Thursday, April 21, 2016

Federal Credit Receipt

To get a handle on the total debt market, one must consider how to de-couple USD from debt AND allow retirement of the debt. To that end:

If the Social Security Administration were to turn in a few of their bonds to the Treasury, the Treasury could issue them a "Federal Credit Receipt" (FCR). That FCR represents an obligation on the part of the Treasury/Federal Government and is an asset held by SSA.

What that does, is allows the Treasury, Federal Reserve, and potentially Congress to set terms on the redemption of the FCR.

For example, the Federal Reserve economists might determine that a Texas Stock Market is beneficial to Texas in distribution of capital and its economy. So, the FCR might be redeemed for ownership in a Texas Stock Market. The FCR would then be off the books of Federal obligations and SSA would hold beneficial ownership in an income-producing asset.

This plan shores up Social Security, while allowing a way out of the debt, and provides resources to economic development and infrastructure throughout the United States.

Friday, April 8, 2016

Fixing money

Money can be fixed by simply keeping accurate track of a person's transactions.  Reputation.  It doesn't matter which currency: USD to seashells.

It's that simple.  The formal structure for that ledger is below.

Tuesday, April 5, 2016

How to eliminate the "national debt"

Retire each existing Treasury bond, in exchange for a new monetary instrument called a "Federal Credit Receipt" (FCR).  The FCR is essentially an IOU that is non-interest bearing.  

This allows economic control over the bonds and where the value is directed.  Rather than China selling $2 trillion in bonds, receiving dollars, and then spending them, the Fed & Treasury can decide what can be purchased and define the terms.

Example: Social Security can turn in some of their Treasury bonds for a Federal Credit Receipt. The FCR can be used to purchase a Texas Stock Market, with Fed oversight.

This controls inflation and gets the US out of debt, while rebuilding the economy.

Saturday, April 2, 2016

Money is accounting and the corruption is underestimated.

What is needed is a common language to describe financial transactions. I solved this 8 years ago. It's a structured form of contract law.

Lawyers, IT, and finance can't screw it up. Nor can it be misrepresented by other languages or cultures.

Monday, July 6, 2015

Sunday, May 31, 2015

A ledger to describe any financial transaction

The following will work for any transaction, meet regulatory approval, and provide any imaginable functionality.  Stock market to grocery stores, retail and wholesale.

Stock Exchange example:

My offer 100 IBM.                            Offer 100 IBM at $10/share.
My terms $1000.
His counter $970.                              Bid 100 IBM at $9.70/share.
My counter $980.                              Offer 100 IBM at $9.80/share.
He accepts.                                        Buyer hit the offer.

Example:  I have 11 oranges and want 10 apples

My Offer 11 oranges
My Terms 10 apples
His Terms-escrow AAA Escrow Co.
His Terms-value 10 oranges
His Counter-value 9 apples
His Counter [computer-generated contract]
My Terms-escrow ABC Escrow Co.
My Terms-value 9 apples, 1 soda
My Counter-value 10 oranges
My Counter [computer-generated contract]
His Terms-value 8 oranges
His Counter-value 2 sodas
His Counter-value 9 apples
His Counter [computer-generated contract]
I Accept

Computer-generated contract:

He owes 9 apples, 2 sodas
I owe 8 oranges
Terms: ABC Escrow Co.

Database columns

Event Types
Terms (value, escrow)
Counter (offer, value)

The above provides a full audit trail.  All data is stored in text format.  "Relational" data is stored in ancillary tables with the EventID for reference.

The above works intra-firm as well as inter-firm.  It is an EDI format that operates on an event-basis, so it works the same on paper.  The protocol allows flexibility in mode of transfer and security, without changing the structure.

Tuesday, May 5, 2015

How to restore confidence in the banking system?

The National Institute of Standards and Measures was created by the US Treasury to define the gold and silver weight standards.  Today, money is based on databases and contracts, so is it time for a standard?

A public standard describing monetary transactions defines the security and integrity of the information.  It allows an audit trail that can be compiled between institutions.

From a monetary science perspective, the standard encourages liquidity and velocity of money.  The cost of transactions decreases, due to its efficiency and removal of ambiguity (intentional or otherwise).  With greater efficiency and transparency, trust can be restored.

The basic format of the proposed standard handles any type of financial transaction, conforms to contract law in all countries, and is readable by anyone.

Monday, April 27, 2015

How do you "steal" money from a bank?

The most effective way is to add 0's to a database record.  No one loses any money, so it is easier to hide.

Depending on your access to the database (and resulting reports), an explanation for the source of money will have to be faked.  Faking incoming transfers might be as simple as creating a record in the incoming wire or ACH credit transactions.  The amount and frequency should not raise any red flags.

Auditors do not normally check deposits against the sourcing bank or entity.  For example, you might have a deposit appear to come from Paypal on an ACH credit.  It is highly doubtful the auditor would contact Paypal to verify the deposit.

This could be set up as an automated procedure to simulate an ongoing business of some kind.  Be sure to pay your taxes on the "profits".

From the bank's perspective, they are not losing any money and in fact, will see your bank account as beneficial to their "reserves".  Assuming you have thought through all relevant possible auditing checks, you could simply spend the account directly and not worry about "laundering" it.  Alternatively, you could transfer it slowly into gold or out of the country and retire.

A public specification to describe financial transactions goes a long way to solving this problem.

Wednesday, April 8, 2015

What if?

The Bank of Thailand stopped accepting digital baht as settlement internationally?

That could lead to an "external currency" and an "internal currency".  The neighboring countries might handle the "exchanges".

If prices are stable internally, how do you make sure the rice farmer receives the same price on exports?

Friday, January 2, 2015

Ending quantitative easing

It appears that the new Fed policy is to end the purchase of new bonds. So, they are not printing money any more. As long as that policy holds tight. 

As the Treasury has a $1 trillion shortfall in revenue, they will be forced to sell new bonds to the general market.  Hopefully, the market will place pressure on Congress to balance their budget.

That might lead to a strong dollar.

As the Fed appears to be maintaining static balances of T-bonds, I hope they aren't creating cash to replace the bonds as they mature. If the Treasury pays the principal, the Fed can use the proceeds to replace it.

Thursday, December 25, 2014

What is a good currency?

A good currency? None has been invented yet. Currencies become accepted when they are tied to something tangible. Then they are corrupted and inflated out of existence, to be replaced by a new currency with finite amount.

The finite tangible currency becomes adopted rapidly, but then becomes a constraint on economic growth. The 'cross of gold' is an example. Then, the currency becomes inflated and the cycle repeats. 

Fractional reserve has the potential to solve many of these issues, but would require rock solid central banking accounting to something tangible. And probably finite, or at least easily quantifiable. 

Bitcoin is finite, so pricing things in Bitcoin, creates a 'cross of Bitcoin'. Also, due to its electronic nature, and for the above reasons, Bitcoin requires alternative currencies.

Saturday, October 25, 2014

The 1st global exchange is open for business!

I have opened discussions with the SEC of the United States. Since my initial offer is in Thai Baht, likely discussions with the Thai SEC will be required. I have also introduced this to the Bank of England.

Please see attached screenshot or visit for live updates.

Sunday, October 19, 2014

An event-based public ledger

While Bitcoin's "blockchain" is a step in the direction of a public ledger, it only works with Bitcoin and does not show the other side of the transaction.  There are companies who are attaching data to the "blockchain" to try and create a public ledger for all transactions, however, the design of the "blockchain" was for Bitcoin and not as a generalized public ledger.

The solution below WAS designed as a general public ledger.  It will support any transaction in any currency and any form of value.  It was designed in late 2007.

The "smart-contract" format described will create an event-based public ledger.  Please note: the "blockchain" has two main functions:  1. verify integrity of the data so it can't be modified, 2. propagate that data across different databases.

Friday, July 25, 2014

Smart Contracts - the format

Any contract.  Any monetary transaction.  Works with any language.  The format is simple and understandable.  Works for finance.  Works for legal.  Works for IT.

While it works to store past transactions, open transactions provide an exchange, so it works for stock exchanges, currency exchanges, or grocery store transactions.

One table with 5 columns:

Transaction ID
Commerce ID - person/entity identifier
Item Type - initiating value, terms, value, delivery, notice, status
Description - quantity and value OR terms OR status/notice messages
Time Stamp

Example - Selling 100 IBM for a final price of 4900 USD:

Initiating a transaction, 100 IBM, myCommerceID
Terms, 5000 USD, myCommerceID
Corresponding Value, 4900 USD, hisCommerceID
Accepted, contract, myCommerceID
Delivered, 100 IBM, myCommerceID
Delivered, 4900 USD, hisCommerceID
Completed, completed, myCommerceID
Completed, completed, hisCommerceID

Example - Buying 100 IBM for a final price of 5100 USD:

Initiating a transaction, 5000 USD, myCommerceID
Terms, 100 IBM, myCommerceID
Corresponding Value, 100 IBM, hisCommerceID
Modification, 5100 USD, hisCommerceID
Accepted, contract, myCommerceID

[deliveries on both sides of the contract]

1. Note the identical structure for both the Bid and Ask.  Everything is a commodity.
2. In-process transactions create a market place for goods and services.
3. The standard format allows other companies to participate.

The above is what I term a "transaction stack".

Friday, July 18, 2014

A public list of transactions (open and completed)

In a standard format, with a Commerce ID for privacy (what some call a "smart contract").

It works with all currencies and barter too.

1. Make an offer to purchase.
2. Describe terms.
3. Receive a counter-offer.
4. Agreement (contract)
5. Deliver on each side.
6. Completed.

Time-stamps at each stage.

Block-chaining the list of transactions is one solution to prevent faked results.

Below describes the details of this.  It solves the idea of "money".

Friday, July 11, 2014

300,000,000 Debt-slaves vs. the Federal Reserve

A class-action lawsuit appears possible.  Fraud is alleged and I think can be clearly proven.  Based on my analysis, I think a conservative ruling would be to force the Fed to only lend what they have with a monetary judgement of $100-500 billion.  As the numbers are large, I suggest a 1% contingency to the lawyer so $1-5 billion.  Each American would receive around $1,000.  Forcing the Fed to only lend what they have would place enormous pressure on Congress to balance their budget.

Basic argument
When the Federal Reserve Act was written, there was collateral.  That collateral was confiscated in 1933 domestically, and 1971 internationally.

Under basic contract law, a contract can be declared null and void if there is insufficient consideration conveyed.  So, if the Fed is purchasing $100,000 T-bonds for essentially creating digits in an account or writing a check, the Fed is not conveying consideration.  While the Treasury receives something of value, the Fed does not take risk or convey anything that would be considered valuable from their perspective.  Therefore, the T-bond contract can be declared null and void under contract law.  (Legislation cannot supersede basic contract law.)

Open market operations have two separate parts. 1. Is the initial bond purchase from the treasury.  That is a purchase with no risk with a marginal cost of zero. 2. Is sitting on the bid and ask to adjust interest rates via buying and selling existing bonds in their portfolio.

I am referring to part one above. That is the origin of the creation or manufacture of money. Government spends it through various contracts. It does not get into the hands of the population until many have marked up the cost. It is an ineffective distribution mechanism. I also submit that it is illegal lending to the government and the fed assumes no risk.

Treasury bonds were designed in the mid-1860s during the Civil War.  Bankers on both sides of the pond exchanged a series of letters.  They were trying to figure out how to keep the population (white and black) as slaves without them knowing they were slaves.  Thus, they invented T-bonds.  It took them 50 years to get it through Congress with the Federal Reserve and income tax system installed in 1913.  Why 50 years?  Because many people at that time understood money and gold, so it was difficult to push through.  See the 1890s and The Yellow Brick Road and the Cross of Gold.  Subsequent generations carried through on the bankers' slavery system.  (FYI, I have been unable to locate copies of those letters on the internet recently.  I read them about 8-10 years ago.)

Tuesday, July 8, 2014

Visions of the future

Lawrence Summers wrote a good article in the WSJ about lack of jobs due to automation.

Currency is a product manufactured by the central banks.  Due to centralization of the distribution system (eg. Wall Street and Washington DC), 90% of the population does not receive sufficient product (currency).  People are forced to work to purchase that product.  That requires jobs.

If, for example, taxi drivers are replaced by robots, taxi drivers will not have a way to purchase that currency.  Without currency, taxi drivers will be begging on the street.

Many wealthy do not see this as a concern, but it is.  If people do not have a way to purchase currency to purchase food, they will steal the currency from the wealthy. Identity theft and other tactics.

Also. Another concern is if a robot taxi driver picks you up and a hacker decides to drive the car off a ravine, who would ever know?

I reverse-engineered the idea of money and arrived at the solution to all of the above problems (described below).

Monday, July 7, 2014

Bitcoin 2.0?

In my opinion, Bitcoin 2.0 will not be a currency. It will be a "block chain" of all electronic transactions regardless of what was conveyed. This requires a standard format. I thought that format through and there is really only one result. Promise Language describes it.

Wednesday, July 2, 2014

How does one gain trust without an authority?

Commerce between anonymous people is possible with a P2P database and open source.

A public record of one's previous transactions is reputation.

This is exchange software and payment processing software: a marketplace to sell any good or service including currencies and stocks.  It provides reputation, but does much more than that.  Anything of value can be traded freely.  Value-added services can be provided by new and existing companies.  It works with today's companies and allows new ones to thrive.

What is a Commerce ID™?

A Commerce ID™ uniquely identifies an individual or entity for the purposes of conducting commerce or monetary transactions.

The Commerce ID™ can be used once for a single transaction or re-used in multiple transactions.  It can be publicly associated with identifying information or kept private.

It allows accountability with total privacy, even if the record of transactions is public (eg. a P2P/peer-to-peer database).

An example of a Commerce ID™ would be a GUID (Globally Unique Identifier) that would be generated by the individual or entity.  That ID might be associated with a name or email or other identifying information.

Monday, June 30, 2014

Alternative Currencies

All currencies have pluses and minuses.  There is no holy grail of a perfect currency.

So the answer is to allow efficient translation between currencies.  This requires a standard language to create that efficiency.

It allows the individual to hold all their wealth in any form (eg. gold, land, wheat, rice, USD, Yen, Euro, Bitcoin, etc.), and have it "translated" electronically when conducting a transaction.

I term this "wealth translation".


A Visa card that debits your Bitcoin when you purchase something at the grocery store.  The grocery store receives currency of their choice, Visa debits your Bitcoin.  A "wealth translator" takes a small fee on the transaction.

See below for the working prototype.  An exchange software that works for any transaction (grocery store to central bank).

Sunday, June 29, 2014

Since I am currently physically in Thailand...

I will talk from the Thai baht perspective.

There are 3 forms of baht:  gold, digital, and physical. Each has a different value.

Once upon a time, the physical correlated to physical gold. That is no longer the case, largely due to the digital abundance. Fractional-reserve.

Can the physical currency return to physical gold valuation? Baht to baht?  Yes, I think it is possible, however, it would require a wind down of digital currency mostly in financial instruments. This is simply moving money from one form to another. Existing wealth remains while pulling society out of poverty.   It also allows opportunities to build wealth.

Saturday, June 21, 2014

The Federal Reserve and Fiscal Responsibility

When the Fed creates money to purchase bonds, the Treasury spends it. Where does that newly created money get spent? Government contracts.

Since the Fed is legally responsible for managing the economy and it is officially considered part of government, fixing that journal entry is possible: an accounting rule or legislation to ensure the Fed cannot create money to lend to the Treasury.

The above would not immediately balance the budget, but would place the Fed on the side of fiscal responsibility.

Monday, June 16, 2014

Fractional-reserve credit vs Bond purchases

It should be stated:  fractional-reserve credit is not the problem. Bond purchasing with created money is the problem. That is illegal lending by the Fed to the Treasury.

Friday, May 30, 2014

A good primer on central bank perspective from the Bank of Thailand

Currency creation and economic growth

Most central banks today create currency at the time of bond purchase.  Since bonds have interest attached, that means every unit of currency has a debt repayment obligation.  To simply use a unit of currency contains an interest fee.  That is what I term the "perpetual fee".

Historically, most central banks created currency to represent gold or silver.  That limits economic growth some describe as the "cross of gold" and is one of the reasons for its discontinuance.

The solution is to decouple bond purchase from currency creation.  Fractional reserve is the interest-based creation of currency that is responsive to economic growth.  It is not a perpetual fee because the loan is paid back to the commercial lending institution that issued the loan.  While, in theory, bonds are also paid back, this is not usually the case due to political issues.  It forces the central bank into a difficult position.  The central bank cannot force repayment to remove that perpetual fee.

So, if currency creation cannot be tied to either gold or bonds, what can it be tied to?  It is my recommendation to look at the productive output of the country and peg the amount of currency to that number.  If recalculated monthly, the economy has room to grow with adequate currency supply.  Fractional-reserve lending can handle the minor fluctuations intra-month.

A common language of monetary transactions removes the friction and clarifies issues such as described above.  The efficiency allows what I term "wealth translation" to perform the money supply contraction/expansion without the need for direct manipulation.  The system described below is also a common interface that will work with any payment system on earth.

The problem with money today

Money is not necessarily currency.

Money is a promise to deliver value, although it might have value unto itself.

The description of value is not money.

Two major problems with today's monetary systems:
1. language differences create misinterpretations of value.  Also, sometimes a value transfer has cultural implications that are not explicitly described.  Language differences exist between countries and between vocations.  Accountants, finance, legal, bankers, computer, and business people might use the same words, but none really understand the unintentional mis-communications.
2. language and cultural differences allow a few to deliberately create ambiguity to leverage a theft that is difficult to detect.

A common language to describe transactions eliminates the mis-communications, whether deliberate or not.

Sunday, May 25, 2014

Bond/currency relationship today (Debt-based currencies)

All existing currencies are said to be debt-based. Originally, the USD was backed by gold/silver. That gold was stolen behind the scenes. So today, there is an accounting problem at the point of creation that derives from the theft. A common language does not entirely prevent theft, but does provide accountability in the future, while also providing alternatives to money supply constraints via wealth translation.

Bonds were not originally the creation of paper USD without value. Bonds were a debt, based on collateral (gold). The USD was a receipt for such. When the gold was stolen, the Fed defaulted on that receipt in 1933 (domestically), then in 1971 (internationally). Since then, dollars are created at the time of bond purchase with only legal limitations set on their creation.


Interest is a measurement of assigning value to risk. Time-based. All transactions have a time component which, today, is rolled up into the bond/currency relationship. That creates a perpetual fee. Promise Language describes that time component while also removing the ambiguity in value descriptions that are complicated by multiple languages and intentional obfuscation.

The New Approach to Freedom - 1949

"When the people of the world have a common monetary language, completely freed from every government, it will so facilitate and stabilize exchange that peace and prosperity will ensue even without world government.

A union of peoples rather than a union of political governments is what the world needs."

E.C. Riegel, monetary theorist

Distributed transactions

A common language/protocol creates efficiency to allow distributing all components of a transaction.  Trust is distributed.  Value translation is distributed.  Every transaction is composed of a value translation and a temporarily trusted 3rd party to assure the value is transferred.

A common language allows barter and allows currency transactions.  The language also describes Time.  All transactions take time, so the current reporting of transactions in a receipt does not accurately describe the transaction and how long it took for each side to deliver on their end of the bargain.  Finance-types should understand that.

A common language allows individual choice in every transaction.  One of the derivatives of a common language is a common peer-to-peer marketplace/exchange described below.

Sunday, May 11, 2014

Looking for investment capital

Working prototype is complete.  See below.

It is a free exchange software, however, does much more than that.

Value-added services to assure agreements are met.  As well as what I term "wealth/value translation".

All transactions are searchable.  Privacy can be kept.

It works with all existing systems/businesses on earth.

Screenshot of the working prototype

This works for exchange software (EG. NYSE, Amex, Nasdaq, CBOT) as well as functions as a free E-Bay or Craigslist-type sale software.

Anonymous users (or not).
Full audit trail (will satisfy law and finance).

Rough draft of the exchange software (works for anything)

            //selling IBM
            TransactionItem item = Transaction.Sell("100 IBM", "myCommerceID");
            TransactionItem terms = Transaction.Terms(item.TransactionID, "5000 USD", "myCommerceID");

            item = Transaction.CorrespondingValue(item.TransactionID, "4900 USD", "hisCommerceID");

            item.Accepted();  //becomes a contract here

            TransactionItem deliverStock = Transaction.Delivered(item.TransactionID, "100 IBM", "myCommerceID");
            TransactionItem deliverCash = Transaction.Delivered(item.TransactionID, "4900 USD", "hisCommerceID");

            Transaction.Completed(item.TransactionID, "complete", "myCommerceID");
            Transaction.Completed(item.TransactionID, "complete", "hisCommerceID");

            //buying IBM
            TransactionItem item2 = Transaction.Sell("5000 USD", "myCommerceID");
            TransactionItem terms2 = Transaction.Terms(item2.TransactionID, "100 IBM", "myCommerceID");

            item2 = Transaction.CorrespondingValue(item2.TransactionID, "100 IBM", "hisCommerceID");
            item2 = Transaction.Modify(item2.TransactionID, "5100 USD", "hisCommerceID");



1 faeb6594-ca25-494c-b506-2b8cc76f06fb myCommerceID Initiating Value 100 IBM 2014-05-11 15:23:50.493 NULL
2 faeb6594-ca25-494c-b506-2b8cc76f06fb myCommerceID Terms 5000 USD 2014-05-11 15:23:53.813 NULL
3 faeb6594-ca25-494c-b506-2b8cc76f06fb hisCommerceID Value 4900 USD 2014-05-11 15:23:53.833 2014-05-11 15:23:53.847
4 faeb6594-ca25-494c-b506-2b8cc76f06fb myCommerceID Delivery 100 IBM 2014-05-11 15:23:53.853 NULL
5 faeb6594-ca25-494c-b506-2b8cc76f06fb hisCommerceID Delivery 4900 USD 2014-05-11 15:23:53.860 NULL
6 faeb6594-ca25-494c-b506-2b8cc76f06fb myCommerceID Completed complete 2014-05-11 15:23:53.867 2014-05-11 15:23:53.867
7 faeb6594-ca25-494c-b506-2b8cc76f06fb hisCommerceID Completed complete 2014-05-11 15:23:53.873 2014-05-11 15:23:53.873
8 24370bb9-ac0c-4546-bcd7-dd131f5f7aa4 myCommerceID Initiating Value 5000 USD 2014-05-11 15:23:53.880 NULL
9 24370bb9-ac0c-4546-bcd7-dd131f5f7aa4 myCommerceID Terms 100 IBM 2014-05-11 15:23:53.883 NULL
10 24370bb9-ac0c-4546-bcd7-dd131f5f7aa4 hisCommerceID Value 100 IBM 2014-05-11 15:23:53.887 NULL
11 24370bb9-ac0c-4546-bcd7-dd131f5f7aa4 hisCommerceID Modification 5100 USD 2014-05-11 15:23:53.893 2014-05-11 15:23:53.900

Saturday, March 22, 2014

Imagine you are running a stock exchange using the Promise Language specification

Initiating Promise:    100 IBM
Notice - accept: 5000 USD

Initiating Promise:    5000 USD
Notice - accept: 100 IBM

Note the structure is identical for both the Bid and the Ask.  Effectively this means everything is a commodity.

"Notice" messages become part of the contract.  Terms and late payments can be specified.  Clearing companies as well.

Monday, March 17, 2014

The Origin of Money

Once upon a time, some guy had an orange and you wanted it.  So you offered to trade a banana for his orange.  But your banana was way back at your hut.  So you picked up a seashell or something and handed it to him in exchange for his orange.  You promised to go get your banana and deliver it later.  That is the origin of money.  The seashell was a symbol that represented a contract to deliver a banana.

Alternatively, both people could have yelled out to the surrounding village that you owed that person a banana.  Then you didn't need the seashell.  Everyone knew you owed that person a banana.  Then you go back to your hut the next day and get the banana.  Then you yell out to the village that you paid back the banana.  Let's hope that banana did not go bad overnight.

Would it be possible to have a computer store these transactions so the villagers wouldn't have to remember?

Sunday, March 16, 2014

Closing out the transaction and EDI format

See below for the context, but two more EDI messages might be a good idea:

"Completed" to show that both sides delivered on their promises and all was acceptable.

"Closed" with a something in the description field to describe transactions that were voided or otherwise rectified if disputed.

The solution to money

Promise Language is a standard way to yell to the global village who owes what.  If placed into a peer-to-peer database, all promises would be tracked.  Open promises and delivered promises.  I was thinking today how to design that database:

Promise table

Type of entry (Initiating promise, promise, notification)
Id (GUID for that promise or a GUID corresponding to the person)
Description (describes what was promised)

So.. it would work like this:

    1 banana
    1 orange

One entry for the Initiating Promise:  my Id, his Id, "1 banana", 12/21/2003 12:15:34
One entry for the Promise:  his Id, my Id, "1 orange", 12/21/2003 12:15:45
One entry for the Delivery: his Id, my Id, "1 orange", 12/21/2003 12:15:48
One entry for the final Delivery: my Id, his Id, "1 banana", 12/22/2003 8:23:32

That's it.

Now.  That shows you made good on your promise.  That's your rep.  Now you can go anywhere in the world with the Promise App that shows your history of promises.

It's free.  No transaction fees.  Works with any currency on earth.

Friday, March 14, 2014

Does this solve monetary science?

The root of money is a "promise to deliver value".

Money is a human construct.

Money originally was a form of bookkeeping to see who delivered on their promises (or who had outstanding undelivered promises).  Sea shells worked in some locales.

Until recently, paper money was a receipt for gold or silver stored on one's behalf.  That promise was reneged upon in 1933 (domestically) and 1971 (internationally).  So today, paper money is a "note" with nothing of value behind it.

Where does the value derive?  Contracts are denominated in dollars.  Rent, salary, mortgage, contracts at the grocery store, etc. are all contracts denominated in dollars.  That is where the value derives.

In small communities, money was a temporary placeholder for one's promises to deliver value.  However, today, the world cannot track who delivers.

That is what "Promise Language" does.  It is a standard format to describe transactions.  The results can be stored on paper or in a computer so you know who delivers on their promises.

Theoretically, wealth translators replace the need for currencies.  However, that is an expensive process, so currencies will always likely remain due to their economies of scale in reducing transaction costs.

What is money?

Anything of value that is agreed upon by both parties in a transaction.

Tuesday, March 11, 2014

Promise Language basics

This is an EDI format/specification/standard/protocol for monetary transactions.  It is free.

Some terminology:
Wealth Storage - a vault or a bank.
Wealth Translation - currency exchange is an example.
Promise Assurance - credit card issuer or an underwriter are examples.
Promise Reporting - credit report agencies are examples.

Only living beings can make promises.

Officers of corporations make promises on behalf of the corporation they work for.  Officers take responsibility for delivery on their promises.

Simple format:

    1 pallet of 100 bills USD
    1 million Euros

Further details can easily be placed into that format.  Who.  When.  Time stamps.  Etc.

Legal can see that it conforms to what they term a legal contract.
Finance can assign risk and time to delivery.
IT can accurately represent it in a computer.

It fixes the world's economy.
It fixes the world's financial system.

Thursday, March 6, 2014

Preventing a perpetual fee (for being born)

An EDI format for monetary transactions prevents a perpetual fee. EDI formats are free.

Bitcoin uses an algorithm designed by the NSA. Is there a back door on that algorithm? I do not know. However, knowing the people involved, I suspect there is. While Bitcoin (and other digital currencies) reduce the fees, it is not perfect.  So, how to prevent a perpetual fee?

All transactions can be described as:

Two people.



End transaction.

Time stamps on each stage clarify risk and accountability.

That is "Promise Language" - a simple EDI format to describe all transactions, regardless of currency. For free.

Tuesday, March 4, 2014

An EDI format and a fill-in form that is a legal contract



End transaction.

The above creates efficiency in electronic transactions by providing a standard format.  It also disobviates the need for a lawyer in every transaction.

Lawyers don't understand money or finance, however, draw up the contracts that define the interactions.  Reading through the legalese is difficult due to lack of a standard format:  Promise Language solves that.

Sometimes lawyers create a contract that finance people call a "derivative".  The contract is unnecessary and creates confusion that loses responsibility and accountability.  This is due to the lawyer's non-understanding of money and finance.

Sunday, March 2, 2014

Potential issues with Bitcoin

Metaphorically (and digitally) speaking, are there 3 Bitcoins?

Was Bitcoin started on the 0 bit or the 1 bit?  Is there a switch/flapper?

A similar applies to the algorithm.  Is there a periodicity that is predictable and controllable?

I have not looked into these issues, however, are enough cause of concern to research... if I were planning a large investment.

Transactions without a lawyer, a banker, or a gun.

Two people.

One promise.
Another promise.

First delivers.
Second delivers.

End transaction.

Time stamps at each stage allow risk and responsibility to be defined.

Promise Language, a banking protocol, fixes the central banks' problems.

Thursday, February 27, 2014

Complex transactions require precise terminology

Imagine you are part of a drug deal or a gun deal.  Tensions are high, heavily armed security on both sides.  Most deals don't end in gunfire due to a deliberate desire to rip off the other party, gunfights occur due to miscommunication.  What was promised?  What was delivered?

In central banking transactions, language differences exist between countries.  Expectations.  Assurances. 

Treaties and trust funds.  Undelivered promises.  Partially delivered promises.  Promises deliberately ripped off.

The above is why a common language to describe complex transactions in a structured way is needed.

Tuesday, February 25, 2014

Federal Reserve and other central banks in a world of Promise Language and Bitcoin

Promise Language and Bitcoin do not define price.  They allow value to be translated efficiently.

Currencies stabilize price.  Salaries and rents and mortgages do not change on a daily basis.

In other words, things are priced in USD not in Bitcoin or Promise Language.  That is one reason why Bitcoin and Promise Language work so well to settle internationally.

Interestingly Second Market is patterning an exchange based on existing gold.  Price fixing with derivatives.  Second Market is bringing an antiquated structure to Bitcoin.  While it appears well hooked up and will gain liquidity, I have mixed feelings on that exchange.

Gold failed because of storage issues AND price fixing via derivatives settled in dollars.  Second Market appears to be setting up the exact same system.  Price fixing twice a day is not necessary for any reason other than to create derivatives to set the price.  Is Second Market's CEO aware of this problem or is he simply cut and pasting gold structure and creating a company?

Saturday, February 22, 2014

Bitcoin's role as part of central bank reserves

Central banks require a clearing settlement device among currencies.  Gold has served that function historically, however, has issues.  Namely: dollar-settled derivatives, requires a vault, and is difficult to transport.

Bitcoin solves these problems.

It is my suggestion that some focus and energy be placed in communicating the advantages of Bitcoin to the various central banks around the world.  This requires trading desks and exchanges to provide liquidity.  The German central bank comes to mind.

Friday, February 21, 2014

A common language to communicate value

Imagine going to Japan and not knowing a word of Japanese.  Your goal is to buy some salmon sushi.  With some pantomiming and lots of gesturing I think most people would figure out how to convey the value that is desired along with the amount of currency required, however, without a common language it would not be the most efficient transaction in the world.

Promise Language is that common language.  Human readable.  Simple.  Computer readable as well.

Tuesday, December 31, 2013

Why does Promise Language make a difference?

It allows other forms of value to be conveyed to facilitate a transaction.  The individual chooses the form of value.  The efficiency allowed through a common protocol decreases the costs of value translation.  The availability of money is not dictated by a single monopoly.  If, for example, a person who wishes to make the transaction does not have dollars available, and the other party wants dollars, another form of value can be introduced that allows the transaction to complete.  The Wealth Translator takes a fee for that translation.  This might sound like an academic discussion, but is not.  It removes the constraint of a single "money supply"'s availability and allows alternatives to the monopoly.

The people promoting existing currencies all want their currency to be used during the transaction.

People want the things they can buy.

They want value or wealth storage.

By holding their wealth in an easily transferable form like Bitcoin or gold, they can hold an appreciating currency while not requiring the people they do business with to accept Bitcoin or gold.

Monday, December 30, 2013

Promise Language eliminates the concept of "money supply"

Edit:  money supply and currency supply are two separate things.  Money is the abstraction of anything of value.  Currency is something issued by a currency provider/central bank.

So how is money supply constraints eliminated by Promise Language?  By making any store of value available to facilitate the transaction.  The simplicity is so pure, every currency on earth would become a store of value.

Currencies have two aspects:
1. store of value (wealth storage)
2. medium of exchange (wealth translation)

Electronic transactions allow near instant exchange (translation) of value.

It is possible for a pure "medium of exchange" currency to be created within this system.  Expands and contracts with the volume of transactions, however, that is outside the scope of current technology.  Promise Language would have to be implemented prior to that kind liquidity to occur.

If the Federal Reserve implemented Promise Language, the Fed would suddenly have so much liquidity with other forms of value that contrary to most economic theories, the good money would chase out the bad.  Of course, existing contracts denominated in dollars would have a real effect, the underlying tide would tend towards wiping out dollars to their intrinsic value.  IE.  dollars would become scarce as other alternative value translations became available.  EG.  Bitcoin or electronic gold or silver.

NOTE:  the above applies to the derivatives world.  Real world contracts/salaries denominated in dollars would become more valuable (increase in purchasing power) by contracting the mess at the "financial" level.

All transactions involve time

Are you taking risk?

There is no such thing as instant delivery.

Value changes.

Transaction fees cover.

Dividing your lines of businesses mitigates the risk of:
1. value change
2. delivery failure

That is why Promise Language is a transactional protocol rather than a protocol of record (eg. a record of the transaction rather than the process of the transaction)

Promise Language clarifies the lines of businesses by clarifying risk.

Sunday, December 29, 2013

Alternative currencies and the same old problems (Bitcoin)

The internet allows efficient "Wealth Translation", but requires a standard language/protocol.

While it is nice to see an alternative currency, Bitcoin suffers from the same flaw as a gold-backed currency. Deflation doesn't exist in the real world because sellers don't like lowering prices. Liquidity/velocity dries up with insufficient transactional currency in the system. Hoarding makes the few wealthy as interest is charged for the use of a transactional currency.  That will be the result of Bitcoin, despite policy and foresight to avoid.

Solution? Efficiency in currency translations. That is most easily done with a common transactional specification/protocol. "Promise Language" does exactly that. All transactions are promises to deliver value. Regardless of form (currency).

Promise Language is free and solves the problem.

      1 stick of gum
      0.01 bitcoin

Andrew Bransford Brown

Friday, November 15, 2013

Wednesday, November 6, 2013

The Mathematics of Monetary Science

Communication * (Trust + Performance) = Accountability

The above equation led to the creation of a monetary transaction specification with descriptive terminology.

"In God We Trust" is printed on the paper, but are they delivering on their promises?

Sunday, February 10, 2013

A banking protocol.

The financial system is composed of a series of broken promises going back to treaties and trust funds.  Modern central banks were deliberately designed as a financial slavery system about 150 years ago, although it existed in other forms prior to that.  What is the solution?

A banking protocol.  I spent 8 years studying law, finance, banking, monetary science, and history and reverse-engineered the concept of money into its constituent parts.  Then arrived at a solution.

All financial transactions can be described as:
- one promise for another
- did each side deliver?

The above describes the basics of what I call “Promise Language”.   Please see the attached diagram:

While this appears simple (and it is), adoption of this protocol would fix the economy and world financial system within a few months.  Due to unraveling the treaties and trust funds’ broken promises, it would end warfare as well.  The protocol can be started anywhere and due to its simplicity and cutting transaction costs, it would be adopted rapidly.

Here is an abbreviated example.  For a more detailed specification, please contact me.

            John Doe
            Jane Doe
            One stick of gum
        [date promised]
            2/8/2013  10:00am
        [/date promised]
            Jane Doe
            John Doe
            USD $1
        [date promised]
            2/8/2013  10:00am
        [/date promised]

Andrew Bransford Brown
+1 917 653 7781

The protocol is currency agnostic.  Currencies can be designed to be backed by tangible value such as gold, silver, land, manufacturing output, rice output, wheat, natural resources, etc.

The protocol eliminates usury (charging a fee for a transactional medium), but allows interest when borrowing capital.

The protocol makes money supply important from the economies of scale of a currency, but unimportant to an individual.

The protocol allows an individual to become their own central bank, but this is unlikely due to the economies of scale of a national currency.

Each currency is a reflection of the culture of the country.

It eases the micro-management required in daily central bank operations.  Design of the currency becomes paramount.  For instance, if the US took the total currency in circulation and pegged it to the value of all real good manufactured exports, including processed food, the currency will gain value in direct relation to the real value of exports.  As exports increase, the value of the currency increases thereby lowering the cost of imports.  This happens automatically without daily intervention and manipulation of money supply or interest rates.

Thursday, January 20, 2011

Promise Language is a standardized protocol for transactions that solves the problem of money.  All transactions are "promises to deliver value" so anything of value can be conveyed.  Time, labor, land, goods and services are all freely transactable so money supply becomes moot.  Wealth Translators facilitate those trades.  Promise Assurers allow two individuals to transact anonymously with assurance their promises will be delivered upon.  Examples are Mastercard or Visa. 

Central banks made promises to provide value, but reneged.  Over time, Promise Language encourages the central banks to deliver something of value and back their paper and digits with something tangible.  That could be land or precious metals, but could also be the rice or wheat output of a country or region.

The core of the global monetary system is based on a lie:  printing paper and passing it off as something of value.  Promise Language changes that core to trust and accountability.  That is a "fractal" that permeates through the economy and over time would eliminate war and solve the environment because Promise Language encourages people to deliver on their promises without force.  The change is not instant, but occurs over time.  In 6 months, business people would see the creativity allowed and the economy would begin to grow.  It might take 5-10 years for central banks to be forced to back their product with tangible value or go out of business.

Promise Language is like a simplified version of contract law, but only living beings can make promises.  Corporations can contract, but only their officers can make promises.  For example, a revenue officer or a purchasing officer.  Accountability goes to the officer, backed by their contract with the paper corporation.

You could have a diamond card with a diamond held in a Wealth Storage facility that could be viewed with a robotic arm showing you your particular diamond.  You might own 73.234% of that diamond and it is spendable at the grocery store.  When applying for a loan, you might only show the lender your diamond transactions because your copper or gold promises might not be as perfect.

Tuesday, November 9, 2010

Transactions today require common trust in govt/central bank, Promise Language distributes that trust.
At its most basic, Promise Language is a simple standardized protocol describing transactions between people.  However the structure of that protocol will transform the banking system into a system of trust and accountability.  It can be started at a small local credit union or at a large central bank, but either way it will be adopted by all institutions due to its simplicity and significant cost savings. The protocol is similar to how internet browsers standardized on a single version of HTML.  It is more than a protocol however.  The entities in the diagram above already exist today, but the protocol changes how we view them.  Subtly changing the banking system from a system of theft and corruption to a system of trust.  Eventually forcing all central banks to back their products (money) with something of tangible value.

Promise Language is the result of reverse-engineering the concept of money.  Money becomes obsolete.  Currency becomes optional.  All transactions become wealth that is transferred.  The distinction is critical.  Wealth has an owner.  Money and Currency have hierarchical authorities behind them who extract a price and maintain their position through force.

The origins of Promise Language

For commerce and transactions to occur, it requires:
1. communication
2. trust
3. performance
4. accountability

Performance is made through a transfer of wealth:
- gold
- property
- real estate
- promise to work
- prior work
- etc.

Trust might be built by:
- reputation
- performance bond
- cosigner
- etc.

Accountability is the interrelation of trust and performance over time. Reputation. The historical results of previous interactions.

What is trade/commerce?
- An offer consisting of wealth transfer (gold, time, property, etc.)
- Trust between parties (reputation, performance bond, cosigner, etc.)

Trust is a binary decision. It can be quantified and tracked.

Performance is an analog result (partial performance). It can be quantified and tracked.

Trust + Performance = Transaction

Communication * (Trust + Performance) = Accountability

If a computer system tracked the above, what do we need money for?

Brokers could offer wealth translation services. If you want gold but I only have time, we could introduce a broker to take my time and give you gold. True barter system with 100% liquidity.

Money becomes non-existent. Just Transactions. No more money supply. No more interest. Liquidity becomes moot. Liquidity is the result of individual choice to transact their time, gold, or property. If you had no gold or property, you would trade time (wealth).

Since USD would be a form of wealth in this system, it would be phased out naturally (unless it proved to be a good form of wealth storage).

The entire system can co-exist with the current system and transition seamlessly.

I imagine Gold would likely become the measuring unit to translate wealth, but it is not a gold backed system. Gold would facilitate communication of value.

The above would be fairly simple to design. Describe Transaction messages composed of Trust and Performance messages. Servers process the messages and store the results. All open source and the consumer chooses the company/server.  A company of your choice would store your transaction history, validate the integrity and release the data to potential creditors upon approval.

What I'm proposing is simple: a common language that describes the basic transaction/contract (trust + performance). A framework that describes the communication but leaves the details undefined. Trust might be gained through reputation or performance bond. Performance might be made through gold or wheat (or USD or yen).

A common language replaces the need for a common transactional currency.

Currencies become wealth that is bartered.

Money as a transactional currency disappears. Only wealth remains. Wealth is defined by each person/entity. Iran can store its wealth in oil. A farmer can store his in wheat. Wealth translators provide liquidity.

Since wealth translation is expensive, the system naturally tends towards a common wealth like gold. But if gold is hoarded or unavailable, the system self-adjusts by re-introducing wealth translators or by changing the mutually agreed upon wealth to silver or copper or anything else. Dynamically, with no authority, responding to the best available store of wealth.

Pure barter, free from authoritative restrictions. Transactions occur through the common language.

Various companies would:
- process the transaction history (integrity)
- summarize and display the history (similar to a fico score)
- translate wealth from one form to another (wheat to oil to gold to USD)
- provide trust (performance bond, insurance, etc.)

Since all human contracts/transactions can be described as Trust + Performance, it works perfectly within today's system. It also survives a global banking collapse.

The protocol/language becomes the banking system. Each entity within the system is interchangeable. No hierarchy. Totally distributed.

Here's how the system might work:

Define a public specification for a Transaction. It would store who, what, when, and where. Not why or how the transaction was determined. The protocol would be openly designed like HTTP or HTML.

With that described, companies would fill various roles (these companies already exist):
- transaction coordinators
- transaction reporters
- transaction fulfillment
- wealth depositories
- wealth translators
- wealth lenders
- performance assurers

Performance assurers would be household names (Visa, MC, Discover, Amex). When transacting, Trust would be gained by saying: "All my transactions are assured by XY Corp". If you failed to perform, they would perform on your promise (whatever that promise was).

Present a card at a convenience store. The card would identify you. The store would likely accept various performance assurance companies (eg. Visa, MC, Discover, Amex). Trust is gained. Performance will be made through your preferred method (eg. gold). If the store does not accept gold, a wealth translator would facilitate the trade. If they do accept gold, your wealth depository would transfer gold to the store's wealth depository. The coordinator follows the process and sends the result of all transactions to the parties' respective transaction reporters.

With the exception of the coordinators, all of the above businesses exist today. Their only change would be to communicate through the public protocol.

There is a cost to all of the above, but the benefit is authority becomes distributed into interchangeable entities. It also allows total freedom of interaction between participants. No entity can gain control and it eliminates central banks and the need for a transactional currency. Maybe most importantly, the system is built with accountability (rather than authority) at its core.

In small communities, remembering the results of previous transactions is how people know who delivers on their promises.

This would do the same thing, but on a global scale. A protocol that tracks: "what was promised and if it was delivered".

Promises between strangers could be assured by a trusted entity (maybe a mutual friend or commonly known company). Each becomes an interchangeable node on the system.

Since money is "a promise to deliver value", the language is the money.

HTML is a standardized language that allows PC's to exchange text and pictures. No one profits from that standard and the rules are decided publicly through the non-profit

Similarly, if we were to design a standardized language of promises, a decentralized monetary system builds itself. Promise Language.

Friday, March 19, 2010

Promise Language in real life

PL can be implemented at a small local bank as easily as a central bank. It instantly assures trust among participants while reducing transaction costs. Existing companies that adopt the specification would change how they do business in very small ways that lead to a globally trusted system.

Four categories of companies exist within the system.  These companies already exist, the labels are a way to describe them in the public PL specification:
- Promise Assurance companies
- Promise Reporters
- Wealth Translators
- Wealth Storage companies

Wealth Translators
If two individuals trade different forms of wealth, these companies handle the exchange. For example, if you stored your wealth in a vault in gold or silver, USD could be sent to the merchant instantly, behind the scenes. Simply present your Mastercard or Visa, etc., your gold is reduced, the Wealth Translator takes a small fee, and USD is delivered to the merchant.

Promise Assurance companies
Two types of Assurance companies:
1. Mastercard, Visa, Discover, American Express allow instant trust between strangers
2. companies to accept risk on larger Promises (eg. Lloyds of London or other underwriters)

Promise Reporters
The data belongs to the individual, and the Promise Reporter ensures integrity of that data. Data is only released to others at the discretion of the individual. Current companies like Experian, Transunion, Equifax can easily reorganize along these lines.

Wealth Storage companies
Vaults holding something of value (Euros, USD, gold, silver, diamonds, etc.) on the individual's behalf.

Description of Promise Language (PL)

Similar to HTML or XML, PL (Promise Language) is a simple framework describing promises that can be read by humans and processed by computers.  For example:

  (person's name)
  (person's name)
  (description of value conveyed)

A Transaction would comprise two Promises. A Transaction is marked as completed when both Promises are delivered. Simple. Templates for forms of Value (such as electronic gold, paper money, electronic silver, labor/time, etc.) allow for efficient processing by banks and related financial entities. Transaction costs go down. Reporting becomes automated, standardized and simple. Conveying reputation to others for credit purposes becomes easier.

What is Promise Language?

It is a public specification for contracts (promises) between individuals. Promise Language (PL) provides a framework that can be easily read by a computer.  That creates an accountability system which pushes corruption and corrupt currencies out of competition.

Who is making the promise?
Who is the recipient of the promise?
What value is to be conveyed?
Was it conveyed?

A computer system tracking the above promises becomes money. Any value can be conveyed so money becomes obsolete and meaningless. All forms of payment become wealth that is transferred through the conscious action of individuals who wish to transact. Money supply becomes moot. Money supply is only limited by the individuals' desire to transact. If nothing of value is available to one or more of the individuals, time or labor is the value. It is a barter system that works to barter anything (including USD) but will tend towards a stable, commonly accepted form of value such as gold or silver. However, if gold or silver were to be hoarded by large-monied interests, the population can simply choose another form of value such as copper or diamonds or anything else imaginable. What makes for a good, commonly accepted form of value? Something finite and discrete in nature such as a single diamond or a known quantity of gold. For example, the Federal Reserve could tie its currency to ONLY the gold in Fort Knox. That decision is up to the bankers at each central bank. The paper/digits of a central bank could be tied to the rice output on a yearly basis (currency fluctuations would arise from varying output).

Thursday, July 16, 2009

A place to discuss new forms of money

Promise Langage is a loose framework for describing promises between individuals. Similar to contract law, but simple.

Money is simply a way to temporarily convey a commonly accepted form of value between people. A universally accepted way to represent value. However, today's money is simply paper and digits that can be printed or typed into a computer database. The only restraint to the amount of paper printed or digits entered is the amount of inflation the population will endure or allow before rejecting the currency. This is due to the authority structure (central banks and government) inserting themselves as the caretakers of the printing process.

At the core of every central bank on the planet is a fraudulent journal entry. If you are familiar with bookkeeping or accounting: what is the offsetting asset or liability when a bond is accepted by the central bank from its respective treasury? Answer is none. It is a fraudulent journal entry, accepting an IOU (bond) with interest attached. Nothing of value is conveyed to the Treasury. It is simply paper or digits added to the Treasury's bank account to be spent freely into the economy. The only limitation is the propaganda surrounding the system that fools the population into believing inflation is good or beneficial or at least, a fact of life that is unavoidable.