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Gold based community credit union

I've been writing a book for a while now and got it completed a little over a week ago. After I had some people review it for me, a conversation sparked up over one of the topics in it. I had proposed a non-government sanctioned credit union type of bank and they all liked it but had lots of questions on how it could work. I've got many of those issues worked out but still have some more and I would like the DP clan to offer their suggestions. Also, if anyone actually wants to take the ball and run with it, feel free to contact me and I'll help what I can for you to start one up.

The idea is fairly simple, but seems complex when you're brainwashed to think today. You deposit your money into a debit account, it's converted to gold ounces, and you can pull it out (converted back at that time also). That's the short version. The long one is that any money excess you have in there is available for loan to someone else. The types and sizes of loans available are determined by the amount of excess stored in reserve. Small in the beginning and building as the deposit grows. Ultimately, it could offer loans for cars, homes, educations and emergency medical bills. That last one is so that its members could ultimately eliminate buying any type of insurance.

It would make money by keeping the rounding differences of gold conversions on every transactions. Since the statistical average rounding difference is 1/2 a penny per transaction, this is the basic revenue of the system.

The members with a positive balance will gain from the price of gold rising while their money is in there. However, they also have the option to set a floor value on their money (one month in advance of activity) which places all their money below that amount in an untouchable investment pool.

People that need money can borrow from this pool but have to persuade 'the community' they are the most deserving of that money because it's a first-come, first-serve basis. To present their case, they have to offer regular dividends back to the pool (or to the individuals who chose to lend their pool money to them). In this way, they compete by their offers of responsibility, repayment history and dividend promises. Anyone desiring to go negative (get a loan) has to have all his income direct deposited into this account so his daily 'checkbook balance' amount is helping work for the system.

All the money taken in is deposited into a digital gold company such as goldmoney.com or similar. I just used that one as an example because I think it's the only one with actual physical gold behind all deposits.

As the systems grows and more savings amounts, stock portfolios and even retirement accounts are moved to this system, the pool will increase. This will essentially become similar to a gold based economy with community lending with no interest cost. Their only cost above the price of gold rising is the dividends they promised in order to get the loan. This is similar to how Prosper.com works.

Beyond the basic income of the system mentioned above, a small percentage of dividends would be charged for system revenue. A public statement of standing would show how well the system is doing for expenses vs. this income and that percentage could be voted up or down accordingly. This would cover the cost of member expenses like visa (or a similar system) backed debit cards or checks, unless those should be directly charged to that member using them.

Ok, so what do you guys think? I'm looking for input, questions and comments.



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That sounds like a great

That sounds like a great idea. I have been thinking about a scheme where you could have a checking account where high volume traders would trade the gold that the bank has on account for dollars so that you could save in gold but still make daily purchases in dollars.

Ventura 2012

You can't be FDIC insured if

You can't be FDIC insured if you supply currency other than FRN's. Without FDIC approval, good luck finding investors, or businesses who will deposit their money in such an institution.

FDIC is everything in banking.

What I really like is what Idaho is doing:
http://www.idahoreporter.com/2010/idahoans-may-soon-be-able-...

Silver that is Mined, Refined, Pressed and sold in Idaho for the sole purpose of paying State fees and taxes.

GOOD IDEA!

Here are some Hugo Salinas Price links:

From Mr. Hugo Salinas Price on using Silver as money;

http://www.dgcmagazine.com/dp/node/106

Mr. Price's latest article:

http://www.gold-eagle.com/editorials_08/salinas092309.html

beesting

FDIC is only important if you don't have a full reserve

If you have your rules set up so that only time-guaranteed money is lent back out (like a 6 month CD that stays deposited), then you never go negative and there's no need for the 'expensive' FDIC insurance. It's just another middleman leech on the average person's transaction costs.

When investors learn this, they'll be beating down the front door to get in... especially if their return is higher (by the inflation rate) rather than lower.

However, the goal isn't to attract professional investors. It's to support personal savings in the average Joe and put that money to work locally. Locally and anti-big-corporation is the only way we have out of the global movement.

...back to work...

The FDIC also protects

The FDIC also protects against robbery. If a 'bank' had vaults filled with gold and silver, it would be a prime target. The FDIC protects the money if someone breaks in and takes it. That is why bank tellers are mandated not to resist any sort of robbery attempt. Because it's all insured.

If I deposited $1 million worth of bullion, I'd want it insured and currently, the FDIC is the one who does so.

VIA MAT insures the Gold/Silver/Platinum in Goldmoney.

http://goldmoney.com/stored-and-insured-gold-and-silver.html

All of the precious metals owned by our customers are stored securely in London, Zurich and Hong Kong in the specialised vaults owned and operated by VIA MAT International, one of the largest independent vaulting and secure transport companies in the world. Founded in Switzerland in 1945, the VIA MAT group now operates in 10 countries with a staff of 900 employees. VIA MAT meets the rigourous standards of the London Bullion Market Association and is one of just a handful of accepted custodians who are trusted to form the chain of integrity that ensures the London Good Delivery standard.
They have vaults in London, Switzerland, and now Hong Kong that have a "Full' audit every 3 months:

http://goldmoney.com/report.html

https://secure.goldmoney.com/bar-list.php

beesting

reedr3v's picture

Thanks for the great ideas, work, and

discussion in this thread!

just ran across

a candidate in oregon who wanted to start a state bank.

details here:

http://www.bradbury2010.com/issues/bank-of-oregon

not sure if this is really relevant...

Thanks for that,,, Mr. Bradbury is on the right track but,,,

,,,I don't think he realizes that to build something solid it must have a "solid' base.

If the bank is built with FRN's that lose value due to inflation, or a base of mortgages that can lose value because of inflated estimated values in FRN's, he's right back where we are now,,,in economic chaos.

The founders had it right when they declared "nothing but Gold/Silver" should be used as money, because it provides a stable "BASE" for a monetary system, if it's a bank, a state, or simply a households long term retirement plan.

The value of Gold has quadrupled in dollars in the last 9 years, while housing prices/valuations in dollars have fallen. So lets say my property was worth 300 ounces of Gold about 9 years ago, when Gold was $300 per ounce. {$90,000.}

$90,000 in dollar terms. So say it appreciated to $200,000 during the housing boom, but now it's valued at $150,000, and just might fall further.

The 300 ounces of Gold would be worth about $340,000 at the current $1240 price of "wholesale" Gold ! {Appreciation, instead of depreciation }

How long before Americans realize we must back our money with Gold/Silver????

beesting

I think this is very interesting

bump for discussion.

"We can see with our eyes, hear with our ears and feel with our touch, but we understand with our hearts."

Hello Tam, May I Call You Tam?

My small family has been doing something similar since 1994, and it has worked great for those that decided to support it long term, because Gold has quadrupled in dollar value since 2001.

Our rule, that has worked well is;
To borrow from your own account you cannot borrow an amount over what you have put in. But with the approval of the other members you can borrow and sign a promissory note with interest to pay back your loan. The interest charged is divided up to the fund and eventually all the members personal accounts. { lots of math, once a month }

The reason is, members will many times try to borrow from the fund, with no way to pay back, which would deplete the whole fund, essentially killing the whole fund.

We have been using Goldmoney.com since it's inception {Feb. 2001} and although the rules on "CAP" {Customer Acceptance Policy } have become much, much, more stringent since it started due to the American banking regulations, we are still using it.

I have been trying with very little success to get other family and close friends to use Goldmoney.com.
The excuse seems to be that it's too complicated.
I would gladly try to answer any questions about Goldmoney, but their site map covers about everything.

http://goldmoney.com/sitemap.html

I would be more than happy to assist with encouragement, as my time permits, thanks tonnes of Gold for starting this thread.

beesting

Thanks for the input, Beesting

I'm Todd, by the way. I'm kinda new to this concept. You read where the concept came from and it just blossomed from there. Then after researching more, I found goldmoney.com which takes care of a big part of it on it's own. It has mostly morphed into the whole concept of a community bank because of my complaining about such a huge part of everyone's income going to people who don't produce anything in society. (That would include bankers, insurance agents, 90% of government and most all middlemen). I figured out one time that if we cut out all these 'wastes' in our products, we could live on a lifetime income of $600k when we average making $1,600k and just blow the rest. And that's without compromising on much of anything.

I'd love to chat more. You can drop me an email at mckissick(at)gmail(dot)com and I'll toss out a few more questions.

Unfortunately for us, most Americans have a looong way to go,,

,,,before they will understand and use Gold/Silver Constitutional money again. { My opinion }

We have to price things by weight, which is what the founders did. Examples only: 10 pounds of potato's = 1/10th ounce of silver. A pound of Honey = 1/10th ounce of silver.
A cord of dry firewood = 1/10th ounce of Gold, etc. etc.

I was lucky enough to live outside the USA { Japan} for over 5 years and became used to converting U.S. dollars into local currency for goods and services priced in Yen, in my head. Currently with pocket calculators, it's a lot easier.

The point is, if you're growing stuff you have the right to put your own price on it. Try rounding off amounts and things priced in precious metals and dollars.

In my opinion, the sooner we start using Constitutional Gold/Silver as money once again, the sooner we can retake control of our "Liberty'! {The Fed/IRS controls our lives }

Here is something introduced in New Hampshire years ago, that has not gained very much attention;

http://news.goldseek.com/JamesTurk/1232989200.php

beesting

Its not too complicated...its too expensive.

UNLESS you keep putting money in. You have to pay the handling fee for your purchase of gold (or silver or platinum) with a portion of your newly bought metal (some portion of a gram).They take monthly storage fees (in gold grams) out of your stash. So unless gold keeps going up or you keep putting money in, all your gold grams will be gone eventually. But its like that with any bank I guess. The other problem is that if you want your money you need to have access to the Internet. With all that said, I like GoldMoney. Its a good place to put savings and you can pull it out in whichever currency you want.

You're Right But Here Is An Actual Transaction.

I had lent a good friend $1,000.00 for a start up in a Silver based currency.
I pressured him to open a Goldmoney account, which he did.
Eventually in Sept. 2009 he paid the $1,000 back in Gold grams.
Here is a copy of a recent e-mail I sent him:

An Update { For example purposes only } on the $1,000 that was deposited in my G.M. holding account last fall.

The $1,000,00 in Gold is now worth about 1,138.40 an increase of about $138.40.

We just finished our tax return, because my wife gets a tax refund, we have to file.
On the tax return they ask to list any interest earned.
We had a local savings account of a little under $1,000 for the year.
We listed about $2.80 total for our 2009 interest.

The difference in saving in Gold and saving cash was about $134.60 in U.S. dollars, in favor of Gold. {Despite monthly G.M. storage fees }

Now do you see why a savings account in Gold has worked out better than a savings account in dollars?

The bad part; If we sell Gold in our G M holding, and transfer dollars back to our local bank account it's either a $40.00 or $50.00 wire fee, last time I checked.

beesting

Ouch. That's awefully steep for transfer fees.

If this did work out, I'd want to offer a debit card to members for easy transactions at all kinds of stores like everyone else uses these days. Seems like everyone and their uncle offer their own private card and they're all backed by Visa. That would eliminate the bank transfer fees.

I wonder if a community credit union type organization could get better rates (storage, etc.) either through goldmoney or another organization that backs the money with physical gold. I've heard the Lakota indian tribe has a soverign bank that's gold backed. Think they might work some sort of deal?

Hi Again Todd.

Debit/credit cards in dollars are under the control of the Fed/IMF banking system.
Goldmoney's rates between holding account to holding account in Gold grams are very reasonable.

http://goldmoney.com/fees.html

{snip}
Payment Fee
GoldMoney's transaction fees are extremely low at only 1% of the payment amount. GoldMoney charges a minimum fee of 0.01 goldgrams/silver ounces/platinum grams and a maximum fee of 0.1 goldgrams/silver ounces/platinum grams.

For example, a goldgram payment valued at $50 costs 50 cents, whereas a goldgram payment valued at $50,000 costs only $3.95.

•The maximum goldgram payment fee is 1/10th of a goldgram (about $3.95)
•The minimum goldgram payment fee is 1/100th of a goldgram (about $0.39)

It's only when you are changing from Gold into dollars or other currencies that the bank wire fees are high.

Goldmoney is a worldwide system, so you could buy a pencil from somebody in Australia cheaply, but shipping the pencil would cost too much.
For a local community, trading Gold grams for products would work out good, in my opinion, but expenses in dollars {gas, seed, hired help, etc. }would have to be taken into consideration.

By the way Goldmoney does have a way to trade Goldgrams for physical Gold/Silver:

http://goldmoney.com/redeem-gold.html

beesting

So how many of you still think we can fight the FRB legally?

I've come to the conclusion that the only way to fight these guys is to relegate them to insignificance by just not using them. If people have a better choice, they will choose it and if no one uses the fake fiat system, it will fade into the sunset.

I'm working on this for food and energy. I could use some critique and help on the one for money.

Bump !

Am I the only one at the D.P. that has already made plans for when the currency collapses?

Ron Paul has said we have the power to buy enough Gold/Silver to take back our monetary system.

beesting

I Like the Way You Think

I want a similar outside-the-box idea for farm produce.

There are small farmers and family farms who need money from time-to-time. There are people like me who want a source of vegetables, etc., in case of hard times.

Instead of insurance against a dollar collapse, what if we could invest in farm output, with a dollar return when times are good, and a vegetable return when times are bad? Many farmers participate in farmers' markets, so distribution would not need to be difficult, and if, at some point, labor was needed, the public would know where to go.

Another huge benefit would be to educate the voting public on the needs of independent farmers. (after all, the public owns stock in the big guys, already)

Bottom line, however, is we dreamers need to hook up with someone who will actually do something...

What do you think? http://consequeries.com/

This started from a need to fund our own farmer's market

We decided to build a farmstead but no money or land.

We decided to just grow natural/organic produce hydroponically and sell it. We have a great location on a main highway 1/2 block from a major WallMart. (Ha Ha) But no money.

We finally decided to start it as a farmer's market to bring in produce and make a name for it while our produce is growing in our gardens. No money needed.

Then we're going to make a rammed-earth-brick building which looks a little rustic to house the operations.

Then we're going to use a solar concentrator I designed to make a cheap PV system produce 4 times its output and send that to a few batteries to run LED grow lights. This makes all the electrical a low voltage DC taht doesn't require much code wrangling. Coupling this with the hydroponics and aeroponics, we should get our growing costs way down and be able to finally have it profitable. This also allows us to have a year round growing season.