Gogo: A Local, Stable, Convertible Means of Exchange
What Gogo Is
What does the Gogo look like?
How does Gogo work?
Why the Gogo?
How the Gogo got its name
Questions and Answers about the Gogo
About the Designer of the Gogo
What Gogo Is
The Gogo is a local, stable and convertible means of exchange, and is designed to be and to do what the Canadian Dollar is not, and can not. Read on and you will learn the differences.
Circulation of the Gogo is limited to the area of Grand Forks in southern British Columbia, Canada. Other communities can have their own Gogos if they like.
The value of the Gogo is based on the value of the Canadian Dollar in 1980, and is forever stable at that level. This means that prices in the Gogo will never change.
The Gogo is convertible with the Canadian Dollar, based on the Consumer Price Index at the time of the exchange. For example, in 2001, 1 Gogo costs $2.20 Canadian, which reflects the decline in value of the Canadian Dollar of 2001, related to the value of the Canadian Dollar in 1980. You can figure this out yourself by acquiring a copy of the Canadian Consumer Price Index and calculating the decline in value of the Canadian Dollar over time.
The Gogo is a means of exchange, it is not a store of value. It is therefore designed to circulate. To encourage this, there is a 5% charge, applied on a yearly basis, on the Gogo. This 5% covers the cost of printing the currency and other expenses associated with managing the Gogo properly. Any excess will be returned to the community of Grand Forks.
What does the Gogo look like?
The Gogo is a note printed on secure paper. It features the image of Silvio Gesell, the originator of this form of currency, along with images from Grand Forks. It also contains the triple cross symbol, from alchemy, for aqua regia, which is an acid capable of dissolving gold. It also features spaces for stamps, on the front and back, which state the validity of the note.
Text on the note:
''This bill is guaranteed by the issuing agency to be kept at the exact value of V.80. That is the purchasing value of a Canadian Dollar in the year 1980. It is valid until the expire date and can then be exchanged for one with a new expire date one year later for a renewal charge of 5% (more or less). The agency will exchange the bill at any time for any available other currency at the appropriate exchange rate minus the renewal charge as long as there is at least one months validity left.''
How does Gogo work?
Gogo works just like any other kind of money, it is used for buying things. It cannot be used as a store of value.
To get the Gogo, you must convert your Canadian Dollars for them, at the prevailing exchange rate, based on the value of the Canadian Dollar of 2001 relative to the value of the Canadian Dollar in 1980. At the time of writing, this is $2.20 Canadian for 1 Gogo. This exchange rate will change over time, depending on the value of the Canadian Dollar. The value of the Gogo will always stay the same.
The Gogo can then be spent like money at participating businesses.
If someone who is holding Gogos would like to convert them back to Canadian Dollars, they will receive an amount equivalent to the prevailing exchange rate at the time of the exchange, minus 5%.
Each Gogo note is valid for one year. At the end of one year, as validated on the Gogo note, the note will have to be exchanged for a new one, also minus 5% to be paid either in Gogos or in National Currency (either Canadian or US Dollars).
Why the Gogo?
All National Currencies, like the Canadian Dollar, are unstable and decline in value over time. Do you remember the price of a loaf of bread, postage stamps, a pound of beef in 1980? How much do these goods cost now?
The Canadian Dollar has lost 55% of its value since 1980. The price of most standard goods and services now cost more than two times what they did in 1980. A 40 cent chocolate bar in 1980 now costs one dollar. This fact, along with the proof provided by the government in its Consumer Price Index, shows that the Canadian Dollar is losing its value.
This means that businesses cannot make effective financial plans for the long-term, because they cannot, with complete accuracy, predict the decline in value of the Canadian Dollar over that period.
This means that people cannot expect their salaries will rise at the same rate as the price of goods, and therefore they begin to fall behind. This problem is solved by the Gogo which will always be stable in value.
Image: The declining value of major National Currencies, including the Canadian Dollar, since 1980.
Purchasing power of the Canadian Dollar, 1980-2000.
All National Currencies, like the Canadian Dollar, try to achieve two contradictory goals at the same time. On the one hand, they function as a store of value, and on the other hand as a medium of exchange. If money is used as a store of value, it means that it is missing as a medium of exchange on the market. This means that there is never enough money to satisfy all of the exchanges that are needed. Businesses cannot, ultimately, sell all of their goods.
The Gogo, by being stable and function as a medium of exchange, is always in sufficient supply in the community. It will increase business because it will help to sell goods that cannot be sold because of the scarcity of Canadian Dollars.
A healthy economy is one in which money is circulating, and this is exactly what the Gogo is designed to do.
All National Currencies, like the Canadian Dollar, can go wherever in the world they like. They usually go to where they can get the greatest return. This can starve small communities of the money to function properly.
The Gogo is designed to circulate only within a specific local area, and thus, unlike the Canadian Dollar, cannot drain out of the community to other areas. Thus, the Gogo will strengthen the economy of Grand Forks, and will always be there when we need it.
We know what is best for our community. We need an honest and transparent medium of exchange which keeps its value forever, circulates around our community and does not leave, benefits local business and will be invested in our community. Ultimately, the Gogo will be of benefit to the people of Grand Forks.
How the Gogo got its name
Last time somebody asked me again what the name Gogo means and was not satisfied with the pat answer: Money on the go!"
So here is the whole story as far as I can recollect. When the idea of a local money, which had the working title of "V 80 Can$" (The value of the Canadian Dollar in 1980 as measured by the Consumer Price Index) was discussed in a somewhat lubricated brainstorming session, it started with explaining what this money actually was. How to find a name for that monster?
If I remember right it went over, someone said ''why not call them ''G G'' for Grand Forks Gesell money?'', which became ''Gogo'' pretty fast.
Then all kinds of names for the ''Gogo" were suggested: Stabilo, because of its stability came close. Granda, Bobcat, Skunky, Peach, Goldy, Greeny, Super, Solido, Spunky are a few I recollect, but a funny thing happened. I also had liked Pemo for peoples money and Pecho for people changer. Every time some new name for the ''Gogo" was proposed, the Gogo was mentioned until everybody got so used to the name that everybody laughed when somebody said: ''Now I have to go-go. Tell me, if you find another name."
So Gogo it was!In other towns and other countries they will probably use other names, but as long as they use a value of the past and stick to it and apply a small user fee to keep them in circulation even at low interest levels, it will be Gogos they have and they will set them free.
Questions and answers about the Grand Forks Gogo.
Qu: As a Businessperson, why should I accept the Gogos?
Answer: Why not? You will make an extra sale. You are dealing for the first time in your life with an honest money, which keeps its value.
Qu: What will it cost me?
Answer: Gogos can be exchanged for Canadian Dollars at par value. At the end of the one-year lifespan of the Gogo, they will expire and it will cost 5% to replace the old Gogo with a new one. If you convert Gogos back to Canadian Dollars, there will be a 5% charge.
Qu: Where can I exchange them?
Answer: Any member store of the Gogo Alliance in Grand Forks will exchange them.
Qu: How are the Gogos backed?
Answer: Gogos are backed by the merchandise of the stores of any business willing to accept Gogos, as well as the other currency they were sold for and which is kept for exchange purposes. We expect there will be only about 10,000 Gogos in circulation to begin with.
Qu: What can I do with expired Gogos?
Answer: Gogos can be exchanged for new ones, for a 5% fee, or converted for Canadian Dollars, also for a 5% fee. To avoid the charge, Gogos can be saved with the Gogo Alliance and used for other purposes.
Qu: How many participants are needed to make the Gogo successful?
Answer: Similar programs have succeeded in areas with a population similar to Grand Forks. We believe the support of about 30 stores of all kinds are needed for a successful start.
Qu: Isn´t something like this already being done by barter clubs?
Answer: Not really. Even if it is local, it is not a medium of exchange like the stable Gogos and does not circulate any faster than other money. A group of 20 people or even thousand do not form a market large enough for money to move.
Qu: Why was something like the Gogos not started long ago?
Answer: There are many reasons. Mostly lack of knowledge, but also opposition by people who want to continue to suck money out of local areas and they could not do this with Gogos or similar local medium of exchange.
Qu: When will the Gogos be issued?
Answer: That depends on you and people like you. When enough of you ask us to go ahead, the Gogos can be issued by the Gogo Alliance within weeks. Without that the yet-to-be-formed alliance will not do it. Later they might be forced to do it for their own use if the economy deteriorates too much.
You can speed this process up if you put a sign in your store window, which says that Grand Forks Gogos will be accepted here right now. It will encourage the members of the alliance to go ahead and begin accepting Gogos.
Qu: How can I find out what the exchange rate is?
Answer: It will be published in the local paper on local TV and stores will show it in their store windows.
Qu: Are the Gogos legal tender?
Answer: No, they are not legal tender. If legal tender is required, you must exchange Gogos for Canadian Dollars. They are only a local medium of exchange, not real money. For all other purposes they can be used in complement to the Dollar.
Qu: Are there drawbacks to the Gogo?
Answer: No, there are no drawbacks to the Gogo. There are some people who would not benefit by using Gogos, namely, those who profit from war, those who profit from speculation and those who live off of the work of others.
Qu: How many Gogos will be issued?
Answer: Surprisingly few, because what is important is not volume but circulation. For the Sunshine Valley, we expect about 10,000 Gogos will be issued, of which about 1000 will expire every month and will be renewed at a total cost of about 42 Gogos per month or 500 Gogos per year. This small sum will cover printing costs, administrative costs with enough left over to ensure operating costs into the future. Any excess would go to community projects.
Only 10,000 Gogos moving 500 times a year can bring 5 Million Gogos worth of sales, translating into 11 Million Canadian Dollars worth of sales for the stores which accept Gogos in the area is something which makes it worth their small effort.
Qu: How many stores will participate?
Answer: We will be contacting stores to confirm their participation. So far, every business owner we spoke has expressed their support for the Gogo and has confirmed their intention to participate. Should there be a few business owners who would prefer not to join in the beginning is not a problem for the Gogo Alliance. People with Gogos to spend simply will not shop there.
Qu: Does the Gogo really need this complicated exchange rate?
Answer: The Consumer Price Index, on which the exchange rate is based, is the most simple, accurate and transparent way of determining the stable value of the Gogo. It is less complicated than the money market method of determining exchange rates, which has no basis in reality. You see by the difference between 1 Gogo, which is always equal to a Canadian Dollar of the year 1980.
Qu: Is the expiry date on the Gogo really necessary?
Answer: Yes, it is the motor, which combined with the small user fee keeps the Gogo in circulation and also keeps it close to the place where it has to be exchanged once a year.
Qu: Why should I bother about the Gogo at all?
Answer: You may find that it gives you that warm fuzzy feeling inside, like having done something good for your neighbour and fellow businessman today.
Qu: What shall I do to help the Gogo?
Answer: This question deserves a somewhat longer answer which will consider the stages of involvement.
1) Put a sign into your shop-window, which shows that you will accept Gogos.
2) Show that you are a friend of the Gogos by a pledge to buy at least 20 Gogos to jump-start their use. Exchanging your Canadian Dollars with Gogos will not cost you anything: you can still buy the same amount of goods or services with them.
3) Talk with your friends and encourage fellow businesspeople to do the same.
4) Join the Gogo Alliance, who will issue and control the Gogo and use additional means to get the Gogo in circulation.
5) Get involved with promoting and running the Gogos. After a month, they will promote themselves by the upswing in business they will generate and those who benefit from the Gogo will be the best advocates for the Gogos.
1)About the ability of the alliance to back the Gogos.
2)The full and sometimes harsh truth.
3)The harsh reality of the change!
4)A simple business proposal5)Why does the Gogo need a user-fee
6)Why lowly Gogos can be kept at a stable value, which no big currency could do so far.
7)Question for a business owner.
8)Go Gogo or repeat history
9)Gold standard is a dead duck
11)Fine print on the back of the Grand Forks money.
12)Gogo and Watto.
13)The features of the Gogo.
14)Where the Gogo can be used.
15)The real worth of monetary assets.
16)Additional benefits of the Gogos
17)Are Gogos additional Money?
18)Uses of the Gogo.
19)Friends of Gogo.
21)The banks, Gogo accounts and exchange.
22)The ways to put Gogos into circulation
23)The real costs of the Gogo.
24)The hidden side of the Gogo.
25) Why 1980?
26) The difference between Gogos and stamp script
27) Gogos and Terra.
28) Gogos and LETS!
29) Gogos and other currencies.
30) Statutes of the Gogobank society
31) Prosumers, the modern slaves.
32) Gogos hidden power.
33) The functions of money.
34) Buy Gogos!
35) Why is there no Gesell money, if it is known for such along time and is such a good thing?
36) Cast your bread on the water
37) More Gogo stories!
38) Future benefits of the Gogo!
39) The enlargement of the Gogo area.
40) Long term effects of the Gogo!
41) The main features of the Gogos!
42) Both sides of the coin.
43) Dear reluctant businessman!
44) Gogos in time and space45) Some numbers from Woergl
46) The mistakes of Woergl.
47) What is wrong with our Dollar?48) The Gogo exchange booth
49) Gogos in action
50) The real start of the Gogos.
51) Gogo falsification
52) Exchange rate of the Gogo
53) Gogos for Japan.
55) Gogos are better than Dollars
56) The simplest way to start a Gogo island.
57) Gogos and taxes.
58) The harsh reality of the change!
59) Gogos are play-money.
1)About the ability of the Gogo Alliance to back the Gogos. We will now look at a worst case scenario. The alliance sold some Gogos for the price of 2.20 Can$, let us say 2001 and after a year the Canadian Dollar has lost half of its value. The exchange rate would then be 4.40. Let us assume that the sum in question is 1000 Gogos ( about 1/10 of the amount of Gogos in circulation.
The alliance had 2,200 Can$ for that amount taken in but it also has the money for the rest of 9000 Gogos which they have sold at steadily higher prices - the last ones for 4.40 and what did it cost? Only the cost of printing the Gogos. About 600 Can$, by the way. This is, even inflation rate assumed, 29.700 Can$ plus the 2.200. Together 31,900. No problem to shell out the 4.400. We can surely disregard the 300 Gogos for printing also. :-)
See, inflation does not happen overnight and nobody in his right mind would even think in such a case to exchange stable Gogos for a money which he sees dwindling in value in front of his eyes. He would rather pay the user fee of 5% if he wants to keep the Gogos at home. More likely he will put them on a Gogo account at the bank. There it will depend also on the time frame whether he might still get some interest for long term deposits or has to pay at least part of the user fee to the bank for short term deposits.
The alliance has the whole difference between printing costs and nominal value as clear profit in its coffers as long as the Gogos stay in circulation and they will do this in both cases. On deflation of the other money anyway and also when the other money is highly inflated. The only time when a more frequent exchange can occur, is, when the other money is only slightly inflated and then the alliance has no problems either. The user fee will handsomely take care of slight exchange losses.
In Woergl hardly any money was exchanged. It was used and even the voucher accounts at the bank were usually transferred before the monthly fee was due, even when the exchange fee was only 2% while it costs 5% for the Gogos.
The voucher account transfers in Woergl did not have a huge volume, because in a local market fast moving cash can easily handle all payments. The voucher account transfers were also handled by the single local bank and therefore nobody paid much attention to them. Most people didnt even have such accounts, only a few businessmen.
One must understand that the high use of account transfers today is only possible with high interest rates which make it possible for the banks to hide their high costs and the fact that cash does not move at low inflation rates - so everybody tries to stretch it by credit transfers.
Properly moving cash wakes this unnecessary and cash can handle all payments, as it did in Wörgl. Not because there were no accounts but because they were not necessary with properly moving money as the Gogos also will be.2)The full and sometimes harsh truth. Here is a look into the logical results of the introduction of Gesell money, when started locally as was done 1932 in Woergl, Austria. There it was stopped by force after 14 months but here we will assume that it will be possible to avoid this. We will also assume that some necessary changes were made, like the introduction of an exchange rate and adherence to a stable currency reference standard. So now we start at the beginning, when a group of local merchants start such a Gesell money by the simple way of giving it out as a cash bonus of 1% with purchases.
The Gesell money will have an exchange rate to the other money (we will call the other money Dollar and the Gesell money Gogo from now on, to make it more clear) which shows the stable purchasing value of the Gogo. The Gogo will also have expire dates at which date it has to be exchanged for new Gogos with a new expire date at a user fee of 5% once a year. (We will later explain why this is preferable to another possible way like stamp script, for keeping his money in circulation).
The stable standard will be the value of the Canadian Dollar of 1980, short V80 Can$ for value 80 and the issuing agency will guarantee this value of their Gogos.
What will happen now?
The small amount of Gogos (remember, 1 %, 1 Dollars worth per person in Woergl) will stay in circulation and will be used before the Dollars are used, because it will be some time before the people will really trust this new free money and, of course, they would not want to pay the user fee, if caught with a bill on expire date.
( The money of Woergl changed hands between 4 to 500 times a year compared to a normal" turnover of the Dollar of 20 times a year)
So now these Gogos will push with every turnover wares on their one way street from production to consummation thereby removing them from the market, opening space for new wares and new business and giving with that former unemployed a chance to produce.
( In Woergl the unemployment rate dropped by 25% from an extremely high level in a very short time.)
Depending on the bite the Gogos take from the market less wares are left on it for the Dollar. The more the Gogos spread, the less wares are left for the Dollars and in a short time the owners of Dollars will realize that there are not enough wares left on the market for them to buy. Now the fight will begin. They will bid up the prices of the remaining wares and the Dollar will lose value even faster as it did before the Gogos. It would not matter to the value of the Gogo and to all credits or balances based on its value. The Gogo is isolated from the Dollar by the exchange rate,
(Therefore such an exchange rate is an absolute must for the Gogo.)
It is only the Dollar and all Dollar assets and, of course, Dollar debts which will change in value, probably losing it completely as other currencies did.
Yes, this is the somewhat bitter truth. The Gogo only by being a safety net for the community might hasten the unavoidable demise of the Dollar, but it should not be blamed for it.
Two aspects concerning the Gogo (the money which goes and goes.)
There is first the matter of the application of the user fee by the renewal charge instead of stamps. The reasons for this are besides the much simpler way of doing it once instead of by monthly or bi- monthly pasting of stamps, are twofold. It allows for greater flexibility if later it is noticed that a change in the fee is necessary and it also supplies an easy weapon against a possible attack. When enemies ( holders of large Dollar assets for instance) would try to make trouble for the Gogo by holding back and then suddenly releasing large amounts of Gogos they can easily be foiled by calling back more bills with future expire dates and raising the fee. Large amounts will anyway not be easy to get. ( Remember the 1%.) The holding back will became very costly for them, while it would not hurt the people using the Gogos properly. These people would not have much cash and will gleefully pay a higher fee for the little they might have just to hurt the would-be spoilers.
The second aspect is the possible over-issue of these Gogos but this is not possible by the way they are put into circulation. The businessmen who give them out, have to pay for them and they will not pay for something which they do not need, when the Gogos are coming back to them as payment for sales. It might be necessary to put Gogos which are exchanged back for Dollars to be replaced to avoid any slack. At least the amount collected as user fee must even be replaced. It need not concern us a lot, because the user fee which becomes due at any exchange back will make it too costly for people to exchange without need. People will use them otherwise before exchanging them.
There is no way to stop the spread of the Gogos. Once businessmen in the surrounding areas and towns realize the upturn of business for the ones who give them out and accept them they will do the same, even without necessarily going to the agency and buying Gogos. They only have to accept some in payment and then use them. They might give some out as bonus too for competition sake again, but it is not necessary. The only thing they have to do, is putting a sign in their windows: Gogos accepted here."3)The harsh reality of the change!
We know now, what is necessary to overcome a deflation with Gesell money. We know how it must be done to be successful. We know how little of it we need and we know how fast it can spread.
I will only repeat what this money must have. It is 1) a stable reference point. 2) a market of critical size. 3) demurrage. 4) free space for it because the other money is not working any more either though high inflation or preferably through deflation. 5) motivated people and an issuing agency, which does not fold if opposed.
I will not go into each point because that was done before and sometimes in the near future this points will come together.
We know what causes the boom and bust cycles and nothing has changed therefor the same thing will happen as has happened untold times in history. Inflation will be brought to an end by deflation, where money will disappear from the market. We have had now a very long buildup and therefor inflation will be severe. It cannot be prevented any more either because there is just too much money floating around. The moment inflation starts to get out of hand, which it will, the owners of huge amounts of it will force the government of the day into a deflation policy and even a monetary reform. The small guys will have lost everything, while the big ones though diversification will still be comparatively well off, probably still also in precious metals. But now the disappeared money will be replaced by Gesell money which has never happened before in history.
This will not allow the money, which by hiding forced the wares to stay unsold on the market slowly to come back to pick up bargains. There arent any. They were bought by Gesell money. The age-old money game does not work any more and money has lost its power and therefor its value. The only money of value left is the stable Gesell money, which was only a safety net of about 2 Dollars worth per person and, of course, the contracts made out in this currency. The few new ones made out in the disappeared money after it had its reform (the former ones had lost their value with hyper-inflation) now lose their value with the money they are made out for.
There is one thing which nobody, but nobody has taken into consideration. It is the fact that with moderate inflation only a small part of the money (cash, legal tender) is in circulation on the market and there is not even a tenth of the amount necessary available, if all the owners of accounts would want their money in cash, which they have a right to ask for.
It is similar as it is with the price of shares in the stock market. A very few being sold decide the paper worth of a hundred times the amount of shares which do not move. They would be worthless, if they move.
Exactly the same applies to money. 5% of moving cash decide the value of all the rest - not only of the 95% of hardly moving other cash but also the value of all other monetary assets.
The funny thing is that if a part of the 5% stops to move on the market, as it does during deflation that people believe that the rest of the money including all monetary assets are now worth more, which they are - but only if they do not move.
This overhang of money does not allow a replacement of the disappeared cash by new one, which would be a simple thing to do. The Fed can easily find some bad risk debtor to sign a promissory note and can issue new cash for it. It is doing this anyway, but has to watch that this money feeds only the stock-market bubble, where everybody is happy when prices go up.
The fat would be in the fire, if it would reach the general market and would push prices up there too. Then all this huge amount of not moving money would start to move with appalling results. hyper-inflation! It is this horrible fact which nobody wants to admit. The Fed can only control a very small amount of cash and has no power at all over the more than 500 times larger amount which is in other hands. Now that we understand this, what has it to do with Gesell money introduced as a local safety net against deflation?
For that we have to look at the attributes of this money. It has demurrage and will therefor stay on the market removing wares from it. This means that the relation between available wares and the other money changes. There will be less wares and therefor higher prices for them. In other words money will lose value and will therefor start moving and - good-by deflation.
What about inflation? Not the inflation of the other money. That has run its course. It cannot be changed any more. It lost its value and with it the value of all its monetary assets as it has done untold times before. What about this new Gesell money? Remember, it stayed on the market because of demurrage but what about its value? No problem. It was guaranteed and proved it by always being exchanged at the proper exchange rate and it will continue to keep its value. It works like a catalyst helping to exchange goods and services whose prices may change but like a catalyst its own value never changes.
Now, of course, we might not have the old money around any more and will have to collect the prices for the cost of living index in Gesell money prices. That is all!4)A simple business proposal The proposal for local Grand Forks money, the Gogo, looks complicated, difficult and unusual only on the first look. In reality it is very simple and every businessman will understand it in a very short time applying only normal business sense to it.
Given the fact that business is slowing down and there seems not to be enough money around self-interest should let everybody make the effort. This local money would increase the available money in the community and because it is local, it would stay in the community and not disappear in all different manners as the national money does.
This is one point. The second point is that this money has a time limit. It has an expire date, so it has to come back to the issuing agency once in a year and can therefore be controlled whereas the national money cannot. The exchange or user fee of 5% would also make it possible for this money to be managed in such a way that it would keep its purchasing value. This is another thing which the national money was not able to do.
The user fee would also keep this money in circulation generating untold sales which is also something the national money cannot be depended on, as is shown by the dismal business volume.
This is actually all somebody needs to understand. This money, given out as a sales gimmick, as a bonus of whatever percent a businessman wants to give (1 to 3% advised) will not, as the Canadian Tire Money does, have only value in one store which prevents its circulation and this is the huge difference. This is not the only way the Gogo will be put into circulation. The friends of the Gogo will do that also to jump-start its use. This money will CIRCULATE and by doing so generate up to a 500 times its value in sales.
It could, of course, be a bit less if a turnover of such a money of more than once a day is not possible. It was in a former experiment but it does not really matter. Even a sale once a week would more than triple the sales our money now allows including even all the sales through credit transfers. This should do for a start.
Some might say that they do not want a money which forces them to buy locally because they can get goods cheaper somewhere else. Such a view is wrong because they do not consider that they have gotten the local money from local people and have earned a profit and now they should return the favor but nobody forces them to do it. They can always exchange the Gogos if they can get something more than 5% cheaper from somebody who doesnt accept Gogos.
The local supplier has only these 5% which he can be more expensive. This isnt much of a force. The convenience of buying locally, the saving of travel costs, better service and guarantee usually amount to more than that. Besides that, the Gogo doesnt replace all the Canadian or US Dollars in circulation only some and therefore every businessman will still get plenty of those to use where he cannot use Gogos.
Should the Gogos really take off and replace a lot of the other money then it doesnt matter either because then they will be accepted by most partners one needs to trade with - even ones farther away.5)Why does the Gogo need a user-fee The Gogo needs the user-fee to stay in circulation as a medium of exchange. It makes it not as suitable as a store of value. For that purpose people can use gold or silver and even the government money if they believe that it will keep its value. Using the medium of exchange as store of value means to remove it from the market as medium of exchange and this brought about the endless boom and bust cycles and wars since the begin of history.
Because the Gogo stays in circulation, it can also be managed in a way that it keeps its value. To have such a standard of value is worth much more than the 5% it will cost the person who happens to have one when it expires. On the average it will have been used during the year it is valid some 500 times. The real cost is therefor negligible for people who use it for what it is meant to be used. For buying and selling. Actually it is the 500th part of 5% for every trade done with a Gogo. It is a joke, if somebody is afraid of this and lets himself be scared off by people who profit by wars and depressions and therefor want them to continue and fight an honest money.
People can also escape the cost by the simple way of lending the money to somebody else. Then he or she will pay the fee.
The simple way the user-fee is applied to the Gogo and the way it is spread over the whole year makes it easy to manage. There will never be any bottlenecks.
Gogos are a local money and while they can move freely during the whole year, once a year they have to come home to be exchanged and that makes them controllable. That is the reason for the user-fee.6)Why lowly Gogos can be kept at a stable value
This is really the question which should be answered without any room for doubt, because it sounds unbelievable that a local money can do, what escapes all other currencies advised by the most revered economic scientists since the time money began. We know that the Gogo will have the purchasing value of the Canadian Dollar of the year 1980 and this value will be shown by its exchange rate.
The agency will buy and sell (subject to the fee) any amount at any time, which, of course, means that everybody else will do it at the same rate. This is simple and not unlike the open market policy which is used by all currency banks.
The question is. Can the agency do it? And why? What gives it the power to do what obviously the National banks cannot do despite their promise to keep the currency stable?
The answer is simple. It is the expire date and the renewal fee of 5%, which the other money does not have.
Gogos will be continuously sold and bought at the prevailing exchange rate so it is not as if large amounts which were sold at a low exchange rate have to be bought back at a high with a huge loss. It will always be small sums where occasional losses are easily covered by the fee. The fee will also prevent the buildup of huge cash-holdings of speculative money and therefor nobody could use disruptive methods of moving huge amounts of money as is done with the other currencies, where 98% are used this way.
Speculation in Gogos will be too costly for speculators and because of the small amount of steadily circulating Gogos every such attempt will be noticed right away. With the money of today this is not possible because of the huge unnoticed hoarded amounts of it and the time-lag involved.
One could compare it with a small group of horses on tight leashes in the hands of the alliance to a lot of free running horses which can be spooked to run in every direction and can easily be stampeded of the National Bank and the government.7)Question for a business owner. Some businessmen in Grand Forks plan to start a local money like the Canadian Tire money. It will be a little bit different because it will be accepted by more than one store and will therefore circulate and generate more business. The more the merrier. To keep it in circulation it will have an expire date as shown on this sample bill and it will have an user fee which will be collected at the time of renewal. It will not hinder circulation, because it is known that such a bill will change hands as much as 500 times a year. The 5% therefore divide up to 0,01% for every trade.
This fee will also make it possible for the alliance of businessmen who issue this money to guarantee its purchasing power, which will be exactly the purchasing power of one Canadian Dollar in the year 1980. It says so on the bill and it will be proven any time by the alliance because they will take them back.
But, of course, the idea is to keep this stable money in circulation and therefore such an exchange will cost the 5%. But one doesnt have to exchange it. There are plenty of businesses which will sell you gladly whatever you want to buy with them.
It will also be accepted in the US. The simple question now is: Are you going to be also one of the businessmen, who will accept these Gogos? It will bring you a lot of new business and you do not need to accept 100% Gogos on every sale. You could go as low as 10% Gogos and 90% normal money, if you have the feeling that you might have a hard time of getting rid of them. It will be up to you and your customers and, of course, your competition. If it sells for 100% Gogos you might have a problem selling for Gogos and Dollars.
You must understand one thing. The Gogos are local and regional money and the will stay around and come back into your store untold times, because they cannot disappear to Toronto or Washington.
All you risk is putting a sign in your window saying: Gogos will be accepted here." Whenever you think, it is not worth it, just take it away. There are some businessmen who give Gogos out as a bonus like Canadian Tire does and this is perfectly all right for somebody who wants to bring them into circulation and at the same time use it as a sales gimmick, like Canadian Tire does. You should only not take them as payment for the same sale. This would not put them in circulation.
The worst that could happen to you, if you have taken more Gogos in as you can use, is, that you have to exchange them at a loss of 5%. But remember, they brought you a trade, where you probably earned a lot more than that.
It is sure that you can see the benefits which the Gogos can bring not only to your business but to the whole area. So do the little part of giving them a try. Once the Gogos are issued the alliance will give you a sign which only says: Gogos accepted here". This is all we ask. What percentage of Gogos you will accept for every trade is up to you.
I explain it once more: Yes it will cost you 5% if you want to exchange them back, but if you only took 50% Gogos in a deal this would only amount to an discount of 2.5%, far less than you have to pay for mastercard. There is also the other side. You can use the Gogos to buy something locally and thereby treat other business owners as you would like them to treat you and keep thereby the Gogos moving locally. Then it would not cost you anything at all.
Let it develop. You are not asked to do much and you are risking nothing but more business.
8)Go Gogo or repeat historyThe first half of the 20th century was marked by two world wars and the great depression. All of them a direct result of the gold standard which causes always a deflation if strictly adhered to. To overcome the dire results of deflation which were most markedly seen during the great depression in the thirties the states have to abandon it every so often. The great depression was only ended by the war as was the one 1912/14 by the first world war.
Wars usually cause inflation. The second half of the century was marked by that. Even in the more stable economies the value of the money declined by about 90%. Many countries experienced a total loss and it is only a question of time until the still more stable currencies will go the same way unless a gold standard is re-installed.
Should that happen history will repeat itself. A depression of worse proportions than the one of the thirties will occur and nobody will realize what the cause is. Rabble raisers will use the mass of unemployed desperate people to come to power and the next war is bound to follow. It could be the worst of wars - civil war. It has happened already in many countries of the world and is still happening.
So far the worst could be prevented by keeping inflation going and having abandoned the gold standard this could be done but it cost many countries dearly which could not hold inflation down to a bearable level. The problem now is that the steady influx of inflation causing new money has brought a huge overhang of Dollars in the whole world and those are an always possible threat of much higher inflation if they return.
The only way out of this vicious circle is the installment of a stable currency without inflation but also without deflation which means without the deflation causing gold standard. A cost of living standard must be used instead.
Simple lowly Gogos are such a currency - so it could be said:
Go Gogo - or die in the next war.
9)Gold standard is a dead duckWhen Milton Friedman called the gold backing of the Dollar the smile of a vanished Cheshire cat he only said the truth but now some people are talking again about some new Bretton Woods with a return to a gold standard. They seem to think, that fixed exchange rates forcibly introduced this way could curb world-wide inflation.
It could be done, but only at a fixed gold price and that would mean tying the economy again on the fate of a single price of a not very useful good. In former times this was often done and always caused a depression, which was then cured by diluting the gold standard and abandoning it in the end, to wage war.
In order even to get back afterwards to a gold standard again, the paper money had to be deflated. When there was too much in circulation it had first to undergo a monetary reform. We are now in a situation where more paper money than ever before in this world is around. I do not want to say in circulation because most of it isnt and sits only around. This money has to be taken into consideration, if a gold standard is to be introduced and that is the problem. It is just too much. A gold standard could only be started after a currency reform, not instead of one.
Of course, people do not understand what hits them as far as currency is involved, but it is hard to imagine that they would stand for a currency cut out of the blue, without getting rid of the government who does this to them. The large amount of paper money now makes it impossible to follow the way of a deflatory reduction of the paper money which was used before. There was never before such a lopsided situation, the result of nearly 60 years of deficit spending" and by compound interest steadily growing debts and the opposing monetary assets.
To jack up the price of gold instead is also out of the question. That could not be contained for the gold price alone. Most other prices would go up also and that must be prevented or the economy collapses in a hyper inflation when the monetary assets start to move.. So far this has been prevented by manipulating the gold price down which is in a sense more like manipulating the Dollar value against other currencies up. This allows the influx of cheap goods into the American market and thereby keeping also inflation down. Without this, paper money would have to be pulled out of the market and this would mean collapse also. This time by deflation.
One can turn it any way, it would always end in economic collapse and therefor the gold standard is a dead duck - never to fly again.
10)Money illusion.Everybody thinks that he knows what money is and how much it is worth. It is used daily to buy all kinds of goods and services and is received as payment for the own goods and services. The prices of the goods decide what the money is worth used to pay for them. So far everything is clear, but there is a not so little snag in this definition. By USING the money and only for the money used the value is decided on the market and now people think that this value also applies to all the money which is not used.
This belief is fostered by a lot of people who do not want to destroy the illusion but the truth is that just as a few sales of shares on the stock market decide not the real value of all the shares which are not moving, only the so called paper value. This value could drop to nothing, if those shares were sold.
Exactly the same is the case with the not moving money in the vaults or savings accounts. Their value would go down to near nothing if large amounts would move. It happened in many countries of the world and the Dollar escaped despite the over-issuing of it so far only because people in the whole world are holding on to their Dollars not moving them. If significant amounts would start moving into the market buying goods people would soon find out that their Dollars were not worth as much as they previously thought. In other words the prices of goods would go up and that could lead to a stampede, where everybody would try to buy something, anything with this money which obviously loses so much on value. This would, of course, speed the demise of the money up still more. It was experienced in many countries.
Now the overhang of idle money is at dangerous levels and the slightest loss of confidence could start an avalanche at any time. Then, sorry to say, the real value of the Dollar will surprise everybody. When this will happen is still the question not that it will happen. It is the same as with the stock market crash. It is bound to come, but who knows when. It could happen next week and it could still be prevented for years.
Exactly the same goes for the Dollar crash. It will happen just as it happened to other currencies. The question is - when? There is not the slightest evidence, that our economists learned something new in the last fifty or even 80 years and the people in Latin America or Africa and other countries went to the same Universities as the European and US. economists and they failed dismally. Ours will fail as well.
We better be ready to help ourselves and there is a way, to do just that. It is the Gogos! The main reason for that is, that Gogos cannot build up large overhangs of dangerously idle money. They are a money on the move and by moving stimulate sales and business. They can therefore be controlled like a boat under power can be controlled and they can be kept at the exact value of the Canadian Dollar of 1980 as promised and guaranteed right on the bill. This means: no inflation for them but also no deflation which can be even more deadly for an economy.
Fact is, we will have to do it ourselves because no government can admit that they steered the currency to the point where it is worthless and that therefor all owners of monetary assets, which they were pushing all the time have nothing but worthless paper in their hands. They will try to keep up the sham as long as possible.Let us hope, that in other countries around the world, they can also help themselves in the way of the Gogos to overcome inflation as well as deflation and , sorry, your money is not worth anything now. Do not blame the Gogos for it.
11)Fine print on the back of the Grand Forks money.
''This bill is guaranteed by the issuing agency to be kept at the exact value of V.80. That is the purchasing value of a Canadian Dollar in the year 1980. It is valid until the expire date and can then be exchanged for one with a new expire date one year later for a renewal charge of 5 %(more or less). The agency will exchange the bill at any time for any available other currency at the appropriate exchange rate minus the renewal charge as long as there is at least 1 month validity left.''
This is all that is needed. The exchange rate to Canadian and American Dollar will be published in the local newspapers and displayed in store windows and wherever necessary in Web sites. What the banks will charge as difference between buying and selling this currency will be determined by the market as it is now with other foreign currencies. Competition will keep the price of this service down. Exchange booths will take the place of the banks if they charge too much and they also will compete with the best rates. Usually the banks will have them as can be seen in Mexican border towns. The other exchanges can have only slightly higher rates for convenience outside of banking hours. There will be very little exchange. The user fee will prevent most.
Whether the stores will display their prices also in Gogos, ist up to them. In the beginning they probably will not, but later on they might prefer to do it, in the US as well as in Canada. The stores now only display the prices in their own currency but everyone in the border area takes the other money and uses the exchange rate. It will be exactly the ame as with a third currency. No problem. Everybody will know how much Canadian or US Dollars the Gogo will be worth.
As for the ability of the issuing agency to keep the value of the Grand Forks money. This is simple. The renewal charge gives it enough leeway. This money will be bought and sold continuously (not necessarily in large amounts because people would rather try not to pay the renewal charge and exchange the money only if they really need to do it and there are not such large amounts of cash in circulation anyway, as we have shown). Therefor only a short time between selling and buying back has to be covered. So even if the Canadian Dollar should lose 50% of its value in a year the 5% renewal charge would cover a whole month if all the Grand Forks money in circulation would be exchanged. This would not be likely. Who would exchange stable money against one losing that much in value? In such a case the agency would have even to try getting rid of their Canadian Dollars by buying durable goods.
Nobody needs to worry about the ability to hold the value of the Grand Forks money. There is more to worry about the value of the Canadian Dollar. :-(.
Now, in case the Canadian Dollar keeps its value, as we all hope, there is no problem at all for the agency. It has the Canadian Dollars ( or American Dollars ) it received for selling the Grand Forks money in the cash-box or in their account and simply use these to buy back any which the people bring in. Every time this is done they make 5% and they would laugh all the way to the bank.
With the spreading of the Gogos there will for a long time alway be more sold or given out as credit than are bought back or are coming back as credit repayments.
( the more or less in the fine print gives the issuing agency the means to reduce the renewal fee if practice shows that this would be necessary to have the Gogos more readily accepted or raise it, if the Gogos would be the target of an attack to destabilize them by selling and buying in larger amounts.)
12)Gogo and Watto.In Japan another alternative money is put into circulation which has some similarities to the Gogo but also a lot of differences. The basic idea is the same. To use some stable means of exchange beside the not stable and often missing money of the National banks. Now to the differences:
The Watto is, as its name suggests tied to the kilo watt hour. This is a very simple way and because it is the price of energy which has many ties to other prices is better than any other standard which uses only one commodity or no standard at all.
The Gogo uses the worth of the Canadian Dollar of 1980 as standard measured by a cost of living index. This might look more difficult but is a much more exact standard of value.
The way to be issued and put into circulation:
The Watto is issued by a member of a barterclub like a promissory note and like one of them circulates later by being indossed and used like this by subsequent users until it comes back to the original issuer to be redeemed. As it could be used without indossing anew in between it might circulate quite often before coming back, but it is doubtful how fast it will circulate. An expire date alone would not help.
The Gogo is issued by the Gogobank and sold or borrowed into circulation not to a limited club, which might have long distances between members, but to the general public, where a lot of businessmen have already put signs into their window that they will accept them. A much faster circulation is thereby assured, because it reaches a real market, not a make believe one.
The exchange rate:
The Watto has no exchange rate as such, only a price. While it could be exchanged for money instead for goods or services this is not intended.
The Gogo has the exchange rate determined by the current difference of the consumer price index to the one of 1980. Exchange is discouraged by the renewal fee of 5%, which will be charged for exchange, even if the expire date is still a year away.
The Watto has at he time being no demurrage charge. The limited circulation does not warrant it. This means that no speed up of circulation can be expected.
The Gogo has the user or renewal fee of 5% which will be charged when expired notes are exchanged. This will work like demurrage and the general acceptance in an existing market consisting of many businesses and their customers will speed up circulation slowed only by the movement of wares and services. The Gogos have to slow down when they have taken the existing wares from the market to wait for new ones to get there and, of course, services take time also. One cannot pay faster for a month services than once a month.13)The features of the Gogo. The Gogo looks different to other money basically only by the table of exchange dates and the guarantee of the same purchasing power as the Canadian Dollar of the past. Exactly of the year 1980.
It has the ghostly Dollar of 1980 watching over its value and the renewal cost on the expire date makes it possible for the Gogobank to keep it by the simple means of buying or selling any amount of them at the appropriate exchange rate, which is tied to the cost of living index which shows the value of the Dollar of today.
At the same time this renewal fee will keep the Gogo in circulation and in the vicinity because it has to come back to the Gogobank once a year for renewal.
What benefits a stable money brings which stays in circulation in the area is explained in other chapters and will be noticed by everybody in a very short time once Gogos are put into circulation.
The Grand Forks Gogo will probably be the first local money with exactly these features in the world.
Value 1980 is considered by some but most want to start pari with their own national money, even when they consider an exchange rate later. Some will use stamp script as demurrage. Some like the Watto of Japan go a still other way. There are as many different approaches as there are clubs or barter groups, but so far none of them have found a really successful way to reach the general market and nobody tried to reach the business owners in this market ahead of time. Nearly all of them try without success to form an alternative market, some even without money, instead of using alternative money in the real market.
. The 500,000 members of the club del Tuerque in Argentine with their Creditos made the mistake of letting them at the value of the Peso and because the Peso is in trouble their Creditos are also. With a stable Credito they could have introduced the demurrage they had planned for last year and that would have spread it and would have speeded up circulation of a stable money like the Gogos will be.14)Where the Gogo can be used. The short answer to this is: wherever it will be accepted. That is in all the stores which display the sign : Gogos accepted here." They can therefore not be transferred out of the area and must benefit it by staying in local circulation. The Gogo area at the beginning probably being spotty but in some cases extending for 100 km. One hour driving time distance might be all that can be be handled from one location.
They cannot be used where only legal tender is accepted because the Gogos are not legal tender.
There is even right at the beginning a large enough base of acceptants and therefore no danger of finding no place to use them. Why the stores will accept Gogos is a basic question which can also be asked for the Dollar. They accept those also not because of the pictures printed on them but because others will accept them and give them goods in exchange for them. Exactly the same is the case with the Gogos.
The store owners have sold goods, hopefully with a profit and will use them to buy goods or services with them now for themselves. This is how trade works and with Gogos it is not any different.
The only difference with the Gogo will be that it will stay in local circulation by the features which are built into it. Those features will also prevent that it will be used for other purposes as buying and selling even locally. It is not suitable for saving. That must be done by other means. The 10,000 Gogos should go, always go, as their name suggests.
They need not run, because the 5% in a year user fee is not really pushing them that fast, it will only prevent them from staying idle for long times.
They will slowly and steadily move goods and services taking up the slack the official money left by leaving the area or staying hidden.
15) The real worth of monetary assets.
Money is worth what can be bought with it. This is such a simple statement, that nobody will give it a second thought. It is a truism. Anybody can prove it for himself by going on the market and buying from the most reasonable seller and that is when his money is worth the most. The give and take on the market not only decides the worth of goods, their prices but also the worth of money that is how many goods one can get for it.
What nearly nobody including most economists understands, is, that it only decides the worth of the money on the market at that moment in time. It is clear that if more money from the monetary assets would reach the market, money would lose some of its worth and would become completely worthless if all the monetary assets would be used this way.
We are not talking about inflation with over-issuing of money now and assume a fixed amount of money and we also assume a fairly constant supply of goods on the market not to murk up the basic conclusions.
What happens on the market when some people do not use their income of money to spend it but save it?
We are again talking about the saved money which is not used by others. We are talking about the money which is used as store of value ( in former times as gold coins). It is missing on the market and some goods stay unsold and slowly rot away losing on the average 3% of value in a year. So after a year 3% of the goods which gave value to the money are gone while in our current system the money in the monetary assets increased by the interest. There is after a year already a spread of 6% assuming 3% interest.
Continue this for a few years and most of the real value of the monetary assets rests on thin air and the day of reckoning will come once again and when it was pushed by increasing the money supply into the future it will be the worse for it. The funny thing is, that nobody realizes this because of the glut of unsold goods on the market. It looks as if there are too many goods and not enough money.
In reality it is just the opposite, only the money never reaches the people who would need the goods and would buy them. It is in the hands of people who do not want to buy something at the present time and who are only looking for interest bearing assets. As long as they can find them some small parts of the money trickle back to the market and the life of illusion can continue - the illusion that the monetary assets have real value.
That this illusion has ended in many countries again and again doesnt seem to give second thoughts to the economists. There must be something wrong in this system where in every generation one monetary collapse at least happens. Could it be the fact that we try to match aging goods with seemingly ageless eternal money when we trade with them on the market?
Is money really eternal when it dies every generation when it cannot be matched any more? When will that happen to the Dollar? What made it so longliving? Could it be the spoilage of the currencies of the rest of the world? Was it feeding on them like a vulture? It seems like it, when one looks at the interest payments of the third world countries, where an original loan despite paying back within a few years twice the amount (including interrest) they now still owe twice as much as the original loan was.
The Question what the Gogo has to do with the above comes to mind and why this is on the Gogo page. It has something to do with the Gogo. We know that the Gogo bills will all stay on the market and one doesnt have to worry that there will be a disruptive overhang of them as there is with the money of today, which is not on the market. That is one point and there is another long term one. Nobody will pay interest for a loan of Gogos, when the one with surplus Gogos he wants to save is known to have to pay the renewal fee every year. He will have to settle for repayment without interest and he will do so, because the Gogo he gets after years will have kept its value and that is worth more than interest. Here goes the second part of the spread we showed above. There is no missing money on the market and therefore no surplus goods which lose value and there is no interest to increase the monetary assets nominally.
The field between goods and money is now level. The productive power of mankind can now for the first time in history push the interest rate down to Zero without interrupting the economy by deflation.
Lowly Gogo will not do it alone and one small area in the whole world will not bring the interest rate down, but for here and now it will be a medium of exchange which knows neither inflation nor deflation. It will always be as much worth as the Canadian Dollar was worth 1980. Kept up long enough the world will notice. It can be kept up because the small user fee of 5% a year enables the Gogo alliance to hold the appropriate exchange rate for ever.
Gogoland will be a heaven of stability with steady trade and work for all. More we cannot expect from lowly Gogo.
16)Additional benefits of the Gogos. The benefits of the Gogos for the local economy are already known by all participants but there are more. Because of the user fee which is applied every year the Gogos stay in circulation and because this user fee will be charged ahead of time when exchanged back nobody can escape it.
This gives the Gogobank the means to hold the Gogos at exactly the value of the Dollar of 1980. This was made clear to everybody and all the businessmen who agreed to accept the Gogos understood this all and saw the benefits for themselves and the community which will arise from introducing the Gogos.
But there are much more of them in the long run. For one there will be no unused Gogos and therefore no dangerous overhang of them can develop and nobody in his right mind would pay interest for Gogos somebody would like to lend him, when he knows that they will cost the owner money to hold them back. They will still be lent out from people, who have at the time no other use for them and want to save them for later. The only thing will be that they would not get interest for that or very little, but for that they will have the security to get something of the same value, the value of the Dollar of 1980, back. This is a benefit which many people in the rest of the world would have appreciated. Maybe soon also in North-America.
Without interest it would make no sense accumulating vast amounts of monetary assets and without interest earnings it would not be easy to do. People would save by other means, like having beautiful homes with other stores like good wines in a cold-room. The accumulation of monetary assets as well as other assets only being possible by work, it is only a question of time until people will realize that it is senseless to work until death and will take life more leisurely. This will not only be a benefit to them but also to the environment.
Without unwanted unemployment and with prices of goods not including interest anymore (which is, including the interest the government has to pay, and which it has to collect as taxes, about half the price on the average) everybody can be sure to make a good living by working very little time and that is something we cannot even imagine what that will do to the life of people. One thing is sure although. When it will be so easy to make money by working the people, who are able to work, will be generous with the few, who are unable. This will be another benefit of the Gogos. They will be a money of generosity.
These are only a few of the added benefits of the Gogos not the least one that there would be no more wars, which are fostered by depression and unemployment.
This might be the greatest benefit of them all and let us hope that the words of this Mitar Tarabich, a Serbian seer will come true:
....those who will run and hide in the mountains with three crosses will find shelter and will be saved to live after in abundance, happiness and love, because there will be no more wars....17)Are Gogos additional Money? This question can be answered with a no. They are not additional money because the Dollars which were paid for them stay instead as backing on the books of the Gogobank. It is exactly the same as with the gold or foreign currency as backing for the Dollar.
Even if some are given out for promissory notes this is only a temporary addition, just as it is with Dollars given out on such a basis by the National Bank. They have to be returned in usually three months time.
The Gogobank will always have balanced books and it will say so in its bylaws It will also be open to audit at any time to prove this.
There must always be enough assets to balance the Gogos in circulation.
It might have double the time frame for the few promissory notes it might take in but it will not allow a prolongation of those as the National Banks do. It would not be prudent to do otherwise and would lead to over-issue of Gogos.
This is something the Gogobank cannot allow because of its guarantee of keeping the Gogo at the same value as the Canadian Dollar of 1980. In fact, the Gogos will be held at a much tighter leash than the Dollar is, because of this.
The Gogobank must be very prudent because nobody will pail it out if it cannot prove day for day that it is able to keep the Gogo exactly at the same value as the Canadian Dollar was 1980. That is what it guarantees right on the Gogo bill and it has to prove it by buying any amount of them back at any time.
Therefore it cannot overdo it with giving out Gogos for promissory notes either. This will be only a very small part of its operation. It does not need to do it either because of the mall amount needed. It is different with normal money where much more is needed because so much is used as store of value.18)Uses of the Gogo. When Gogos are taken in by a businessman there are a few restrictions to their use compared to Dollars. He cannot use them everywhere and therefore might have to exchange some of them for Dollars. We know that this will cost him 5% so it is interesting to find out what else he can do with the Gogos to avoid this cost.
First and foremost he can buy something with them locally from everybody who accepts them and this is the main reason Gogos were introduced in the first place - to keep them in circulation within the area and providing employment and additional sales.
Buying locally means, of course, also buying local services like paying employees or tradesmen with them. This will provide work and employment locally.
Next use is investing the Gogos locally. This is also a huge benefit to the community. It can be done directly or by putting the Gogos into a Gogo account and then the bank can do it instead. It will also face the same restrictions and will be forced to invest locally.
There is besides paying taxes and postal services only on other thing the businessman cannot do and that is - paying his suppliers from far away.
Here is the fact that the Gogos are after all only a supplementary and complementary medium of exchange. A businessman will still take in Dollars too. He will simply use those for these purposes. In case that his Gogo income is so much and his Dollar income too small - only then he will have to exchange some. It will not break him to do this because the Gogos brought him more profit than the little bit the 5% cost of exchange for small amounts will be.
Should a business person find out that he will get more Gogos as he can use, it is a simple matter. He or she can exchange the surplus and it will probably only be a very small part of earnings of the additional sales generated by the Gogos or he can tell his customers that he will only accept part of the payment in Gogos taking the chance, that a Gogo customer might go to his competition. A Gogo customer, is, of course, being somebody who has Gogos, which he had earned before.
As said before - nobody will be forced to accept Gogos - no businessman and no tradesman and no employee - but it will be wise to accept t least part payment in Gogos, depending what the competition is doing. The Gogos will cost him only 5% if he wants to exchange them right away. He has until the expire date time enough to use them locally. There is no rush only the gentle remainder of the expire date. The Gogos will not disappear. They will stay around in the area and nobody will hoard them even when he can use them as a store of value until their next use. For most he even has a year time for it in the beginning and only later the time will shrink to half a year on the average.
The Gogos are designed for a gentle transition - unlike the stamp script of old. Every worker will accept them as payment, when he sees that the stores accept them and every store owner will accept them, when he sees that other store owners, tradesmen and workers accept them for their wares and services.
The Gogos are a medium of exchange like the Dollars but they are a better medium of exchange because they are a worse store of value for the long term because of the user fee. To offset that drawback they have a stable purchasing value and it is a matter of preference for everybody. Somebody prefers an unstable Dollar - fine - he or she can continue to use them as long as they like. Somebody wants a stable medium of exchange and is willing to pay an user fee of 5% a year for it, it should be fine too. They can even use both, as long as they want.
19)Friends of Gogo. In order to facilitate the continuos acceptance of Gogos and speed up the original introduction as well as the replacement of Gogos which are exchanged back a group is forming which will buy Gogos for no other reason than putting them in circulation. It will cost them nothing because they will use them to buy the same amount of goods they would have used the Dollars for.
The only reason they are doing this, is, that they know what benefits the Gogos will bring to the community. Quite a few members of this group are among the business owners, who agreed to accept Gogos. They are going to buy Gogos to use them and will so jump-start their use.
It is a completely informal group without a membership fee and most members so far do not even know each other.
It is in the future whether a more formal club will be formed with social functions and talks about the background of the Gogos and their future possibilities.
Everybody knows that the more Gogos are in circulation the more are likely to come back to him. So, while in the beginning mostly articles for daily use will be bought with Gogos and for larger articles only part of the purchase price will be paid in Gogos, later even sales on credit might be done on a Gogo base. The seller will know that the ghost of the Dollar of 1980 stands guard over the value of the Gogo and will therefore prefer to use them.
It will be a milestone of sorts, when the first house will be sold on that basis.
Let us hope that the members of the friends of Gogo will not be called after the first letters of that name F O G: Fogeys.20)The Gogobank. The Gogobank is not really a bank. Legally it is just a public service society formed with the sole purpose to provide a local medium of exchange when the governments money does not do this part of its function well.
Its statutes are clear forward and the book-keeping standard. The balance sheet will show the issued Gogos as liability of the society on one side of the ledger and cash, foreign reserves in form of Canadian and US Dollars and accepted interest-free repayment notes for loans on the other side. There will also later some reserve fund be there if there is a surplus in the operating costs. The society can operate in the red up to a limit of 1000 Gogos, which will be covered by the personal guarantee of its officers. In the unlikely case this sum is exceeded the society will ask for donations and they will be forthcoming by the people who will see how beneficial to the economy this local medium of exchange is.
In the beginning there will be a 10.000 Gogo limit until experience will show if more are needed and demanded by the market. There is not expected that more are necessary unless the area of use expands a lot. The Gogo is not replacing the Canadian Dollar - it is just supplementing it, therefore not more of them are needed.
The psychic part of the Gogobank will only be one or more safety boxes at credit institutes which handle Gogo accounts or one or more strongboxes in the stores of society members.
The Gogobank will never show any profit, because the minimal surplus which could occur with the minimal income from the user fee, which is even when the full amount of 10.000 Gogos is in circuation only 500 Gogos a year, must be put into the reserve fund.
It does not need any profit because it is not really a bank, but a public service provider for a minimal fee.
So it is clear that just as the Gogos are not real money (legal tender) the Gogobank is not a real bank. As a point aside, the Gogos themselves are not valid the way they come from the printer numbered and with safety features. They need to have a validity stamp from the Gogobank and an expire date indicated by two punched holes on the expire date table on the note.21)The banks, Gogo accounts and exchange. While the banks are not really necessary for the Gogos because with a fast moving local money transfers are not such a big deal, it would be in their interest to get involved. They would not want to leave the business to the pawn-brokers.
The features of the Gogo, of course, will need some re-thinking by the banks. There is no problem to carry Gogo accounts. It is the same as carrying a foreign money account. The exchange rate is just the same clear cut deal. Only the user fee of the Gogo will have to be considered.
Every owner of a Gogo account will know that a bank will not pay his user fee of 5% a year or 0.416 a month and will not squawk if the bank charges it to him for a daily account, even knowing that they might lend some of it out. This is their legitimate income. He will, of course, never have a lot of money in such accounts unless the banks will charge less than the full user fee.
They might do that when a minimum balance is kept and they can get away with holding very little cash themselves. Some guesses are that they will charge as little as half the user fee. The free market and competition and the law of supply and demand will decide, as they always do in a free market without monopoly power.
If somebody puts it in a term deposit, this is different and here the bank has no reason to charge him anything. They can lend out this money and can charge whatever interest the market allows. With a money like the Gogo without inflation risk 1% should be enough.
The banks get their income from the difference in the interest rate they have to pay and the one they can charge and that is the same with the Gogos.
Now to the business of exchange. There is first the exchange between Gogos and Dollars. This will not amount to very much because the yearly user fee will be applied then right away to discourage such exchanges and if a commercial bank is doing such exchanges the Gogo Society will have to allow a percentage of this fee for handling to the bank.
The same will apply to the exchange on the expire dates. The banks will not have to do it for free, but they will also not be able to charge an arm and a leg for this service or the stores of the members of the society will do it themselves. The amount of Gogos will be very limited and with the expire dates spread out over the year it will be so little that everybody will be amazed. It might be as few as 500 bills a month here in the valley.
It is not the amount of Gogos as much as their faster turnover during a year, which makes the difference. There will be no idle Gogos but the only time they will cause additional work is once a year, when they must be exchanged. Being only a complementary medium of exchange an amount of 10,000 Gogos which means around 5000 bills at the most will circulate in the sunshine valley and surrounding areas as far as 100 km away, but there will not be very many far out in the beginning.
This means that only around 500 bills need to be exchanged every month. This can be done by a single teller in half a day. Or, if the banks do not want to be bothered, any designated store of the alliance can do it also and will gladly do it. Besides the percentage of the user fee it gets, it will see people with Gogos come into the store and some might buy something at the last moment before paying the user fee. It might be prudent for the banks not to tempt them by refusing to do this service.
Fact is that the alliance (or society) will have a bylaw to limit the amount of Gogos issued to that sum for the first year until an extension of the Gogo area might create a larger demand for Gogos.
Considering the small amount of Gogos the actual physical Gogobank could be nothing more than a safety-box at a bank or, again, a strongbox at a member store.22)The ways to put Gogos into circulation There are a few ways to put Gogos into circulation as there are a few different ways they are backed as there are with any money.
People will buy them outright and the purchase price in Dollars is also the backing in the coffers of the issuer.
The people who bought them will automatically put them into circulation by buying something with them.
Another way is the one that people get them as interest free credit. Here again the backing is in the re-payment obligation of the debtor and his securities. Here also the Gogos will get into circulation because nobody would borrow Gogos unless he is going to spend them. It might not cost him any interest, but in the last two months of his credit it would cost him the renewal fee for his 10% payment. While this is not much, only 1% of the original sum, why should anybody pay this for something he doesnt intend to use? He will get no interest for them and eventually he will have to pay the user fee. The Gogobank will also ask for what purpose larger credits are asked for to prevent abuse and might in such a case call back Gogos ahead of the expire date with the simple notification: Abuse by hoarding of Gogos was noticed, therefore notes with expire dates XXX will be called back for exchange!" As simple as that. Or: Hoarding of Gogos was noticed therefore the renewal fee will temporarily be 8% instead of 5%".
Another way to get the Gogos into circulation would be to give them out as a sales gimmick like Canadian Tire does with its money. Here it would not matter whether a businessman bought or borrowed the Gogos used for this purpose. It would also not matter if a businessman finds out that he borrowed or bought too many Gogos because he had taken in more than he expected.. He will find a use for them as everybody finds a use for money. In the worst case, he can always exchange them back.
There will be some people who will buy or borrow Gogos for the sole purpose to get them into circulation because they realize how good the Gogos will be for the local economy. Who knows which organizations might get involved with that. Maybe even the city. It does not really matter and one thing is the strength of the Gogo. Because of the fee of 5% it is bound to stay in circulation in its majority and in the area.
In a sense the Gogo is also backed by the merchandise of all the businesses which are willing to accept them as payment. It doesnt matter how fast the Gogo will come into circulation but everyone that comes would be fully backed. and the books of the issuing Gogobank" would always be balanced and above board. For the liability of Gogos in circulation there will always be opposing assets. The faster moving Gogos will only replace slower moving Dollars and they will be just as idle as before sitting as backing for the Gogos in the accounts of the Gogobank.
Let us hope that the Gogo will go into circulation fast, but even this does not really matter. It will find its own speed of development. There is no rush as long as the Canadian Dollar is still here and worth something. The Gogos are not going to replace all Dollars, only a very few idle ones. The planers of the Gogobank alliance will not exceed 10,000 Gogos, unless they unexpectedly will spread much farther than considered. The Gogos will be something like a complementary medium of exchange, which can be used instead of the missing Dollar for some purposes - not for all of them.23)The real costs of the Gogo. We know that the Gogo has an user fee of 5% a year and that they are attached to every Gogo bill and that the temporary owner of one at the individual expire date has to pay it.
We must also consider one year and the amount of temporary owners of a bill to find out what the costs are for each of them. It is clear that an owner which has the sole possession of a bill for a year has to pay the full costs of 5% alone.
If the ownwership during the year is shared with a second owner (assuming equal times) the costs are also shared even if one of the owners (the last one) has to pay the full costs on a single bill. There are, after all, many bills and therefore everybody gets his turn to pay and will have free use of other bills during other times. Two temporary owners would also mean half the cost.
Now, even the only partually moving money of today moves up to 20 times a year therefore the costs for a user would be 1/20 of 5%, which is 0.25% for each trade.
Money with an user fee moves much more often throughout the year. To move once a day would be no excessive speed and even 500 or 1000 times a year would be possible, but let us stay for the time being with once a week.
The costs per trade would then be 0.1%. Then go to 3 times a week. The costs would be 0.033%. This is a cost it is sure that a businessman can live with and it is a good guess that such a speed will be reached with the Gogos. Twice that speed was reached in a former experiment with a similar kind of money. In our case with 500 trades it would be 0.01% and with 1000, of course, 0.005%.
To worry about the costs of the Gogos, is , as we see on this example, kind of silly, dont you think?
When Jesus talked about the costs of the kingdom of heaven on earth, he said something which should give you pause:
What did Jesus say (Matthew 11:28)?:
"Come to me, all of you who are tired from carrying heavy loads, and I will give you rest. Take my yoke and I put it on you, and learn from me, because I am gentle and humble in spirit; and you will find rest. For the yoke I will give you is easy, and the load I will put on you is light".
Indeed, the load will be very light.24)The hidden side of the Gogo. The Gogo has a hidden side. We know that is keeps its worth because the Gogobank, whether run by an alliance or a society will keep it so by buying and selling exactly at the value of the Canadian Dollar of the year 1980. The Gogo therefore knows no inflation. It is honest measure and what that means, everybody will experience in time and in a short while this will not be only an intellectual knowledge but a gut-feeling for everybody. The will realize that the changing exchange rates do not mean that the Gogo changes its value but the Dollar.
Not the Gogo becomes worth more - no, the Dollar becomes worth less. But the other side is, that the Gogo does not become worth more either and this has some far reaching consequences. You do not have to pay more back, if you borrow some just as you cannot pay back less either. The Gogo is honest measure.
It knows no inflation but also - and this is much more important - it also knows no deflation and therefore no depression and no unemployment and none of the results of them - civil and international economic warfare, which often ends in real war.
Because of the user fee, nobody will pay interest for the Gogo and when you think that nobody will lend out Gogos then, you forgot the user fee. Someone who has spare Gogos he doesnt want to use or invest himself cannot just hold them back. It would cost him money to do so. Therefore he will gladly and generously lend his money to anybody who is a good risk. Even the worst skinflint will do so.
You must know, that we make a medium and form it to our liking, but the medium also exerts its influence on us. When we change the medium, it will also change us and the Gogos will change us into generous and caring people.
The money we had so far forever made us into what we are. People who want to live by the labor of others collecting interest. They will try to get more and more and the compound interest will aid them to do it. This money makes it possible and, of course, people use it in this way and if they do not belong to the few, who have enough money, they are trying to get enough to join their ranks. One cannot blame them and one cannot change them before this money isnt changed. Then they will change on their own and you would not recognize them any more. This money is dishonest and of changing value and therefore it makes us dishonest too. Honest money will make us honest.
Maybe we should have called the Gogos not Gogos, money on the go, but Pechas, People-changers.
This is the hidden side of the Gogos. They will change the people and by that change the world. It is such a simple thing. Let the people use everything else as a store of value but the medium of exchange, because it is impossible that money can be both at the same time. They can use gold or silver as store of value but not, when they want to use them as a medium of exchange at the same time. This doesnt work. It never worked.
Understand! Everything else can be used as store of value but the Gogos. There is no law against using them as such also and they can be used as store of value for a short time without any problems - only long term use will be costly. If somebody wants to save stable Gogos he can put them into a bank account where the bank will give the use including the user fee to someone else. He can claim his Gogos later, when he needs them and they will be there being worth just as much as when he put them in, but they would not have grown nominally more by interest through the labor of others.
We say nominally because in real terms the money of today only gets worth more for a few during a depression - balances out between collected interest and loss through inflation at other times - and collapses every generation to become worthless in all countries of the world.
The only exception, the US Dollar did so only by robbing the rest of the world so far, but will collapse also some time in the future. Maybe not in a distant future.25) Why 1980? Question: Why was the year 1980 chosen? I understand that a year in the past is set as the base year of a Consumer Price Index, which is then used to measure the value of the Gogo and I can live with some inaccuracy because this is still much better than the loss in value as the Canadian Dollar had for the time in question since 1980 - 55%.
But why 1980?
Answer: There were a few reasons to choose 1980. For one it had to be a year in the past which is not too far removed and for sure one past the time of the gold standard where exchange rates were fixed without regard for the inner value of a currency. Before 1971 was therefore out of the question. Up to 1980 from there was the precious metal speculation, which reached its climax 1980 and showed that the price of gold or silver has little to do with the value of a currency, but during that time there was still some hangovers from before.
Why not a later date was chosen, is another matter and this has to do with the currency speculations since then which falsify all exchange rates between currencies. Since the Gogo is in fact also a currency with an exchange rate to other currencies it was therefore advisable to choose a year where such currency speculations were not as prevalent as the are now. Still a later date could have been chosen but with the future in mind and the fact that the Gogo will be a third currency in a border area where already two currencies are routinely used and where the parity of purchasing power had drifted apart from the official exchange rate and might drift apart some more it was deemed better to use a some time removed standard of value for the Gogo.
The Canadian Dollar of 1980 was therefore elected. The Gogo is tied to the Canadian Dollar, but not to a Dollar of changing value. It is tied to the unchangeable Dollar of 1980.
Remark: I hate local money! It forces me to buy locally but I buy most of my stuff out of town, where I get it much cheaper. Keep your local Gogo money. I do not want it.
This remark came from somebody, whose income came from a pension and was paid to him in Canadian Dollars and therefore his attitude was understandable. It is different for somebody who earns or can earn Gogos by selling goods or services locally. He or she now already has Gogos and would not have taken them in payment if there were no profit in it. He or she is not forced to buy something locally with them if everything here is more than 5% too expensive. It is easy to exchange the Gogos then and go out of town to buy the cheaper goods somewhere else.
But in order to have sold something he must have been able to charge competitive prices and the same goes for many other businesses and service providers in town.
There is no doubt about it. He or she will find something to buy or have somebody willing to provide a service at competitive prices for the Gogos. They will stay in town and will circulate among people who are willing and able to produce at competitive prices. They will even give former unemployed a chance to produce and the businessmen taking them in will use them for that locally as long as this is the case and only exchange them back into Dollars if they absolutely have to do it.
This is, after all, the reason for the Gogos. We would not need them, if the Canadian Dollar would stay here and circulate.
There will also still be a lot of Dollars from all the people like our Gogo hater and hopefully he spends at least some of them in town. All the people who get paid by the government will have not much use for Gogos. There is nothing wrong with it.
Only the unemployed should exchange at least some of their dole into Gogos. It makes no difference for them. They can buy with the Gogos, what they would have bought with the Dollars, but the Gogos will stay in town and might come back to them as wages, while the Dollars will leave town.26) The difference between Gogos and stamp script. The difference between Gogos and stamp script as Irving Fisher proposed are a horrendous difference in the cost of demurrage 104% a year with stamp script and 5% a year with Gogos. The technical way of application would not matter so much.
The second difference is that stamp script never had a standard of value separate from the Dollar. Both of this facts show, that stamp script would never be accepted from businessmen unless forced on them. Stamp scripts with anything near such a demurrage are therefore out of the question.
There was, of course, a stamp script with only" 12% in Woergl, which worked quite well for over a year. But this also had no separate standard of value against the Austrian Schilling, which would have caused its downfall even if it would not have been stopped by the government. It worked only because it had not to compete with the official money. The official money had left the market, as it always does in a depression.
Stamp script like this works only in a depression. Stamp script with a demurrage of 6% a year might work now, but to have any durability, it would also need a standard of value and therefore an exchange rate to the official money. Maybe some other local currencies will try that route.
The basic necessities of alternative medium of exchange to be accepted are: the lowest user fee which will still keep it in circulation in normal times and that should be less than 6% and a standard of value measured by an representative index and therefore an exchange rate to any other currency - even the national one.
More is not necessary and how the user fee is applied is a technical matter. The Gogo does it in the simplest known way. It will therefore probably the method of choice for all alternative complementary currencies as will be the value 1980, measured by the Consumer Price Index. It is the most logical way. A single price of a single good as standard, be it gold, silver, oil, rice, rye or wheat or Kilowatts only looks simpler on the surface.27) Gogos and Terra. Most of this is already implied on the Terra-page, but there should be a more elaborate difference worked out between the two alternative currencies.
Terra is, so far, a currency without cash. It has, so far, a somewhat indistinct standard of value, but it has a user fee or demurrage, so there are similarities to the Gogo.
There are also huge differences. Not something, that would make them not compatible, but something that should be seen. Terra is a stable currency and can be used in dealings among international companies, but it is not an every day medium of exchange without cash. It could supply a reasonable standard of value, but so can V 80.
The value of any currency is decided on the marketplace through the law of supply and demand and the question remains, how the value of Terra will be decided without going on the general market via generally accepted cash. It might work itself out, no question, because there is a large enough market among international companies, but it is doubtful that it can happen without cash on the general market.
We should be all for Terra. It is a neat idea. It might bring a breakthrough for a currency with an user fee, but as long as the general public is not included, it will bring no real change. It might be possible that the value standard of Terra will be adopted by other national or international currencies which have cash or Terra might get cash at some level. In this case the user fee of Terra must also be adopted for cash because one cannot have two parts of a currency different. Then, of course, Terra will be world-wide Gogo.
This is about all that can be said about Terra and the Gogos. They are brothers, but on a very different level. Some might think that the level of Terra is the higher one and lowly Gogo will not care....28) Gogos and LETS! In a sense one cannot really compare. LETS is a system of money-less organization of trade among people outside of the normal market among a very limited amount of people while Gogos are an alternative money in competition on the general market with other mediums of payment - the money of the state and account transfers and other money surrogates.
The organization of trade with the help of mutual credit is not money! It also depends on a value standard which usually existing money has to give. It will therefore always only be of limited use and only amounts to anything when money doesnt do its proper work.
Such is the case during a time of stagflation and therefore the LETS system finds many people who want to try it, usually with dismal results because 20 or 50 or even thousands of people are not forming an open market. The people in these groups only seem to see the negative side of our money but not that it has also a very positive side of making trade possible among many people in practically unlimited competition between sellers of goods and services to provide them at the lowest possible price.
They do not know it, but in a sense the LETS people want to get rid of money altogether. That it is possible to reform the money so that it does its work properly while doing away with the bad attributes as it is done by the Gogos they probably have to see with their own eyes first. Until then they will form groups of people trading among themselves goods and services in narrow markets which are not competitive on the open market.
There is nothing wrong with LETS and it will give some people with skills, which nobody on the open market has any use for a purpose in life and maybe some captive customers. To expect some general change from LETS is a dream. General trade without a real medium of exchange is not possible and LETS has no such medium of exchange.
It is the money which has to be changed, not the market. LETS brings nothing, what credit and cash-less transfers do not now bring. It is trying to do it without interest, which is commendable, but it will not work. There is no way that an honest price for different goods and services could be found. This can only be done by wheeling and dealing on an open market with a medium of exchange which also has mass and substance - even if it is only paper. LETS would in the end need a big brother" to decide how much they are worth.
A market without money can only be a market where only surplus goods of primitive self-sufficient people are bartered. Nobody could produce wares for sale, if there is nothing to sell them for.
To say it in short: We cannot do away with money - but we surely can improve it.29) Gogos and other currencies. There is actually only one difference between the Gogo and other currencies. The Gogo has a stable purchasing power which other currencies have not. Stable means stable in both ways. It doesnt become worth less as in inflation but it doesnt become worth more as in deflation. The Gogo is the cash part and also the unit of the Gogo currency as a Dollar bill is the cash part and the unit of the Dollar currency. Both are the basis of their currency and all monetary assets are figured in their respective value.
The question why the Gogo can have a guaranteed stable purchasing value and the other currencies cannot is answered by the user fee of the Gogo. It prevents its use as a preferred medium to store value and thereby keeps it in steady circulation as medium of exchange and payment. The issuing agency who is guaranteeing the value cannot over-issue Gogos or it could not fulfill this promise. It can under-issue the Gogo as long as there is a second currency in circulation and therefore only as many Gogos will be in circulation as people are using to buy goods and services. Not more, but also not less.
After a while people will use Gogo denomination for most deals with a longer time frame because of its stable value, but that might take some time. In the beginning they will use Gogos because they know that the Gogos will stay around and in circulation in the area with the chance that they also will come back to them.
They know that the Gogos are not legal tender but they also know that they are convertible and can be exchanged for legal tender, which the Dollar is, at any time when legal tender is called for. They will only do it if they have run out of Dollars because of the fee. Therefore most Gogos which got into circulation will stay there and will generate more trade.30) Statutes of the Gogobank society. These are the proposed statutes of the Gogobank, which explain the purpose of the bank.
1) The Gogobank of Grand Forks is formed for the sole purpose to supply the town of Grand Forks and the surrounding area with a stable medium of exchange.
2) This stable medium of exchange, called Gogo, will have some features which will keep it in local circulation. It is a user fee of 5% applied when the Gogos, which have an expire date will be exchanged for new Gogos.
3) Only a limited amount of Gogos will be sold and the money received for them must be kept as a backing for the Gogos in an account at a commercial bank or as cash at the Gogobank office to be used for buying back Gogos.
4) The limit for the first year of operation is set at 10,000 Gogos which means that the total user fee for a whole year cannot exceed 500 Gogos.
An exemption to this limit can only be made if the area where the Gogo will be used is expanded.
5) The stability of the Gogo will be guaranteed by the Gogobank society and the Gogo will be held at the value of the Canadian Dollar of the year 1980. It must therefore have an exchange rate, which will be determined by the official Consumer Price Index using 1980 as base year. The society will publish this exchange rate at least monthly and the previous exchange rate will be used until a new one is published.
6) The society is only responsible for the value of the issued Gogos. (10,000 at the most in the first year) Any deals or debts which might use the Gogo as a base are the sole responsibility of the parties involved in such deals.
7) The Gogobank will buy back any amount of Gogos, subject to the user fee of 5%, which will be applied at this moment, as long as there is at least one month validity left on the Gogo bill.
31) Prosumers, the modern slaves.In our society where everybody produces something which has very little worth and usefulness for him and therefore must sell it and then must buy the products of others as consumer. This simple fact is expressed in the word prosumer. Everybody is (pro)ducer and con(sumer) at different times and there is not a consumer who is or was not a producer before. There is only the market and money between the two aspects of a person and here is where the slavery takes place.
The prosumer gets much less for his goods or services than he has to pay for the goods and services of others. The prices contain a lot of costs like interest, taxes and all kind of other cost which are collected in the price. How much that is can easily be found out and it is much more than the 10% tithe of old.
Let us use the example of two producers with about the same value of their skills. An electrician and a plumber. Normally a days labor of one would be worth the same as a days labor of the other and they can and will trade one to one, if the can do it without going to the market.
Now we look what happens then when they do. Each of them sells his labor on the market and buys the labor of the other on the market and a horrible thing happens. What was an even exchange turns into a nightmare, because now each of them must exchange 7 to 8 hours of his labor for one of the other man. Each price is burdened by at least six times as much added costs - mostly unnecessary costs which could be reduced or as in our example when the two deal directly with each other avoided completely.
Once people notice that they are cheated out of about 85% of the value of their labor they might start looking for ways to reduce or avoid these costs and get rid of the people who bring them about. There are such ways.
Why is this short piece on the Gogo page? It is simple! The Gogo is one of the ways of reducing unnecessary costs and will bring higher returns for labor and less for the black- mailers who stand between the two honest producers who only want to exchange their product in an honest way.
The reason you do not know this and probably will not believe it, is, that from Kindergarten on you were brainwashed by the black-mailers in power and somebody, who is brainwashed never knows it himself. It was done so since the beginning of time and when 2000 years ago somebody turned over the tables of the black-mailing money-lenders, they nailed him on a cross. The churches which pretend to follow his teachings are not doing it at all. They turned into money-lenders themselves and in each country they bless the weapons which are used to uphold their power.
Everybody tells you that people must change before peace on earth can become reality and nobody tells you that it is possible to break the power of money which rules the world today and makes wars possible and even unavoidable.
Money freed man from the dependence and serfdom to rulers only to put him under another kind of serfdom. The one of compound interest. Even this could be tolerated if money would not go on strike if its interest demands of at least 3% are not met. Striking money then means depression and that leads to war.
Now take a careful look at the Gogo and you will see that the power to strike is taken away from it. That is the whole secret. Gogos are the money of uninterrupted trade. Gogos are the money of peace!
32) Gogos hidden power.Nobody seems to take any note of the fact that our Dollar moves on the average only 15 times during one year. It is lazy and doesnt fulfill its role as medium of exchange very well, but nobody realizes that, because it was always so.
The Gogo is a different kind of animal. The user fee makes it run faster even if it is only applied once a year. See, in practice there are always a mix of Gogos used with as many as 12 different expire dates and nobody will go to the trouble of sorting them out with exemption of pulling out the expired ones. Nobody on the other hand will keep the mix around for a longer time when every month some of the notes will expire. He will use them for what the Gogos were created - for trade.
Some will be used a few times during a day, some will be kept in the wallet for a month but an average speed of turnover was reached with a similar money of 500 times a year. Only time will tell how fast the Gogos will move but even one move every week will mean that they will move 3 ½ times faster than the Dollar.
Every movement means that goods or services were also moved. A movement of only once a week is a ridiculously low estimate and an average movement of once a day would be much more realistic.
That would mean that the small sum of 10,000 Gogos (today worth around 22,000 Dollars) would move over 8 Million Dollars worth of merchandise and services during a year.
That much additional business in the valley - that is the hidden power of the lowly 10,000 Gogos. Every Gogo put into circulation would mean an extra income for every inhabitant of the valley. 10,000 Gogos mean an extra 365 Gogos ( 800 Dollars worth) for everyone in the valley on the average. Money which will be earned and spent in the area.
To repeat once more. Nobody is forced to accept Gogos and nobody will be forced to buy some in order to put them into circulation and everybody who gets some Gogos can exchange them right away into Dollars again - it would only cost him 5%.
Everybody can even hoard them, if he wants to pay 5% every year for the privilege. It might be cheaper than hoarding Dollars, if they loose more than 5% a year through inflation, because the Gogos keep their value, but it would still be a silly thing to do. Nevertheless, everybody is allowed to hoard as many Gogos as he likes to hoard.
People will not do it, because they are smarter than that. While nobody is forced to accept Gogos, they will be accepted because businessmen are even usually smarter than other people and they will accept Gogos. Nobody will be forced to buy Gogos, but enough people will, because they are smart enough to see the benefits of the Gogo and it will not cost them anything. They will only buy as many as they would have used Dollars to buy something locally anyway.
They will have a local currency which moves much faster as the Dollar they have bought them with. These Dollars will in the meantime stay in the accounts of the Gogobank and do what they always do while providing the backing for the 10,000 Gogos. They will be lent out again by the commercial bank which provides the account and move in their usual lazy way, while the Gogos do the work they should have done.
The interest these Dollars earn is the only real income of the Gogobank besides the rest of the user fee, which is, as we know only 500 Gogos a year which is left after printing and other costs. Nothing! The maybe 300 Dollars interest in a year will not make the Gogobank rich either.
It will barely cover the costs and that only because the Gogobank will have not very high costs. It will be run on a volunteer basis by some businessmen of the alliance in turns. They will fight for the privilege because it will bring people into their stores exchanging expired Gogos and some might not want to pay the user fee and buy some merchandise with them instead. Every businessman will gladly oblige them and pay the 5% out of his own pocket.33) The functions of money. When I try to explain the differences between normal money and the Gogos I sometimes run into difficulties to make people understand them. Most of them realize that the Gogos would benefit the local economy by keeping in the area and in circulation by their features, but they do not really know what the features of money are and how economists see and explain them. Many businessmen are willing to accept Gogos, but while they have to do with money all of their life they did not give it much thought.
Economists see three functions of money:
First it is a medium of exchange and payment.
Second it is a unit of measurement and
Third it is a store of value.
There is not much difference between the Gogo and the Dollar as far as the first function goes only that the Gogo is only a regional money and not legal tender nation wide. On one side this is a handicap for the Gogo, on the other side it keeps it in the area and because of the user fee also in circulation.
As to the second feature, the Gogo is a much better unit of measurement, because it will always worth as much as the Canadian Dollar of 1980. The Dollar is only a unit of measurement in the present and its future value is anybodys guess. In the past 20 years it lost more than half of its purchasing power.
The third feature is the most misunderstood one even among economists. Not very many see that money cannot be a store of value at the same time as it is a medium of exchange. It can only be one or the other, but it must be able to be both. Not at the same time, but each at different times.
Here the difference between the Gogo and the Dollar is such, that the Gogo is not as good a store of value as the Dollar in a deflation - but who wants that.
Up to an Inflation of 5% the Gogo is still not as good a store of value as the Dollar and actually, if we can tolerate that and are willing to pay always more for our necessities of life we would not need the Gogo. The only problem here is, that it involves an eternal fight not to fall behind and nobody can be sure that inflation might not take of, as it did in many countries of the world.
Then, with inflation over 5% the Gogo would even be a better store of value as the Dollar.
I really do not know how I could explain it in simpler terms. Some friends of mine, who are economy professors in universities say that I should use their language to make my views more palatable for the scientific community and not use simple laymen language and it seems that I am still not understandable for the average layman.
Maybe I should speak in parables and wait 2000 years until somebody understands them.34) Buy Gogos! In the hidden power of the Gogos is explained, that the Gogos will move faster than the Dollar which was used to buy them because the Gogos have this feature of the user fee which will keep them in circulation and allow the Gogobank to keep them at a stable value.
Stable money without a user fee doesnt move very well, as the Dollar shows with its turnover of only 15 times a year. Only with high inflation it moves faster and who wants inflation?
The Gogos will move much more merchandise and still be stable, so every Gogo which is bought and put into circulation will keep moving and eventually will also come back to the person who bought it, bringing income and profit.
The Gogo will not only benefit the businessmen by bringing more sales but everybody in the area. The businessmen receiving Gogos in payment have two choices. They can exchange them back right away, but that would cost them 5%. They can also buy some goods or services locally with them. They will prefer to do that. This means that most of these Gogos will stay in local circulation providing work for the people who are willing to work for them and more sales for the stores.
It is a good guess and proven in an other such money experiment that the Gogos will move at least 25 times as fast as the Dollars do. This means that every Gogo bought and put into circulation will provide 25 times as much sales and work locally as the Dollars would have done, used to buy them.
Everybody should think of the benefits, it will bring him and the community and should buy as many Gogos with his Dollars as he would have used to buy goods and services locally at the stores which display the sign: Gogos accepted here!". It will not cost him a dime and the Gogos will come back to him many times while the Dollars would have ended up somewhere else.35) Why is there no Gesell money, if it is known for such along time and is such a good thing?
Somebody asked me this question a little while ago and I really started to think about it. Now I am not a believer in conspiracy theories but it does look as if there is an evil force at work. Everybody who hears about Gesell starts right away to improve his ideas thereby destroying them. These people then start pushing their ideas and by doing it split up every group which forms to bring the ideas of Gesell to life.
The way they usually do it is quite simple. They make it look difficult and impossible to introduce the reforms of Gesell in a smaller framework. Most of the time that is enough to have people drift away from such groups where there seems to be no hope to do anything. To prevent any danger that such a group might get other ideas they usually try to stay in some position in it and you only have to look at such groups to notice it. For that reason those groups stayed sterile for a century and will do so in future and it is fruitless to even contact them.
With such a situation there need not be any other opposition and to keep the idea out of education is simply done by having teachers who show any interest in them discouraged by the same means as other people are discouraged. They are shown that it is not good for their rise in ranks if they do so. The power of money is subtle and it has to be because the people using it are a very small minority and if known would easily be disposed. They have to keep the majority uninformed.
Not only this. They must keep them dancing around the golden calf which they were able to do since the time of Jesus and all the times before.
It is only in our time that the hand of Silvio Gesell years after his death started to end the rule of gold. The gold standard is as good as dead for more than 60 years now. This has prevented severe depression and actually the powers of evil are on the retreat because stagflation, which is an impossibility to find interest bearing assets still erodes the value of their money by inflation.
They would need a deflation to gain it back and with it its power. Here they have also run into a situation they never had to oppose before. During the last depression a simple small follower of Gesell started Gesell money of a sort and could barely be stopped by the forces of evil before it would have become unstoppable.
Now they cannot start a deflation by holding back their money because it would be replaced by hundreds of such local currencies introduced by disciples of Gesell, many of which are not known.
When it then would try to get back on the market, where before in times of the gold standard they would have picked up bargains of all kinds galore they will find no surplus wares because they got sold by Gesell money. With nothing to buy their money would be worthless and with it all of their monetary assets.
How is it foretold? The kingdom of God on earth is only for the poor in spirit. This is actually a message of hope for them, because they will then be poor also. Gods mills grind slowly and for him sixty years are no time at all.
Now we have some kind of draw. Deflation, the only way to bring undisputed power back to the old money is not easily managed without a gold standard and dangerous not only because any war which always follows a depression would be too dangerous to contemplate with atomic bombs around but also because of this Gesell money, which might get a foothold.. It would find the feet of clay of god Mammon.
So far stagflation and the destruction by inflation of many countries kept the power of the money lenders still somewhat together.
Because of the political weakness of the money reformers there is no danger for the power of money as long as the few, who contemplate unconventional ways like alternative local Gesell money do not find people who are motivated by deflation. These few people were also misled by the belief that a deflation is a pre-requisite of local Gesell money. Only a very short time ago ways were found to start local Gesell money during a stagflation and they are not widely known yet, but they are spreading under ground and is only a matter of time, when they will be implemented somewhere.
The people who get the message do not have to butt their heads against opposition to find a few followers and do not have to fight these money reformers who must first have political power in one state and never even think about other ways. They also do not have to prepare ways and means in case of a deflation, which might never come. Now they can concentrate their efforts on finding local markets where stagflation brought some hardships like unemployment and small business failures. They can show a way out. Somewhere the path will be followed and the example will do the rest.
36) Cast your bread on the water
We talked about the way to put the stable Grand Forks Gesell money in circulation and keep it moving. (I like the idea of calling it Go, go money, because that is what it will do. Go from one hand to the other, never resting.) Now we are going to find out how fast it will move.
First we must realize what money is. We handle it every day and use it, but nobody gives it a second thought. We do not take money because of its pictures for our goods or services but because we know that others will give us their goods an services for it in turn. Money is a generally accepted medium to split barter apart in time and space and at the same time gives a standard of value, which makes it possible to trade such different things as chairs for bread and do this not one to one but on the market with many different buyers and sellers.
Once the Gogos are accepted as money they will do the same, only better as the money we use now because they cannot go into hiding. The expire dates will prevent that. Most of the money we use now is not on the market exchanging goods but sits around waiting for better deals. The Gogos cannot do this and therefor all of them will be moving and exactly as fast as new wares are coming on the market. Not faster but also not slower.
A money similar to the Gogos was tried out in a small town in the Austrian Alps 1932/3 during the big depression. It moved about 500 times a year. Compare this with other money. Such money moves in the best of times about 20 times in a year on the average. Less during a depression.
Now we realize what this tiny amount of Gogos put into the market will do. They might move 500 times their value of wares (and services) during a year not leaving unsold wares on the market and also no unsold services. Therefore everybody who has a service to offer will find an empty market and willing buyers. No more unemployment.
In other words, the Gogos will come back at least 25 times faster as other money would and with every move will take their values worth of wares from the market. The bread which you have cast into the market will come back untold times.37) More Gogo stories! There are always more questions about the Gogos surfacing and one of the most often asked one is how only 10,000 Gogos can have any impact at all. Nobody seems to be able to grasp the fact that any money by moving moves wares and services of the market and the faster it moves the more it does so. The Dollar is fairly lazy and moves on the average only 15 times a year. This means that it moves 15 times its worth of wares and services from the market into consumption. Economists know this fact, but do not seem to find it to be of any concern, that a bit more than one movement a month must be too slow.
The Gogos because of the user fee will move a lot faster. How much faster is still to be seen, but considering former such moneys and common sense a movement of once a day is a reasonable assumption. This means that Gogos will move about 25 times as many goods as the Dollars do. 10,000 Gogos being worth 22,000 Dollars will therefore move as many goods as 550,000 Dollars would move. It is doubtful whether so much cash is around in the valley now in movement. Anyway, 10,000 Gogos will do a lot of moving merchandise and services in the valley and surrounding areas. It will not be only peanuts and that is all we need to know at the present time. We will see and all it takes is to replace some Dollars by Gogos. A few thousand at the start will show the difference.
The 10,000 will be all which are needed for the valley and they will be put into circulation slowly and not all at once. They will stay in circulation and slowly some will be added until there are enough to do the job here and only if the area of their acceptance is expanded more will be sold and issued.
There is no danger of over issue because the Gogo society guarantees their value and must be careful to have always enough Dollars to redeem the Gogos. There can never be more Gogos as the public is willing to buy and use.
Another frequently asked question is what to do with Gogos which one does want to save. Saving them as cash is costly because of the user fee, so what else can one do? As long as the banks are not carrying Gogo accounts, which would be no problem for them to do and one isnt willing to loose the 5% by changing them back to Dollars, or one doesnt trust the value of the Dollar any more, there are still many other choices. Some pawn-brokers or jewelers will gladly hold Gogo deposits. There will also be many local investment possibilities. Smaller sums can be used as pre-payment for goods or services and there will be enough trustworthy service providers or businessmen who will accept them. Sooner or later the banks will in their own interest come on-line also. In short, if there is a demand for having a place to park Gogos free enterprise will provide lots of places.
There will be enough honest people who will prefer to deal with an honest money which doesnt cheat either partner in a deal of longer duration by changing its value.
Of course, they will not let the lender get away with usury any more for long - but this will take some time.
The question of how the Gogo can be kept at a stable value surfaces also again and again. It was answered before, but because the answer is so simple nobody seems to believe it, that the price of anything - and the exchange rate is a price - can be kept at exactly the level wanted as long as the object (the Gogo) stays in control of the Gogo society. The Gogobank has this control through the expire date and the user fee. The price which the Gogo society charges and pays at redemption is the one everybody else will also have to use. Nobody will accept less or can charge more when everybody can sell or buy at the Gogo society for a certain price. And everyone can check what that price should be. The Gogo has exactly the value of the Canadian Dollar of 1980 and the exchange rate shows exactly how much less the Canadian Dollar of today is worth in purchasing power. The exchange rate will change when the value of the Dollar changes in order to keep the Gogo stable as is guaranteed in writing on the bill by the Gogo issuer.38) Future benefits of the Gogo! All businessmen agreeing to use the Gogos have realized that they will increase business by staying in the area and with every move will also generate profits for them. This is a very egoistic motive but we should forgive them because this egoism will benefit the whole area.
The features of the Gogo do not allow it to be held back out of circulation for a long time and therefore the profits of the businessmen must be put back in circulation. The Gogos must be used or invested locally. When they are used to buy goods or services they benefit the people which sell these right away. They will create more business and employment. These are the short time benefits everybody will notice right away but there are also more long term benefits.
The businessmen and the service providers ( labor and tradesmen) will by repeated trades get more Gogos as they need for immediate use and will look for ways to invest them. They must invest them or stand to loose the 5% every year and they must invest them locally.
Every such investment brings employment and improves the economy of the area and because they are made by local people who also have to live here, it will be beneficial investments. They have no interest to invest in polluting industries or provide opportunities for outside investors of such. It wont be giant investments but it will be many small ones besides maybe a few where investments are arranged by more people in a common endeavor.
There are endless possibilities like a cannery for fruit and vegetables, which would be also a way to make it pay to grow them. Rebuilding the smelter lake with a holiday village around it, including a convention center. Basic cottage industries which use not abuse renewable resources like a brick factory as was here before. People who live in the area and have roots in it will not tolerate its destruction, if there are other opportunities to make a living.
They might want to build hotels and beautify existing ones to attract tourists and such will come to see the wonders which the Gogos did to the area, but it will be a slow and naturally growing part of already existing basic businesses, not one force-feed by outside capital influx. It is a beautiful country here and the local people will take care that it is kept that way and that will attract people to visit in a sustainable way as the gaudy honky-tonk way of a fairground can never do. Besides - the local people would not want to live in one and they will have the say. It is their Gogos, after all, which will be invested there.
The Gogos are not only a safety net in case of the collapse of the monetary system of the world which is built on the USDollar. They are much more. They will not only allow peaceful trade in the area when the rest of the world goes up in flames - they will also create wealth because they will not hinder the work, which is the only way to create wealth by hiding or threaten to hide, as our money now does. It will not be the wealth of gigantic weapon factories - it will be the wealth of many beautiful homes and small enterprises.
There will be no hunger and no unemployment in the area and the young people will not have to leave it to look for work. Eventually even educational facilities up to the highest levels will be developed here by people, who want to have their offspring stay close. The mothers will take care of that.
The area will become the envy of the world and everybody would want to live here or at least to visit it. This is something to be taken into consideration. It might happen quite fast and we should be prepared to have accommodations for those people.39) The enlargement of the Gogo area. Originally the Gogos were conceived as a local money which would slowly spread also in the surrounding area within a limit where necessary exchanges could be done within an hours drive.
Lately even before the Gogos were started some ideas surfaced to maybe develop some ways for the local businessmen to use their Gogos also to buy supplies from farther away. Such a way was found. It is actually quite simple and would work like the Hawala banking works. Any town could also adopt Gogos, if sufficient trade could be developed and could have a Gogobank branch in a local store. No problem at all. Transfers could be made by phone and only odd cash adjustments would have to be made by courier. Mutual credit and trust would do the rest. Because everybody would profit by it, not one businessman would not fulfill his commitments.
This idea was something like a break-through and even the originator of the Gogo idea was surprised by it. It means that the benefits of the Gogo could spread even faster as imagined before. Every town where a node of local trade with Gogos can be developed would become part of a larger network of beneficial trade. The area will grow quite naturally among people who already have business dealings with each other and nobody will be forced to join the network. Most of the Gogos would still stay in local circulation but there would also be some trade between towns farther apart.
We know that the Gogo society isnt really making any profits and will have to let a percentage of the user fee also to the branches, therefore it will be prudent to leave the Gogos printing and issuing with the original Grand Forks main office but this will be a minor matter of the future. One must always remember that there will not be very many Gogos - only the ones used for trade and none for long storage of value.40) Long term effects of the Gogo! The main results of the Gogo are many. Once the Gogo is widely accepted neither inflation nor deflation are possible any more because of the Gogos stable purchasing power and therefore the effects of those are canceled.
The results of no inflation is, of course, that for the first time in history money isnt only a measurement of value at the time of a trade in the present, but also one for the future. That makes long term deals not only honest but in some cases only then possible. It also will lower the interest rate by making an inflation premium unnecessary.
The results of no deflation are much larger. No deflation means no unemployment and therefore in time much higher wages. Busy, well paid people will then build up a capital stock, where the competition will push the price of borrowing capital - the interest - still lower. Lower interest will then make enterprises possible which now would never get off the ground.
Now money gets only invested if interest levels are well above 2% and then money is pulled out of the market. The Gogo cannot be pulled out like that because of the user fee. This is actually all there is to it. The many benefits of the Gogos: more trade, no unemployment, lower interest, stable consumer price index, they are all the result of the small user fee.
Our money now has the power to withhold its services and that keeps the amount of real capital, which can be built at a continuos level of scarcity and sometimes even demands destruction of some not only by preventing people from working to rebuild the one that has deteriorated from natural causes but also through actual destruction though a war.
It seems unbelievable but even wars can be prevented by the small user fee of the Gogos. A user fee which might cost a dime for every 100 Gogo sale, once the Gogos are wide-spread enough so exchange against legal tender is not necessary any more. By then the Gogos might even have become legal tender.
Every well-meaning person should look into the heart of the Gogos and not listen to the war-mongers, who are afraid that they will loose their power with the introduction of the Gogos. Everybody should look and let his own heart be filled by hope, that a world without war is within reach. The lowly Gogos can bring it, if people help them to grow.
It is simple to understand for everybody and one doesnt have to be a scientist for it. Once the Gogos are in circulation even understanding them will not be necessary any more and just using them is all that is needed but before that everybody who makes the small effort and tries to understand will be somebody, who will have a hand in making the world a better place and will be glad about it until the end of his days on this earth.
The Gogos will not only change the world, they will have changed him.41) The main features of the Gogos! There are actually only two features which distinguish the Gogo from the Dollar.
1) The Gogo has a stable purchasing value.
This isnt really that much of a distinction, because the Dollar has that also at a moment in time. The Gogo even uses this stable value of the year 1980. It is only that it is tied to it. The Gogo will always have this value, while the Dollar looses its value and is now in the year 2001 only 44 Cents worth compared to the Dollar of 1980. This implies an exchange rate as necessity. This slight inconvenience will probably soon disappear, when businessmen realize the convenience of pricing in a stable currency. They will then not loose on old stock prices or being forced to change them.
2) The Gogo has an expire date and must then be exchanged for a new one at which time an user fee of 5% is applied.
This is also a necessity, because it keeps the Gogo circulating. While amounting to very little for a single trade, it will prevent long time holding back of larger sums of them. It works this way: The expire dates are staggered monthly, therefore from every larger amount of Gogos about 1/12 will have to be exchanged every month. This is enough inconvenience for everybody to hold cash unnecessarily.
Most people are spending their income and save only small amounts in a bank, where others can use it. There will be no difference for them.
The fee of 5% also allows the issuer of the Gogos to keep them stable and therefor the only reason for hoarding money - that it might become worth more - has disappeared.42) Both sides of the coin. Money has two sides. On one side it is a medium of exchange. When it is generally accepted on the market it is also a measurement which can show the relative value of the goods traded with its help and makes it therefor possible to compare the prices of different suppliers for those goods..
This makes it possible for people to specialize and trade a single skill or ware for all the necessities of life and for luxuries. It allows also to split a trade in time. Here the second side of the coin comes into play.
Money is also a store of value from one trade to the next. There is nothing wrong with this but there is the fact that money can only be used either as a medium of exchange or as a store of value, not both at once.
Therefor money used as store of value is missing on the market as medium of payment. This would not matter if it is only a short time during which trade goods would not spoil or otherwise have costs for storage.
Money does not have these costs and is therefore a preferred store of value. This is the problem. Now it is missing on the market. Fact is that 95% or more of the money is always missing for shorter or longer time.
It can be replaced, of course, and this is done by all kinds of money surrogates.
In modern times more and more by money transfers with help of the banks and so we have the funny buildings all over the world and untold people doing make believe work there only because our money can be used without costs as store of value.
Cash used as payment for goods and services can easily match the speed of the movement of goods. There would be no reason at all for those surrogates - if money would move.
43) Dear reluctant businessman!So, you do not want to accept the Gogos which other businessmen started, because they are not backed by the government and the banks and you might have to exchange them and that would cost you 5%.
Fine! Nobody will force you, if you want to lose a sale, when a customer would like to pay with Gogos. He will simply go to your competition which takes Gogos.
All the Gogos in circulation were bought from people who want to have a local medium of exchange and they knew that the user fee of 5% will keep them in circulation creating untold further sales. As long as they use them to buy something from participating businessmen or pay a tradesman or their help with them, it doesnt cost them a penny. They only replaced slowly moving Dollars by faster moving Gogos.
Now take the case that you need to exchange some, because you have to replace the sold merchandise from outside sources which do not accept Gogos. So, what? How much does it cost you when you accept payment with a credit-card? You better think twice whether a lot of additional sales are not worth the 5% cost. Some other businessmen have that figured out already.
You should think yourself into the shoes of your customer who has Gogos. The 5% fee applies to his Gogos also and he is therefore not reluctant to part with them. That goes for all people with Gogos in their wallets and if you cannot see, what that will do to the overall business in the area where Gogos are used, then stay aside - as said before, every participating businessman is more than welcome because it expands the market for the Gogos, but nobody will be forced to accept them.
In time everybody will although or will see his business dwindle away. The Dollars which people do not like to part with are not enough to keep it going.
44) Gogos in time and space Which results will the introduction of Gogos have in the future? We understand that the will bring more sales locally because they will replace slow moving or disappeared Dollars by faster moving Gogos. Dollars only move fast with high inflation while Gogos move driven by the user fee even as a stable medium of exchange. This makes it possible to have a stable medium of exchange which stays on the market for the first time in history. Stable or deflated money always before left the market and caused a depression. This means that in time changes will happen, which have never happened before.
At first this will happen only locally, but when surrounding areas will notice what is happening, they will also want to benefit by such a medium of exchange as the Gogos are. They will therefore either want to join the Gogo area or would start a Gogo market of their own. Closer areas will probably do the first and areas farther away the second. The Gogos are designed to allow both, even the use of the Grand Forks local Gogos as far away as around half of the world.
\In order not to hurt local pride other center pieces with local scenes could be used. They could use the same standard of value of the value of the Canadian Dollar of 1980 as now the US Dollar is used which isnt stable and the only difference would be the different local stamp, which says where the Gogos will be exchanged. In a sense the Canadian Dollar of 1980 could become what in former times was Gold as a world-wide standard, but so could other V 80s be used.
The use of the original Gogos would have a few benefits. First, if the new Gogo market is also a small local market they can save themselves printing costs and more important, if there is local opposition it is easier to have a foreign" medium of exchange and keep it in circulation. Even very oppressive governments could not stop such use of foreign" money. This will work in both cases.
The Gogos will be used when the other money is inflated as Dollars and DM were used and in case of deflation this money disappears from the market anyway and leaves it to the Gogos. That happened in the successful experiments during the Great Depression. ( like here described:
There are 4 stamps on the Gogo. One is the numbering, another is the validation stamp of the Gogo alliance Grand Forks, the third is a dry stamp of the alliance as an added security and the forth one is the stamp showing the locality of exchange. The space for this stamp will be the only one left empty if Gogos are sold for the printing costs to other Gogo markets. All it would cost them then is buying a stamp of their own locality. (Maybe 20 Dollars worth. :-).)
Because all Gogos are local, money transfers will not be much of a problem in the beginning and can easily be handled by means of Hawala banking until the other banks come on-line and carry Gogo accounts. There is no reason to involve them in the beginning. It only would make it more convenient for businessmen not to use the Gogos as Gogos and exchange them right away. This is not the idea. They can go to an alliance store for that and they might be gently persuaded not to exchange it but buy something instead.
I am quite sure that most of the smaller new Gogo markets will use the original Gogos, if only to show their appreciation for the people of Grand Forks who gave them the Gogos. I must also tell the motel owners in town to prepare for the people who will come to see where the Gogos have started. It happened in the small Austrian town of Woergl, where they had a similar experiment.
Let us dwell a little bit more on a medium of exchange in time and place. Every medium of exchange opens a span of time between an exchange of goods. Barter is immediate exchange (credit excepted) but a sale for money which is kept for a while as store of value extends the time until the second part of the barter can be done by buying. This also brings the benefits of competition into play and makes production of wares for sale possible. Our civilization couldnt have been developed without money and it will be destroyed, if money is abandoned, but there is also a drawback to money, which isnt easily seen because it happens only if the span of time in which money is used as store of value is extended past a reasonable time.
Let us imagine that traders will only meet once a year on a market. ( This isnt farfetched, traders do this on fairs). Here buyers with money and sellers with merchandise meet. All is fine, when a deal is struck, but the buyer with money is in a stronger position, because he can wait another year without loosing anything while the seller of merchandise cannot do this. He will take into consideration what a year will do to his merchandise. At the very least he will have the cost of storing it. It could also become obsolete, rot, spoil or rust. After a year, when buyer and seller meet again, if they havent struck a deal in the year before, the buyer will still have his money and could even now have more, when he earned some interest on it in the meantime, while the seller would have lost part of the value of his merchandise. It looks like he has the short end of the stick but this isnt quite true because now more money meets less merchandise and this means that there is money without merchandise to buy at last years prices. It doesnt really matter to the buyer because he can play the waiting game for another year and so forth.
So what happens? (And it does happen in reality contiguously) There is always more money kept as store of value for which no more merchandise exists. It only looks like it because every year a lot of merchandise stays unsold. In the end the system has to collapse, because there is just too much money and no more merchandise for all of it. It all has to happen, when money is used this way as store of value instead of being used as medium of exchange.
How would it be different with Gogos as medium of exchange? Here the user fee comes into play. Not only does it keep the Gogos in local circulation, it also prevents them from being used for longer times as store of value because it would cost the same to keep them as such as it would cost to keep wares. The Gogos will therefore always be invested and none would accumulate as surplus of money without merchandise to give it value as happens with the Dollar now. They will therefore not become worthless as other money becomes every so often.
Some currencies have so far escaped the worst but at the cost of other currencies and it is their turn now. The Dollar lost 95% of its value in the last century and the demise will accelerate. Just think what will happen when all the Dollars in the world including all the ones in all accounts would try to buy something. Once the avalanche is started, there will be no stopping it.
The Dollar will become worthless and hopefully the stable Gogo is established by then. We should really not wait too long. In a time of war or civic unrest it will be much harder to introduce a sane and honest medium of exchange.
45) Some numbers from Woergl. These are numbers from the first days of Woergl:
The first paid out wages in the amount of 1000 Schillings returned almost on the same day to the coffers of the community: taxes were being paid! On the third , somebody comes running and loudly says : Mr. Mayor! Our Value of Work Vouchers have been falsified. We have only issued 1000 Schilling so far, however, the amount of overdue taxes paid with these reached already 5,100 Schilling! Somebody must have forged the vouchers!"
Having known the story of Woergl for a long while I never questioned these numbers. Thousand Schillings were issued and I assumed, as everybody else did that they went into circulation right away, but was this so? They were issued as part wages to notoriously skinflint public employees as monthly wages. Who can think that they spent them on the first day? Id rather think that they spent them over the length of the month, meaning that on the first three days only a tenth of the amount came into circulation. How could a paltry 100 Schillings and even 200 move 5100 Schilling of taxes into the coffers of the city? They must have moved at least three times more to get there. First to the receiver, then to the tax payer and third to the city again. Probably the must have moved more than that in between before they came to somebody willing to pay taxes, probably a lot more. All within three days!
There is no sense even guessing at figures of circulation speed. How often in three days? How often in a year? We know that the Austrian money at that time moved on the average only 8 times a year.
No wonder, they called it the miracle of Woergl and the Austrian National Bank got scared for their slow moving money and had this powerful competition squashed by the force of law. A powerful competition of only 5,294 Schillings altogether.:-) (monthly average)
Now consider that bit was maybe only 100 which scared them so, because they started fighting the money of Woergl before it was even issued.
How about trying to put a few hundred Dollars worth of such a money into circulation now and see, what will happen? Stick it out, even if the National Bank opposes it as they did the Social Credit money of Alberta 1936. These guys did it the wrong way with a horrendous user fee of 52% a year and therefore could not get people to accept it. Because of that they still needed the money of the National Bank and could be black-mailed when threatened by a loss of the credit rating.
Fact is, that they would not have needed the money of the National bank and their credit at all and should have told them to keep it in no uncertain words if they would have used such a low user fee, that people could have accepted the Alberta money. This money would have ended the depression within weeks as Irving Fisher falsely had predicted for stamp script which had an even higher user fee of 104% and therefore also never was accepted.
Without depression, who knows, whether W.W.II would have happened. We know that a high 12% user fee was used in Woergl 1932 and their money was accepted and if a lower user fee of about 5% is used such a money would still be more acceptable. As long as the money of the National bank hasnt left the market as it had done in the time of Woergl, it is better to use as low a user fee as possible to get such an alternative money accepted before deflation and depression gets a foot-hold.
The example of Woergl shows how little of such a money is needed to move a lot of goods and services and by that would keep the economy humming.
With extreme caution in the estimates we can say that the estimated 300 Schillings in circulation during the first three days in Woergl must have moved at least 20,000 Schillings of goods and services to enable some businessmen owing taxes to pay the 5,100 Schillings of Taxes collected. It was probably much more. But even so the turnover of this money was high.
What does this mean for the Gogo, which is a similar medium of exchange as the money of Woergl was? This is easily answered. Even a small amount of Gogos introduced into the local economy would generate many sales as were generated even in the first three days in Woergl and it would go on and on as long as the Gogos would stay in circulation as they will by design.
On the very first three days the money of Woergl generated about ten times more sales as the money of the Austrian National Bank it replaced, did in a year. The same would apply to the Gogos and the Dollars they would replace and if continued during the year the amount of additional business will be staggering.
The Gogos, not having as high an user fee as the money of Woergl had, might not move quite as fast, but even five times the amount of business wouldnt be so bad.
How about trying out a few hundred Gogos? Only two for each participant are needed. So even when all the people in the valley will be using them 10,000 will be plenty because the Dollar will, after all, also still be used.
In Woergl they started with 300 Schillings and used in the average about 5000. The small amount of 10,000 Gogos will be backed by all the merchandise in all the stores willing to sell for Gogos and all the tradesman and workers selling their services for them as well as the Dollars they were sold for and which are kept for redemption by the Gogo alliance.
Do not ever think this is a scam, where the members of the alliance want to run away with the measly 10,000 Gogos, when they and the other acceptants can make a Million Dollars in sales every year if they keep them stable and in circulation.
The numbers for the first three days of Woergl show something very hopeful. It will only take a few weeks and only a few Gogos to overcome a depression hitting our area. When as little as 2 or 300 Schillings could generate at least 20,000 Schillings of sales within three days this shows the motive power of Gesell money clearly and it is only a matter of introducing it.
It should be done ahead of a severe depression because then it could be too late as it was in Woergl. Woergl was stopped by the Austrian National Bank which didnt want their deflation policy ended by it. The results of that are known. Unemployment brought Hitler to power. Austria was annexed and W.W.II started.
It is unbelievable but a continuation of Woergl could have prevented it. Even in Woergl alone unemployment was reduced by 25% in a very short time and without unemployment and depression there would have been no war.
The owners of the Austrian National Bank have to take responsibility for much blood whose shedding could have been prevented.
46) The mistakes of Woergl.
We know now that Woergl failed not for reasons of faults of the money used but because it could be stopped by the opposing forces.
We must therefore look closely what allowed them to do this and avoid making the same mistakes.
Mistake 1 was using a fairly high demurrage of 12% a year which brought a reluctance of business owners to accept this money. They would not have accepted it at all, if the other had not all but disappeared. To overcome this reluctance a lower user fee as proposed for the Gogos (5%) should be used.
Mistake 2 was to have the money issued by a government agency, even when it was only a local one. This made it easy to squash . The proposed way of issuing the Gogos by a group of business people is much more flexible and any opposition can be foiled the same way as was done and is done by many people even in very oppressive countries. They are using Dollars there and they will use Gogos here and somewhere else.
Mistake 3 was during the short time of the experiment not so severe but it would have ended the experiment even without opposition. It was the missing standard of value and with that the bondage to the National money. This would have tied the two currencies together and in case the money of Woergl would have spread and bought more goods thereby removing them from the market any returning National money would not have found enough wares to give it value and both tied together currencies would have had a severe inflation. It is therefore necessary to have a standard of value and an exchange rate right away for the Gogos.
The fourth mistake, if one can even call it that, was the timing. The money of Woergl was introduced too late. The factories were already shut down and unemployment so high that it could not be overcome fast enough even when it was reduced by 25%. Here also the dependence on a government agency prevented the spread of the money. Everybody - and there were many ready to join - was waiting for the legal issues to be resolved. When the opposing forces won, it was the end of the experiment. The depression continued and ultimately ended in W.W.II.
Let us hope that this time better timing can prevent W.W.III.
47) What is wrong with our Dollar?
This is a question which I sometimes hear, when I tell businessmen that a local money" is planed. Sometimes the temptation is great to say, if they get so much that they do not realize it themselves, I will not waste my time telling them. If somebody cannot see that something is flawed with a Dollar, which lost 55% of its purchasing value in the last 20 years and more in the years before and at other times during the depression gained up to 10% a year in value, which throttled the economy and caused a worsening depression, it is a hard sell for a better money.
It is a good thing that such naysayers are not needed. Only a sufficient amount of businessmen with different wares and services to form a market of critical size (about 30 to 50) who accept Gogos are necessary.
Because most businessmen can see the benefits which the Gogos will bring it is only a matter of time until they will be in circulation.
Then the envy of the ones on the side-lines will do the rest, when they see how much business the acceptants of the Gogos are doing.
We seem to be heading into a depression now and that will motivate more people to go the Gogo way.
Patience. The solution is known and spelled out and the Gogos are known also in other parts of the world. They will be issued not only here in the near future and once started, there will be no stopping them.
The Dollar as well as the Euro and other currencies will then have to shed their wrongness or go under. It will be a monetary reform as none ever before.
The design of the Gogo makes a local non-government medium of exchange possible which can be kept in circulation and also have a stable purchasing power. A few businessmen to run the Gogo alliance which issues the Gogos and a few dozens which will accept them is all that is needed. Once accepted the design of the Gogos will encourage the people who have accepted them not to exchange them back into Dollars, because that costs 5%, but use them to buy local services and goods or invest them locally. The next acceptant will do the same and the next and the next.
Everybody will try to keep the Gogos in circulation whatever his station in life is. The worker and tradesman as well as the businessman will know that the Gogos will come back to them, because they cannot leave as the Dollar does. Businessmen might sometimes be forced to exchange some Gogos back into Dollars in order to buy something outside of the Gogo area or for paying taxes. They will try to avoid this, if they do not sell enough for these purposes for Dollars, but even if the have to do some exchanges it will only be a very small part of the profits the Gogos have brought them.
Especially unemployed workers should try to get Gogos as much as they can into circulation because they will give them work. A businessman whose sales are going down and a tradesman who cannot sell his services to the unemployed are in the same boat. They shouldnt wait until more empty stores tell the story.
48) The Gogo exchange booth
Gogo, the local medium of exchange needs a place where it can be exchanged and it will be in a member store. For the first year the director of the Gogo alliance will decide which of the volunteers will have the honor. There will be hardly any work, because the user fee and exchange will be only after a year, when the validity of the Gogos runs out and other exchanges back into the Dollar will be infrequent because of the user fee of 5% which applies then right away. This store will be only one of many who will all exchange Gogos and it is more for convenience that the Gogos for exchange will be collected there, so the alliance officer can do the exchange in one place. Every business owner will except Gogos also for exchange, because it is in everybodys interest to keep the Gogo freely convertible or it would lose some of its acceptability.
It will be different in the second year because then about 1/12 of the circulating Gogos will expire every month. This means that the exchange booth will have to replace about 400 Bills every month worth about 800 Gogos. For that it will get 2% of the 800 while the other 3% go to the Gogo alliance for printing costs. Hardly something to get rich, but still enough to cover costs which are nothing much.
It isnt expected that store owners will fight for the privilege, but there is some incentive. It is the fact, that the exchange will bring a movement of customers to the store, who have Gogos in their hands, which will cost them 5% to renew. The store owner might get some of the Gogos if he pays the 5%.
This could bring a fair amount of extra business and for that reason it is planned to auction off the privilege to run the exchange booth for a year. This would be the fairest way. It will be a jokingly small amount probably and more or less fun bidding more for the honor of being a citizen showing that he cares enough for the community and the Gogos to get involved.
As said before, there will be only 10,000 Gogos circulating in the area and only 800 of those will return every month to be exchanged. There isnt much work involved. Quite often other businesses might have collected a few expired bills and bring more than one at once to exchange. The about 400 bills will not come singly to be exchanged.
The whole exchange will more or less run out of the eyes of the general public. People will just exchange their Gogos which have expired at the next business which will do so and which collects the fee in one form or another. This could also be done by waiving it for a sale. On the other hand most businessmen will also exchange the Gogos against Dollars because it is in their interest to keep the Gogos convertible without problems for the public. This way the exact amount of Gogos which are used properly will stay in circulation automatically and no useless Gogos will accumulate anywhere. The businessmen will in turn then give not needed Gogos back to the alliance. The Gogos will by design run themselves and hardly need supervision.
When a store owner has collected some expired Gogos he will either go to the alliance office and exchange these bills or call a officer of the alliance to come and do it at his place. Again. This is between the alliance office and a businessmen who is member of the alliance and need not concern anybody else. It isnt of any concern to the tax man either because there is no sale involved - only a simple exchange of money.
The businessman who has sold something for Gogos has treated it as any sale for a foreign currency. He will have booked them as Canadian Dollars at the proper exchange rate and will treat them as such until exchanged in his till. He will pay the taxes for the sale in Canadian Dollars.
The Gogos are nothing but a replacement for missing cash in form of a stable trade token and will be used by their design exactly in the amount necessary to replace the missing Dollars. Not more and also not less if many people accept them.
49) Gogos in action.
Since the Gogos started sooner than expected to get into circulation, it is time to divulge some of their secrets. Gogos are first and foremost a local medium of exchange and most people accepting them know, that they will benefit the local economy. But what will happen then? Other areas will notice that the Gogos increase business and get rid of unemployment and will also want, either to join the local Gogo area or start one of their own. It doesnt matter what, if they follow the design of the Gogos closely.
The original issuers of the Gogo will probably not want to go to all the hassle of expanding their area and will only help with advise so trade can be expanded with similar currencies of the same value which are easily exchanged at a stable exchange rate because they are kept at the same value. The value of the Canadian Dollar of 1980. Each Gogo island has then a local money of its own connected only by the same value.
The local money will empower the local people and take away the power of the anonymous rulers of the outside money. It will not be needed any more and what isnt needed becomes worthless. There will be no more usurious compound interest charged on the piddling amount of money the rulers of this money lend out.
Local people with Gogos they will not need themselves or want to save for later, will lend them out without interest, instead of paying the user fee, to other people, who will use them for enterprises. These enterprises will employ other local people.
One hand will wash the other. The Gogos will not leave the area as the Dollar does. There will still be give and take with outside areas but the local people will have a 5% advantage. If they are not able to use this to their benefit, it cant be helped, but it is sure that many will only need this advantage. To have 5% or not to have it makes the difference of going broke with a business and having to close shop as many had to do or running a successful enterprise, giving other people work and employment.
There are people who survived so far, but how much better would they be off, when more people in the community would be able to afford more of their wares and services? There are many people with ideas and there are many people willing to work, but if there is no money because it is sucked away they will not be paid. The Gogos will be there to pay them and they will be able to pay others with them.
Embrace them and let them do their beneficial work of bringing sellers and buyers together for the benefit of both and the area will blossom with trade and employment..
50) The real start of the Gogos.
It will probably never be clear when the Gogos really started. Surely not when they existed only as an idea. They didnt start when the first businessmen agreed to accept them either and even when they were printed, it wasnt a start.
When the first merchandise changed hands for Gogos one might consider this a start but others would think that the real begin was when these Gogos were used again and so started to circulate.
Still others would say that Gogos really started when they were generally accepted and used on a market - even a very limited one. Let us say, when one businessman used them as a trade token to buy his lunch for some time at a luncheon and the Gogos didnt come back directly to his store to buy something there but moved in the mean time through other hands, like to a nearby farm market and to other stores and to their employees and back to the luncheon and other diners in the area and for other services. Every such use for payment bringing additional sales of goods and services and therefore additional profits for all involved.
Where should we point the finger and say: Here the Gogos started."
Shall we wait until Gogos are used in other areas? Shall we say that the Gogos only started, when they were used in far away places?
It probably doesnt matter and if somebody says: For me the Gogos started when I earned my first and used it to buy something," he is right as far as he is concerned.
Somebody else might not even find it necessary to put his personal start to the time he uses the Gogo again and will say: When I sold my first bag of potatoes for a Gogo, that is, when they started for me." He is also right. Everybody can have his very own starting point.
For some it might be the first time they see a Gogo before they even touch it.
51) Gogo falsification
Some time ago somebody voiced the concern that Gogos would be forged because they do not have the protection of the law against forgery as the Dollar has. We will assume that this was a genuine concern and not a ruse to scare people away from the Gogo and let the soon to be acting director of the Gogo alliance and inventor of the Gogos answer:
Whoever is concerned that the Gogos could be falsified, doesnt realize that the Gogos are a very limited local medium of exchange with an amount of 10,000 at the most as trade tokens circulating beside the Dollar in a limited area.
(I explain this for the original Grand Forks Gogos, but it would also apply to other local Gogo areas anywhere in the world.)
We must suppose that Gogos could be forged only when they are already generally accepted and used and have therefore proven their merit and usefulness and have brought added business to the local area.
So now somebody wants to forge some. He does it, which isnt so simple and what can he do then? He cannot go to the Gogo alliance to exchange them, because they know exactly which serial numbers are in circulation and which expire date each serial numbered bill has. They simply had noted down each end of the month how far down the numbers the issue had gone. At redemption this would routinely be checked. Besides that they know their bills well and would not easily be fooled by a bogus bill.
For using the bogus bill the counterfeiter has to find a half-blind or rushed businessman to use it. He could get away with that and if the bogus bill is well made it might even circulate for a while to obliterate the track to the originator, but chances for it being spotted before that are high and what would happen then?
The people, who saw the benefits which the Gogos brought them will get very upset and if the perpetrator is known. He will be lucky to get away with a severe beating and might even be facing a lynch mob.
I do not think that anybody will risk this by counterfeiting a few Gogos.
So Gogos are actually much safer from forgery than the Dollar is, where forgery can hide in a huge amount of bills.
Forging Dollars a counterfeiter only is facing the law and maybe the admiration of the people for his daring and skill and if caught some time in a jail as punishment.
Forging Gogos will carry much harsher penalties and therefore they do not even need the safe-guards built into them like the secure paper they are printed on, the numbering, the expire date holes and the three added security stamps. This measures would only make it a little bit more costly and difficult to forge Gogos. In fact, copying on the right paper and getting the four necessary stamps would cost more as the few bogus bills he could get into circulation before being caught are worth.
The Gogos will be secure in more ways than this. They will also have an assured and guaranteed stable purchasing power, which means that all contracts written on a Gogo basis will be honest measurement. Such honest contracts with money were never possible before in the whole history of mankind and this will be the most important part of the Gogos.
These Gogo contracts and Gogo credit will keep the amount of Gogo cash confined to the exact amount necessary.
People will gladly earn as many Gogos as they can, but they will not buy or borrow Gogo bills they do not intend to use. This is a very effective way to prevent over-issue. The businessmen who are accepting Gogos are the best safe guards for the value of the Gogo. As long as they accept Gogos that is all anybody must know. The Gogos are in reality backed by their merchandise which is a much safer backing as that of any other currency without a stable value standard.
It doesnt matter who they are and they might even be not known. Who needs to know more than the one businessmen who accepts his Gogos? There will be at the most five Gogos in circulation per participant in the market place. Are you worried about your five Gogos and do not trust that a businessman will take them in payment? Then do not accept them as wages or payment. Nobody will force you.
Sometimes you will have, of course, a lot more Gogos in your wallet as are your share and so will have many other people because the Gogos move, but by then you will know that many stores will accept gladly any amount of them and so will your plumber and your mechanic.
52) Exchange rate of the Gogo.
The Gogo has the same exchange rate as the Canadian Dollar of 1980 has to the current Dollar. Exchange rates to other currencies are then just figured out by using the official exchange rates of the Canadian Dollar to them.
There is only a slight difference. There will be no penny pinching because the Gogo is a local money used for buying goods and services and not an object of speculation with huge sums where even parts of Cents make a difference. Differences of less than 1% will be disregarded and the exchange rate will stay the same until then when it becomes noticeable. It will also always be kept at a somewhat rounded number. When it is now 2.20 Can$ to the Gogo, it will be kept at that number until 2.25 is reached and so on.
This way there will be a steady exchange rate for some time and changes in the exchange rate will not be on a day to day basis. People will not worry over small change. In fact the Gogos will have no small change.
At the exchange rate of today somebody who will pay for a 10 Dollar item with 5 Gogos worth 11 Dollars will get a Dollar change back. The smallest Gogo denomination is a half Gogo worth today 1.10 Canadian.
It works just as it works now when you pay with Canadian Dollars farther down in the States. There they will give you American change. Everybody will therefore still have some small change in Dollars at least. The Gogo doesnt replace the Dollar. It only takes the place of missing Dollars on the market which are causing the empty stores and unemployment.
53) Gogos for Japan
Grand Forks Gogos were designed as a local medium of exchange with reach into the surrounding area in Canada as well as in the Unites States because Grand Forks is a border town. They are coming into circulation slowly now.
Their exchange rate to the Canadian Dollar at this time is one Gogo = Can$ 2.20. This is exactly the difference in purchasing value between the Canadian Dollar of 1980 and the one of today. The Gogo is the Canadian Dollar of 1980. The rate will be changed if the Canadian Dollar changes its value. For exchange into the US$ the official exchange rate is used and it comes to one Gogo = US$ 1.40.
This would be enough, but then an exchange rate to the Euro was added because some European town showed interest also to adopt Gogos as local money.
There will hardly be much commerce between these local places of use in the beginning, but because every Gogo-like money needs some kind of value standard from the past there is no reason for not adopting the standard of the Canadian Gogo and in some countries the legal obstructions against local money can be overcome by this. Canadian Gogos are foreign money and those restrictions do not apply to them.
The Japanese Yen would have an exchange rate of one Gogo = 183 Yen. This would be the same value as the Canadian Dollar of 1980 and if a town in Japan would adopt Gogos this would be the correct rate now. When the inventor of the Gogos suggested one Gogo = 200 Yen instead, this had two reasons. First is, that a round number is better for introduction and secondly that an exchange rate based on the official manipulated exchange rate is somewhat flawed anyway because it doesnt consider the sometimes missing parity of purchasing value of two currencies and right now the Yen is in reality just as much worth as all other currencies. Nothing much! Just imagine everybody would try to buy goods with all the Yens in circulation and the ones hoarded and all money accounts.
It will be interesting to find out if this 10% under valuation of the Japanese Gogo will make much difference in Japan itself. Probably non at all until the Gogos have spread world-wide and more trade will be done on a Gogo basis or maybe on a Terra" basis, if Terra is developed sooner as the Gogo is.
By then something else will have happened. Gogos are not suitable for currency speculation and therefore a more close purchasing parity will have developed and a under valuation of the Japanese Gogo will have no long duration any more. In the beginning it might have had some benefits for exporters and would have curtailed some imports, but as nobody could keep any Gogos back for speculation, the exchange rate would automatically adjust to the purchasing value parity. Remember, it is the exchange rate of a local Gogo to the Yen we are talking about here for the time being, NOT the exchange rate to other Gogos far away. Probably the exchange rate will long have caught up to the sinking value of the Yen, when trade with countries far away will be done with Gogos. The exchange rate might be on Japanese Gogo = 400 Yen by then.
Gogos can be used very well for buying or selling wares or services, but are not suitable for currency speculation as our money now is, where the mayor part of it is used for that purpose. There can be no overhang of unused Gogos. It costs money not to use them. Not much. Only 5% in a year and only for the Gogo bills. There will also be an added penalty of 5% after two years for not using a bill. This shows on the expire date. The costs will add up for every year. Therefore no cash can be kept for speculation.
The costs for people using the Gogos will be minimal and could be less then 0.01% for every trade, but using the Gogos as store of value for long will become very costly. In fact, with the added penalty keeping a Gogo bill for ten years will cost as much as the Gogo is worth. The design of the Gogo is also flexible enough to lower or raise the costs by simply changing the time of validity.
To make it clear. The issuer of the Grand Forks Gogo only guaranties the value of the Gogo bills with the Grand Forks localization stamp in circulation. Nothing else. Deals made with this value and other Gogo bills from other locations even when using the original Gogo bills are not his responsibility. They will have to use their own location stamp. They are the responsibility of the ones making these deals and the issuers of the other local Gogos.
55) Gogos are better than Dollars.
Gogos are better than Dollars as medium of exchange and as trade or barter tokens because they are a worse store of value despite the fact that they have a stable value. The user fee makes that.
The Dollar has no stable value and so sometimes, if inflated, it is even a worse store of value as the Gogo is, but during no inflation or deflation it is a better one. The problem is, that then it is used predominately as store of value and not as a medium of exchange. It is then missing on the market place and no more trade or at least much less trade can be done. Unemployment and depression is the result.
Using Gogos could prevent those, but at a cost. The 5% user fee. The question is, whether it is worth 5% a year only for the cash which somebody has in his hands on the end of the expire date once a year to have no more unemployment and no more depressions followed by wars.
It looks like for most people it isnt worth it. They want to use only the Dollar and are not even willing to try a few Gogos as trade tokens. All they seem to want, is to collect as many Dollars as possible, not realizing that it isnt the Dollars they want, but the goods which the Dollars can buy at a later date. They will be in for a big disappointment as many people found out in the rest of the world, when their money became worthless.
As long as there was no other stable alternative money like the Gogos around they had no choice. If they had seen the writing on the wall they could buy durable goods before their money became worthless and that was always done. They used them as store of value and sometimes also for barter. Many people fell through the cracks but most survived unless robbed of their possibility to grow food and driven of their land.
This was one way their money betrayed them. It became worthless. The other way, when their money became worth more was even worse. Money disappeared from the market and they couldnt sell their services any more. Again some could survive, growing their food on their own land. As long as their ownership was protected by remnants of a civilized society they could at least provide for their basic necessities. In all of history mankind survived somehow but many civilizations did not.
56) The simplest way to start a Gogo island.
Gogos are local trade tokens and trade between different Gogo islands do not really need them beside sometimes for squaring up of accounts between different chapters of Gogo alliances.
The easiest way for a beginning Gogo island is as follows. First it needs somebody who knows the way of the Gogos and can figure out the exchange rate. This isnt very difficult when the original Grand Forks Gogos are used.
These are the Canadian Dollar of 1980 and if their exchange rate to the Dollar of today is 2.20 it is no problem to take the official exchange rate to any other currency to arrive at a local exchange rate. Penny differences do not matter with Gogos used for buying and selling goods and services and Gogos cannot be used for speculation, where it makes a difference.
The next step is to find a few businessmen and trades people of as many different trades as possible who agree to accept Gogos. How this can be done is described on www.visit.to/gogo on the Gogo page.
Now one or more of the businessmen can form a chapter of a Gogo alliance and order the original Gogo bills without the stamp for the locality, get a locality stamp for the new Gogo island and they are ready to put them into circulation. How this can be done in many different ways is also described on the home page of the original Gogoman.
It isnt necessary to do it exactly this way and even slightly different means can be used to collect the user fee and the Gogo can be named differently but as an exchange rate for a stable trade token to a medium of exchange which is not stable like all currencies of today are, is necessary it doesnt matter which stable standard is used and it might as well be the one used for the original Gogos.
Especially for a small Gogo island in the beginning it is less costly to start with one or more thousand Gogo bills without going to the hassle of printing separate ones. The original Gogos also have the status of a foreign medium of exchange and in some countries this might help for legal reasons.
Grand Forks Gogos can be used as USDollars or DM were used in the former Eastblock.
In Canada itself other localities with separate Gogo islands can do the same but can also order bills with their local scenes as center pieces, or have them printed themselves. Every Gogo island with its own chapter of the Gogo alliance is a own independent entity and solely responsible for their own trade tokens. The original alliance of Grand Forks has only an advisory function. Again, they are only responsible for the value of the Gogo bills with their locality stamp put into circulation. Whatever other deals are done with them is between the buyer and seller and the creditor and the debtor if they use the value of the Gogo in their deals.
Every Gogo island will try its best to keep their Gogos stable in order to make them acceptable in other Gogo islands as well, but this will be a matter between the different chapters of the Gogo alliances and will hardly have any effect on the general public. A Gogo island which doesnt keep the value of their Gogos up, will have a hard time having them accepted in other Gogo islands and even among their own people. It is in their interest to hold their Gogos stable and it is no problem to do it, because of their limited amount. There will never be more Gogos in circulation as there are used for trade. Holding large amounts for purposes of speculation would cost the speculator too much user fee.
57) Gogos and taxes.
Sometimes the question is asked how somebody can pay taxes for his Gogo income, when the government and the tax office do not accept Gogos and the simple answer is to pay them with Dollars. The Gogos are treated like income in a foreign currency and are usually booked as Dollar income at their exchange rate in the till. This can be done right away or after they are converted or spent.
Gogos will in the beginning only be a small part of the income and not many of them will need to be converted and if the Gogo income will increase so will the places one can use them.
No sense seeing a problem where none exists. There will be little need to convert the Gogos back and if it needs to be done, it will only cost 5 %, a small price to pay for additional business. It will only be on a minute part of the income and should it be needed one can always as businessmen accept only part of a payment in Gogos, if the competition lets him get away with it.
Nobody is forced to accept Gogos at all. They are NOT legal tender. One will use Gogos where they are accepted and will use Dollars in the places which do not take Gogos and only will need to convert them, if he runs out of Dollars for those purposes and if he is willing to do so. In case of taxes one might have to do it but one can always abstain from buying something else in places, where they do not accept Gogos.
Nobody should worry about a Gogo income under 50% of his total income and if somebody refuses to accept Gogos before that, it will be his loss. After 50 % one might think about converting or accepting only part payment in Gogos. Here it is the question what is better. Loosing some sales or paying 5 % exchange fee. It is everybodys choice.
The Gogos will probably not reach the speed of turnover which the money of Woergl reached during the first days and there might be more than one Gogo per person in circulation for two reasons. First there isnt such a severe depression with many unsold goods yet and secondly the Gogo has less user fee. Nevertheless the turnover of the Gogo will very soon reach a multiple of the turnover of the Dollar and therefore a much smaller amount of Gogos will move much more goods and services.
It is better when the Gogo doesnt take off as fast as the money of Woergl did. It gives people more time to adjust and avoid mistakes. A slower start with a smaller market and even less Gogos in circulation as there was money of Woergl in circulation will allow it to grow slowly to its full potential.
It is intended for Gogos to be used by people who want to use them and not something the government forces on them, even when it is only a local government. People should see how the users of the Gogos prosper and not be talked into it under high pressure. Everybody can accept only a few Gogos and use them in the beginning until he sees that there is nothing to be scared of and that they are beneficial for all concerned - even the government, which will get more taxes from people, who earn Gogos as from people without income.
Slow and easy is the way to go. Lets start the Gogos and watch them grow. One Gogo at a time and one more user at a time. Once a certain size of market is reached the development will speed up by itself. There is no rush. There is only a need to start it in the right way before the window of opportunity disappears in a nuclear holocaust.
58) The harsh reality of the change!
We know now, what is necessary to overcome a deflation with Gesell money. We know how it must be done to be successful. We know how little of it we need and we know how fast it can spread.
I will only repeat what this money must have. It is
1) a stable reference point.
2) a market of critical size.
4) free space for it because the other money is not working any more either though high inflation or preferably through deflation.
5) motivated people and an issuing agency, which does not fold if opposed.
I will not go into each point because that was done before and sometimes in the near future this points will come together.
We know what causes the boom and bust cycles and nothing has changed therefore the same thing will happen as has happened untold times in history. Inflation will be brought to an end by deflation, where money will disappear from the market. We have had now a very long buildup and therefor inflation will be severe. It cannot be prevented any more either because there is just too much money floating around. The moment inflation starts to get out of hand, which it will, the owners of huge amounts of it will force the government of the day into a deflation policy and even a monetary reform. The small guys will have lost everything, while the big ones though diversification will still be comparatively well off, probably still also in precious metals. But now the disappeared money will be replaced by Gesell money which has never happened before in history.
This will not allow the money, which by hiding forced the wares to stay unsold through deflation on the market slowly to come back to pick up bargains. There arent any. They were bought by Gesell money. The age-old money game does not work any more and money has lost its power and therefore its value. The only money of value left is the stable Gesell money, which was only a safety net of about 2 Gogos worth per person and, of course, the contracts made out in this currency. The few new ones made out in the disappeared money after it had its reform (the former ones had lost their value with hyper-inflation) now lose their value with the money they are made out for.
There is one thing which nobody, but nobody has taken into consideration. It is the fact that with moderate inflation only a small part of the money (cash, legal tender) is in circulation on the market and there is not even a tenth of the amount necessary available, if all the owners of accounts would want their money in cash, which they have a right to ask for.
It is similar as it is with the price of shares in the stock market. A very few being sold decide the paper worth of a hundred times the amount of shares which do not move. They would be worthless, if they move.
Exactly the same applies to money. 5% of moving cash decides the value of all the rest - not only of the 95% of hardly moving other cash but also the value of all other monetary assets.
The funny thing is that if a part of the 5% stops to move on the market, as it does during deflation that people believe that the rest of the money including all monetary assets are now worth more, which they are - but only if they do not move.
This overhang of money does not allow a replacement of the disappeared cash by new one, which would be a simple thing to do. The Fed can easily find some bad risk debtor to sign a promissory note and can issue new cash for it. It is doing this anyway, but has to watch that this money feeds only the stock-market bubble, where everybody is happy when prices go up.
The fat would be in the fire, if it would reach the general market and would push prices up there too. Then all this huge amount of not moving money would start to move with appalling results. Hyper-inflation! It is this horrible fact which nobody wants to admit. The Fed can only control a very small amount of cash and has no power at all over the more than 500 times larger amount which is in other hands. Now that we understand this, what has it to do with Gesell money introduced as a local safety net against deflation?
For that we have to look at the attributes of this money. It has demurrage, acting like a fine on idle money and will therefor stay on the market removing wares from it. This means that the relation between available wares and the other money changes. There will be less wares and therefor higher prices for them. In other words: this money will lose value and will therefor start moving and - good-by deflation.
What about inflation? Not the inflation of the other money. That has run its course. It cannot be changed any more. It lost its value and with it the value of all its monetary assets as it has done untold times before. What about this new Gesell money? Remember, it stayed on the market because of demurrage but what about its value? No problem. It was guaranteed and the Gogo alliance proved it by always exchanging it at the proper exchange rate and it will continue to keep its value. It works like a catalyst helping to exchange goods and services whose prices may change but like a catalyst its own value never changes. For every single price which falls another has to rise and if some rise, following the law of supply and demand another must fall. Single prices can change but the price level cannot.
Now, of course, we might not have the old money around any more and will have to collect the prices for the cost of living index in Gesell money prices. That is all!
The complete loss of the value of money has happened in many countries and it will happen here too and therefor it would be prudent to have a stable local money in place. Not only will it provide better business right away, but it would also be a safety net for all, who would do as much of their contracts on the basis of such a money as possible. Even the Gogo alliance will have to change the additional backing of the Gogo bills in circulation by the Dollars it has gotten for them to Gogo denominated promissory notes. Dollars which become worthless at high speed are not a good backing any more.
So, even if it might take some adjustment to work with two currencies of different value, it must be done this way. The other money is already quite valueless. People just do not know it because the people who have it are not buying. It is the same as with stocks. They are only worth a lot if nobody is selling them and as long as they are going up nobody will sell. The big boys are still looking for bag-holders to unload and the big boys with money are doing the same with their cash holdings only slowly converting them into real assets, which they want to pick up cheaply from people who get into trouble by a diminishing cash-flow.
There might still be time, but danger signs are already on the horizon. A stock market crash might be a trigger. The worlds currency system is by no means stable and while it may not be the end of the world severe disturbances are liable to happen any time and only a stable local currency which is sheltered by an exchange rate can be some kind of a safety net. Let us provide it for our neighbors and us.
There are talks about a combined Dollar- Euro currency, but this is no solution just as the Euro is no solution for the weak European currencies. It might postpone the day of reckoning at the cost of destroying formerly strong currencies but without a change away from the ancient monetary system nothing will change in the eternal boom and bust cycles.
59) Gogos are play-money.
Gogos are in a sense play-money like poker-chips which are used in a limited area. Imagine that they were introduced as such by a few businessmen in the small town of Shangri La in Canada. These businessmen had noticed that the Dollar was draining out of their town and some businesses had already to close their doors for lack of sales.
When they introduced the play-money they had called Gogos and which had some features to keep it within the area and in circulation slowly some results were noticed. By providing at first only a limited additional business among them more people in the community realized that the people using Gogos started to prosper and so they jumped on the band-wagon as well. More decided to sell their wares and services for these poker-chips as well and they also started to prosper.
Nobody wanted to cash out because one of the features of the Gogos was, that the yearly user fee became due then right away ahead of time and therefore everybody tried his best to use the Gogos for the full time of their validity. Some friends of the Gogo even got Gogos by depositing Dollars at the Gogo office for them because the saw the benefit of them for the community. It didnt cost them anything because they could buy the same amount of goods with them as they could have bought for the Dollars deposited. Some businesses gave out Gogos as bonus and some Gogo meals were held, where Gogos were sold as meal tickets. Every Gogo introduced which ever way into circulation stayed there and generated untold sales, this way also providing work to replace the sold merchandise.
The use of a Gogo bill was free for a whole year and only on the end of the year each Gogo bill had to be exchanged for a new one on their individual expire date for a user fee of 5 %. This feature kept the Gogos moving and allowed the alliance office to keep their purchasing value, measured by the consumer price index at always the same value as the Canadian Dollar was 1980.
Later other small towns which were in the same predicament started to use this play-money as well even as far away as half the world. Some used the original Gogos from Shangri La only with a different locality stamp and others created their own patterned after the successful Gogos.
About the Designer of the Gogo
Hans Eisenkolb is a retired businessman who has lived in Grand Forks for the past 5 years, previously living for 15 years on Vancouver Island. Originally from Austria, as a young man, he learned about a very successful similar experiment in Woergl, Austria that took place in 1932 during the Great Depression in Europe. Later, he met with some of the proponents of this system and learned about the economic theories upon which the system was founded.
A proponent of the economic theories of the German/Argentine businessman Silvio Gesell, Hans is an active member of discussion groups in Germany. The Gogo is the sum of his many years of experience as a businessman and his synthesis of the economic theories of several key economists and social entrepreneurs, whose purpose is to improve the lives of people, be of service and benefit to the community, and to maintain the health of a local economy.