Flattr, Google Checkout, Ven, Bitcoin, BankSimple, Square, and KickStarter are a few examples of these sorts of ground-breaking technologies. The Web Payments initiative at the W3C will live at the intersection of many of these emerging technologies and movements; mobile payments, alternative currencies, crowd-sourced investing, next-generation banking, and electronic commerce.
The purpose of the Web Payments Community Group is to create working technologies that enable universal payment for the Web. We will be integrating many of the technologies that exist today, some of which are listed above.
The goal is to create a safe, decentralized system and a set of open, patent and royalty-free specifications that allow people on the Web to send each other money as easily as they exchange instant messages and e-mail today. The group will focus on transforming the way we reward each other on the Web as well as how we organize financial resources to enhance our personal lives and pursue endeavors that improve upon the human condition...
Sacred Economics traces the history of money from ancient gift economies to modern capitalism, revealing how the money system has contributed to alienation, competition, and scarcity, destroyed community, and necessitated endless growth. Today, these trends have reached their extreme - but in the wake of their collapse, we may find great opportunity to transition to a more connected, ecological, and sustainable way of being.
Governments can create new credit electronically on their own computer keyboards as easily as commercial banks can. And unlike banks, their spending is expected to serve a broad social purpose, to be determined democratically.
Banking has moved so far away from funding industrial growth and economic development that it now benefits primarily at the economy’s expense in a predator and extractive way, not by making productive loans. This is now the great problem confronting our time. Banks now lend mainly to other financial institutions, hedge funds, corporate raiders, insurance companies and real estate, and engage in their own speculation in foreign currency, interest-rate arbitrage, and computer-driven trading programs.
Industrial firms bypass the banking system by financing new capital investment out of their own retained earnings, and meet their liquidity needs by issuing their own commercial paper directly. Yet to keep the bank casino winning, global bankers now want governments not only to bail them out but to enable them to renew their failed business plan – and to keep the present debts in place so that creditors will not have to take a loss.
We must find a way to put the yin back into money and the economy...
"In the hands of the bankers and over a period of time, money was transformed. What started out as a soft, rather commonly available means of exchange, became – without anyone paying much notice – a more and more scarce “resource”. Money itself became a commodity. It hardened. It transformed, in almost imperceptible steps, from yin to yang. Today, money is highly controlled, it is scarce, and it is firmly in the hands of the bankers. Its control passed from the hands of the ruler, into the hands of the banks. We didn’t really notice, because the central banks, which control the issue of money today, are a clever fig leaf. Politicians were fooled into a belief that the central banks are actually emanations of the governments."
Worried that the Federal Reserve and the U.S. dollar are on the brink of collapse, more than a dozen states have proposed using their own alternative currencies of silver and gold.
Unlike individual communities, which are allowed to create their own currency -- as long as it is easily distinguishable from U.S. dollars -- the Constitution bans states from printing their own paper money or issuing their own currency. But it allows the states to make "gold and silver Coin a Tender in Payment of Debts."
To the state legislators who are proposing state-issued currencies, that means gold and silver are fair game, said Edwin Vieira, an alternative currency proponent and attorney specializing in Constitutional law. And since gold has grown exponentially more valuable, while the U.S. dollar continues to lose ground, the notion has become increasingly appealing to state lawmakers, he said.
The features of the Occcu are explicitly inspired by those of the Terra, a project of a Trade Reference Currency (TRC) and the GraDiDo system and allow to promote concrete monetary fairness:
“No interest rates and no bubbles;
Fixed fee generating taxes (demurrage) ;
Motivate to spend or donate and not to accumulate;
Value creation by individuals and their community work.”
Put it symply from Occcu documentation: “A cheque in your wallet allows you to agree on a payment anywhere.” Indeed, Occcu is a P2P horizontal market where anyone – in principle either big or small players – can buy or sell goods and – or services. The core principle leading the designers of Occcu is a principle already formulated, for example, in the ethical architecture of the Italian SCEC: Basic Income as a fundamental principle of currency design. Any member of the Occcu network receives a monthly amount of 100 Occcu (SCEC ‘s network members receive a periodical contribution from the issuer of SCECs). Fianlly, an up to date information system cheaply run the operation of the Occcu payment system.
Wherever I go and ask people what is missing from their lives, the most common answer (if they are not impoverished or seriously ill) is "community." What happened to community, and why don't we have...
To forge community then, we must do more than simply get people together. While that is a start, soon we get tired of just talking, and we want to do something, to create something. It is a very tepid community indeed, when the only need being met is the need to air opinions and feel that we are right, that we get it, and isn't it too bad that other people don't ... hey, I know! Let's collect each others' email addresses and start a listserv!
Community is woven from gifts. Unlike today's market system, whose built-in scarcity compels competition in which more for me is less for you, in a gift economy the opposite holds. Because people in gift culture pass on their surplus rather than accumulating it, your good fortune is my good fortune: more for you is more for me. Wealth circulates, gravitating toward the greatest need. In a gift community, people know that their gifts will eventually come back to them, albeit often in a new form. Such a community might be called a "circle of the gift."
(Dec 2011) Our economic system requires constant growth to survive, an impossible goal considering resource scarcity.
Political leaders around the world are trying desperately to prevent a financial crisis that seems inevitable. Our economic system requires constant growth to survive, an impossible goal considering resource scarcity. In response to this quandary, a group of money activists in South Africa have been experimenting with an internet-based exchange system that ignores physical money and interest. While it focuses on the local, it still permits international trade. Currently over 340 separate groups in 34 countries are using it, and as the world economy slows down, more and more are coming on board.
As a store of value or an asset Bitcoin's shady. Here's why: since the supply of bitcoin is limited and knowledge/use of it is growing (potentially virally) it's the perfect breeding ground for a speculative bubble.
Bitcoin appears to have intrinsic value as a P2P transaction system.
A P2P (person to person) transaction system can be used to for many different things, least of all as a currency for retail transactions. One of the more interesting of these uses is it growing use as a wire transfer system like Western Union for the $10 Trillion and rapidly growing System D, the world's shadow/black economy. Why is a P2P transaction system perfect for this?
Notes would typically be denominated in a unit of account: in this example, three hours’ labour “in Carpenter’s Work” from Joseph Peters. This particular note is non-transferable, however most notes would be. Usually, the community of people who are willing to trust the issuer to make good on their promise defines the boundaries of circulation. A typical medieval market would involve trading with notes issued by bakers, butchers and farmers. Promises issued from one source could circulate through many pairs of hands before returning to their issuer for redemption, providing a supply of money even for people who didn’t intend to redeem them. As confidence begets confidence, self-issued credit becomes money.
Banco Palmas is an initiative of local currency and microcredit which has been practiced since 1998 at the Palmeira neighborhood in Fortaleza, Brazil.
Other poor districts of Brazil have been receiving training in order to start similar projects in their own communities. This evolved to the constitution of the already mentioned Brazilian Network of Community Banks. The banks register with the network and after a rigorous training process, they receive certification.
As of 2009, 47 similar local currency initiatives are found in Brazil, and there are some interests to implement similar systems in Argentina, Venezuela and France too.
"Money is just information, a way we measure what we trade, nothing of value in itself. And we can make it ourselves, to work as a complement to conventional money. It's just a matter of design."
My comment:
This is a feature length film - 1hour and 20 minutes.
Pay Pal has come to dominate online self-publishing, a rapidly expanding industry which allows authors sell ebooks directly to readers. Last week, without warning, the US firm wrote to every major self-publishing website, announcing that henceforth it will refuse to process payments for clients that sell books which contain certain types of what it regards as "obscene" content.
From now on, the firm said, it will begin aggressively prohibiting erotic literature which contains scenes of bestiality, rape, incest and under-age sex. Ebook websites that sell such works will have their PayPal accounts deactivated.
Mark Coker, the founder of Smashwords, one of the world's largest such sites, said the announcement has so far caused roughly 1,000 of the 100,000 novels that he stocks to be withdrawn from sale. "Regardless of whether you or I want to read these books, this is perfectly legal fiction and people have a right to publish it," he told The Independent on Sunday. "It surely isn't for some financial services company to control what is written by an author."
What is to be proposed here is a national and extremely efficient version of a LETS (Local Exchange Trading System), or a local currency system. These are basically barter schemes but strongly improved by using a local medium of exchange. Members gain points by supplying goods or services to other members. Such points gained are in the next round used to buy goods or services from other participants. The big advantage is that this enables economic activities locally which would else not have taken place due to lack of a regular medium of exchange (i.e. money).
My comment:
There is an updated and expanded version of this paper, "What if the Greeks, Irish, Baltics, Spaniards, Italians did this: high-tech parallel monetary systems for the underdogs?" available at http://tinyurl.com/8yjsn7c
Max Keiser and David Hales discuss Ripple, Bitcoin and the general move towards open source currencies as the trust in our current monetary authorities fades...
A new currency is launched in Bristol, which will be used in independent businesses and aims to be the largest local trading system in Europe.
By definition, Bristol pounds must stay in the city. Spend a tenner in a Bristol bakery, and they must use it to pay their suppliers or staff. In turn, those companies will have to use the money within the local economy.
"We'll be driving more business to independent traders, and ensuring the diversity of our city, which is one of the things people love about Bristol," Mr Mundy said.
Already more than 100 firms are signed up. A family bakery, the Tobacco Factory Theatre, the Ferry company, dozens of small cafes - even Thatcher's Cider will accept Bristol pounds.
Five local currency communities you should know about.
Local currencies are alternative forms of money recognized within location-specific communities, the idea behind their value being that money stay within a community in order to support local businesses. With the continuing economic decline, recent years have seen a return to local values and local currencies represent one way to invest money close to home.
Let's fix America's economy from the ground up...starting with food. Go to http://www.slowmoney.org/ Steps you can take: 1. Share the video with your friends...
What if your money, instead of sitting shackled in a fee-laden bank account, could be out making the world a better place? If your meager savings could make a difference, would you share them?
Alternative economy activist Mira Luna recommends investing in tangible things to benefit yourself and the people you love.
"Money...is a representation for energy and where it flows or is stored. A sustainable and healthy community is the best investment...You will have a more joyful, healthy and abundant place to live. Rather than bottling up energy and hoarding it in bank accounts, community currencies facilitate the flow of energy and wealth."
There are many alternative ways to put your money to work improving your sphere. Here are a few options worth looking into...
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