Caretology

an eight-caret diamond for Valentine's Day

I’m in my Appalachian childhood home and will have the pleasure of going on a hike with a reader next week. She said she appreciates the breadth of my topics, spanning a wide range, and their depth in diving into various rabbit holes. Guy Duperreault commented that he pictured us curious ones with our noses in the ground and our furry butts in the air, brushing the dirt from our eyes with our paws, delighted to find someone else exploring the same rabbit hole. Yes!

I do what James Corbett recently called Nichecasting, a neologism he’s coined for intensively covering a narrow topic for a particular audience. However, I do that in many areas and have been thrilled to find other spelunkers! Like Nefahotep in esoteric mystical texts and Rhonda in deciphering words, especially the Buy Bull, as she would say. Julius Skoolafish and others in unravelling the World Wars, and the Robert Malone/ controlled op rabbit warren puts me in much good company.

In this case, we’re rabbits in search of carets (^). This is the community credit that I use to replace globalized money in my book, How to Dismantle an Empire. I end with the one system change needed to take back control over our own labor so that our time serves family and community rather than making the rich richer.

I’ve been delighted to find Mark Alexander, of The Ministry of Truthiness, willing to explore this rabbit hole with me. Not only has he read and reviewed my book, but also made time to meet with me three times when he happened to be in my hometown. We quickly went from the social on the first visit to gossiping about all of you on the second, to the nitty-gritty of how my caret system works. He’s now learned a new programming language to develop an app to handle caret transactions, which would make it easy to simulate and show how it works. So I’m hoping to lure more into this rabbit hole.

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In a discussion on power, Nefahotep quoted the phrase, “One shall rule behind, one shall govern in front.” I’m concerned not at all with the puppet governments in front. My concern is with the system of money that empowers the rulers behind, and how we can take that back.

The mortgage represents the transfer of legacy wealth from one generation to the next, the community inheritance. A home should incur a debt to make sure the previous generation can live out their lives in comfort and security, and to pass on the gift in a better form to the next. It’s the heart of the economy that pumps energy into the exchange of local goods and services. To owe no debt for all we’ve been given is to stop the heart.

But that debt shouldn’t be to the bankers. Bankers claim ownership of the homes by issuing credit against them with a few keystrokes, which we repay with 60 years labor from dual incomes. They usurp the inheritance. The interest, equal to the price of the house, goes to them. The principle, the money they created with a keystroke, is cancelled out and disappears when repaid. This necessitates inflation in order to repay the other half of the debt, because there’s not enough money left in circulation. Inflation is the artificial dilution of saving compared to the housing it buys, manipulated through the interest rate.

The bankers are the rulers. Their other face is as corporations, which Rhonda transposes as Crop Rations. They decide what our ration of the crop should be in wages but also extract their ration of our labor harvest in taxes, mortgages and debt. Labor is extracted from our families and communities in order to serve them. There is NOTHING you can change without changing that.

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Most people, even of the few who get this far, remain stuck at ‘how will that happen?’ They don’t move from the abstract concept of self-rule to the nitty-gritty of self-governance. Predicting how it could happen involves speculations that lead to an endless mire of useless arguments. Planning what you would do when it happens leads to useful and productive arguments.

When we know what we want next, the opportunity will present itself through the spontaneous combustion of the present system. If that system collapsed today, something worse would replace it. So this post skips over ‘how will it happen?’ and goes straight to ‘what do we want next?’

This is the one system change needed: Only public banks owned by commonwealths under 200,000 people have the right to issue, tax, or set the exchange rate of credit used for internal trade backed by the properties within its borders. I call this commonwealth credit a caret (^).

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the rules

The caret system is anarchy in motion, not blinded by science, if you get the reference. Here are the three rules for caret distribution that means it CANNOT be corrupted, CANNOT be extracted, and CANNOT be used for private or preferential gain:

1) Must be distributed equally to all commoners (commonwealth members), as you define them. This protects against corruption and preferential treatment. Carets can’t be used for salaries but only for targeted subsidies. Distribution can’t be need-based but must be equal. Anyone born in your commonwealth, to parents who are members of your commonwealth, or who lives there an amount of time set by the commonwealth becomes a commoner and eligible for dividends and benefits.

2) Every caret exchange must deduct a 15% pension contribution for Social Security. Your commonwealth bank will be capitalized by the Social Security Trust Fund, issued as three debt-free trillion-dollar platinum coins by the Federal Government, not the Federal Reserve. This capital will never be spent but will set the limit for how much debt can be issued at 10X its value, as is the rule for banks today. In return, the commonwealth will make Social Security payments and give the Trust Fund a return that will keep it solvent forever. Carets can be made exempt from income and sales tax, at your discretion, but the pension deduction for Social Security is required to protect retirement.

3) Caret distribution cannot exceed the formula Debt + Tax + 2X Cash. This makes sure that you can’t run out of imperial currency to exchange for carets and be forced to sell off assets or borrow again from bankers. Debt means the amount you bring in from monthly mortgage payments, that are debts to yourself. It could also mean student debt, if you choose to extend that. It doesn’t mean loans for cars or credit cards that require dollars. Tax means however you decide to tax carets, with the one requirement for Social Security. And with the 2X Cash, you can issue a multiple of your imperial currency reserves, depending on the exchange rate you set.

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the questions

Within these parameters, however, there are decisions you need to make as czar of your fiefdom. Here are the decisions, followed by my choices:

1) What will be the exchange rate of imperial currencies ($) for your commonwealth carets? In Santa Cruz, I would set it at $2 = ^1 and price all housing, rentals and education in carets. This would give long-term residents a 2:1 advantage. I’d set seven years to become a commoner and allow for the 1:1 transfer of a set amount of savings from $ to ^. This will also create more cash reserves that can be distributed in carets.

2) How will you tax ^ and $? I would make carets free of all income and sales tax when spent on locally produced goods and services. When dollars are spent or carets are ‘cashed-out’ for dollar purchases, the tax is 50%, giving local producers an advantage.

3) Will you allow exchange of a monthly amount of $ for tax-free carets? I’d allow commoners to exchange $3000-$6000 per month for tax-free carets. This would add to the dollar reserves and give them a way to pay for housing, local goods and services without tax. The remainder would be taxed normally.

4) Will you cap the amount of ^ someone can earn? I wouldn’t have a minimum wage but would have a maximum wage of ^60 per hour or ^6000 per month, plus an additional allowance for long-term savings for retirement or a down-payment. We compete against each other for mortgages based on how much debt we can absorb. By capping caret income, it keeps the cost of housing within bounds, lowering the cost of living. It also makes services, including doctors, dentists and construction, more affordable.

5) What interest rate will you charge on mortgages? For the first six months, I’d offer a 3% fixed mortgage and no variable rate. This would ensure that all existing mortgages would refinance at the commonwealth bank, paying it off in $ or other imperial currencies and transferring it into carets. These carets can be distributed in advance of monthly payments to make sure there’s always enough in circulation to repay the debts. At six months, I’d raise the fixed rate for new mortgages to 3.1% then by .1% each quarter. After five years it would reach 5% interest, which is where it would stay permanently. Equity loans could be extended at 3% for 80% of the market value.

6) What return will you give the Social Security Trust Fund as capital? Remember that 10X the capital (and 10X deposits) is the maximum amount of loans that can be made. If the maximum loans were made at 3% interest, the Trust Fund would generate 30% its value in interest annually. I would give it a 7% return, which would be ample and leave the remainder to be used as capital, deposits or distributed as dividends.

7) Will you offer interest on long-term savings? I would give a 4% interest rate on long-term savings with the maximum deposit depending on the commoner’s age. This would enable people to stop gambling on the stock market for their retirement. I’d allow loans against the principle at 5% for any reason. This would only add 1% to the interest they accrue at the same time. Downpayments could be made, home projects could be done, and crises could be averted. This would also increase the long-term deposits adding to the loan balance.

8) What incentives will you give for people to use ^ in ways you want to promote? This is the most important question here! If I had ^500 per person per month to distribute, I would put ^100 each towards locally produced food, wellcare, education and home improvement. These would be targeted subsidies so they would pay no tax or Social Security but can use it for anyone providing that service. The provider would contribute the 15% to Social Security and use it anyway they want.

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the results

If you have 10,000 people in a village, this would add ^1M a month each to local food production, wellcare, education and home improvement as ways that people can make a living. And the next month, all the subsidies and earned carets would circulate again, less Social Security and mortgage payments.

For the remaining ^100 carets, I’d put ^40 into projects on their block, ^30 into neighborhood projects, ^20 into their hamlet and ^10 into their village. These could be spent in any way that benefits the group. For a block of 30 people, that would be ^1200 a month. A neighborhood of 300, ^9000 a month. A hamlet of 3000, ^60,000 a month. A village of 30,000, ^300,000 a month. Imagine what you could do!

As we delve into the rabbit holes of how we’ve been fooled, I hope we also join in imagining what we want.

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There’s been much talk about Biden’s $10K student loan forgiveness but student loans are just one symptom of the dysfunctional education system. This episode examines how to reinvent K-12 through university with self-driven curricula, edu-tourism, edu-travel and no debt. It uses the economic system of anarchy and federalism described in my book, How to Dismantle an Empire. It references The Student Loan Scam by Alan Michael Collinge, a TEDtalk by Sir Ken Robinson, a NY Times article by Nick Burns, and The Underground History of American Education by John Taylor Gatto.

Continues the System Change Series developing a parallel community economy backed by local mortgages. This episode explores retirement and using the Social Security Trust Fund to capitalize public banks, stabilize the interest rate, and bring down the cost of the Unaffordable 4H—housing, healthcare, higher education and hope for retirement. Cites Eric Laursen's tome, The People's Pension. Explains how inflation is really dilution, what Ben Franklin thought was the right interest rate, and how we've been tricked into betting our futures on gambling chips.

I talk about Julian Assange and RFK, the Porcupine Freedom Festival, Larken Rose and "If You Were King" and the authority problem. I look at money as a means of organizing labor and YOUR job as czar to design a self-organizing system of distributing the wealth to enable the best for families and communities—as they define it. I reinvent police and homeowner's insurance in my fiefdom.