Category Archives: Currencies

01/31/2015 Bitcoin is not enough – we need a new real asset backed Digital Currency

After many years of a long sabbatical leave, I am slowly back on my blog. First, the TARELV supercharged digital currency as a Bitcoins alternative that may bring FARJHO back to into action.

Within the past few years since 2006 I have been working on the new concept and the business method to quantify and create a tradable liquid market for home equity. For those who remembers that product is called FARJHO (Flexible And Reversible Joint Home Ownership). Basically we were trying to build a stock exchange for every single house and condo with each home being a stock that minority shareholders could trade in and out like they would buy and sell Google’s or Facebook’s shares on the stock exchange. Some of my previous work, which is on hold now, could be seen at http://farjho.com, http://wehomeowners.com or http://investorsally.com.

Following that new capability to extract the liquidity out of home equity, academically, I have also followed up to develop a concept and business method in 2009 to create a real estate value backed currency exchange rate pegging system called TARELV (Total Aggregate Real Estate and Land Value). Some of the previous research and blogs could be seen at http://tarelv.com.

TARELV was designed not as a new currency but rather a new foreign exchange backing or pegging system to provide fiat currencies a new life by backing each country’s currency through the value of their real estate via the FARJHO solution.

The problem with Bitcoin is that no matter what advantages they may provide in payment efficiency, it is in itself still a fiat currency with no real value to back it up.

That is where FARJHO and hence TARELV could help. Imagine a new block chain technology backed digital currency (say t-coin for now) that was mined and created since day one by an equivalent amount of partial home equity extracted via a FARJHO contract? Hence this new t-coin will always have a minimum floor value of that original partial home equity amount and could be exchanged back (convertible) into the home equity any time. This could be done in any country in due course so that means t-coins could be mined and created in many parts of the world and utilized universally.

These new real asset backed digital currencies will therefore have both the advantages of the block chain technology that Bitcoin has and the real value backing that the current fiat currencies in circulation do not have. There is a very simple way that we could mine these new types of asset backed digital currency and make it work through FARJHO.

More to come later.

Advertisements

06/18/2011 Weekly round-up of TARELV, SwapRent and FARJHO discussions from various Linkedin Groups

Here below is a weekly round-up of some more useful discussions from questions on TARELV, SwapRent and FARJHO.

==============
On the separation of shelter value vs. investment value provided by FARJHO and SwapRent:

Yes, it is all about  providing consumers with more new choices under the free enterprise capitalism principles and helping the less wealthy people without having to turn the country into a socialist welfare state so that we could still be economically competitive on the world stage. Sometimes people do have to think outside the box to look for those innovative ideas to make it happen.

Both FARJHO and SwapRent give consumers the ability to separate the Shelter Value (Use or Usufruct Value) away from the Investment Value (Financial or Economic Value). Having the ability to make investment decisions is a double edged sword and it does cut both ways in terms of winning and losing.

Having these new choices made available to them, home owners could finally decide for the first time on whether they may or may not want to participate in the investment games while enjoying a 100% of Shelter Value at all time through FARJHO or SwapRent so that neighborhood stability and social harmony could be ensured.

They could leave those real estate punting games to people who are more suited or more interested in pursuing under a free market. When the punters lose their shirts the home owners’ on-going occupancy stability would not be affected under either FARJHO or SwapRent arrangements.

Thanks again and I look forward to more inputs and comments.

===========
On Assignats used in France back in 1790 during the French Revolution:

Thanks for this additional info. Somehow they never taught us about these monetary histories back in my Micro and Macro Econ courses at business schools, let alone the Econ 101 that I took during university days. Or perhaps they did but I simply goofed back then since I was an engineering major.

But the engineering background may just come in handy now to create a new generation of land-based money by applying my research in recent years on property derivatives to back up these new land-based currency concepts.

The land connections of both the French Assignats and the German Rentenmarks seemed to be very simplistic legal claims on the properties. It wasn’t practical to really convert the currency to the title ownership of those underlying properties. Back then they had no real quantitative finance knowledge and/or methodologies to make that kind of currencies realistic.

With the new methodologies and marketplaces of both SwapRent and FARJHO, these land-based currency ideas could finally indeed have a chance to become realistic with a lasting value.

For a simple introduction about SwapRent and FARJHO, please visit http://www.PeoplesAlly.org. Thanks.

06/11/2011 Weekly round-up of TARELV discussions from various Linkedin Groups

Here below is a weekly round-up of some more useful discussions from questions on TARELV that I would like to share with the readers.

============

On distancing TARELV from Wall Street’s hands:

….. While I sympathize with your political views (see our own web site at http://www.peoplesally.org) but that is a different subject. TARELV is purely an academic and grassroots intellectual proposal for a fresh start to try to build a financial system under capitalism in the right direction. Our value is to break the intellectual hostage Wall Street has held on Main Street and bring the economic benefits directly to the working class people and let them have their fair shares in the system so that they would not turn our country into a socialist state.

Wall Street will not be able to swindle you again because of TARELV. They don’t own it. In fact, a new type of currency pegged on and backed by real financial asset value may stop the government cronies from printing money irresponsibly to bail out their Wall Street buddies to continue to swindle you. It will serve as a handcuff on the politicians not to steal more money from the future taxpayers to dish out to their cronies today. TARELV is your friend …

============

On TARELV being a new exchange rate system between national TARELV currencies:

….. Thanks for the comments. Tarelv is actually intended to be a national currency as an extension of the present free market capitalism. So you will have American Tarelv, Japanese Tarelv, European Tarelv etc. and you can still trade them based on their exchange rate, say long US-T against JN-T in the open market. That is where a JN-T would be worth a lot more vs. a DN-T, Danish Tarelv due to the different state of economic activities in each country.

So Tarelvs represent really a new national exchange rate pegging system rather than a new universal currency on its own. It has individual nationalities.

It will provide an automatic self-healing effect when strong Tarelvs are exchanged into weak Tarelvs to produce goods at a cheaper cost for multi-national corporations. This will help create more economic activities in the country facing economic problems. The reason why people are reluctant to help countries in trouble now is simply due to the fact that few people see there would be economic productivity for them to repay. With no fresh money pumped into the country there would indeed be no productivity. So if the national Tarelv is pegged and backed by the value of a portion of the real estate and land value then the foreigners would feel more secure in investing in that country again. So the capital flow will automatically level the playing fields among countries.

The “total aggregate real estate and land value” is the national asset that is much more fair and equitable, unlike gold, silver or any other commodities that only bless those who were born with them or those were strong enough to rob them. They are limited in nature and therefore unsuitable to serve as widely distributed currencies. That universal scarcity nature could only promote more crimes and oftentimes, more wars.

I never fully understood the fuss or hype about Bitcoin or those digital Linden dollars stuff. To me they are no more than the beads they give you when you are at a Club Med resort facility. Once you are out of the circles they have zero value (I still have some of them at home as souvenir.) but for those party animals at the resorts they mean everything to them then and there in order to get the next beer.

==============

On TARELV vs. Rentenmarks:

….. Well, to my great relief, the Tarelv idea wasn’t totally off the mark after all, Renten Mark that is.

I am not an economic historian and the Tarelv idea was organically developed solely on the back of my last 10-year’s research work on real estate derivatives and a new form of home ownership structure. Please see my other two discussions on SwapRent and FARJHO posted in your group.

One question I still have is that why the Rentenmark had such a short life span even though it did the job that it was originally created for? Some economic historians could really offer some help here.

The modern derivatives or quantitative finance techniques such as SwapRent and FARJHO may help create a sounder foundation for implementing the real estate money idea. It may give the policy makers and economists more alternatives to consider rather than beating the dead horse between the only two choices of fiat money and commodity money again.

Wouldn’t a new Greek Tarelv currency may help Greece with a chance to attract more fresh foreign capital to revitalize their own domestic economic prosperity again? If they failed, at least the foreigners could be left with a few pieces of Greek Islands to call home to!

In my humble view, fiat money based on Chartalism theory seems to be a total illusionary bubble in the global financial marketplace waiting to burst. It seems that we are not too far away of that awakening point now.

===========

On TARELV being an exchange rate pegging system vs. simply a new oddity currency:

….. “Convertibility” is the word to distinguish what a currency is vs. what an exchange rate mechanism is that makes a particular currency viable.

I like very much and respect the open mind attitude towards free market competition. The spirit of Tarelv is exactly that, finding the most competitive financial asset to back up the currency claims so that citizens of not just one country but around the globe may have confidence in holding and using them.

That is more and more important these days since in a flat world we are economically getting closer and closer through technologies and improved transportation means. One sovereign entity’s desire to make some Fiat money “legal tender” under Chartalism for its own citizens in one country may no longer serve the purposes anymore if foreigners do not agree. You got to put your own sovereign land on the line in order to gain the confidence of the foreigners to hold your otherwise worthless paper notes or electronic digits.

Otherwise a national currency “without convertibility” could indeed become beads in a Club Med resort, BitCoins for online techies or AnarchoJesse Labor Notes for that small New Hampshire neighborhood, etc.

About TARELV

TARELV is currently an on-going research project on alternative currencies and/or alternative exchange rate pegging systems that is open to the participation and contributions by the like-minded professionals, practititoners and academics who may share similar visions on a worldwide basis.

Please feel free to leave any feedback and comments on how you would like to participate in this group effort to further fine tune the new TARELV related concepts and methods.

This TARELV idea was originally developed on the back of the author’s last 10-year’s research work (as of 2011) that started back in 2001 on a new form of real estate derivatives SwapRent and a new form of non-derivatives based home ownership structure FARJHO.

As the idea has grown more mature through the years and the need of a brand new exchange rate pegging system to replace the existing fiat currency concept and Chartalism has become more and more transparent these days, the author would like to start to work with other economists and practitioners with similar passion in this field to hopefully bring this new exchange rate system to life together.

What the author believes in is that where both Assignats and Mandats in France back in 1796 as well as Rentenmark in Germany back in 1924 had failed to stay on as a major currency concept, given the current state of the global economy and the quantitative finance methods, TARELV may have a chance to make it in 2011 and beyond.

For a more detailed introduction to the new FARJHO methodology to use equity sharing to own homes one home at a time using only member level debt financing, here is the link to my white paper on FARJHO (https://www.box.com/s/cc0de069ab5c3fd3007e) which is to be published as a sequel to my earlier article on SwapRent (https://www.box.com/s/v24qtqip4hlgff5l1646) published in the December 2009 issue of the Journal of Housing Finance International (HFI) by the Brussels-based International Union of Housing Finance (IUHF).

An easier first step to understand FARJHO is to watch this simple three-minute FARJHO introduction video. http://www.youtube.com/watch?v=UV0hUjAGUZg

%d bloggers like this: