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M4 Money: An Essay

M4 MONEY: AN ESSAY

 

 

By

Edward E. Rochon

 

 

 

Shakespir EDITION

 

 

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PUBLISHED BY:

Edward E. Rochon on Shakespir

 

 

M4 Money: An Essay

Copyright © 2016 by Edward E. Rochon

 

 

 

Thank you for downloading this eBook. This book may not be reproduced, copied and distributed for non-commercial purposes, unless prior permission is given by the author.

 

Your support and respect for the property of this author is appreciated.

 

 

Bookcover Image:

By Pratyeka (Own work) [CC BY-SA 4.0 (http://creativecommons.org/licenses/by-sa/4.0)], via Wikimedia Commons; Wikipedia: Money Tree

 

 

Some Other Works by the Author

 

[Compound Interest: An Essay
Dollar Inflation: An Essay
Dollar Inflation II: An Essay
Green Gold: An Essay
Inflation Court: An Essay
Jobmasters: An Essay]
[Minimum Wage & Economics: Essays
Monetary Stability: An Essay
Voodoo Economics
__]

 

Reading Material

 

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Table of Contents

Title Page

Preface

Chapter 1: Assignats

Chapter 2: M4 Attributes

Chapter 3: Effect on Farmers

Chapter 4: Considerations

About the Author

Preface

Here is a proposal to ameliorate the poverty of poor nations and the problems of farmers, family and corporate, in the developed world. It supposes the method works around the problem of endemic corruption in the poor nations and has innate attributes that inhibit corruption and misuse by M4 issuers.

In the United States, Congress would issue M4 money domestically and internationally, not the Federal Reserve Banking System. It is suggested Congress test the waters by using M4 money for foreign aid before attempting economic remedy in the United States. Observation of how the markets and speculators would treat the species, problems of dissemination and so forth could be observed on a test by small scale basis. It is likely speculation and exchange would center around Chicago, since M4 money bears more similarities to the futures market, than traditional banking, but this would be new territory.

Essentially, God or nature would guarantee the ultimate value of M4 money. Since the national motto is: In God We Trust; this is fitting. M4 could be used as a banking instrument, particularly in poor nations. It would get around problems associated with usury. Never having read the Koran, it would be of interest to see what sura citations could be used to condemn money valuation and profits that are essentially acts of God. But due to its liquidity, it would undoubtedly be discounted for immediate gain, arbitraged against species and speculated upon. Back to Table of Content

 

 

Chapter 1: Assignats

Using assets other than metals and commercial paper to back up and act as money is not a new idea. Invariably, the assets would be expressed and exchanged as paper currency, especially with real estate and fixed assets, they being incapable of liquidity of exchange.

The most famous/infamous example of this was the assignat circulated during the French Revolutionary period, backed up by seized church and noble estates. The paper currency was less common then, and the defenses against counterfeiting less developed. Moreover, the British government and financial community deliberately conspired to counterfeit the assignat, undermining its value and stability as a medium of exchange. So counterfeiting was on the highest level, justified by a state of war and competing commercial interests. All things are fair in love and war: justified all actions. The tendency to overvalue assets to avoid direct taxation, siphon off assets into the hands of corrupt officials, greatly contributed to the demise of the assignat in addition to the obvious lack of liquidity of real estate. You might consider this type of money separately from the usual currency of liquid mediums such as metals and fiat valuation.

Under the current conditions of the world economy, I deem a modified version of assignats could be useful in promoting prosperity, especially in the developing, impoverished nations. This could often involve bi-national, multinational issuance of commercial currency to give more confidence to purveyors and recipients of the medium. Generally, a wealthy nation or nations would issue common M4 bills with poor nations. I spell out the basic idea and the reasons justifying it below, along with reasons why the flaws of assignats would not weigh against it. Back to Table of Content

 

 

Chapter 2: M4 Attributes

M4 money has three basic attributes:

One: Locus of Valuation: The medium is based on the value accrued to fallow land. From the time of the Old Testament proscriptions of Moses to modern science, it is known that fallow land increases in agricultural value as a general rule. It becomes more fertile, producing more abundant crops, producing more wealth. This wealth comes from God, or nature if you prefer. This increase in valuation is fairly reliable with some precautions of not letting the land remain too fallow for too long, increasing the labor for land clearing. The primitives used fire clearing, very efficient. But in settled areas, using fire has not always been so advisable, whether this is justified by dangers or not, it is not as common. Settled areas use plows, and fire tends to leave tree stumps in the ground. Primitives use these stumps as trellises and work around the stump to their advantage. Settled agricultural usage generally involves one crop in one area at a time, though this is a bad method that modern automated equipment could resolve, given the determination to build it. When we talk about cattle grazing, fire is generally suitable whatever the level of settlement, with precautions to limit the burn to the place desired. So this gain is the basis of the money, and is fairly reliable.

Two: Security of Valuation: Public corruption is endemic in the developing world. A major problem is that police and bureaucrats are not paid enough. This facilitates their corruption by tyrants and foreign exploiters. Now since the valuation of M4 is based on land lying fallow, it must be assured that the land does in fact remain fallow. If you have cattlemen in Africa cheating to feed their cattle at the expense of others in agreed upon fallow areas, this must be stopped. M4 money sets aside payment to the securer of the money form. Police, rangers, carabinieri who watch over the fields must be assured that the profits accrued from the beneficence of God is shared by them. For any issuance of M4 money, the insurers of security are specified with respect to police precinct, ranger territory and so on. Some percentage sufficient to encourage them to protect the land is necessary. If they fail to do so, they will lose their commission.

There are known scientific methods of analyzing soil and terrain to determine its fertility. And knowledgeable people can tell a lot just by the look of the land. The developed nations would send specialists at random to validate the increase in value at the maturity of the money. By its nature, M4 would have a maturity period, and so similar to bonds in that respect. M4 certainly implies considerable distance from M1 currency by its very numeration of 4. A local cop might allow a relative to cheat as a favor or for a little bribe. As long as it is not rampant, the land will remain fallow. This is particularly true for grazing land, a critical problem in North Africa and the savanna regions, north and south and throughout the world. Endemic cheating would cause bitterness in the police precincts and the local populace that did obey the fallow proscriptions. These harsh eyes on fellow officers would have an effect.

Three: Volatility: On the stock market we know that certain stocks have a higher volatility due to risk, but risk entails higher potential profits to lure capital, and because all volatile stocks and ventures have the potential for large profits through speculation. Great swings in volatility produce great potential for great profits and great losses. The trick is to be on the profit side. And we can also see that stocks and bonds are types of money (M3) in many respects. Specifically, I am using the term volatility to refer to risk associated with realizing the value of M4, but risk generally equates to more transactions due to valuation changes. So I am not specifically referring to the stability of the species, but risk of its value not being realized. But they work together.

Bonds by corporate bodies can indeed produce the wealth to pay them off. I consider the bounty of God with respect to fallow fields to be more reliable in general than the affairs of state. However, due to potential cheating due to extreme poverty in certain areas, the effects of inclement weather and the predictions by modern meteorology of those effects would create a volatility factor with respect to the expected maturation of M4 money. And the farmers would spend the money without any respect to maturation. It would be effectively M1 money to them, but speculation on it would be more in the M3 state. And M3 would influence the value of the effective M4 as M1 paradigm. Congress would take advisement and link a volatility level to each issuance. This would be periodically reviewed and modified at appointed fiat mandated periods. You can be sure the markets will watch volatility percentages and agree or disagree on a speculative basis. Chicago is a likely center for this type of matter. We must suppose the Federal Reserve would take note of this business along with the central banks and international monetary centers. I deal with basic matters, have very little detailed knowledge of any of the subjects of my essays, and do not wish to comment on these matters in any detail. I simply believe on an intuitive level and as a matter of basic principles that M4 money is potentially viable and useful to the benefit of humanity.

Volatility would influence the value and rate of buying and selling of M4 money, the effects of buying and selling of money market devices as influenced by M4, should M4 take on a significant economic impact in the future. Since profits are made off of the bounty of God, how imams and clerics would view certain trading of this currency device would be important in areas such as North Africa and Asia. I will not comment on these Koranic matters, as stated above. Back to Table of Content

 

 

Chapter 3: Effect on Farmers

Desperately needy people need sustenance immediately. They cannot think of future consequences of actions. By paying them to leave fields fallow, they can use the effective monetary species to feed and clothe their family while the fields lie fallow. They could travel to gain extra income elsewhere and do needful chores on their belongings. They could do things to increase the productivity of the land such as soil conservation techniques of tree planting, etc. Care should be taken that those who plant the trees are the ones who suffer if the job is not done right. Later on, richer fields will produce more abundant milk, meat, hides, animal byproducts to enrich the country and its economic infrastructure. Healthier, better fed children are more productive, better able to pay taxes and insure their self-improvement with bicycles, tools, books, and whatever achieves that goal.

Experts who have studied the matter are appalled at how little wealth would be necessary to prevent the desertification of Africa, Asia and other areas. But corrupt governments relying on tax income from exploited resources from multinationals, the general indifference of bureaucrats to poverty other than their own, complicated by bribes and extortion, and a general pessimism produce these wretched results. Here is a prime example of why the people must never give up on paradise. And paradise to be effectual spiritually must work immediately to produce that ideal in the current situation, otherwise it is fraud. Only scoundrels care nothing about the destitute. In the end, they ruin their own countries and their own lives. Their cynicism is not self-interest but self-destruction. Evil is not motivated by self-interest, called selfishness by many, but by lust. Lust cares neither for the self-interest of others, nor for the interests of itself. The drunk ruins himself as well as his own family.

God alone is good, but evil overtakes the stubbornly iniquitous. It behooves the righteous to prevent them from taking the righteous down with them by whatever just means available. Back to Table of Content

 

 

Chapter 4: Considerations

Control of paper money was taken from Congress to prevent political corruption from corrupting the money supply. Of course the bankers and business concerns are never guilty of that! Ha, ha, ha, ha. Not even Adam Smith believed that nonsense. But conceding the point, too much power cannot be left in the hands of independent central banks.

Because the wealth of M4 money ultimately depends upon the grace of God, because M4 money will make it more difficult for tyrants and corrupt officialdom in poorer countries to exploit foreign aid handed out through M4 joint ventures, because M4 money will help Congress do away with pork barrel agricultural subsidies without destroying agricultural smaller scale ventures, because it conforms to scriptural and scientific proscriptions to leave the land fallow and uses that future wealth to liquidify the economic needs of agriculture and food consumers, we see that legislatures are constrained by circumstances of nature from abuses in the creation of M4 to a considerable extent.

By giving family farmers, and corporations as well, payments in M4 to pay for expenses while fields are lying fallow, other subsidies are not required that distort production and create overuse of land to take advantage of subsidies. It is neater for Congress to deal with. It sates the poverty of the farmer and the profitability of corporate agriculture. And in the end, God pays for it, not the American taxpayer. By making it harder for Congress to cheat, it makes it easier for whistle blowers to blow the whistle on pork barrel expenditures and foreign aid waste. The bounty of God makes it easier for legislatures to evade the temptation to corrupt the American economy by pandering to special interests, or even through genuine pity for their constituency in their plights. M4 spreads the vicissitudes of weather, market volatility, blights and pests over the commonwealth of the American people. Are these farmers sitting on their asses drinking beer and watching the boob tube all day? If not, then let us see that liberty and justice for all becomes honest prosperity for all.

While real estate is not liquid, the potential produce of the land is more readily transportable and so liquid to that extent. This means the money it represents has the liquidity of money in general. The simple folk will be given currency bills that exchange as bills, assuming vendors have confidence in them. Since they can be treated as money in general, they are not the equivalent of food stamps, and the holders of M4 currency can do as they please with it. If the currency approximates local M1 money, and the bills are readily exchangeable at face value for goods, mixing them in till drawers with regular currency of like value would be a minor irritation that would not deter vendors due to loss of revenue on sales. The M4 should be distinct as this clearly indicates what backs it up and its intention. Fiat money, while perfectly acceptable when trusted, has a stigma of null value behind it. It is deemed an evasion of raising taxes when actually raising them. It generally produces unfair inflationary income redistribution, generally to the rich in the end, though they are the first to complain at times when it goes against them. Inflation is a nothing problem when no redistribution of significance takes place. It may have some useful value in keeping the economy on track and even in upholding fair prices, income and wages. But this takes a fine tuned economy to see through to success on a regular basis. M4 hopes to aid this.

Briefly, currency avoids many problems associated with food stamps, loans, various other similar types of subsidies that may be in place to help the poor. These are a pain in the neck to buyer and seller, prone to corruption despite the notion that they prevent corruption, are in fact overcomplicating the matter, and are unjustly paternal with respect to the intelligence and intentions of the recipients. God alone is the universal father. Corrupt people will waste anything that comes their way. Is the land fallow or not? Then it will increase in value and pay for the M4 currency.

We should also note such procedures place scientific agriculture under close scrutiny that is reflected in financial accounting as well as in law. The data bases of finance, law and science are then fertile ground for better research, understanding, and utilization of agriculture and nature, and in fine tuning its use to human needs. The symphony of prosperity requires this harmonization.

By testing this out on targeted foreign aid projects, seeing how the markets react, the local populations in target countries react, Congress can tailor the M4 supply to meet the needs of a suffering world. The music of the spheres, heard or unheard, must be matched by the music of sound financial harmonization with minimal dissonance. A little dissonance is sometimes agreeable in the symphony. Perhaps some people deserve to suffer due to their profligate lives and the rod of poverty corrects things. But a symphony of nothing but dissonance is a horror to behold and hear. I have heard such modern productions and was disgusted.

The matter of M4 brings up the potential of labor to back up commercial paper. You might call this M5 money. That is, potential available labor, unemployed, underemployed or inefficiently employed, has a potential monetary value in like measure to fallow land. It is much more volatile (risky as to value) in nature due to worker morale, honesty and skill level, as well as sick time and death. I might consider this in a later essay.

The Communist theorist would do away with money. So why bother with new means of generating funds? The Communist bureaucrats along with their Mandarin predecessors are largely incompetent administrators. Part of the problem is the complexity of the economy. There is also a very big tendency towards over-centralization by bureaucrats to maintain control. This just does not work. On the other hand, I have no use for Lowland prognostications on markets. It is organization and not labor that is the central parameter of prosperity. The goal of prosperity is absolutely paramount. Paradise or as close to it as possible is mandatory. Even the Socialist needs the worker paradise. This is how these fools fooled so many with their nonsense.

In general, decentralized economics requires money, in adequate quantities, with reliable value or predictable future value. Centrally controlled economies can do away with it through allocation by decree, but at the likely cost of centralized incompetence, immorality and vain glory ruining prosperity. Since organization is the primary factor in wealth generation, the federal form of government, from the individual and family unit, through cities, counties, provinces, all the way to the federal center of government is the best manner to deal with this. But how competent are the maestros and musicians? We must keep the whole opus in mind, listen with an honest ear to keep the symphony harmonious, wholesome and pure.

So barring a world without any scarcity in supply, and no concern of compensation, money must remain to facilitate decentralized decision making in the macro-economy. The bureaucrats should make every effort to facilitate prosperity by ever diligent attempts to better organize society. But vain pretense, hollow slogans, contempt for the peons and the rest does not a paradise make. I certainly hope that my musings here are not delusory, have some value to the problems dealt with. Of course, if nobody pays attention, this is a problem whatever the value of the notions. Then, I will simply employ them in my own life to whatever degree possible. Thank you for perusing my little essay on this subject. Back to Table of Content

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Other Works by the Author

[(*]Available online[)*]

Collected Poems I
Collected Poems II
Elements of Physics: Matter
Elements of Physics: Space
Elements of Physics: Time
Unified Field Theory: An Essay
Space as Infinity II
Golden Age Essays
Golden Age Essays II
Golden Age Essays III
Golden Age Essays IV
Golden Age Essays V

 

About the Author

My current biography and contact links are posted at Shakespir.com/profile/view/EdRochon. My writings include essays, poetry and dramatic work. Though I write poetry, my main interest is essays about the panoply of human experience and knowledge. This includes philosophy, science and the liberal arts. Comments, reviews and critiques of my work are welcome. Thank you for reading my book.

Back to Title Page


M4 Money: An Essay

A preface notes the scope of the work. Chapter 1 briefly mentions the Assignat, used during the French Revolutionary period as paper currency. It used real estate as the surety of value. Chapter 2 lays out the requirements of M4 money: 1.) Locus of Valuation, 2.) Security of Valuation, 3.) Volatility. An area of land is specified for the issuance. It is secured by police, rangers, carabinieri in order to remain fallow, and these securers receive a commission upon successful maturation. Congress or legislatures note the potential volatility of the issuance. This refers to the likely accrual of value of the fallow land. Chapter 3 deals with the effects on farmers and the economy. We note how little effort is required to prevent desertification of semi-arid and other regions of the world in terms of financial input. I refer to experts on this matter without offering sources. The reader should check the Internet and libraries to make up their mind on the matter. I did not do the work on these reports, nor the reader, so check it out for yourselves. I mention the problem of corruption in the developing world and how M4 might ameliorate this. Chapter 4 deals with underlying considerations of M4 and why it might be a good idea. It notes that decentralization of economics requires money, that removing it through centralization is likely to produce incompetence, immorality and vain glory among bureaucrats. Since organization not labor is the central generator of wealth, experience shows that a federal approach with the individual and family as the lowest unit and so on up to the chief of state, each providing organization at its respective level seems the best solution to social harmony and prosperity. This requires money, sufficient money, reliable money, and M4 proposes to aid this objective. Hope you enjoy the read or at least find it of interest.

  • Author: Edward E. Rochon
  • Published: 2016-03-24 23:35:06
  • Words: 3454
M4 Money: An Essay M4 Money: An Essay