martes, 15 de julio de 2014

B2P currency mortgages

¿How could we buy capital goods (real estate, big machines, infrastructures) using B2P currencies without a banking credit system?

The two keys to the answer are the following:

  1. B2P currency cannot be kept as “savings”. The B2C currency could eventually be stored under the bed to reappear in the future, but the goods it does represent cannot be put in a time machine to reappear in the future the same way. This time machine trick can be played with an undifferentiated currency such as fiat money, but not any more with money representing goods. At fiat money, when money disappears from the monetary mass under the bed cover in form of savings, the goods this money was supposed to trade, in order to be sold, have to rely on savings money reappearing from the past. Because at fiat money any money can buy any good. This is not any more the case with B2P currency. Money issued to promise the vegetables production of a given year cannot be saved to buy production of vegetables ten years later. If the money created for this production cycle is stored under the bed, some vegetables will rot on the shelves without being sold.
  2. The manufacturers of capital goods, like a big truck, issue their own long cycle B2P currency, but need to eat every day. That is, they need to buy every day vegetables and meat, drinks, dressing, use telephone and electricity. In one word, manufacturers of capital goods with long duration and strong manufacturing effort, requiring large factories, need to buy in the perishable, short cycle, products market to do their job today and every day.             
Overall, B2P currencies result in detaching the attribute of money as storage of value from the other two classic attributes:  the attribute as a means of trade, and the attribute as a measure of value. In the new economy savings can be done by exchanging B2P currencies representing short period perishable goods, by B2P currencies representing long lasting goods. As it has always been done with gold. 

As an example, real estate builders could issue their own B2P currency to pay their expenses in construction. Such builders would not be carrying any debt, except their obligation to provide the products they promised, on time. And they could capitalize new construction any time by issuing new B2C currency.

The real estate builder has both the ability and the responsibility to create enough purchasing power to absorb all of his production. This could be done by issuing each month enough (and only enough) B2P currency to eat this month and to buy the construction materials. The amount can be adjusted to ups and downs in production following future sales forecasts. The builder’s creditors are customers who have acquired the builder’s B2P currency in order to buy the buildings, or, more generally, to trade with the currency in the exchange market.

Under the B2P system, payment would be made directly by the buyer to the builder and the time-line of payment could be adjusted and negotiated at each selling contract according to the builder’s discretion and the customers needs. When a customer acquires a house, a contract would be signed between the parts scheduling that each month a share of the house property contract goes from the builder to the buyer, against a payment in the B2C currency of the builder. If the buyer is producing perishable goods, it will go to the exchange market to sell his B2P currency against the B2P currency of the builder. Capital goods producers will be very eager to put their currencies in the exchange market because, as we said, they need to eat every day.

The most remarkable benefit of this system is that it does not need or justify any interest, because there is no storage of value in the money, but only at the goods. The whole process follows a real time exchange of property on goods.

5 comentarios:

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