My comments on "Free Energy as a New Economic Standard, and other Alternative Solutions"

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My comments on "Free Energy as a New Economic Standard, and other Alternative Solutions"

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Mike Upstone on Free Energy as a New Economic Standard, and other Alternative Solutions

With the prospect of affordable, clean energy technologies now emerging onto the scene, we should also ponder the prospect of new forms of economic stability and even monetary systems based on these new, abundant, inexhaustible technologies. Mike Upstone provides some refreshing economic concepts. 

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On February 28, Sterling Allan conducted an interview with Mike Upstone as part of the Free Energy Now series.
 

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Mike Upstone

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By Sterling D. Allan
Pure Energy Systems News

Presently, our economic systems are pegged largely on oil and other fossil fuels; and the economic systems of the world are teetering on the brink of collapse, even as the stability of these depleting systems is called into question.

With the prospect of affordable, clean energy technologies now emerging onto the scene, we should also ponder the prospect of new forms of economic stability based on these new, abundant, inexhaustible technologies.

That is where Mike Upstone is coming from, and as a brilliant mind and networker, he is making waves in the economic systems of the world, coming up with some great banking solutions that follow the same principles that we see in clean energy: distributed, rather than centralized, for example, working from bottom up.

I was so impressed with his thought processes along these lines that I recently had in interview with him to give him a chance to articulate some of his thinking.

Mike's bio is quite interesting and diverse.

Briefly, he began at age 21 working as a management consultant for FTSE 100 companies (the UK's top 100 companies), as a result of taking IQ and other extensive tests. He also worked as a Market Analyst Jane's Defense Weekly -- the U.S. military publication - prior to attending the British military academy, Sandhurst, where he began training as an Army officer before a premature departure due to injury. Then he got involved in photography, where he won awards for digital technology breakthroughs and works, which led to quality guidelines and standards used by industry giants like Adobe.

In all his work, he has gravitated toward the writings of the late W. Edwards Deming, who has quite a movement around him, similar to what we might imagine around Ron Paul in 40 years from now.

And in the past couple of months, it's as if a flood of contacts and networking has unfolded for Mike in the process of coming up with alternatives to the corrupt economic systems around the world, everywhere from low to very high-level players who have woken up to the corruption and wish to be participants in something that is more sustainable -- based on principles of freedom, foremost, as well as integrating principles of individual responsibility, stewardship, and shared responsibility for the outcome of human civilization, recognizing that we're all in this together, and we are all part of the God essence, working for a better world.

One of the things that struck me most poignantly was that there isn't going to be just one solution that everyone is going to have to agree with; but that there will be many solutions that will be synergistic with one another.

The best analogy I can think of for this is how there are many exotic clean energy technologies emerging -- any one of which could provide a major solution to the energy and economic needs of the planet. Not only do multiple solutions provide redundancy, but they provide an accelerated means by which we can address the problems. There is plenty of room for many players with many solutions -- both in terms of energy and in terms of economic solutions.

The future is very bright, notwithstanding the dark thunderclouds presently on the immediate horizon. Mike's optimism is contagious. He sees a lot of winners coming out of the crisis we're going through. "People will come through this with a sense of oneness, empowerment , and illumination."

It works on a systemic approach, which mitigates individual weakness and draws from the wisdom of the crowd, and the goodness that lies therein.

He agrees with Adam Smith, that there needs to be a level of competition. We can live in great abundance, with wars being rendered unnecessary.

He also agrees with Gerald Celente's view on productive capacity that free energy emergence brings to the world. Energy is requisite for everything we do in our modern society. Things should naturally cost less and less over time.

Currencies need three attributes: 1) the ability to circulate easily; 2) a stable measure of value; and 3) a medium of saving or storing value.

His economic model places value on the planet itself: nature, rivers, streams; and he envisions a way to connect that into a medium of savings, using technology to remediate the planet as value added. "We're trustees of the planet: leaving it in a better state for our children should be hardwired into the new system."

He also draws from nature to illustrate how many similar systems can work in harmony -- like a flock of birds or a school of fish that move in synchrony.

One of the basic assumptions of his model is that everyone is/can be wealthy.

His statement: "If people are given responsibility, they act more responsibly" -- stands in stark contrast to the present nanny state that treats people like imbeciles that must be subservient to the Big Brother overseeing state. "People rise up to meet high expectations."

Reinstalling trust, via Trusts, will be a key component of the improved systems that are our destiny.

Mike is also part of a movement to create a safe haven for inventors, where they can pool their strengths, both intellectual and resources, into a common system based on trust/Trusts that cannot be squashed so easily by the bullies on the global block.

He believes that diversity can provide strength, rather than driving a wedge of division. Nature is replete, if not characterized, by diversity.

Another key attribute of a viable monetary system is transparency, in contrast to all the secrecy and duplicity that characterizes the present system that is rife with, and even actively encourages, corruption. Contracts should be clear and understandable, not written in legalese, which is like a different language that only those trained in the law can understand. Really, one shouldn't sign a contract unless he/she understands it.

Mike doesn't have a website yet, but if you are interested in contacting him, or on getting updates on the status of this open project, he may be reached at Michael_upstone@yahoo.co.uk

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This story is also published at BeforeItsNews and Examiner.

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Article says:  

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Currencies need three attributes:

  1. the ability to circulate easily
  2. a stable measure of value
  3. a medium of saving or storing value.

 
"His economic model places value on the planet itself: nature, rivers, streams; and he envisions a way to connect that into a medium of savings, using technology to remediate the planet as value added."  

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My key questions:

  • But does a "stable measure of value" really need to be that of a currency?
  • Why couldn't a "stable measure of value" be the circulation itself?
  • Instead of representing a fixed amount of currency, could instead a "stable measure of value" be better provided by, not a currency, but rather a "dynamic asset" whose value is best correlated with power (a rate throughput of energy) rather than energy itself?

I [Kmarinas86] comment below:

The value of nature, rivers, and streams is not like that of a hoard of cash. Their value is contingent on the circulation of matter. 


 
Why not denote transactions as units of circulation?

Likewise, the value of a currency is contingent upon its circulation. Therefore, a currency value increases with the rate of circulation in exchange for final goods and services. But does a "stable measure of value" really need to be that of a currency? Why couldn't a "stable measure of value" be the circulation itself? 

On Aristotle's views about wealth

Instead of representing a fixed amount of currency, could instead a "stable measure of value" be better provided by, not a currency, but rather a "dynamic asset" whose value is best correlated with power (a rate throughput of energy) rather than energy itself? Aristotle once said this, "Wealth does not lie in ownership but in the use of things!"

What about "flowcash"?

It would therefore seem appropriate to conduct commerce using "dynamic assets" which are in essence units of "flowcash" created by a buyer-seller relationship where an increased rate of economic activity is received by the buyer from the seller, manufacturer, worker, entrepreneur, etc., and dissolved after the discontinuation of such a relationship. If we accept the flowcash concept, it would work like this: 

"Flowcash" and employment

Instead of being paid $300 in cash every week, a worker could obtain 300 credits of flowcash from his/her employer. This flowcash would be on electronic record, automating electronic funds transfer in equal amounts per period for an undetermined number of periods. It does not involve the issuance of new currency, but rather it involves the creation of a non-volatile and very predictable rate of funds transfer.
 
If that worker gets a raise, instead of being paid an extra $50 a week, a worker could obtain 50 credits of flowcash from his/her employer.  
 
If that worker decides to quit after receiving a raise, or gets laid off, if we assume there is no safety net, the worker would have to return the 350 credits of flowcash to his/her employer. That is more serious and important-sounding, than say, "not receiving a paycheck". So it may help with labor hiring/firing ethics.  
 
If there is a safety net, then that safety net could be simply in the form of flowcash. If the safety net is 20% of the credits of flowcash that were lost, then safety net would provide 61 units of flowcash.  
 
A worker could transfer those credits of flowcash to his/her bank, where it is converted back to ordinary money. 

"Flowcash" and debt

Loan debt would work differently too. For example, one would obtain "b" number of credits of flowcash from the lender. In exchange, the person will owe "m*t plus b" number of credits of flowcash to the lender, with the "m*t" amount increasing with time "t" and some function "m" which can be based upon, for example, the number of credits of flowcash which have not been paid back on time. When person can retrieve enough credits of flowcash to cover the "m*t" and "b" amounts, then the payment "y" is satisfied.  

"Flowcash" and houses
 
The same principle would apply to houses. If a person would normally pay $1200/month on owning a home, or about $300/week, then the person could instead just find a source of 300 credits of flowcash. As soon as 300 credits are obtained plus the amount of value "m*t", then they can passed to the mortgage broker to settle the payment. 

If the house burns to the ground, credits of flowcash can be created and given to the former homeowner to make up for any loss. This can occur without any fiat injection, but only so as long as that flowcash is not converted back into fiat flow.  
 

Saturating the economy with "Flowcash"

Alternatively, the whole economic system could later be saturated with flowcash ("rivers" of value in your hand), while static valuations ("bricks" of value in your hand) become rendered obsolete. In that, perhaps not so distant, future, all economic transactions obey the "going concern" principle.  
 
Flowcash would in fact be a more congruent way to value assets, which (per Robert Kiyosaki's explanation of the difference of Assets vs. Liabilities) generate cash flow, and liabilities, which consume cash flow.


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We could establish an accounting standard where the cash flow imported into an economic entity (e.g. business or household) must, by law, equal cash flow exported from that same entity, eliminating the need for money stock despite the existence of money flow.

Furthermore, under the right conditions, flowcash ("river-like" or "going concern" value) can be used as a complete and utter replacement of currency or any other fungible store of "brick-like" or "hoard" value, making it impossible to have cash flow out greater than cash flow in (since negative units of flowcash would not exist). This can occur only if it is enforced that one cannot provide units of flowcash in excess of what is received. The requires that all units of flowcash received must be provided to others. Once such a rule is place, it would be similar to the legal requirement that debits equal credits, except that here we are dealing with flow rather than the stock. If such was enforced, Ponzi schemes would not be possible, as the cash flow out would have to match the cash flow in, so if the people are not getting their money back as fast as they put into it, then it is automatically a fraud because it would prove that some of the cash flow is being diverted somewhere else. To be a legitmate operation, and not a Ponzi scheme, there should be another source of cash flow. If this does not already exist, there is little point in trusting that one gets their money back as the possibility for fraud is great. So using flowcash exclusively (wherein all cash flows are tabulated as units of flowcash in both the books of the provider and the recipent) would be the nail in the coffin for most future Ponzi schemes. At most, a tiny number of Ponzi schemes would be driven by the last vestiges of "hoard" types of value, but the conveniences derived by the "going concern" property of flowcash could lead to its near-universal adoption in place of the "hoard" types of value. For these reasons and others, flowcash may be shown to be a better way to represent and account for real wealth.

A debit entry of one business on the books should equal a credit entry of another business on the books. This requires a common unified accounting method which flowcash can make practical.

With a flowcash system in place, periodic financial statements such as the income statement and statements of cash flows will be more important than the present balance sheet, and would in fact not only replace the function of the present balance sheet, but it would also be superior to it as well. Furthermore, it combines aspects of cash and accrual methods of accounting. The nature of flowcash implies recognition of economic revenue and expense over a period of time (which provides benefits of accrual accounting), while at the same time not being a seperate abstraction from the actual cash flow (thus, it is also able to provide benefits of cash accounting).

Furthermore, the practice of tracing cash flows can be made much more simiplified by tabulating each cash flow in units of flowcash, and giving that bundle of flowcash a unique serial number. This establishes the origin and destination of any bundle of flowcash. Any auditing of such flowcash could work simply by reporting the serial number of that bundle and looking it up at the database server, which is hooked up to the system that completes the transaction electronically. The advantage here is that the each bundle of flowcash represents a mutiple of transactions proportional to the time passed. For example, $30/week rent is represented by 30 units of flowcash and given a permanent serial number which is hard written into the electronic database (non-rewritable media + redundant copies), which would represent 52 or 53 transactions over a period of one year. Thus, a system of flowcash can reduce the data that needs to be audited by at least one order of magnitude compared to what is presently required.

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