As a 3 year student, mentor & advocate of MPE™ in the video “ PFMPE, Do banks retire Principal ? “, I can assure you all promissory obligations even today are collateralized by a true creditor who gives up property so why even use CPO or UPO ? , The *Uncollateralized* Promissory Obligation suggested by kmarinas86 is something that doesn’t even exist today nor would it in a Mathematically Perfected Economy™, to suggest a principal debt or for a better term the promissory obligation is Uncollateralized is nothing more than an unqualified assumption, furthermore a * Collateralized * Promissory Obligation wouldn’t be even a promissory obligation if it had no collateral value so why even use C before PO. Just because the banks give up no consideration of their own commensurable to the debt they falsify to themselves purporting to loan principal as a purposed misrepresentation ( falsify ) of the promissory obligation doesn’t mean the promissory obligation is Uncollateralized, to suggest a bank debt is Uncollateralized today is only demonstrating one hasn’t studied MPE™ in any depth. .
May I remind kmarinas86 that MPE™ is for free only it has to be kept in its original form , to do otherwise it would not be a solution & it would mislead others to think somthhing to be true when its clearly not. MPE™, PFMPE™ etc. are trademarks used with permission from PFMPE. The trademark therefore is simply to stop others from stealing MPE™ in its entirety & selling it to you for personal gain or profit thus falsely claiming to be the original author of MPE™ . All rights therefore are ultimately reserved to mike montagne original author of MPE™, which means anyone can use the MPE™ thesis as long as they don’t change or alter it in an anyway & give credit when credit is due to mike montagne the original author of MPE™ who I might add has no intention to sell MPE™ to any nation, logically something that will free the world comes for free . MPE™ is strictly NON PROFIT .
Now if kmarinas86 would like to contact myself or mike montagne the original author of MPE™ for a rational discussion or even debate on TNS radio please by all means contact us.
http://australia4mpe.wordpress.com/category/contact/
Otherwise please refrain from trying to modify a thesis that no one has disproved or improved in over 44 years. I see it is clear kmarinas86 is already misleading others with unqualified assumptions like many plagiarists of MPE we the PFMPE have to contend with today who may I add never attempt to converse with mike montagne the original author of MPE™ before hand, if they did logic would tell us they have genuine intent. Nevertheless I could keep going undressing kmarinas86 purported modified version of MPE but I feel that would be wasting further of my time.
Thank You & Good Day.
David Ardron
For 44 years, MPE (http://www.perfecteconomy.com/) has survived all arguments against it. This topic was previously discussed on these boards back in 2010:
http://www.peakprosperity.com/forum/has-mike-montagne-discovered-holy-grail-financial-solutions/8917
However, I think its one major weakness can be summarized by one ardent supporter of this idea, chotaboy66:
http://www.youtube.com/all_comments?v=xutuUJwulDE
If MPE cannot be implemented on a microlevel, then it requires a top-down implementation, which has no chance in the real world given that the support for MPE has only been bottom-up, which it will most certainly remain so. However, it turns out that a modified MPE can be implemented on a microlevel, and thus, be implemented via a bottom-up approach, which is the only viable course for an economic model that has (and will have) only bottom-up support.
Given that MPE(TM) is trademarked, perhaps the modified MPE called another trademark MMPE(TM).
Under a masking alias, I posted the following on that video's comment section:
_____________
If we would replace...
...the word "principal", a word that has, in an unqualified way, been made synonymous with "the thing which you multiply interest upon"...
...with the terms CPO, which stands for *Collaterized* Promissory Obligation (as in MPE), and UPO, for *Uncollateralized* Promissory Obligation (as in Banks)...
...it can [be] clarified to newcomers what MPE is about. Don't even use the word principal! If one simply gave new nomenclature a try, confusion can be reduced considerably.
An example of avoiding the use of the terms "principal", "loan", and "creditor":
Under MPE, every promissory obligation (or PO) is a CPO, where C stands for Collateralized. A CPO under MPE always occurs between a true originator of property (OP) (note, do *not* call it a "creditor") and an oblig[or]. All CPOs under MPE are *fully* collateralized, so interest is unwarranted. Instead, money will be issued directly to the OP equal to the initial CPO and retired from circulation at a scheduled rate.
In observation of some of the conflict I have read of late concerning those who doubt MPE, I would like to raise some vital points:
More about Choice of Words and Rhetoric
1) If you want to call something a "falsified loan", don't. Why? The problem is that the word "loan" (a noun) is being modified by the adjective "falsified", which does not itself specify what about the "loan" is being falsified. So, if it is not a loan at all, why even call it "falsified loan"? Instead, directly talk about the money that is being issued.
2) Never argue or make claims about who "issues" the money. Whether it's either the banks or the people who "issue" the money is not the critical point. A more important point is that a sum of money is issued *to* someone. Terms are established to retire that money. How that money is retired depends on the system - that is the critical point to be made.
3) As much as we can say that it is the banks' obfuscation, improprieties, falsified whatever, theft, stealing, etc. that the people are charged interest on their savings through the outright lies of the system, we could instead, after all, talk directly about the inflation, deflation, and the terminal nature of debt. Perhaps we could then realize that MPE would be best started by creating a new nationless currency not limited by borders. More should be spoken about that than of banks.
On Expecting the System to Change for You
4) As much as we can try to the get support of influential bank people for a new economic model (MPE), that does not mean that their support is vital. Bypassing banks is critical if we do not get their support. Bypassing banks is not without risk. BitCoins were exchanged outside official banking channels, but they failed. Improperly favoring those people who adopted BitCoins sooner their others, their use led to an outright Ponzi Scheme. However, the most important of [BitCoin's] failures was to *store* [fungible] value digitally.
5) We are up against the banking institutions, and we cannot wait for *their* permission to adopt MPE. Given that they will not in the near-distant future create the tools to implement MPE for us, if we wish to hasten MPE, we must take it upon ourselves to establish it without making the same big mistake that BitCoin did. The value of our money needs to be protected. We must make the decision as to what measures will be taken to ensure the value of money issued during the introduction of MPE.
6) If we consent to agree that MPE can be attempted without the cooperation by major banks, we must stand up to the reality that such lack of cooperation from them means we must create our own medium of exchange. However, if we assume axiomatically [that the] value of things is to definitionally consist of tokens of *stored* denominational [and fungible] value (e.g. a loaf of bread that is worth [and can be traded in exchange for] "$2"), all might be lost if the currency is later taken away, deleted, falsified, etc..
Reconsidering What Wealth Is
7) The Wise Aristotle once remarked, ''Wealth does not lie in the ownership but in the use of things." and he is right. [Note that when Aristotle speaks of the use of things, he did not merely mean "consumption".] If we take this gem of wisdom from Aristotle and try to apply this to MPE, we would be consistent to remind ourselves to relate Aristotle's advice to concept that the originator of property (OP) and the oblig[or] are two sides of a transaction, with only an accounting system in between.
Three Financial Statements
8) What BitCoin had was a medium of exchange. However, what BitCoin lacked was proper accounting system. Therefore what BitCoin lacked was the understanding of the causes of inflation, deflation, and insurmountable debt. MPE does not have those problems. The big problem, as I referred to in last line of point "4)" was that BitCoin stored [fungible] value digitally. To protect [general] value, whether in coinage or digits, we must understand three basic financial statements.
9) ''Wealth does not lie in the ownership but in the use of things." Aristotle wisely declared. Taking the advice of this man, we would do well to consider what this "Wealth" he describes looks like on a financial statement. In a similar vein to his assertion, we must question with great skepticism about whether or not having "more money" expresses responsibility with money. We certainly know it does not[, considering the massive, insurmountable deficits (and thus insurmountable debt) of many of the world's richest countries]. A large balance of debits and credits in a balance sheet does not [properly] represent [the amount of] pure wealth [as defined in the above quotation of Aristotle].
10) The income statement and the statement of cash flows more accurately reflect what Aristotle speaks of when he defined wealth. The use of things is reflected better by the revenues and expenses of the income statement, as well as the inflows and outflows of cash [Note: *Not* by the total assets and liabilities]. For example, if I own a house with electricity, water, insurance, etc. I may as well be expected to give up a sum of cash each period. In other words, I have an outflow expense.
The Key Argument of this Exposition
11) Such outflow(ing) expenses, as I have describe[d] in point "10)", are periodic in nature. As such, they correspond to the rate at which currency is to be retired under a system of MPE.
Depreciation and consumption being reflected as they are, it would do good to have an accounting system where tokens of outflowing expense were created in proportion *to the *rate** that such depreciation and consumption occurred, but this proportionality is not exactly the same that MPE presented. [To see why it is not the same, continue further to point "12)"]
12) MPE, in its present exposition, does allow individuals and companies some degree of latitude as to how quickly to depreciate and/or consume the property. In as much as they have the ability to depreciate and/or consume that property at a variable rate, as in the case of accelerated depreciation, they have the ability to change the rate at which corresponding money is [held back] from circulation [though the amount in excess of linear depreciation is equity which can be returned back to circulation, while the amount equal to linear depreciation must be retired or otherwise the property must be forfeited and returned back to the originator of property]. The volume of token[s] of in circulation under MPE equals the RPV, or remaining property value. [This is why MPE is different than the forthcoming modification of it that I am proposing.]
The First Half the Hypothesis [The "If""-part]
13) However, let's imagine what was suggested in point "10)", that "it would do good to have an accounting system where tokens of outflowing expense were created in proportion *to the *rate** that such depreciation and consumption occurred". Such tokens, proportional to the rate of depreciation and consumption, are not directly proportional to RPV (which changes even if the combined rate of its depreciation and consumption (which and whenever applicable to the property) were held constant). It must be stressed that due to such contrast, such tokens do not follow MPE as originally exposited by Mike Montagne.
The Problem With Other Alternatives
14) However, in memory of the colossal failure of BitCoin, which represents a scheme where *stored* consideration of value was subject to theft[, w]e should consider the alternative route implicitly suggested in point "10)" that "it would do good to have an accounting system where tokens of outflowing expense were created in proportion *to the *rate** that such depreciation and consumption occurred". In this modification of MPE, consideration of value is stored as rates of RPV not the RPV itself nor of any other kind of *store* of value. [We will try to think of some reasons why this is better than BitCoin.]
The First Half the Hypothesis [The "If""-part] (continued)
15) This modification of MPE begins by considering the amortization of the value of NRP (Newly Represented Property) and then issuing identical tokens into circulation in proportion to the amortized amount given a common period. Linear depreciation is represented by a number of such tokens in account balance, while accelerated depreciation is represented by a [falling] number of such tokens in account balance. It must be stressed this provides consideration of value, without having to *store* it.
The Second Half the Hypothesis [The "Then"-part]
16) The benefit of this modification is to avoid the major problem of BitCoins, which was theft of the currency. There is no "currency" in the modified MPE, in the usual, purest sense under this modification, as the tokens involved are merely proportional to the rate of combined consumption and depreciation, as opposed to the RPV itself. Thus, removal of such tokens only removes a rate of consumption and depreciation, which is opposite of desirable for the one otherwise trying to steal[] them.
17) The modified version of the MPE still involves an originator of property (OP) and an oblig[or]. The difference is that the modified MPE can offload the responsibility[,] of protecting the fraudulent theft of money[,] to the current largesse of the banking system, which already has billions of dollars worth of anti-fraud detection in place. The accounting system described in the modified MPE stores no[ne of the] money [that is transferred from the bank accounts in the established banking system to another account in the established banking system] whatsoever[ as it] only [harbors] non-fungible tokens proportional to the rate of consumption and depreciation[, thus this accounting system's primary storage function is to simply keep score, where the points are measured in non-fungible tokens].
Futher Description
18) Unlike currency, as understood in the purest sense, the tokens in the modified MPE do not represent assets at all. They represent the rate [of expense] of assets[] as either depreciation or consumption per common period. Thus, when one has a certain amount of RPV on their record, their record will also have tied to it a number of tokens proportional to the combined rate of depreciation and consumption. Such tokens are not for exchange. If new oblig[or] replaces the old, new tokens replace the old tokens.
_____________
I didn't have time to post the following on YouTube, as chotaboy66 had banned my masking alias from his videos:
Fungibilty is Unnecessary
19) When we consider the problems of theft of tokens, these problems are reduced if each token merely represents a rate of depreciation and consumption. Each token under modified MPE is forever-until-retired assigned to one-and-only-one originator of property (OP) and one-and-only-one obligor, so stealing the token serves no use for the thief, as the OP and the obligor remain unchanged. Because of their nature, such tokens are non-fungible and do not *store* value. Thus if a token is deleted, it can be simply reverted back into existence.
Tokens of A Second Kind
20) In the future, the modified MPE, which can co-exist with the older economic zeitgeist at any scale, from local to global, can be made to work totally without the older economic zeitgeist. The only requirement is that there will be another kind of token which is proportional to the rate of revenue, and that for every token proportional to the rate of revenue, there will be a token proportional to the rate of depreciation and consumption. Tokens of both kinds must be matched and of equal amounts so as to retain inter-firm, firm-individual, and inter-individual accountability. No one can therefore make up revenue out of thin air because in this system an expense (for rate thereof), of a specified measure, must be on a different firm's or individual's record for a revenue of equal measure (for rate thereof) to be justified (earned).
The Eventual Amortization of all Assets, Liabilities, and Equities
21) Contrasting the original vision of MPE, authored by Mike Montagne, in the modified MPE, there will remain no more tokens proportional to the value represented property any longer. The only tokens that remain would be tokens proportional to the rate that such property is rendered for use. This will render the balance sheet as we know it unusable. Instead of debits on the left column and credits on the right column, there will instead be debits per common period on the left column, and credits per common period on the right column. We can call this the AABS, or Amortized Amount Balance Sheet, which can serve the same objective goals of accounting as those of a Balance Sheet, Income Statement, and Statement of Cash Flows, simultaneously. The latter three will no longer be necessary, as AABS will replace all of three them under modified MPE. The AABS will also ultimately render all savings, debit, credit, and investment accounts as unnecessities. [Believe it or not, an economy does not require them at all to function.] There will be only ONE type of official financial statement for each firm or individual, namely, each firm's or individual's public AABS record. This is constitutes at least a six-types-in-one consolidation of financial statements, which represents a capacity to vastly reduce the complexity of auditing procedures and billions of dollars saved every year in financial management costs even after initial transition costs are factored in.
Quadruple-entry Accounting Method
22) In modified MPE, there will be quadruple-entry accounting for each transaction involving x-number of "rate of revenue" (ROR) tokens and x-number of "rate of depreciation and consumption" (RODAC) tokens. When a property is produced and transferred under modified MPE, the obligee obtains x-number of ROR tokens on his/her public AABS record when the obligor obtains x-number of RODAC tokens on his/her public AABS record. For purposes of computer-automation, all financial audits (with the ultimate objective of de-office-ing the entire financial sector before this century's end), all (2*x)-number of tokens involving the same obligee and obligor will share the same unique identification number.
A measure of tokens, 2 entries
For any property transferred from the obligee to the obligor, all ROR tokens associated with that property are in the right-hand-side (RHS) of the public AABS record of the obligee, and all RODAC tokens associated with that property are in the left-hand-side (LHS) of the public AABS record of the obligor.
Derivations from the 2 entries for tokens
For each firm or individual, ROR tokens (RHS) minus RODAC tokens (LHS), equals rate of equity (ROE). As periodic accounting profits and their mirror entity, accounting losses, approach zero for firms and individuals, so does ROE. When it gets close enough to where the difference doesn't matter, this is nothing more than a balanced budget for all. The function of ROE (rate of equity) and ROD (rate of debt) (i.e. ROE * -1) is to replace credit scoring. ROE/ROR = the level of financial competence, while ROD/ROR = the level of financial incompetence. When people all have balanced budgets, the level of financial competence = the level of financial incompetence = 0 (i.e. base level).
A measure of property, 2 entries
The obligee (who is by rule the originator of the property (OP) under modified MPE) must provide an account under which the property that was transferred fits. The value of this property's contribution to the account (x-number of tokens) is on the LHS of the obligee's (i.e. OP's) public AABS record, and that same exact account amount will also be also seen on the RHS of the obligor's public AABS record as x-number of tokens. In other words, the property is correctly treated as an asset to the originator of property (hence, this amount is on the LHS), for it brings in revenue flow in the form of ROR tokens, while the property is also correctly treated as a liability to the obligor (hence, this amount is on the RHS), for it takes out expense flow in the form of RODAC tokens. Watch the following video to learn the true difference between the assets vs. liabilities:
4 total entries for every transaction in a quadruple-entry accounting system
In total, this means that every accounted for transaction must have four, not two, entries. Of these four, two will be on the obligee's public AABS record, while the other two will be on the obligor's public AABS record. The matching principle between revenue and expenses under modified MPE applies not within the same firm but rather, between two different firms/individuals, hence the need for the AABS record to be public and automated by computer logic (except for inputting the description and amount of each transaction). There will be no more "pen and paper" method to make up revenues and expenses out of nowhere, for all such entries will be disclosed to the system for public review (with personal information redacted except at rule enforcement offices where the unified database and its clone backup databases will be managed by volunteers of justice in an arrangement similar to common juries) - the end of money fraud.
As I write these lines, it has been only a minute after I have discovered that I was not the first to think of a quadruple-entry accounting. So what I say has in fact, some measure of academic relevance already, prior to my own awareness (http://www.concertedaction.com/2012/05/20/balance-of-payments-part-2-double-versus-quadruple-entry-bookkeeping/):
Another example (http://gym-eleous.ioa.sch.gr/textid/SNA2008.html):
1.63 The accounting rules and procedures used in the SNA are based on those long used in business accounting. The traditional double-entry bookkeeping principle, whereby a transaction gives rise to a pair of matching debit and credit entries within the accounts of each of the two parties to the transaction, is a basic axiom of economic or national accounting. For example, recording the sale of output requires not only an entry in the production account of the seller but also an entry of equal value, often described as the counterpart, in the seller's financial account to record the cash, or short-term financial credit, received in exchange for the output sold. As two matching entries are also needed for the buyer, the transaction must give rise to four simultaneous entries of equal value in a system of macroeconomic accounts covering both the seller and the buyer. In general, a transaction between two different institutional units always requires four equal, simultaneous entries in the accounts of the SNA (that is, quadruple entry accounting) even if the transaction is a transfer and not an exchange and even if no money changes hands. These multiple entries enable the economic interactions between different institutional units and sectors to be recorded and analysed. However, transactions within a single unit (such as the consumption of output by the same unit that produced it) require only two entries whose values have to be estimated.
More:
http://www.bing.com/search?q="quadruple+entry+accounting"
https://www.google.com/search?q="quadruple+entry+accounting"
At the pivotal phase of modified MPE, where total abandonment of the old economic zeitgeist begins:
All savings will be converted into equal amounts of ROR tokens (held by savers) and RODAC tokens (held by those holding the I.O.U.s for deposits) based on an amortization of their value according to the period corresponding to the typical rate of turnover of savings. All debts will be converted into equal amounts of ROR tokens (held by creditors) and RODAC tokens (held by debtors), based on an amortization of their value according to the period corresponding to the typical rate of turnover of debt. Once all cash and IOUs have been converted through this process, all the ROR tokens will cease to accumulate or maintain any sum of cash, and the RODAC tokens will cease to deplete any sum of cash. There will cease to be savings, debts, and cash (or equivalents) in modified MPE when the old economic zeitgeist is eliminated via the amortization process. Savings, debts, and cash itself become unnecessary for economic operation in modified MPE absent of the older system. Modified MPE evolves into a use it or lose it proposition (e.g. using, not using, overusing, or underusing ROR tokens, where use of them constitutes having RODAC tokens on one's record) where combined with measures of financial competence to guide the rationing behavior of buyers and sellers enables us to fill the void of a rationing mechanism, a void which otherwise remains after removing the old system of savings and debt.