Phone-to-phone payments already bringing massive changes to Kenya

Posted on June 8, 2014 | 2 comments

Try to imagine what your life would be like if you had no bank account, no credit or debit cards, and no cash, and on top of that, you lived in a country where poverty, crime, and corruption were rampant. I’ve never been there, but by many reports Kenya is just such a place. How do people cope?

As in other places, like India and Thailand, that I have visited, it seems that the majority of people in Kenya are micro-entrepreneurs who eke out a living by producing and selling products or services of some sort. And, like everywhere else, having a means for exchanging those goods and services and “paying” each other is crucial to survival.

Ultimately, as private currencies and moneyless exchange mechanism proliferate, we all will have numerous payment options.  The Bangla-Pesa project operating near Mombasa is one such model that is now being replicated in Nairobi and other parts of Kenya. But even technologies that only provide new ways of paying with national currencies are proving to be beneficial in many ways.

Kenya’s Safaricom company has led the world in implementing phone-to-phone payments with the M-pesa. All it takes is a text message from the buyer’s phone to the seller’s phone to make a payment. Almost everyone in Kenya has access to mobile phone service and they may draw cash from their accounts at any of the 45,000 independent agents scattered around the country.

A recent Business Week article documents the ubiquity of this payment mechanism and its positive effects in such diverse areas as security, renewable energy, crowdfunding, and economic development . You can read it here: Ten Days in Kenya With No Cash, Only a Phone.

When mobile phone payment systems include complementary currency options, the beneficial effects will be multiplied manifold. — t.h.g.

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Posted in Developing Alternatives, Exchange Design, Finance and Economics

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Newsletter–late Spring, 2014

Posted on May 28, 2014 | 2 comments

Newsletter Contents

  • Colleagues doing great work
  • Upcoming Conference
  • The Buddhist way—Principles to live by
  • Psychiatry running amok
  • Flight MH370

I do some of my best thinking when I’m on the move—in a bus, a train, a plane (though perhaps not in a Thai minivan). I can’t help but wonder if this might be due to a physical phenomenon of “induced creativity” akin to the electromagnet induction of electricity that occurs when a coil of wire is moved through a magnetic field. Could it be that “creative energy” is induced when an idle brain is moved through the Earth’s magnetic field or through a monotonous landscape? Far out, eh?

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Colleagues doing great work

 * The NGO, Koru Kenya, headed by American social entrepreneur and aid worker, Will Ruddick, which I’ve written about before, is now undertaking, with support from the Kenyan government, a program to replicate their successful Bangla-Pesa community currency program in other poor areas around Mumbasa and Nairobi. This is one of the most promising projects I know of that demonstrates how local liquidity can be created by producers themselves to facilitate trading amongst them. See my May 4 post about the project , and please help to support it financially by donating even a small amount via their Indiegogo Crowd Funding site.

* Our friend and associate, Michel Bauwens, who is founder and director of the Peer to Peer Foundation, has been engaged by the government of Ecuador to head an effort to plan the transition to a commons based peer-to-peer economy and shared-knowledge society. The project is known by its acronym, FLOK (which derives from the words free, libre, open, knowledge). Bauwens has just announced the publication of the “integrated Commons Transition Plan” which can be seen at https://floksociety.co-ment.com/text/xMHsm6YpVgI/view/. Bauwens recently explained the FLOK transition project at an Integral Theory Conference. You can see it here.

* In 2012, Professor Jem Bendell was appointed to head the newly formed Institute for Leadership and Sustainability (IFLAS) at Cumbria University in the U.K. His inaugural lecture, Exploring Sustainability, given in April of this year was both interesting and enlightening. It is well worth watching at https://www.youtube.com/watch?v=j-Opqi-2UgY.

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Upcoming Conference

Chong Kee Tan and his Bay Bucks team are in the process of organizing a major “new economy convergence” titled, Living the New Economy, to be held in San Francisco October 23—26. I will be one of the keynote speakers, along with Charles Eisenstein and Ian MacKenzie. For details and to register, visit this site.

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The Buddhist way—Principles to live by

I often receive useful input from my correspondents via email. One that came to me recently was a list of life principles referred to as “The Buddhist Way.” I immediately posted it on my blog at https://tomazgreco.wordpress.com/2014/05/20/the-buddhist-way-principles-to-live-by/ , and intend to tack it up on my wall so that I may keep the principles always in mind.

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Psychiatry running amok

A few nights ago I went to a showing of a documentary film titled, The Hidden Enemy: Inside Psychiatry’s Covert Agenda, a film of the Citizen’s Commission on Human Rights. I was astounded to learn, among other things, the extent of suicides and domestic violence amongst our military personnel, and the scale and scope of the their drugging by psychiatric staff both during and after their active duty service. Our troops have been virtual guinea pigs for psychiatric drugs that have questionable benefit and horrendous side effects.

The showing, sponsored by Veterans for Peace, highlighted some startling facts about psychiatry in the military:

  • The shootings at Fort Hood and the Washington Navy Yard are linked to psychiatric drugs.
  • 22 veterans are committing suicide every day.
  • In 2012 more active duty soldiers died from suicide than were killed in battle.
  • A questionnaire used to screen military personnel for depression and PTSD is copyrighted by Pfizer, who manufactures the antidepressant Zoloft and other psychiatric drugs.
  • 85% of military suicides had never seen combat.
  • More than 60% of suicides in the military were taking antidepressants or recently undergoing outpatient psychiatric treatment.
  • The antipsychotic drug, Seroquel, is referred to by soldiers and veterans as “serokill” because of its implication in cases of cardiac arrest and sudden deaths.

The showing was followed by a Q and A session during which many veterans described their own personal experience with psychiatric drugs that were prescribed based only on brief interviews and descriptions of symptoms, not a very scientific approach to treatment, in my view. In many cases, multiple drugs are prescribed even though no scientific testing has been done to determine possible interactions among them. I urge everyone to read the information and view the video here.

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Flight MH370

While news of the disappearance of Malaysia Airlines flight 370 has faded from the headlines the mystery remains, and the failure to find one shred of physical evidence that the plane crashed into the ocean, adds to the plausibility of explanations other than the official ones.

No less a figure than Mahathir bin Mohamad, who served for 22 years as Malaysia’s Prime Minister, has accused the CIA and the Boeing Company of hiding key information. The May 19 edition of the Sydney Morning Herald reported as follows:

One of the most influential figures in Malaysia’s ruling party claims information about flight MH370 is being hidden and the Australian-led search for the plane off Western Australia is a waste of time and money.

Former prime minister Mahathir Mohamad said the plane’s disappearance on March 8 was “most likely not an ordinary crash after fuel was exhausted”.

“The plane is somewhere, maybe without MAS [Malaysia Airlines] markings,” he said. “It is a waste of time and money to look for debris or oil slick or to listen for pings from the black box.”

“Someone is hiding something. It is not fair that MAS and Malaysia should take the blame,” he wrote.

Dr Mahathir suggested the United States’ Central Intelligence Agency had knowledge of the disappearance of the plane with 239 people on board but was not sharing it with Malaysia.

He also claimed that Boeing, the plane’s maker, and “certain” government agencies, have the ability to remotely take over control of commercial airliners such as the missing Boeing 777. [emphasis added-t.h.g.]

“For some reason, the media will not print anything that involves Boeing or the CIA,” he said.

Further, a number of articles compiled by Intellihub report that:

1. Malaysian opposition leader, Anwar Ibrahim, has accused Malaysian officials of withholding evidence.

2. ‘Hijacked flight 370 passenger sent photo from hidden iPhone tracing back to secret U.S. military base Diego Garcia’.

3. One of the passengers, Philip Wood, sent a text message saying “I have been held hostage by unknown military personal after my flight was hijacked (blindfolded). I work for IBM and I have managed to hide my cellphone in my ass during the hijack. I have been separated from the rest of the passengers and I am in a cell. My name is Philip Wood. I think I have been drugged as well and cannot think clearly.”

What a strange world we live in.

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Posted in General interest, My activities

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How do central banks control interest rates?

Posted on May 9, 2014 | 1 comment

Question: How do central banks control interest rates?

Answer: By creating counterfeit money.

Of course, they will never admit that. They see their “purchases” of debt instruments, mainly those of governments, as being legitimate. But such purchases violate sound monetary principles, and even their legality is questionable.

The obvious question that must be asked is “Where do central banks get the money with which to buy those debt instruments?” The answer is, they do not “get” the money, they create it–by fiat. This is  their celebrated “quantitative easing,” which is actually currency inflation. The new “high powered money” thus created puts new “reserves” into the banking system, which banks use to multiply their own purchases of government bonds and other assets.

Without this “monetization” of debts by the banking system, newly offered debt instruments, like government bonds, would have to offer higher rates of interest to attract buyers from the general public.

Interest rates on the ever-increasing amounts of sovereign debts can only be kept low by this sort of central bank intervention. As I put it, central banks are the “buyers of last resort” for bonds that cannot be sold at artificially low rates of interest. The chart below show just how desperate the situation has become since the financial crisis of 2008.

Interest Rate Elephant In The Room

 

Initially, however,  in the case of the Fed, the purchases were of “junk” that the banks had created during the real estate bubble. That was the bailout that saved the banks but put the squeeze on people through foreclosures, layoffs, and loss of income on their savings.

As shown in this chart and others I posted previously, all he major central banks are doing the same thing, so foreign exchange rates are not too adversely affected–yet. But keep your eye on Brazil, Russia, India, China, and other countries that show signs that they may not be willing to play along./ t.h.g.

1 Comment

Posted in Banking, Finance and Economics, Geo-politics, Inflation

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Revolutionary aid project set to spread in Kenya

Posted on May 4, 2014 | 2 comments

On the heels of the successful Bangla-Pesa community currency project, the NGO, Koru Kenya has been asked by the government to create similar programs in other poor neighborhoods around Nairobi and Mumbasa. Unfortunately, no significant funding is being provided by the government, so private contributions are being solicited through a Crowdfunding campaign at Indiegogo: Fight Poverty in Africa by Redefining Community Development.

This is a revolutionary approach to aid, one that empowers people to sustainably provide for their own needs. I strongly endorse this project and encourage all to make a financial contribution. Even small amounts can make a big difference. –t.h.g.

2 Comments

Posted in Developing Alternatives, Emerging paradigm, Finance and Economics, Implementation Strategies

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An open letter to the Financial Times

Posted on May 2, 2014 | 5 comments

Dear Martin Wolf,
Your article, Strip private banks of their power to create money, highlights some of the problems of the global money and banking system, but falls short in the proposed solution.

The problem is not private money creation, per se, but the monopolization of credit (money creation) in the hands of a private banking cartel and the collusive arrangement between bankers and politicians.

In today’s world, banks get to lend our collective credit back to us and charge interest for it while central governments get to spend more than they earn in overt tax revenues, relying on the banking system to monetize government debts. These two parasitic drains on the economy, interest and inflationary government debt monetization, create a growth imperative that is destroying the environment, shredding the social fabric, and creating ever greater disparities of income and wealth.

Turning over the money monopoly to politicians (what I call the “Greenback solution”) will not change things very much. It will be the same people wearing different hats. The political process has been so thoroughly corrupted and taken over by this small elite class that political approaches to solving the money problem have no chance of passage anyway. I articulated that argument a few years ago in my Alternet article, The End of Money: Take Power Back From the Money and Banking Monopoly.

True solutions must emerge, and are emerging, from society and from associations of small and medium-sized businesses. Money is first and foremost a medium for facilitating the exchange of goods and services and other forms of real value, but the exchange function can be effectively and efficiently provided outside the banking system and without the use of conventional political money. This is being done for associated businesses through credit clearing exchanges and through the issuance of private currencies or vouchers by businesses that produce real value. Both approaches have the capacity to provide exchange media that can be used by general public as well.

So, rather than ban private issuance of currencies, such private issuance needs to be proliferated and encouraged. There needs to be competition in currency so that there will be a sufficient amount of exchange media, and so that political currencies cannot be abused without losing patronage in the market. Rather than establishing the state as the money power, we need to have a separation of money and state. That argument is more fully developed in my latest book, The End of Money and the Future of Civilization.

Best wishes,

Thomas H. Greco, Jr.

5 Comments

Posted in Banking, Exchange Design, Geo-politics, Prescriptions, The Debt Imperative

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Income (and wealth) inequality becoming a political issue

Posted on April 27, 2014 | 4 comments

At long last, income inequality is becoming a mainstream political issue, thanks in large part to New York Times columnist Paul Krugman and Thomas Piketty, an obscure professor at the Paris School of Economics.

The English translation of Picketty’s new book Capital in the Twenty-First Centuryhas become a political bombshell especially since Krugman’s review of it appeared in New York Review of Books. Titled, Why We’re in a New Gilded Age, the review highlights Picketty’s research findings and political agenda.

As Krugman describes it, “The big idea of Capital in the Twenty-First Century is that we haven’t just gone back to nineteenth-century levels of income inequality, we’re also on a path back to ‘patrimonial capitalism,’ in which the commanding heights of the economy are controlled not by talented individuals but by family dynasties.” And in assessing the book, he calls it “a tour de force of economic modeling, an approach that integrates the analysis of economic growth with that of the distribution of income and wealth. This is a book that will change both the way we think about society and the way we do economics.”

Krugman concludes his review with this statement: “Piketty ends Capital in the Twenty-First Century with a call to arms—a call, in particular, for wealth taxes, global if possible, to restrain the growing power of inherited wealth. It’s easy to be cynical about the prospects for anything of the kind. But surely Piketty’s masterly diagnosis of where we are and where we’re heading makes such a thing considerably more likely. So Capital in the Twenty-First Century is an extremely important book on all fronts. Piketty has transformed our economic discourse; we’ll never talk about wealth and inequality the same way we used to.”

Now, Krugman has upped the ante with his April 24 editorial The Pikkety Panic, arguing that “..what’s really new about “Capital” is the way it demolishes that most cherished of conservative myths, the insistence that we’re living in a meritocracy in which great wealth is earned and deserved.” Krugman presents evidence to suggest that “conservatives are terrified” and in a panic to try to refute Pikkety’s inevitable conclusions, but failing to find substantive arguments, they have fallen back on name calling. If you can’t refute the facts, then try to discredit the source.

Summing up, Krugman says,

“Now, the fact that apologists for America’s oligarchs are evidently at a loss for coherent arguments doesn’t mean that they are on the run politically. Money still talks — indeed, thanks in part to the Roberts court, it talks louder than ever. Still, ideas matter too, shaping both how we talk about society and, eventually, what we do. And the Piketty panic shows that the right has run out of ideas.”

If that isn’t enough to make the political pot boil over, another newly published academic study, Testing Theories of American Politics: Elites, Interest Groups, and Average Citizens finds that “economic elites and organized groups representing business interests have substantial independent impacts on U.S. government policy, while average citizens and mass-based interest groups have little or no independent influence. The results provide substantial support for theories of Economic Elite Domination and for theories of Biased Pluralism, but not for theories of Majoritarian Electoral Democracy or Majoritarian Pluralism.”

Of course, most activists and even ordinary people have known all that, but now that academia has taken notice and begun to present solid scientific evidence, the pressure on politicians to acknowledge these conditions and act on them will build more quickly.

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Posted in Economics, Finance and Economics, Government, Politics, The state of democracy

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Qoin launches B2B exchange

Posted on April 22, 2014 | 2 comments

Community Currencies in Action (CCIA) has announced the launch of TradeQoin , a business-to-business trade exchange in the Netherlands.

As their website describes it, “TradeQoin is a trading network for SME entrepreneurs to do business with each other and pay with their own digital form of payment: the TradeQoin. Entrepreneurs can use TradeQoin to purchase and sell quality products and services. By selling products and/or services the entrepreneur can earn TradeQoin. These can then be spent on making purchases within the network, which reduces Euro expenditure.”

The video below features members describing the benefits of the exchange.

http://youtu.be/7VuIpFO7zZM

You can read more about it here, http://communitycurrenciesinaction.eu/sme-tradenetwork/

 

2 Comments

Posted in Business, Developing Alternatives, Emerging paradigm, Finance and Economics, Implementation Strategies

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