You have to outsmart the cartel. If the Greeks either stay in the Euro and introduce a “complementary currency” and a retail discount of say 40% it will quickly become apparent to both Greek and foreign producers that an economy where everyone has sufficient money in their hands and where they can sell their goods to them at a 40% discount and get all of that discount rebated back to them….is one they are nuts not to invest in. Even if the Greeks left the Euro and introduced the Drachma along with a discount mechanism it will quickly become clear that their economy actually theoretically functions like free economies are supposed to…unlike the present one does. As a currency is as good as people have faith in its worth it will very quickly become apparent that this new Greek social credit system fits that bill much better than the current financial tyranny….and everyone will want this new actually functional profit making system.

Ardeshir:  But wouldn’t that encourage a massive influx of foreign firms into Greece, taking advantage of the low Drachma and the 40% discount (which of course the Greek Central banks would be paying them), and then repatriating all their massive profits – including the discount – back to their home countries?

Me:  Greek present producers and new ones as well would be working in a system that actually benefited the individual and was also a profit making one. That would undoubtedly attract outside producers also. To begin with Greece could encourage limited investment in Greek production much like China did/has. The workability of the system would then make the drachma a strong currency.

You just have to have the proper monetary and economic policy mechanisms in place.

Ardeshir:  I get that, Steve, but Greek production in what, is the question, isn’t it. Right now most Greeks don’t have the skills to undertake industrial production of any quality, and acquiring those skills may take a generation or two, as it did in China. (Remember, China was opened up to the West during the NIXON Presidency – over 40 years ago! It took all that time for the Chinese to be able to manufacture iPhones and the like.)

Me: The goods are available elsewhere until domestic manufacturing is built which with robotics and considering the smallness of the Greek economy can happen in a year or less. Again, with the proper monetary and economic policies in place the system will work much better than elsewhere and the drachma/social credit economy will be seen as a good system and currency. The savvy producer/invester will see this no matter what the media and the cartel might want to characterize it as. Make the system work for the interests of both the individual and business and the money will come to build it and profit from it.

Jim:  Steve,

Looking at your “discount” mechanism, using the analogy of an angle being either 30 degress or 150 degrees, would the discount have the same effect as seigniorage?

Is this something we could talk about on the radio?

Me: Jim,

I’m not completely clear on your analogy of the angles, but what the discount does is macro-economically and mathematically equate actually available money in the hands of individuals and the total costs of what is produced in a given period of time. By total costs I’m talking about the costs of rent, personal savings, retained earnings of business, i.e. profits, financial charges, i.e. interest, waste and exports. The formula for the discount is:

Total cost of consumption, i.e. what individuals actually purchased/over

Total costs of the above mentioned costs of production

That ratio determines the discount so if the ratio is (by example $55/$100) the discount is 45% on every retail price and on the total of what people purchased during the month. It would probably best be set up as a discount to your total price at the register so if you spent $1000 in a month’s time….it would only actually cost you $550. Nice, huh?

The policies of a dividend and discount operate seamlessly within the framework of a profitmaking economy and resolve technologically advanced economy’s biggest problems, namely scarcity of individual income because of robotics and AI and chronic consumer price inflation. They are actually an integration of the best aspects and intentions of both capitalism (efficient production)and socialism (economic democracy) which is actually an entirely new and different system known as Distributism.

And again, Public Banking fits within that framework as both a structurally competitive and downsizing element of private finance’s market for government and infrastructure funding, and also as a central credit creating agency constitutionally mandated to determine and distribute the dividend amount and the discount percentage and so operates in the true interests of the individual.

Me:  Continuing…Social Credit is actually the evolution of profit making systems in that it allows them to continue to exist despite the inexorable and contradictory drives of innovation, profit and artificial intelligence
and their effects on aggregate demand…and even despite private banking’s ability to create money ex nihilo because with public banking as both a structural balancing force and the public credit creating agency responsible for the computation of the discount and distribution of the dividend….the system always has sufficient money available to keep the system free flowing and with the discount not only does inflation no longer erode savings and profits but it actually increases everyone’s purchasing power.

Jim:  Thanks Steve,

Responding to both emails, it seems as though your system counteracts the interest-on-debt costs that Margrit Kennedy computed to be about 40%.

Those actually working in the realm of robotics should see their incomes go up, but then again capitalism has a way of forcing all incomes to their lowest. And your system seems to compensate for that.  N’est-ce pas?

Does your system mitigate the problems caused by human greed?  It seems to, by taking the pressure off, but there are always those for whom enough isn’t nearly enough.

Thanks again,  Radio invitation is still open.  This has been a theme of mine with Marc Gauvin et al.  Discussion is archived.

The angle analogy is very basic re point of view:  a 30 degree angle is a 150 angle looked at from the other direction on a 180 degree plain.  One way is the discount, the other is seigniorage, which grows the money supply as needed.  (See the Patacone, colonial scrip, and Guernsey pound.)  Might be a really bad analogy!

And speaking of the Patacone, don’t the Greeks know how well that worked?

Me:  Actually I’d be happy to do a radio interview. We’re going to Mexico for a week in a couple days, but in the interim if we could communicate via email on the questions you wanted to ask so I could have my answers well in mind I’d be happy to do it after we got back. Thanks for the offer. And of course I would be happy to mention the structurally balancing and individually beneficial nature of Public Banking in the overall framework of a Social Credit economy as well.

Me:

Thank you Ardeshir those were all relevant and good answers.

The Public central bank (in Social Credit circles it is referred to as the National Credit Office) (NCO) same Banking/Financial purpose and principle just different words. The Public central bank/NCO would ideally be a separate branch of government that was arms length (or more) from the executive or legislative branches with the specific mandates I have mentioned before of calculating the Dividend and establishing the Discount percentage, plus in my mind taking over the job of the FED as the issuer of reserves to all Banks at 0% interest, and only for stable and ethical purposes meaning not for MBS, CDS, or any other derivative product nor for shorting the currency either. Those kinds of things would be handled by private parties using their own money…as the Public central bank/NCO would not be forthcoming with such unstable and unethical leverage to do so.

The Social Credit/Public Banking concept and system would be one of true structural and paradigmatic balance. (Public Banking and Private Banking) and (Debt and Gifting) Profit could exist within it, but a philosophy and policies of consideration for the individual and the free flowingness of the system would be PRIMARY to profit unlike the inversion of such…as it is now. Such a system would be Social Credit or as I refer to it sometimes a Wisdomics or Gracenomics.