Tag Archives: BitCoins

0205 2015 Bernie Madoff’s Ponzi scheme in the making again – discussion with a centralized payment exchange company official trying to pump their new fiat cryptocurrency

Within the past week I came across and exchanged a few detailed email discussions with a dominant company trying to sell their new fiat cryptocurrency via a scheme that smacks of an IPO (Initial Public Offering) or a Private Placement sharing offering in the stock market. The problem is that they are not properly issuing a stock of a company through a normal securities broker dealer but rather trying to sell in the open market their own new fiat cryptocurrency themselves!

I see the company as perhaps having built a good payment system only, which has yet to be verified. For the version of the new fiat cryptocurrency that they are trying sell to the public on the payment exchange that they have built, it is a bit naive and may even be wishful thinking. They are also trying to keep a big chunk of each new issuance to themselves.

Even Uncle Sam may not be able to pull off such as good deal in issuing a new fiat national currency. I wonder how they could continue to hope to convince people to pay for it and use it. I was told by the official that they had recruited top tiered industry luminaries and ex-government officials as board members and hence the value of their new fiat currency is partially attributable to “who they are”. He tried hard to legitimize what they are doing and distance himself from having to do a security offering under the securities laws. I was not convinced. It is just too obvious.

What they are doing is like hoping to create wealth bubble out of thin air with a Ponzi game. Sooner or later it will burst when people come to realize there is no intrinsic value in their new fiat cryptocurrency. Their fiat cryptocurrency also seems to be primed to be used as a perfect pump and dump candidate.

Mark my words, it is a big disaster in the making. Watch out SEC!


0204 2015 For Bitcoins to call those national currencies fiat is like the pot calling the kettle black.

0204 2015 Digest of discussions occurred else where.

— On why the French Assinagts and Mandats did not succeed back in 1790

Thanks for providing us with some detailed historical info on the earlier French version of real estate backed currencies, Assignats and Mandats. As could be clearly observed even in your article, the French had the right idea but the wrong execution back in the 1790s, let alone the fact that they were backed by the stolen land!

Even the subsequent Rentenmarks circulated more than one hundred year later in 1924 did not have the necessary legal or technological infrastructure to make it work properly. That is the whole premise of launching the TARELV concept and the associated exchange rate pegging system in 2011 as the modern day new innovative quantitative finance knowhow and method such as FARJHO and the block chain payment ledger technology provided by the invention of Bitcoins could finally make these ideas realistic.

— On possible different types of real estate that could be used to back up currencies:

Absolutely. They are not mutually exclusive. All forms of real estate backing will happen sooner or later. Just remember that lien encumbered properties will not work very well, no matter how small a portion that lien may be. So a portion of the unencumbered equity of a decent office building, a hotel or an apartment could certainly work just fine if the owner is a credible and trustworthy entity.

— On why FARJHO Fund is better:

When you get to analyze the quality and characteristics of underlying assets, you will see the problems with conventional REITs. I understand that you may have mentioned that to express the generic concept.

A FARJHO Fund (or FARJHO itself) has many advantages. Here is to name a few: (1) It  is a pure un-leveraged equity, hence will never get foreclosed; (2) Via FARJHO, each batch of the t-coins will be mined and created by a group of regular homeowners in any part of the world, hence the de-centralized democracy nature that the crypto-currency enthusiasts love so much about could be maintained.

— On Bitcoin’s decentralized Utopian fantasy:

The abuse of fiat currencies and debts have proven in history repeatedly as the root cause of financial instability. In many currency crises, e.g. Asian, Ruble in 1998-1999  etc., the issuers were not the ones who manipulated them but rather the sudden lack of confidence by all participants. That is the problem. Lack of confidence all of a sudden.

Currencies need to be backed by assets, gold standard or real estate (German Rentenmark, French Assignats, Mandats etc.) just like debts need to be collaterized by real assets or equity to provide stability and confidence. That is a problem I was trying to address with TARELV way before these new Bitcoins things even came on stage.

Now for Bitcoins or any other current crypto currencies to claim to call those national currencies fiat is like the pot calling the kettle black.

The idea that these new digital currencies are decentralized or frictionless in transactions is simply a Utopian fantasy. Once they have gained momentum, they will still need many third parties to maintain their ongoing stability to become successful anyway or they die. Their success could only be transient and ephemeral. If they are successful in commanding confidence by finding a backer, layers of middlemen and interest groups will then also come in to impose transaction fees and could make it even worse than those currencies they were intended to replace.

Don’t we already see the same scenario replaying itself over and over again in modern politics? You overthrow a dictator and then came chaos until the next dictator comes again to provide stability.

So the crypto currency’s only advantage is tech oriented, i.e. payment efficiency.  Don’t expect them to come to build a Utopian libertarian society for you.

The real estate or home equity backed digital currencies (t-coins) that I am proposing is different because it is a wide open platform for all kinds of possible grassroots homeowners, for-profit institutions, non-profit organizations and national governments alike. It will be taken out of the monopoly of the government’s hands. For the lack of new terminology at the moment, it is a FARJHO fund from a group of homeowners in a geographical area who mine and create the new batch of t-coins.

To put it in a simple word, it will replace the bad “their” dictator with a new benign “our” democratic dictator. 🙂

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.

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