STAFF NEWS & ANALYSIS
Don’t End the Fed, Ignore the Fed: How to Distance Yourself From a Collapse
By Joe Jarvis - May 24, 2017

I like mom and pop family owned restaurants, and local craft breweries, two businesses that are currently doing great in America.

Giant corporations, on the other hand, are legally bound to the government, which causes most of the corruption in the corporate and government world. They end up taking advantage of people and bludgeoning their competitors using the government.

The United States of America is a giant corporation that is entering its dinosaur phase. Do you remember what happened to the dinosaurs? Their extinction paved the way for mammals to be the top species on earth. And in the same way, the collapse of the American financial system will pave the way for better smaller governments, and governance.

The collapse does not have to be apocalyptic and full of death and destruction. If people start taking action now, they can arrange their local and regional governments, as well as their own independent finances, as a cushion. People are already poised to reject monopolistic corporations (the USA being the largest of these), and currency should reflect these values.

Personally, I am not a big fan of how government operates, which is why I promote governance instead. The difference is that government is monopolizing power by force, while governance is gaining the consent of those governed in a particular group or land area. In currency, many organizations are experimenting with the governance of financial systems.

But I also realize that moving quickly to an entirely new system of governance could cause some major upsets. People might not be ready to adjust that quickly, and the adjust or die philosophy does seem a bit cold for 2017.

That is why adjustment should be gradual while allowing the people that are ready for quicker adjustment the freedom to go their own way. In fact the more people we have who are ready to go out and forge an example of how an area or group of people or internet community can be governed effectively, the more options we will have for solving many societal problems.

But there is one last major ace in the hole that the United States government is holding. That is control over money.

States Governments Can Help

Before anything goes down on the federal level, we need to make sure the states have the ability to cushion a collapse. Money is the main thing that would be an issue if the federal government ceased to exist, especially since a financial collapse is the most imminent threat to America.

Just this week Arizona passed a law officially recognizing gold and silver as legal tender by eliminating the capital gains tax on precious metals. Ron Paul helped campaign to pass the law and said:

By allowing the people of Arizona to use an alternative to Federal Reserve-created fiat currency, HB 2014 will help the people of Arizona survive the next Federal Reserve-created recessions. Passage of this bill will also help make Arizona more attractive to the growing number of people seeking alternatives to fiat money in order to protect themselves, their families, and their business from the effects of Federal Reserve policy. Thus, this bill will help attract new investments and jobs to Arizona.

This is actually better than a state government asserting more control over currency. Instead of trying to push their own fiat currency, or trying to issue their own silver or gold backed currency (which would cause friction with the Fed and Feds), they have simply freed up the market to give more options to residents.

And you don’t need to necessarily carry around a sack of gold to pay your debts. Banks are now theoretically free to hold your gold or silver safely, and issue their own representation of those coins, say on a debit card, which can then be spent, and redeemed in real gold or silver at the bank.

This type of solution is an opt-out style where it requires no action to end the Fed, or friction with the federal authorities. Arizona residents can now protect themselves from financial ruin by holding and using real currency, not fiat dollars.

Berkshares

Shift your attention to New England for another small example of a region setting up a backup plan for economic exchange.

In the Berkshires, a mountainous county in Western Massachusetts, locals have been using what they call Berkshares for over a decade.

The currency is accepted only regionally and is meant to keep wealth in the area. They encourage people to use the currency by making the exchange rate favorable: one Berkshare costs 95 cents effectively giving anyone who uses them a 5% discount on anything they buy.

For a community like the Berkshires, this makes sense. There are plenty of local artisans, farmers markets, and small businesses that foster a sense of cohesion. There is only about $140,000 worth of Berkshares circulating, but the proof of concept is interesting.

It should be noted that Berkshares are still a fiat currency, with the only value being their wide acceptance by businesses of the region, and the fact that local banks convert them back into U.S. dollars if you so choose. I would be interested to see the same concept applied but backed by silver.

Other communities are different and will need different solutions. That is the point, that one size fits all approaches–centralizing government–does not do what is best for people.

Cryptocurrencies

For online commerce and communities, there is much buzz surrounding cryptocurrencies, and enormous potential. However, the actual use of cryptocurrencies as currencies is still relatively minimal. Many people are treating them as investments right now, hoping to grow their worth, and sometimes even trading them back into fiat dollars in order to spend them.

But this is just the very beginning phase where people work out what makes sense and what does not in terms of the underlying governance and technology of the cryptocurrencies. If a particular coin’s value levels off and it becomes widely accepted, this will become a very freeing mode of exchange.

And of course, all these ideas on currency can be melded to form more stable mediums of exchange. There are already gold backed cryptocurrencies coming out; one company is called DinarDirham. A co-founder said:

If you have an asset that follows real-time gold price, which can be redeemed or claimed for physical gold and if you combine the benefits of digital currencies with benefits of gold as a store of value, in a transparent way, you get a match made in heaven. This is a cheap way to store, trade and use gold globally. Our unique and innovative trading technology based on blockchain makes this possible.

This is not to endorse the actual company DinarDirham; four people involved were arrested by the Brunei Commercial Crime Division. It is unclear if this was in response to actual fraud or simply backlash from the government for threatening the status quo.

But other options for gold and silver backed cryptos are emerging, including one called ZenGold with the same idea:

ZenGold aims to create crypto assets that are backed by physical gold in order to enable investors to instantly buy and transfer even a very small fraction of gold anywhere in the world while having pertinent asset information securely stored onto an unalterable Metaverse Blockchain.

As with anything else, especially new technologies, cryptocurrencies should be thoroughly vetted to make sure they are legitimate, and even then there is no guarantee that it is a safe store of value. But with the battle being taken to centralized banks, including the Federal Reserve, on so many fronts, it is a time to be optimistic about the impending collapse of the old world dinosaurs controlling our lives.

Experimentation Phase of Governance

These are all examples of communities experimenting with governance that will provide options for those of us who seek economic freedom, and freedom from centralized banks, and the oppression that comes with them.

Diversify your wealth, and encourage local and state governments to distance themselves from centralized government.

People need to be able to say, “No thank you, I will take my business elsewhere.” That is the only way to make sure that a sinking ship doesn’t suck everyone down with it. Having control over your financial health and freedom, even in the event of emergencies, is an invaluable lifeboat.

Tagged with: , , , , , , , , ,
Posted in STAFF NEWS & ANALYSIS
  • rsanchez1

    I think Donald Trump knows this, and he’s setting up the cushion through community banks. There have been a few times over the past few months where Trump has met with community bankers and promised to ease regulations on them, especially Dodd-Frank which is much more burdensome on small community banks than on huge multinational banks. He has said they are very important to small businesses.

    Also, Mnuchin has conceded that the big multinational banks are getting too big again, but has also insisted that the Trump administration is against bailouts. Mnuchin’s statements and Trump’s outreach towards community banks tells me they know the collapse is coming, and part of their plan may be to put community banks in a better position to survive and lead the recovery on a local level.

    • We hope you are right, you certainly hit the nail on the head in terms of Dodd-Frank. The big banks don’t care, they can hire lawyers to comply and easily pay off any penalties for non-compliance the feds throw at them. It only really burdens the small ones who cannot pay to play.

    • Don Duncan

      No salvation will come from above (TPTB). None. TPTB are the problem, not the solution.
      Sometimes global organization is better than regional, IF it is voluntary. When it is voluntary it can adjust to change, unlike coercive planning. When global fails to be better people opt out and it adapts or dies. That’s called capitalism, i.e., economic freedom.
      Any voluntary solution that is tied to the dollar is unsound because the dollar is unsound. It is a fiat currency, i.e., money founded on faith & force. Both will fail, sooner or later. The dollar and banking, big or small, is fundamentally unsustainable. The latest central bank (The Fed) has not failed completely yet because it had the world’s largest store of wealth available for transfer to the unproductive, the thieves, the politicians/bureaucrats, the crony businesses. And it has ongoing wealth production and support of the exploited, out of willful ignorance. Institutionalized violence/theft/fraud has the sanction of the victims.
      The few of us who know this can take evasive action. (Prayer & hope for divine intervention is not rational action.) Voting for 200+ years and hoping for a different result is not rational. Waiting/hoping for a “leader to save us” is not rational action.
      A return to sound money, hard money, is rational. Doing that outside of the controlled banking system is rational. Working on a way to do that is necessary for our economic survival. A few voluntaryist capitalists can survive the general collapse and help the rest. They will be more inclined to listen to non-violent solutions when desperate because hardship will incentivize them.

  • Anon.

    There’s an interesting concept/platform for local governance called Sapiocracy.

    http://sapiocracy.com/2015/02/what-is-sapiocracy/

    • thanks for the tip, that is certainly an interesting concept.

  • Don Duncan

    Small business owners may save the economy in the Americas. It is harder to be a socialist and run a small business. Socialists quickly turn into capitalists. That is one good reason to patronize small business, and communicate with them about voluntaryism.

    • Agreed, small business is the future and it is great to see many thriving. I suppose the problem of secure storage is an issue, too bad the company couldn’t convince the businesses to accept the gold instead of converting to fiat.

  • georgesilver

    Governments like the mafia do not like competition. Cryptocurrencies are just another form of fiat with nothing what-so-ever behind them except faith. Governments and central banks will soon associate cryptos with funding for terrorism and their propaganda outlets in the media will demand their ban. Soon there will be as many different cryptocurrencies as there are people on the planet in fact the Daily Bell could have it’s own crypto while the tulip mania is going strong. So it’s a race against government control or hyperinflation because of too many cryptos. Once the crypto bubble begins to pop everyone will rush for the exit but very few will get out because crypto liquidity is almost nil.

    • Some would argue the underlying technology is the value of cryptos, making like slightly different than fiat, and then of course an actual precious metal backed crypto would not be fiat.

      • georgesilver

        There are over 700 crypto currencies and expanding exponentially.
        There is only ONE Gold.

        • sukTHEfac

          there’s gold of varying degrees though, just as the cryptocurrencies vary.

      • sukTHEfac

        and once again, the internet reformation proves to be a tool far more powerful than any government

    • aPEON

      Gov controls the electrical grid, the internet grid, the fuel grid, and if they want your gold, they will take it. Alt-currencies = gone

  • Praetor

    You are you’re own governance! If everyone is following they’re own governance in a moral ethical way and selfishness is rejected. Than governance will overtake government as a form of living.

    Its the Wizard of Oz when it comes to currency, ‘Follow the Yellow Brick Road,’ the ingots are the only store of value. To gain self governance we all must become Toto, courageous not cowardly, is not the Tin Man who needs a Taxpayer Identification to enjoy the fruits of you’re labor and ask yourself why is it I need a Certificate saying I was born, when in fact I am here. Toto’s courage is he unmasked the scared weak old man who control all you see.

    The world is not scary, it has a purpose, to teach us how to govern ourselves.!!!

    • sukTHEfac

      dude you seriously need to learn the differences between your/you’re and there/their/they’re

  • aodh macraynall

    Cryptocurrencies, Berkshares; these are great as models of what we can do in the future and no doubt we will do as this System collapses. You are a little fuzzy on the difference between government and governance…sounds libertarian to me and stop with the current year bit…it’s 2017…really?

    • sukTHEfac

      I thought he spelled it out pretty plainly – government is top-down, and governance is top-up. To me, it’s more about perception; do I feel under the boot of my government or do I feel I have control over my governance?

      And for that last part about the “current year bit”…trivial asthetic gripe.

  • Rudya

    As people we have more power than we give ourselves credit for. WE are the economy, WE have the power to make change. Every time you spend money, you are voting with your pocketbook. Who are you voting for? the big chain restaurant, or the small local mom and pop restaurant? Are you voting for Walmart or the small local hardware store? Are you voting for Monsanto, Green Giant, Kelloggs, or your local farmer?

    Money is a form of power, and think carefully about who you are giving some of your power to. Every time you give your money to a transnational corporation, most of that money leaves your community, and thus impoverishing it. This money often ends up in corporate accounts in the Caymans, in the pockets of overpaid corporate executives, or other tax havens and some of it ends up in the political campaigns that choose our “leaders”.

    If the money is spent locally, it remains in the community, enriching it and providing opportunities for prosperity.

    We need to be building self-sufficient, resilient, fractal local and regional communities where dependence on outsiders is minimized. Local production of food and goods is a critical component of this. Local currencies and responsive governance are the other legs of this system. Think about how your spending is helping this or hindering it.

  • SnakePlissken

    End the Fed

loading