Tag: currency Page 3 of 4

Rising Tide Floats All Boats

On January 19, 2010

Wow, stunning.

You know that the time is right for a disruptive technology when nobody can agree what’s floating the World Currency. Will there be deflation, Inflation, or a new currency altogether?

We believe that a new currency will emerge.

It will be called a Rallod (dollar spelled backwards), similar to a dollar, except corrected to represent real human productivity. It will be exchanged in a new social media application and supporting institutions will be crowd sourced. If you think we’re nuts, you haven’t been reading this blog long enough. If we don’t succeed, there will be someone behind us trying.

Never, ever, ever underestimate the cloud; the source of all rain upon which rising tides float all ships, yadda, yadda, etc…..

Conversational Currency

Imagine people owning their knowledge assets like real property? Imagine that people trade knowledge assets like financial instruments? Imagine if they can bundle and securitize knowledge assets like the WS glory days did with debt (debt is really just a future contract on knowledge assets)? Far off? Think again….

In the mean time; here are some interesting articles aggregated by McKinsey:

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As the US economy emerges from the crisis, there’s little consensus on what lies ahead. Economic forecaster David Levy says chronic high unemployment will lead to, at worst, slight deflation. While former Fortune writer and financial adviser Al Ehrbar says, not so fast: with the Federal Reserve having flooded the market with dollars, massive inflation is likely.

Read Here

Plus: What Matters continues the conversation on the fate of the dollar:

GENG XIAO: Why the Chinese will not bail out the dollar by allowing the renminbi to appreciate

Read here

BENN STEIL: There are steep downsides to both a strong dollar and weak dollar policy

Read here

GERARD LYONS: Whether or not the dollar will topple isn’t in doubt, only its speed of decline is

Read Here:

MARTIN GILMAN: Now that the United States is a debtor nation, its currency can no longer dominate

Read Here:

CHARLES WYPLOSZ: The dollar is the worst international currency, except for all the others

Read Here:

TIM ADAMS: The dollar’s share may shrink, but it will continue to dominate

Read Here

MICHAEL MANDEL: Beware of a dollar crash if the United States loses its innovation edge

Read Here

JEFFREY GARTEN: The question isn’t if the dollar will be replaced–it’s when and how

Read Here

Join the conversation at WHAT MATTERS

Here

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Calculating The ROI of Social Media

By Admin

On January 18, 2010

In General Information

This video introduces a new way of looking at social media valuation. People find value in social media otherwise they would not do it. How is that value expressed as a financial instrument? If you engage your clients in the same currency that they are trading among themselves, the greater the likelihood you will realize the value of the new media phenomenon.

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Pssst … Wanna Get Wasted?

By Admin

On January 16, 2010

In General Information

Many Social Media Gurus are espousing a new culture that their clients should forget about blogging (adding meaningful content) in favor of the ubiquitous widespread “updates”.

Using automated apps, you no longer need to waste time creating content that teaches or expresses, you can populate across social media space carefully wedged in between someone else’s creative content. I find this appalling.

The new marketing mantras go something like these:

“Go where your customers congregate”.
“Gain their trust by sharing your stuff”
“Soon, you can start to influence their behavior”
“Once hooked, they will do your deed for freeeee!!”

This is starting to sound more like the neighborhood drug dealer than any sustainable economic paradigm.

Slavery on Steroids

Slavery is a term characterized in part by the coercion of another person to perform or act without compensation. The effects of slavery are not only physical, but mental as well. The effects of oppression manifest themselves in addictive behaviors.

Social acceptance is an extremely powerful psychotic that can be cleverly turned against any person. The techniques of social media are getting increasingly sophisticated in hijacking and consuming the social capital of others.

Green Marketing

It does not take long to see that the marketing professions are defining the social media space regardless of what anyone says about user-generated content. The danger is that social media will become just as unsustainable as the economy that it replaces. People will soon lose the ability to produce the currency that the media demands to support itself.

Ban advertising

t would be high temple sacrilege for any social media monetization strategist to suggest that advertising of any kind must be banned. Well, not exactly, but the objective of advertising can be redefined if there were a means to do so.

The only sustainable monetization strategy (of which there are terribly few current examples) are the deployment of social media applications that empower people to discover their own individual talents, to pursue what they are naturally best at and enjoy doing most – while also eliminating the clutter and irrelevant messages that distracts them from their personal life goals.

This means that brands should communicate more and not less. They should identify, educate, and promote the talents and abilities of a million customers instead of 1 superstar athlete or celebrity.

The proverbial sports analogy:

Advertisers should sit in the bleachers and cheer on their favorite customer, but they should not be in the game, blowing the whistle, or running the scoreboard. Let them pay admission, see my logo, and buy my overpriced beer. Let them sell to each other on their own dime – but under no circumstances should they be allowed on the field, in the schools, or in the home without explicit and expressed permission of the customer.

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Political Memoirs; The Money Shot?

By Admin

On January 6, 2010

In General Information

One must seriously ask, how exactly do political memoirs increase human productivity?

2009 marked the resurrection of the infamous “Book Deal” with lovely Ms. Palin and entourage leading the charge. However, books are not the actual product; it is the kindling (amazon pun intended) that they provide for endless fodder for the mainstream and new media. It’s the money shot.

Entering a mid-term election year with the future of our country in the balance, the onslaught of meaningless dribble will be epic. The national pundits will go wild fueling local media coverage as the authors engage in their cross-country tours of duty performing the perfunctory act of accomplishment.

There will be a wide audience of Americans asking themselves the same question:

Should the past be used to predict the future?

Karl Rove

Former deputy White House chief of staff’s book Courage and Consequence will be published on 9 March by Simon and Schuster’s Threshold Editions, a conservative imprint. Deal reported by US media at $2m.

Donald Rumsfeld

To be published in the autumn by Sentinel, an imprint of Penguin. No advance for the former defense secretary, share of proceeds to go to charity.

George W Bush

Autobiography, tentatively titled Decision Points, is to be published by Crown. Deal estimated at $7m.

Laura Bush

Her memoir is due in the spring from Scribner. Laura’s deal may be worth more than her husband’s. US media put it at $8m.

Dick Cheney

Scheduled for spring 2011, the former vice-president shares publisher with Rove. His deal is estimated at $2m.

What if this conversation has no currency?

What if we are reaching a tipping point? What if nobody cares anymore? What if none of this makes any sense to anyone? What if we can more accurately use the future to predict what really happened in the past?

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Should Education be Open Source?

By Admin

On December 18, 2009

In General Information

We continue to challenge the relevance of the college “degree” as being an insufficient measurement for what “educated” is, or is not, in an innovation economy. With the cost of a college degree spiraling upward and the value of the degree spiraling downward, the market will tip in favor of the alternative education measurements.

It is important to note that we do not challenge the existence of institutes of higher education, only the “degree” as a unit of measurement. The four year Bachelor degree and two year Masters degree are irrelevant as a title (there is no legal title since the age of the guilds) and arbitrary in duration to respond to the diversity, speed, and scope at which new technologies become available for deployment.

Ray Barton writes: The UK House of Commons in its’ report on Re-skilling in January 2009 stated the useful life of a degree is five years. In high tech professions, the useful lifetime of knowledge can be as short as 1.5 years.

This alone disrupts the current paradigm of higher education in several ways.

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Pirates, Anarchy, and the Monetization of Social Media

By Admin

On December 11, 2009

In General Information

(Editor’s note: some ideas adapted from writings of Peter T. Leeson and introduces the idea of IOUs trading as a proxy for production. The monetization of social media will likely evolve from such an idea)

No sane blogger would post an article suggesting that anarchy is superior to government as a means of producing widespread cooperation…or would they?

As Milton Friedman put it, “government is essential both as a forum for determining the ‘rules of the game’ and as an umpire to interpret and enforce the rules decided upon.” Most great anarchist theories are duly faulted for significant problems coping with cheating and violence.

Nonetheless, large swaths or anarchy exist today. For example, there is no World Court to enforce World Law, if such laws existed. Nor is there a Global commercial law to enforce contracts between Global traders. Even at a local level there is no guarantee that the government will protect your property or enforce your contracts.

A common objection to anarchy is that without government the strong will plunder the weak because the weak have an inherent inability to protect themselves. How can self-governance alone protect the weak?

Social Piracy?

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Fallout: FTC and Blogger Payola

By Admin

On December 11, 2009

In General Information

The FTC recently issued guidelines for payola to bloggers. The impact and opinions are now emerging over what this means for social media. As with any game played on a new field, rules need to apply. The questions emerge regarding who the rules hurt, who they help, and how the game will develop in the future due to those rules.

Straight from the horse’s mouth:

The revised Guides also add new examples to illustrate the long standing principle that “material connections” (sometimes payments or free products) between advertisers and endorsers – connections that consumers would not expect – must be disclosed. These examples address what constitutes an endorsement when the message is conveyed by bloggers or other “word-of-mouth” marketers.

Extrapolate into the future:

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Is Freedom A New Economic Paradigm?

By Admin

On December 10, 2009

In General Information

A New Economic System of the country of Montenegro is based on complete and unfettered economic freedom; in other words, the elimination of all barriers to conducting business. Is Freedom A New Economic Paradigm?

Veselin Vukotić ‘s paper titled Economic Freedom and New Economic Paradigm, offers a case study that enlightens us as to some of the core changes, some easy and some difficult, that any proclaimed ‘new economic paradigm’ would place on people, culture, politics, and the markets. From this insight, perhaps we’ll see a new paradigm emerge.

Freedom; A competitive Advantage

Montenegro has achieved a competitive advantage in their Eastern European region by reducing international trade barriers, treating foreign and domestic concerns equally, reducing “contribution” fees and other taxes, reduction of public spending, affirmation of private property, and encouraging entrepreneurship. Veselin Vukotić also notes that the concept of economic freedom is a complete theoretical and practical expression of an idea. He quotes Plato:

The difference between concepts is the difference between starting ideas!

Therefore, he concludes that the idea of economic freedom is freedom of an individual to conduct business (earn money), and that business is the key factor of a society’s development and individual wealth. While we now know that unfettered capitalism breaks down at some point, he does accomplish something important – the elimination of all government as a defining element of freedom.

The Singularity Solution

We know it is often easier to solve a problem if we can remove certain elements, even temporarily, and analyze components individually. Suppose we eliminate Government from the equation, corporations would rule. However, corporations are made up of individuals, so individuals would rule…they would rule whom? The logic also breaks down.

There is one exception: what if all individuals were corporations and they ruled only themselves? Corporations are keeping government out of their affairs by keeping people off the books. The solution is for everyone to structure their existence as a corporation contracting to each other for every conceivable business arrangement. Heck, it only costs 40 dollars to open a business in the the U.S.

Self-regulating Freedom?

Knowledge would be shared freely, people would be paid for their productivity, diversity and strategic combination of knowledge would be rewarded. Everyone would own their knowledge and would seek to accumulate more. Trade barriers would be eliminated, taxes would be reduced, private property would be affirmed, and entrepreneurship would be encouraged. Like a family, no corporation could become wealthy at the expense of another corporation for very long.

Would you be willing to pay the government to leave you alone? Is that Freedom or a new economic paradigm or both?

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In Search of A New Economic Paradigm; Part 1

By Admin

On December 5, 2009

In General Information

Too many things too big to fail.

It could be currency collapse, an environmental collapse, a pandemic collapse, a food collapse, a water collapse, Energy collapse, a political collapse, or any number of Black Swan events – something somewhere too big to fail will fail. When that happens, it will take everything else down with it. After all, that’s what too big to fail means.

Look on the Sunny Side

The Idea of a New Economic Paradigm is gaining modern popularity. This declaration is a indeed a grand and lofty goal for the collective human consciousness to grasp. But grasp it we must; both Socialism and Capitalism are bankrupted social models. Quit bickering, It’s time to move on

Do something, anything:

The point of this recurring article is to understand the ideas of other people as to what a new economic paradigm is or needs to accomplish. The following are a few that I’ve dug up and will feature here as a repeating feature Called: In Search of The New Economic Paradigm.

***

It’s Time For A New Economic Paradigm by Joe Kresse, Foundation for Global Community

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The Great Currency Shift

By Admin

On November 19, 2009

In General Information

I am seeing an increasing amount of articles and ideas related to an alternate financial system. The continued traditional media narrative implies that the current system is unstable and corrupted with insider deals, Ponzi schemes, bribes, and high profile acquittals of financial crime. The underlying age-old assumption is that the wealthy (merchant class) will win and the rest of us (the working class) will lose.

Keep in mind that the Mexican peso crisis was not caused by a foreigners, it was the internal wealth leaving their own currency for safe haven elsewhere that sparked the run on the Mexican Central Bank. The absence of a currency other than the dollar and the integration of the dollar among all other currencies is the only thing keeping that from happening in the US. But this may change.

1. Either a new global currency (like a garden salad of currencies and/or commodities) will arise as a ‘less-risky’ diversified alternative,

2. A virtual currency will arise from any number of new developments in social media.

Of course the first option seems far more realistic. But keep in mind that the nature of “Disruptive Innovation” is where the dominant player does not even see the disruptor until it is too late. The thing that social media has not yet figured out is how to capitalize and securitize an alternate currency. But we are getting close. After that, the rest is easy because money is simply a social agreement. What would you rather hold, debt backed currency or innovation backed currency?

Nobody can really say that the entire 65 trillion dollar world economy is not vulnerable to a disruptive currency. Please review The Next Economic Paradigm for a complete specification of Innovation Economics. Thanks!

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Seeding the Clouds of Social Media

By Admin

On November 18, 2009

In General Information

OK, so what part of: Governments and industries have no intention of fixing things that they broke are we still having trouble with? The climate change summit ended in a draw after Kyoto ended in party pooper. You can count the financial crisis, endless warfare, world hunger, slave labor, forest-to-dump consumerism among the same pile of sun dried bullshit. Does anyone still trust the “leaders”?

There is a way out. People need to organize themselves around their a social media financial system. This is actually a relatively easy thing to do. Social media is like a big cloud – a big gray mass with no beginning, end, center or physical boundaries. The only way to engage the cloud is to talk to it. If you talk to it the right way, it delivers rain. If not, the well stays dry.

Now here is the trick. As social media applications continue to integrate, a correlation between conversation and rain becomes “diversified”, the randomness begins to disappear. Steady, consistent, and sustainable conversations across a wide array of social action will delivers steady, consistent, and sustainable rainfall across a wide area of social landscape.

At some point, someone will notice the similarity between the social media rainfall and the behavior of large diversified cash flows. They will develop a financial instrument to “capitalize” this value because it has become predictable. Predictable value flows can then be “securitized”. Unfortunately, the dollar is a debt backed currency and a productivity backed currency will need to arise in its place.

China accuses the weakness of the US dollar for driving speculation bubbles in anything and everything of “value” that is not a dollar. The problem is that the dollar is the only game in town. If there were an alternate currency with superior representation of human productivity, all dollar denominated assets will be converted to the new currency. The entire 50 Trillion dollar debt pressure on the US dollar will convert to a productivity backed currency forced to drive innovation at a comparatively astonishing magnitude – almost on the scale of the problems that face humanity.

A productivity backed currency means that those who are most productive earn the most money. Think about that for a minute, then go read The Next Economic Paradigm.

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Making A Mess on Madison Ave

By Admin

On November 10, 2009

In General Information

Wall Street talks about a Basket of Goods. The UN talks about a basket of Currencies. What would Madison Avenue say when Main Street coverts your baskets of goods with their basket of social currencies?

Here is a simple business plan that will screw everything up.

Suppose that a pool of advertisers in a single industry (yup, competitors) all throw 10% of their advertising budget into a basket. Now, suppose that money is distributed among a basket of the top 10% most active social media mavens (bloggers) based on their rankings related to the affinity segment.

For example, all teen fashion designers and outlets would toss 10% of their ad budget into a basket. The money would be distributed to the top 10% of teen fashion bloggers for doing exactly what they are going to do anyway – communicate their lifestyle experiences in their galaxy of communities.

What does this achieve?

1. If your product sucks, you’ll know why.

2. If your competitor rocks, you’ll know why.

3. Your brand is disseminated more efficiently than advertising

4. You are supporting the community that serves you.

5. People who are good at community organizing can earn a living doing it – that’s good for communities and your brand image.

6. Beats the Payola Laws because the payer can only pull their money from the basket – not any single payee. Pulling out would not send a good message oh, no, no, no

7. Bogus Bloggers can’t beat the rankings

8. a 300 Billion dollar per year advertising industry with a 95% failure rate can be bypassed by GOOD products – profit center anyone?

9. Designers create products in response to Social Priorities not Wall Street priorities.

10. You’ll create a Millions of young, proactive, innovative entrepreneurs too busy to watch traditional media anyway.

Oh sure, you’ll hear a desperate whine from Madison Avenue – That’s all free advertising – as a bulldozer moves the wrong way down a ONE WAY street.

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Community Currency; Ithaca Hours

By Admin

On November 6, 2009

In General Information

Editor’s note: I found this copyrighted piece from all the way back in 1995. I find such history enlightening. As a researcher it allows me to eliminate certain variables such as Social Media, 9/11, TARP, GWB, BHO, Global Warming, and a host of other firebrand influences on public opinion and action. That said, the clarity is remarkable. Take strong note of the intention of fulfilling social priorities. Today, as our corporations and government (federal, state, and local) continue to cut social programs in order to service interest on debt, the void on social programs will induce an inevitable condition; Community Conversational Currency.

by Paul Glover

Originally published in IN CONTEXT #41, Summer 1995, Page 30
Copyright (c)1995, 1997 by Context Institute

Many communities are giving up waiting on large corporations or government to invest or provide jobs, and are instead building on their own strengths and resources.

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Community Currency Systems

By Admin

On November 5, 2009

In General Information

Community Currency Systems are not new, in fact, they preceded the current financial system by, say, 50,000 years. The focus of this blog resource is to investigate all currencies and reflect them upon the image of a vast new technological breakthrough called social media.

Our hope is to discover, specify, and influence the formation a new financial system that allows communities to trade among each other for basic goods and services before, during, and after the “reboot” of our current economic system. We are optimistic that the current economic system will ebb in favor of a next economic paradigm that reflects social priorities as a means of meeting Wall Street Priorities. We’ll be posting several articles on the subject in the coming days.

Here are some of the earlier resources to get you started on local currency and other aspects of community economics. I like the early systems because their rationale was independent of more recent influencers such as 9/11, TARP, GWB, etc.

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A Local Currency Primer-Comfort Dollars

By Admin

On November 2, 2009

In General Information

Douglas Rushkoff has an interesting post, indirectly on how local currency can spur social capital. As more corporate and governmental institutions fail to meet the needs of society, people will need a currency that they can trade among each other. If the dollar fails, the need will be dire.

The difficulties that will ultimately limit such enterprise is the inability to capitalize and securitize a social currency. Conversational Currency solves this problem by demonstrating how social media, if organized correctly, can simulate many of the functions of corporations and government. As such, people will ultimately trade the currency they trust most.

I like Douglas Rushkoff’s work. I suppose the ultimate test of concept would be if he finds this post and contacts us to integrate The Ingenesist Project and Conversational Currency into his thought leadership. Thanks Douglas!!

A Local Currency Primer-Comfort Dollars

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Banking on the Past

By Admin

On October 27, 2009

In General Information

I am writing a short series on the Banks of the past, present and future. Prediction what future of banking was the easiest piece. Identifying the current transition phase was a little tougher so I borrowed from another blogger’s post. Describing banking of the past was most difficult. Here is an example of what I’m talking about:

“The bifurcation of the credit loss piece is a key component of the revised rule,” says Larsen, “but the part that often gets missed when pundits talk [about the rule] on TV is that the trigger that starts the whole [measurement and recording exercise] is the realization that a loan is not going to be repaid. The rule addresses an impaired security, you still have to identify the fair value of that security, and all of the losses are disclosed on the balance sheet.”

Holy shit, did you understand any of that? Guess what – nobody else did either and bankers are wondering why nobody wants their “currency”. Currency is a conversation, a social agreement, a community organizer – if nobody know what it is, people are going to start trading something else.

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A Learning Revolution

By Admin

On October 13, 2009

In General Information

Today I received an invitation to join a poll, but it was not the Gallup organization. Today, I was given some currency to trade – it was not dollars. Today 1200 people read my ideas – but not through traditional media. Today, I did not work for a corporation – but I did work and I did earn convertible currency. I voted 10-15 times today, but not for politicians.

Is this the way things will become? Ask any 25 year old what their aspirations are and, by definition, that is the way things will become.

A Learning Revolution

Today, the Wall Street Journal is reporting a strange new paradigm of populist angst. In the past, public sentiment would swing back and forth between anger against the corporations (liberals) and anger against government (conservatives). Today, however, things are different. People no longer view these populist swings as opposing forces. Rather, people see government and business as one big swindle that takes all of the assets of the people and delivering them directly to the hands of the rich and powerful.

“They’re [people] mad at institutions — all institutions,” said Karin Johanson, a Democratic strategist. “Nobody can underestimate the angst, or even fear, of the American voter right now…The institutions they were relying on which were assuring them of their security were not there.”

So, dear reader, here we sit at our computer screens fully rational and aware that there is nothing we can do to impact change at this macro level. Sure, we can join fringe groups on Facebook, or we could write a letter to our so-called Representatives. Or… WE CAN REVOLT!!! Except, who are we going to revolt against? Government? , Corporations?, Each other? It’s like attacking a cloud…no middle, no defined edges, and no distinguishing features, except lightening.

For example: (WSJ) The double-edged anger is creating difficulty for both parties. Voters are demanding solutions to problems in health care, but remain wary of both government agencies and private firms that could play a role in a solution. People are upset about deregulation and furious at re-regulation. They want government action, but not if it swells the deficit.

“The greatest movement within the tea party is ‘None of the above,’” said Jim Bancroft, a founder of the tea-party group in Hartford, Conn. Officials in both political parties “need to be totally removed — every single one of them,” he said.

It would really not have mattered if John McCain or Barack Obama were president. The difference would have us entering the same vortex with either a scowl or a smile. The job of the President in this day and age is not unlike US Airways Captain “Sully” Sullenberger – land the crippled jet on the icy river by gliding as slow as possible, as low as possible, as level as possible, for as long as possible and hope that the hull does not sink.

Whatever is left will become the new economic paradigm: the fabric of society must remain intact, capitalism must be preserved, and social priorities must be enabled. It will be neither socialism not capitalism – both have failed. We need to learn Social Capitalism where social media is the dominant institution that issues a productivity based currency. So sit back, keep your eyes, ears, and minds open. Learn from each other. Let the pilot do his job – love him or hate him, he’s got the rudder.

Photo credit: Bill Moseley

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What If The Dollar Fails?

By Admin

On October 1, 2009

In General Information

I have been hearing a great deal about an inevitable collapse of the dollar. Not today or tomorrow, but more likely over the course of the next 10 years. The failure will probably not be a stupendous crash since politicians would avoid this as a means of self-preservation. Rather, it would simply be a slow and grinding inability to “afford” many important things using cash. Note that this has little or nothing to do with your human ability to produce important things.

Few people disagree that a 50 Trillion dollar debt obligation cannot be paid back without at least 50 Trillion dollars in increased human productivity. Traditional productivity usually means taking stuff out of the ground, air, ocean, or the forest and making things that eventually wind up back in the ground, air, ocean, or the forest. Today, we are encountering constraints on the planet’s resources. Something has got to give.

The ONLY technological change that is happening at anywhere near the rate that can conceivably deliver a substantial amount of “increased productivity” is Social Media. But how do we turn it into dollars? Maybe we shouldn’t.

Here is the problem; the trends for monetizing social media actually slow it down. People use social media only because of the prospect for increasing their long term productivity as relationships prosper. Entrepreneurs trying to get paid for their innovations invariably need to introduce “friction” by attempting to convert “short term” user productivity into cash. There is no business case on short term productivity making their innovation nonviable. Therefore, the monetization problem introduces a threshold over which most great innovations simply cannot reach.

The purpose of this article is to consider what people will use for trade if the currency becomes ineffective AND their productivity does not. If the dollar does fail, people will attempt to meet their daily needs until a financial system is corrected. Many countries that have experienced currency problems and the most common result are the emergence of a black market where Levi’s, Cigarettes, or other commodities serve as a de facto tax-free currency.

While on-line gaming industry is pioneering virtual tax-free currencies with extraordinary results, back in reality, people will begin trading services. Plumbers will find dentists, farmers will find laborers, and teachers will find landscapers. Matchmaking will become a financial instrument. People will use Facebook and Twitter, Linkedin and many others in new ways in order to keep the game in play.

In fact, perhaps they already are.

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Building a Better Entrepreneur; Google 10^100

By Admin

On September 27, 2009

In General Information

Google 10^100 award voting is Launched. There are two sectors that we believe would have the greatest impact on the greatest amount of people; building a better banking system and funding social entrepreneurs. You can’t have one without the other – if Google funds these two sectors in concert, the outcome would be incredible.

Build A Better Bank

In the old banking system we assume that we have the knowledge to execute a business plan and we go to the bank to borrow the money. In the new banking system, we will assume we have the money and we go off in search of the knowledge. Social Media is an excellent “public accounting system” for knowledge assets.

Our current banking system has gotten it backwards.

Technological change must always precede economic growth. The supranational currency may be backed by productivity and not debt. Social media provides an excellent platform upon which to design such a banking system. People trade “social currency” at a tremendous rate. This is evidenced by the amount of destructive innovation is occurring in many legacy sectors due to social media.

Better Banking Tools for everyone

“Partner with banks and technology companies to increase the reach of financial services across the world. Users submitted numerous ideas that seek to improve the quality of people’s lives by offering new, more convenient and more sophisticated banking services. Specific suggestions include inexpensive village-based banking kiosks for developing countries; an SMS solution geared toward mobile networks; and ideas for implementing banking services into school curriculums”.

Suggestions that inspired this idea

1.   Enable prepaid cell phone bank accounts for millions of people working in the informal economy
2.   Create a community-level electronic banking system for rural areas
3.   Build IT-enabled kiosks which provide access to financial services
4.   Create a single world bank or supra-national currency, uniform rules and transparent public accounting

Fund Social Entrepreneurs

Venture Capital is ridiculously expensive. Corporate innovation serves shareholders value over social priorities. Some say that the financial risk of funding innovation is too high. The top ten reasons why start-ups fail are due to knowledge deficits, not money deficits. A new banking system that trades knowledge as currency would solve this problem.

The key is to match most worthy knowledge surplus to most worthy knowledge deficit. Google is perfectly able to build a search app for knowledge assets if there were an inventory of knowledge assets. With the most worthy match, Risk can be reduced and new financial instruments can be developed such as the innovation bond, innovation insurance, tangential innovation markets, and destructive innovation transition contingency options, etc.

Help social entrepreneurs drive change

Create a fund to support social entrepreneurship. This idea was inspired by a number of user proposals focused on “social entrepreneurs” — individuals and organizations who use entrepreneurial techniques to build ventures focused on attacking social problems and fomenting change. Specific relevant ideas include establishing schools that teach entrepreneurial skills in rural areas; supporting entrepreneurs in underdeveloped communities; and creating an entity to provide capital and training to help entrepreneurs build viable businesses and catalyze sustained community change.

Suggestions that inspired this idea

1.   Provide targeted capital and business training to help young entrepreneurs build viable businesses and catalyze sustained community change
2.   Create a non-profit, venture capital-like revolving fund to invest in high-impact local entrepreneurs
3.   Send young American entrepreneurs to underdeveloped communities to help create small businesses that would economically benefit those communities
4.   Create schools in rural areas to teach local people how to become entrepreneurs
5.   Create a private equity fund to help immigrants in developed countries finance business development in their countries of origin

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Unspoken Communication and the Bottom Line

By Admin

On September 23, 2009

In General Information

As a community developer for several websites, I go through lots of different information sources. I am looking for stories and nuance that demonstrate how conversation behaves like a currency. The more I look, the more I see. The strength of the analogy is quite remarkable.

Unspoken Values

I can also see how the unspoken communication stores as much value as the spoken communication. In the U.S. , there are race troubles, financial troubles, trust troubles, and confidence troubles. Many fears and anxieties can be accelerated by Social Media in unpredictable ways. First, information riles people up quicker than facts can follow, and second, the shelf life is much shorter as issues are dissipated by new ones. Much is left unprocessed.

The Micro-Trauma

What happens when important issues in life go unresolved? The life of a soldier may offer some clues where events can happen faster than the mind can process them. Perhaps the life of a child offers some clues where every day brings so much new information that all new events are processed in terms of basic necessity. Perhaps any traumatic event such as a divorce, loss of a family member, or victimization places us in the realm of the unspoken communication. This is a protection mechanism, not a delivery system.

As the World Churns

Billions of people hustle off to work and spend their day producing stuff in order to earn imaginary money so they can spend imaginary money. This helps things move from the forests to the dumps. They have no idea the sophistication of the micro-trauma delivery system that acts on how they process information.

The unspeakable drives our fears, interests and concern and influences how we process future information. I am amazed at how two people will arrive at opposite conclusions from the same data and the inability for those two people to speak to each other rationally. Advertisers, politicians. PR firms, and traditional media can deliver bits of information and dissipate them quickly leaving an unprocessed data-packets behind.

Opting Out:

I just closed my land line, canceled cable TV and purchase a subscription to on-line music radio that I play constantly. I “hide” the fringe mongers on my FaceBook, and get my news from Google alerts, feeds, and sources that align with what I am able to process mentally and emotionally. What I cannot process, I have a network of trusted friends who can process the information and guide me through the issues. I am quite happy, in fact, as many areas of my life are improving; health, friends, family, productivity, and finances…etc.

There is a tremendous opportunity available in delivering the right information to the right people with the intent of helping them to successfully and completely process information. This is more work up front, but the loyalty in the long-run is exactly what politicians, marketers, and news sources are competing for. Instead they are killing the patient to cure the disease.

In order to monetize in the new economic paradigm, help the unspoken communication become speakable and then listen to your friends.

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You Can’t Eat Gold

By Admin

On September 3, 2009

In General Information

The following is a question and answer that I responded to on a Linkedin economics forum. This question still occurs in so many forms when it is also abundantly obvious that Social Media is driving so much value in so many directions. The irony is that the question is asked within the currency that it fails to recognize.

Art credit

Question:

Fiat money is the cause or always the main cause of financial crisis. Reverting back to gold standard can give stability. How can this be implemented?

Answer:

It cannot. Everyone agrees that money needs to be backed by something tangible. However, gold has a host of problems as well that are discussed extensively on-line and cannot be ignored.

A successful and stable currency must be backed by the productivity of the [citizens of a country] users. So these two words should be interchangeable; i.e., a country spends productivity to fight a war. A country spends productivity to fund universal health care, etc.

The cause of financial crisis is when the money becomes divorced from the productivity. Debt is a transaction that exchanges current productivity for future productivity – assuming that productivity will increase at least by the so-called ‘risk’. CDOs and other exotic financial instruments further obscure true productivity until money becomes driven irrationality and emotions completely separated from productivity.

If people lose trust in the currency, they will no longer trade it – they will find something else. Your hope is that they will find Gold.

Note clearly that innovation is also a transaction that exchanges current productivity with future productivity (due to the innovation). As such, a currency backed by innovation is of the same species as a currency backed by debt. Therefore, the entire financial system does not need to be torn down and rebuilt to serve a new non-debt backed currency.

The answer to your question is to look toward the places where extraordinary innovation is occurring today, right now. It is clear that social media is developing this new currency. The problem now is fairly simple; making human knowledge tangible. This is where the innovation is. Here are some resources of people working on this problem:

http://ingenesist.com

http://relationship-economy.com

http://conversationalcurrency.com

Our deepest concern should be to feed the Goose what’s been so good to the Gander all these years. Of course one argument in favor of gold is it’s scarcity. However, it is difficult to imagine that in an era of scarcity of so many resources, the basis of a currency ought to be more scarcity. Knowledge, conversation, and innovation are scarce relative to the problems that they must be deployed to solve. We’re in this together.

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It Takes Currency to Make Currency

By Admin

On August 11, 2009

In General Information

If you’re a Flash game developer, you are concerned with how you can make a living from your creative and intellectual services. Fortunately there is a payment system so workable, that it may actually work. Game developers can charge money both for their games, and for things within their games.

Here’s how it works:

1.   Player pays real money to buy fake money within the game.
2.   Player spends fake money on virtual stuff.
3.   Virtual stuff increases the value of the game.

The game developer can technically charge for whatever they like: level packs, hats, extended versions/director’s cuts, etc, etc. The sky’s the limit.

These types of transactions have been very popular in places like Korea for a long time, and it was amusing to see the initial resistance and resentment in North America to the idea. Meanwhile, North American Pioneers of such systems are drowning in money.

The Right [virtual] Stuff:

Now, suppose that Social Media could be modeled after a huge game where people act based on a set of incentives like, say, connecting with friends, accumulating followers for their blog, finding proverbial “gold rings” like employment opportunities, business opportunity, spiritual growth, professional advice, cheap airfare, fun things to do, product reviews, or political activism…just to name a few.

Suppose that in order to get from one level of the game to the next, they need to engage in conversation with another player. Anyone who has been on Linkedin, Twitter, or Facebook long enough knows that the “right virtual stuff” is sometimes hard to acquire. Twitter finally broke the mold with applications that now “sell” followers (I wonder if there were any Flash Developers behind this innovation).

A Mutually Inclusive Game:

Now, suppose the game was mutual such that some players need you a little bit more than you need them and they are willing to invest in your connection. Similarly, suppose you need some players a little more than they need you and you too are willing to invest for their connection. Finally, all players know that a mutual link between two appropriate players substantially increases the value of both players relative to the game.

It Takes Currency to Make Currency.

Immediately the engine of entrepreneurialism will ignite as people figure out new ways to play the game. With a trillion dollar advertising industry, a trillion dollar Professional Placement industry, and a trillion dollar recreation/leisure/entertainment/family industry on the ropes, you can guarantee that innovation will be absolutely intense. Welcome to the Innovation Economy.

(Editor’s note: This article was inspired by a piece authored by Ryan and can be found here)

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What is the Current of Currency?

By Admin

On July 26, 2009

In General Information

There is not much more ‘federal’ about the “Federal Reserve” than there is about Federal Express. Except, the Fed is a private company for whom the US government is the “Legal Tender”; literally and figuratively.

We could analyze this cozy relationship or we can realize that the value of any currency is a social agreement among people who trade it for goods and services. There is nothing keeping each and every one of us from “legally tending” a currency in communities to exchange for goods and services – as long as there is a social agreement.

The Semantic Web:

The word “currency” has several meanings. It can mean a “medium of exchange” such as “bank currency”; or it can mean a placement in time such as a “current edition”; or it can mean the flow of something such as the “river’s current”. Money is, in fact, all three; it is exchanged, it changes with time, and it moves things. Therefore, anything that does these three things can be used as currency.

Social Media space has awarded civilization with an extraordinary capacity to create, maintain, and design social agreements. Social agreements are founded on conversations between people. Conversation is the medium of exchange for the trade of goods and services long before the money is distributed (or not).

The Value of Value:

The value of the dollar is not changing, but the value of the social agreement is. Conversations about Land, Labor, and Capital are transcended by conversations about environment, health care, social justice, human rights, and global freedom. The social agreement that once supported the value of a dollar is now supporting something else. The value that the dollar once contained is being transferred someplace else. The people that once controlled the value of currency are being replaced other people. The social agreement is being replaced by another one.

To understand the new social agreement is to understand the currency of currency. To support the conversations that define the new social agreement is to support the value of social currency. To support the value of social currency is to support the value of money.

Humility: The New Economic Paradigm

In order to intersect the flow of money people need to be trading a conversational currency. In today’s economy, in order to find value, we need to ask someone else where it is. In order to create value, we need to tell someone else where it is. In order to stay “current” we must engage with others. In order to preserve value, we need to preserve the value in others.

Most importantly, especially for those who want to hold a great deal of money or power or control: in order to hold value, they must give it away. In order to hold power, they must empower others. In order to hold control, they must give up control to others.

Conversely, Humility is the new gold standard and the bad guys will always try to steal it. Does this sound familiar?

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Is a social contract legally binding…and who cares?

By Admin

On July 13, 2009

In General Information

Trillions of dollars in play:

Trillions upon trillions of dollars worth of value that once coursed through the veins of Market Capitalism is being transferred to social media from the legacy economy now stifled by insurmountable debt. These numbers are indeed spectacular because they account for the invisible value “lost”, and most importantly, the calculations provides clues on how to “find” it again.

What is a Social Contract worth?

According to Legacy Economics, the term “social contract” describes a broad class of theories that try to explain the ways in which people maintain social order. The notion of the social contract implies that people give up some rights to a government or other authority in order to receive or maintain social order. Otherwise, we would each have unlimited natural freedoms, including the “right to all things” and thus the freedom to harm all who threaten our own self-preservation; there would be an endless “war of all against all”.

Take me to your leader

By contrast, Social Media begs the questions: who or what exactly is that authority? Isn’t the greatness of the Internet the lack of an all powerful authority? So why aren’t we at a war of all against all? What keeps social media at peace instead of an endless flame war? Whatever this alien is, it is capturing and storing trillions upon trillions of dollars of value away from the legacy economy, but where?

Separating facts from fiction

According to the old economy, it is a “fact” that human knowledge is an “intangible asset” of which there are only two types defined:

1. Legal intangibles such as trade secrets, copyrights, patents, and goodwill (brands).

2. Competitive intangibles such as knowledge activities, collaboration activities, leverage activities, and structural activities.

However, when we consider social media;

1. There is no law governing the phenomenon – so there are no legal intangibles.

2. Collaboration, leveraging and structural activities are not being conducted in a competitive environment (the context of one “Company” against another).

So, the definition fails to account for knowledge assets in social media. The Ingenesist Project discovers the lost trillions simply by treating the social contract like a legal contract.

Tangible assets are managed by contracts

Technically, any oral agreement between two parties can constitute a binding legal contract. The legacy economy limitation, however, is that only parties to a written agreement have material evidence (the written contract itself) to prove the actual terms uttered at the time the agreement was struck.

But social media, email, and blog posts, etc., all constitute vast “written” agreements and material evidence as far as most people are concerned. So what is missing? Are we waiting for permission from government, Wall Street, corporations, attorneys, or the Federal Reserve to say it is OK for people to stop competing with each other or to renegotiate the terms of the social contract (and currency of exchange)?

The mystery is no mystery

Guess what, there is nothing there. Absolutely nothing except philosophical barriers carried over from legacy economics built upon political division. The mystery is that there is no mystery except using social media to unite people. After all, the biggest Brand in the world is a Community Organizer. Such calculation provides clues on how to “find” value again.

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1.3 Trillion Dollar Professional Contact Market

By Admin

On June 30, 2009

In General Information

“Hey, I know a guy who owes me a favor …”

It is only a matter of time until professional contacts will be for sale. The problem is that the ROI (return on investment model) is such a poor valuation tool for social media. Another valuation tool used in finance is called Real Options. An option is the right, without the obligation, to act on an opportunity at some time in the future. Social Networks, friends, family, and professional contacts behave much more along these lines.

Five Easy Pieces:

While the calculation for the value of an option is complex, the things we need to plug in are fairly simple in the context of social media:

1.    There must be an inventory of the assets
2.    The future date when the asset can be acquired must be known
3.    The cost of acquiring the asset must be known
4.    The value effects on the enterprise must be estimated
5.    The uncertainty related to the asset must be estimated

The term “asset” in social media space may include: Knowledge, skill, an undertaking of a new project, or the generation of a new idea, etc.

The Social Networking Manifesto:

The objective of the building a social network is to know where the knowledge assets are, how much they can help you, how much they cost to exercise, and the certainty that they will be applicable, available and useful when you need them. Conversely, the best way to increase the value of a social network is to be visible to others, tell people what you can do for them, tell people what you need from them, and establish a reputation for reliability.

Most importantly, everyone must have the right, without the obligation, to accept or decline the opportunity. This is what jump starts ‘supply and demand’ and makes a market a market

Let’s consider all options:

To estimate the value of an option to call on anyone in your network use a financial option calculator tool on the web and plugged in social media numbers. Let’s use Linkedin as the knowledge inventory; 40 million knowledge assets also hold options with their contacts. Say that the expiration date is 1 year (for tax reasons). Assume the market value of their skill is 100 dollars and that at some point in the next year, the value of their skill relative to yourself becomes 200 dollars. The right to buy the asset at the earlier price is worth a premium. Suppose that the volatility of the asset is 50% and the interest rate is 7%.

The value of the “call” is worth about $3.47 dollars. The Call is an option contract that gives the holder the right to buy a certain quantity of an underlying security from the writer of the option, at a specified price up to the specified expiration date.

The value of options in a network:

For the above scenario assuming all assets are equal in price of 100 dollars; if someone has 10,000 1st and 2nd level contacts on Linkedin, the value of their implied call option is about 34,700 dollars. If Linkedin were a stock market, the value of the social contracts that people have with each other is 34K x 40M = 1.3 Trillion Dollars market value for the contracts that people hold and trade.

This is not even the value of the transaction – only the right to have a transaction. The value of the social contract is in the conversations that they hold. Contracts are a financial instrument that can be traded, combined, diversified, and aggregated for real money. It’s only a matter of time.

The Ingenesist Project specifies the structure of an innovation economy where a knowledge inventory, a percentile search engine, and an innovation bank will facilitate and aggregate the 5 components of Option Valuation. Social media applications form the operating system for the market in options.

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