JCT: Last post, Peter Scott asked:
>Can you clarify exactly how the bond and its interest works. Is the
>"interest" usury or demurrage? Regards, Peter Scott

Fascinating question because, in a way, it is neither! More
later because I didn't want to get into what the third possibility was
until I had prepped readers with the prerequisite course in banking
systems engineering game theory 101.
I think that since what I was going to describe was so completely
new that Peter hadn't even thought of a third alternative, I had the
right to mention what kind of prerequisite was necessary to stay with
the upcoming lecture.
I had pointed out how "important questions in Economics arise in
a more elementary fashion in the theory of games" and developed a
simple game you can play to model how the money mort-gage really
works. Why game theory is particularly apt at modelling the mort-gage
is that the French mort is "death" and "gage" is "gamble." What better
way to model the mort-gage death-gamble than with a game?

Most have heard of the famous Tobin Tax that many anti-poverty
groups are hailing as a solution to poverty. Using game theory I'll
demonstrate why it can't work in the simplest way!
The Tobin Tax wants to tax financial transactions and give it to
the poor, a forced charitable contribution by the rich based on
transactions. Anything that goes from the rich to the poor is a worthy
charity. But it does not better engineer the malfunctioning money
system.
Money is often called liquidity and for this reason, we'll use
pails of water as our tokens rather than paper or metal. Everyone
pledges their watch as collateral at the pump house to receive 10
pails of water which they all dump into the pool. The name of the game
is to all jump into the pool and repay the pump house 11 pails of
water to get out of the elimination death-gamble alive. The House
forecloses on the losers' watch for having lost the House's 10 pails
of water.
Obviously, when everyone throws 10 pails of water into the poor
and it takes 11 pails to survive, someone has to get knocked out of
the game. Losers lose their watches to foreclosure for having failed
to pay the House back it's 10 pails of water.
I say that the only solution is to correct the imbalance in the
pump house, the 11 for 10. Tobin says that that mechanical shortage
can somehow be remedied by some miracle "splashing in the pool."
See how easy it is to show that the Tobin Tax is not really
better than a glorified beggathon on television to raise money for the
poor. It's just another form of begging it from the rich to help the
poor without ever dealing with the shortage caused by the 11 for 10
rule in the pump house. Can you understand now that though the UNILETS
interest-free alternative time-based currency and the Tobin Tax were
both mentioned in the same United Nations Millennium Declaration, that
the media have chosen to play up not the UNILETS new way to reform the
pump house but the Tobin Tax's new way of splashing in the pool?
So now, before I finally explain just what the Argentinian 7%
interest on their bonds is, a demurrage or usury, I want to make one
final new point.
Almost everything about Economics is backwards.
Almost everything economists do is pretty well backwards.
They do their taxation backward and it really couldn't be
compared until we had a good example of someone doing their taxation
forward.
Now we do. Argentina is doing it forward. Sparta did it
forward with their clay money, Rome did it forward with it's
copper Aes Grave coins, King Henry I did it forward with his English
Tally sticks, North American Indians did it forward with their
wampum beads, Lincoln taxed it forward with his paper Greenbacks
(shot) and Kennedy wanted to tax it forward with his paper
Greenbacks too. (shot too)
Oh, and Guernsey Island has been doing their taxation forward
for almost 200 years.
So what's the difference between forward and backward taxation?

Governments that do it forward "spend and tax."
Governments that do it backward "tax and spend."
King Henry spent as many tally sticks as necessary for the upkeep
of the realm and at the end of the year, he counted up how much he had
spent and then taxed it back. Spend and Tax. Argentina will now spend
as many currency-bonds as necessary for the upkeep of the province and
at the end of the year, they'll count up how much they spent and tax
it back. They'll pay all the civil servants necessary to do the job
right.
In most backwards governments of today, Ontario for instance,
governments tax or borrow from loansharks and then spend. If they
don't have enough, they budget and make cuts to things that they won't
be able to get done. It explains how Premier Mike Harris can argue so
convincingly that none of his staff told him that laying off the water
inspectors might cause some people to die. All he did was kill the
budget, not the citizens.
Obviously, while Canadians continue to croak due to backwards
taxation that offering insufficient budget to pay for the inspectors
needed, Argentina, also with insufficient government money to pay for
their inspectors, will still have those inspectors on the job thanks
to the new local bond-currency that permits frontwards "spend and tax"
policies.

Finally, to answer the question, is the 7% interest on the
Argentinian Provincial bonds usury, demurrage or something else.
In the last post I explained that a demurrage was like a negative
interest, a fee that makes a guy want to get rid of it quickly. If
it's not demurrage nor is it usury, what can it be? It all boils down
to the corrupting the definition of usury.

This from http://www.cyberclass.net/turmel/pombible.htm

EZEKIEL
Ezekiel in 22, verse 25's the test:
"If you lend money to the needy, charge no interest."
Ezekiel 3:18 adds responsibility,
God states his laws for life with his expected certainty:
"And when I tell the wicked man that "You will surely die,"
You will be held accountable if you don't warn the guy?
But if you speak up and he doesn't change his wicked way,
You will have saved yourself and he will be the one to pay."

In 18:5: "Suppose a man takes not much interest,
He takes no usury. He'll live! His actions I have blessed.
Suppose he has a son who takes excessive interest,
And lends at usury. He'll die! His actions I detest."
Ezekiel declared that usury and interest,
Could have a different effect, there was a simple test.
If interest demanded is of something that can breed,
Such interest is payable and not sin I concede.

So if you lend a hundred head and ask to get two more,
That might not be excessive action that he would abhor.
But if you gain all of the calves and he still owes you some,
That would be judged excessive. That is more than maximum.
And if the interest is on some silver or some gold,
It's usury because there are no babies to behold!
It's interest if principal can breed to multiply,
It's usury if principal cannot so classify.

JCT: My Socred grandfather Adelard had only two axioms: Money has
no babies. Interest is theft. I've never seen reason to disagree.

The 7% on the bonds is not negative so can't be a demurrage fee,
if it causes a mort-gage, it's usury and will exhibit Shift B
inflation! If it does not cause mort-gage or generate Shift B
inflation, then it's interest.
Can money have babies, in this case yes. The government owns the
plates and can print up more. It's a lot different when private banks
own the plates and the government can't print up more but has to go
after you for it. If it's a payable debt, then it will generate a
needless though harmless and honest inflation shared by all.

>Date: Sat, 01 Sep 2001 18:30:46 +1200
>From: ps@... (Peter Scott)
>Subject: Email
>To: turmel@...
>Mr Turmel
>You have taken the liberty of republishing a private letter to you in
>a number of places. While in this particular instance I havent said
>anything incriminating, I feel this is generally bad practice,
>ethically.

JCT: I've always turned a question into a lesson. Ethically I
feel fine about the practice as long as it's on topic.

>However what i have a great aversion to is that you have published by
>email address on your website,

JCT: Anyone want to check if you got your question answered sure
knows where to look.

>http://www.cyberclass.net/pataconjct.htm and possibly elsewhere.

JCT: Yes, one good question and it got plastered all around the
world.


>I get far too much junk mail as a result of this type of thing,

JCT: You get junk mail as a result of the type of things as
cerebral as banking systems engineering and economics? I think we have
different definitions of junk.


>I therefore ask you to remove both my email and post from your site,
>asap.

JCT: No.
The only reason I can conceive that you don't want your name
associated with your question is that you yet to master the Grade 9
algebra explaining the disappearing watch at the pump house.
So no. I've always said kids catch on to the death-gamble real
fast. You've been contributing to the lengthy discussions so let's see
how long it takes one of our philosophical wordsmiths to keep up with
the kids in the game. You know what they say about the heat in the
kitchen, my dad worked a blast furnace.

Regards, Peter Scott, Auckland New Zealand

JCT: Do your homework and show an understanding of Shift B
inflation or I will take the time to parse some of your more recent
stuff. And you probably don't want that if there a lot of engineering
errors shown up by the game theory in the same way the Tobin Tax was.
And if you ever think I might be wrong, remember that I'm the
guy who's always been willing to bet money on being correct in the
analysis of the banking system's engineering. And as far as I know,
I'm the only candidate for Professor of Banking Systems Engineering in
the world at the moment. I think that having failing governments turn
to bond-currency, interest-free or less efficient, can only have
enhanced my claim to that position.
So get the game's eye view or take the consequences of admitting
you can't keep up. And don't think I'm singling you out for special
treatment. I'm just a brute who thinks we're in some kind of
liberation war that merits using every resource at my disposal. If
eliminating the positive feedback on debt isn't the only technical
solution necessary, I'll apologize when the world is fixed in that
other different way. Till then,
Don't be backwards by taxing or borrowing, then budgeting (with
interest).
Be forward by spending what you need, then taxing it back (less
the interest)!
I'm betting on Argentina in the World Economic Cup. Especially if
the national government starts paying with small denomination national
bond-currency too. Bets are off if the Feds insist on shutting down
the provincials when they do because having provincial currencies too
doesn't hurt and numismatists love it. If they do, their goal will be
to somehow dis-install the system from the center. Basically, this may
be the method they used to end the provincial bond currency in the mid
1980s for them to all be turning to it again. But it's more than just
6 provinces this time too!
This really is the start of something big.


--
John C. "The Banking Systems Engineer" Turmel, Author of the UNILETS
interest-free time-based currency United Nations C6 recommendation to
Governments in the http://www.un.org/millennium/declaration.htm
Visit http://www.cyberclass.net/turmel / http://www.medpot.net