WO2012172117A1 - Système bancaire de valeurs et technique utilisant une monnaie de valeur complémentaire - Google Patents

Système bancaire de valeurs et technique utilisant une monnaie de valeur complémentaire Download PDF

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Publication number
WO2012172117A1
WO2012172117A1 PCT/EP2012/061617 EP2012061617W WO2012172117A1 WO 2012172117 A1 WO2012172117 A1 WO 2012172117A1 EP 2012061617 W EP2012061617 W EP 2012061617W WO 2012172117 A1 WO2012172117 A1 WO 2012172117A1
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value
currency
equity
portfolio
amount
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PCT/EP2012/061617
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English (en)
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Bart Van Coppenolle
Philip Vandormael
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Holybrain Bvba
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Priority claimed from US13/278,789 external-priority patent/US8489527B2/en
Application filed by Holybrain Bvba filed Critical Holybrain Bvba
Priority to EP12731349.2A priority Critical patent/EP2721570A1/fr
Publication of WO2012172117A1 publication Critical patent/WO2012172117A1/fr

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    • G—PHYSICS
    • G06—COMPUTING; CALCULATING OR COUNTING
    • G06Q—INFORMATION AND COMMUNICATION TECHNOLOGY [ICT] SPECIALLY ADAPTED FOR ADMINISTRATIVE, COMMERCIAL, FINANCIAL, MANAGERIAL OR SUPERVISORY PURPOSES; SYSTEMS OR METHODS SPECIALLY ADAPTED FOR ADMINISTRATIVE, COMMERCIAL, FINANCIAL, MANAGERIAL OR SUPERVISORY PURPOSES, NOT OTHERWISE PROVIDED FOR
    • G06Q40/00—Finance; Insurance; Tax strategies; Processing of corporate or income taxes
    • G06Q40/02—Banking, e.g. interest calculation or account maintenance

Definitions

  • the disclosure relates to banking systems, and, more specifically, to a free- market banking system and a currency for exchanging goods and services in which the value of money is directly tied to underlying assets.
  • New insights in Human Action can be induced from studying human history.
  • the history of civilization can be brought into the consciousness, by studying Cultural history through texts and religious symbols.
  • This disclosure describes an economic invention based on new economic insights, enabled by neuropsychology and the light neuropsychology sheds on Cultural history.
  • new insights laying at the basis of the new technology and invention, it is necessary to dig into the evolution of the psyche embedded in the brain, during the last 550 million years and into the Cultural evolution of the psyche outside the brain, during the last 200 thousand years, and specifically the last 5 thousand years, when the Left Brain Consciousness gained dominance.
  • Bilaterally symmetric Objects project a bivalent Subjective world
  • An animal is an animated being : a being with a psyche.
  • Anima is the Latin translation for the Ancient Greek psyche.
  • axisymmetry a rotational symmetry around one axis of movement or Action.
  • An axisymmetric animal Objected against a change in the environment, such as a change in temperature by moving along the axis of its symmetry, as e.g. a jellyfish does.
  • a bilateral body enabled a more dynamically movement through fluids, such as water.
  • a bilateral animal can not only Object to change in the environment, away from the threat.
  • a bilateral animal can also create change by choosing its own desired direction of movement, independently from the change of the external environment.
  • a bilateral animal can not only Object, but also Subject to change or be the Subject creates change or acts.
  • the psyche of bilateral symmetrical animals could evolve in two dimensions.
  • the bilateral brain was perfectly suited to support the evolution of this bivalent psyche.
  • the bilateral brain evolved bivalent Subject and Object representations of phenomena dealing with bivalent Emotions such as Fear and Desire.
  • the bilateral symmetric brain with its bivalent psyche became evolutionary very successful. And that shouldn't surprise.
  • the two Darwinian criteria for evolutionary success are: 1) natural selection and 2) sexual selection. It is therefore not surprisingly to notice that, given the bilateral shape, the psyche evolved successfully, when using its bilateral brain capability to match with its will both evolutionary criteria.
  • Motivation is the Subjective spiritual force that causes movement, as suggested by the etymology of motivation. Motivation has evolved from the Latin word for moving 'movere', also found in the motor that moves or in Emotion. Motivation is the most primitive and immediate (without delay) Subjective cause of Human (and animal) Action. The real Objective mechanical cause of movement is not situated in the brain stem, but in the muscles, the information source however is the psyche. Motivation is an Objective part of the Subjective psyche and is incorporated in the brain stem. Activation can Objectively be measured through a brain scan.
  • Emotion in the limbic system allows the psyche to feel, from within its incorporated brain, future pain and reward.
  • the amygdalae and b) the nuclei accumbens and the putamen specialized respectively in a) negatively valenced emotion or Fear and b) positive valenced emotion or Desire.
  • the evolutionary youngest part of the brain is the neocortex, the outer bark or cortex of the brain. It has evolved to represent phenomena, in order to be able to link limbic Emotions with these representations and afterwards execute Action and actual movements.
  • the human species uniquely differentiates from other species, through its most complex, furthest evolved neocortex, particularly the part behind the forehead, called the frontal cortex.
  • the Left neocortex mainly connected with the Left limbic system and therefore evolutionary as most successful to deal with Fear or negative emotion by Objecting to Fear, while the Right neocortex successfully dealt with Desire or positive emotion, by Subjecting to it.
  • Phenomena are not directly present in the human consciousness, but are pre- consciously registered by the senses and the backend of the cortex and only afterwards brought into the consciousness by the two pre-frontal cortices.
  • the pre frontal cortex is particularly specialized in repeatedly stimulating other cortical regions, directing attention to representations and bringing them in the consciousness. Emotions draw the attention of the pre-frontal cortices to representations of phenomena.
  • the thalamus projects them on the occipital, parietal and temporal lobes.
  • the temporal lobes extract emotional valence, mainly Fear and sexual arousal by associating with the amygdalae.
  • the orbitofrontal cortex is activated by this emotional arousal.
  • the Left pre-frontal cortex is directing linear language based consciousness and is one dimensional.
  • the right pre-frontal cortex directs image, Subject or idea based consciousness and is two dimensional, the two dimensions of the eye as well as Emotional Valence.
  • Desire for community is truly served by Subjective, empathic thinking, Fear for threats by Objective thinking.
  • the deep chasm between the two human cortices is an evolutionary indication not to confuse Desire with Objective thinking, such as in stimulating the economy, or Fear with Subjective thinking, such as in demonizing capitalists. Both are not successful.
  • Tax was not a forced contribution of scarce resources to the leadership of a community, but the free sharing between community members and occasionally between communities, that were essentially tribes or families, not civilian communities in cities.
  • Perikles also invented modern politics, where power is not directly based on physical violence, but on the Desire of humans to belong to the group and the Fear to be expelled from the group, without necessarily excluding physical violence, from time to time, as e.g. shown from Plato's dead penalty.
  • Perikles subsidized more than half of the Athenian economy, creating a loyal Cultural elite which the vast majority of Athenians craved to join and so securing his lifelong re- election, as a soft tyrant of Athena.
  • the necessary funds to finance his deficit spending he draw as a loan from the treasury of the Delian League, a league created to financially hedge the risk of new Persian invasions.
  • the Intrinsic Value of contemporary Fiat Money currencies is no longer determined by the Value of the metal the currency contains or represents, but by the Value of the assets the banks and central banks hold against the issued Money.
  • the solution to bank runs that was invented was fractional reserve banking.
  • the central bank being loosely under the control of the government, acted as a lender of last resort through its power to create unlimited amount of Money against assets such as government debt, among other assets without Intrinsic Value.
  • assets such as government debt, among other assets without Intrinsic Value.
  • the Intrinsic Value of contemporary Fiat Money such as the US dollar or the Euro, declines, because the central bank issued the Money against these assets or holds these assets as collateral for debt it holds on its balance sheet.
  • the current art is characterized by political soft and hard power over Free Human Action, more specifically political power over Subjective Value expressed in Objective Money, as is the case with Fiat Money with Fractional Reserve.
  • the Legal Tender Currency is the dominant currency in a jurisdiction that is imposed by legal tender law and therefore is in fact the same category as the previous category, Contemporary National Currencies. Also supra-national currencies such as the Euro are part of this category. The disadvantages are the same.
  • Gold certificate currencies that are itself Physical Gold Money work quite well, but electronic transmission or paper transport of golden coins is only possible using an intermediate balance sheet, forcing contemporary gold currencies to be non- Physical Gold Money.
  • the balance sheet connecting a Value Certificate, such as gold certificate currencies and the actual gold asset remains liable to fraud, since the presence of physical goods, such as gold, cannot continuously and transparently be audited.
  • Complementary currencies are already used in relative small communities in the US, Japan, the UK, Brazil, the Netherlands and Belgium.
  • the disadvantage of these complementary currencies is that they do not hedge the risk of loss of Value better than the national currencies, because their Value is one to one linked to the national currencies.
  • the disadvantage of Monetary Confusion and the other main disadvantages are therefore equally present with the pre-existing complementary currencies.
  • Virtual currencies are currencies that are not certificates. There is no Objective basis for the Value, although there might be Market Value and Subjective Value as is the case e.g. with the Bitcoin money. It has no Intrinsic Value, only purely Subjective Value; therefore its Value is virtual.
  • Processing physical goods or intangible services in an economy requires exchanging these goods against one another or against an intermediate physical (tangible) or intangible means of exchange, while ensuring the value of the item traded for has substantially the same or similar value.
  • a good is traded against an intermediate means of exchange, i.e. money, not only should the first price reflect the value of the first good, and the other price(s) the value of the other exchanged good(s), but also - and this is the main problem - the value of the money itself should not be short term volatile or long term decreasing in order to allow the exchange of goods to happen effectively.
  • the value of the money is too volatile or long term loss of value occurs, the goods and services are less efficiently processed, or not processed at all. Periods in which goods are processed less efficiently or not at all result in economic bubbles, crashes, recessions, or depressions, and, in, extreme conditions, great depressions and hyperinflation periods, generally referred to as economic crises.
  • the current state of the art is fiat money with fractional reserve.
  • the objective value of such currency is fixed by law, that's why it is preferred to fiat money.
  • Only a fraction of the intrinsic objective value of fiat money is determined by gold, the remainder is backed by government and private debt and other assets, typically not having an objective, intrinsic value, causing the subjective market value of the current fiat money to fluctuate volatilely and non-consistently within different branches of the economy.
  • This is the root cause of monetary instability conditions such as inflation and deflation or disinflation, causing economic crises.
  • the prior and current solutions to such conditions are to have central banking, providing liquidity, as the lender of last resort, to banks being subjected to loss of trust, or bank runs.
  • the new currency is complementary, meaning it does not replace the existing fiat currency, but may be used in addition thereto, in order to stabilize the fiat currency, its host currency, and prevent monetary instability in its host fiat currency.
  • the complementary new currency solves the problem of monetary instability in both the complementary new currency, as well as in the hosting fiat currency, preventing economic crises and restoring subjective trust in the value of money, and, therefore, in the monetary system.
  • the new complementary currency may be implemented in any of physical, tangible and/or intangible electronic currency forms, as described herein.
  • Figure 1 illustrates conceptually the relationship between physical goods and/or intangible services, the new complementary currency described herein and the equity portfolio substantiating such new complementary currency.
  • the new complementary currency may be issued the form of a certificate for value shares.
  • a central value bank issues the complementary currency as publicly quoted share certificates of its own equity investment fund.
  • These share certificates of the complementary central value bank can be wired or exchanged as paper or coins (possibly featuring an electronic chip) and are then used as currency, freely without legal tender law obliging acceptance of it.
  • the equity investment fund of the complementary central value bank comprises, in one embodiment, an equity stock portfolio guaranteeing long term value through safety margin between objective, intrinsic stock value and subjective market value.
  • the equity stock portfolio that substantiates the value of the complementary new currency is a value stock portfolio, meaning it is picked or selected and reselected by choosing equity stocks that have relatively the best safety margin between objective, intrinsic value and subjective market value.
  • the selection algorithms and their computer implementation are described herein.
  • the stock portfolio's foreign currency distribution is selected with the objective to hedge the foreign exchange risk and the risk of importing monetary instability from foreign currencies, as well as from the hosting fiat currency, and by choosing the currency distribution to reflect the currency distribution of the trade expressed in other currencies, as traded by the community using the new complementary value currency.
  • the short term risk of value loss is hedged by the central value bank arbitrating, directly or through its partnering market makers, between the market price of the new value currency (being the publicly quoted share certificates) and the intrinsic value of its own value currency.
  • the intrinsic value of its value currency is modeled based on the market price of the underlying stock(s) in its stock portfolio or on the intrinsic value of such stock portfolio.
  • Arbitrating between new value currency's market value and the intrinsic value based on the market value of the underlying stock allows for realization of arbitration profit, shared between partnering banks (restoring their balance sheets) and social non-profit organizations (as a free tax for social goals).
  • the arbitration hedges the short risk of the currency and stabilizes the value of the currency, by steering it towards its intrinsic value.
  • the information on market value, intrinsic value based on market value and/or intrinsic value of the underlying stock portfolio can be continuously communicated through electronic means, such as an smart chip embedded in physical, tangible money, allowing the trust to optimally build by having continuous transparency.
  • the design rules, specifications for loans, savings and balance sheet structure of the central value bank, as well as the arbitration and stabilization methods and the stock selection methods, may all be implemented with a number of software algorithms which execute in conjunction with a decision engine and a plurality of predefined rules defining models for the new currency and central value banking system as disclosed herein.
  • Complementary Value Banking applies a set of Objective rules and processes, implementable as executable software embedded in a computer system, defining Complementary Value Banking.
  • the Complementary Value Banking System consists of a Central Value Bank, Bank Partners also called Value Banks and a Community using the Value Certificates as Currency.
  • the Central Value Bank is a publicly quoted Value Fund, a fund holding and trading equity stock, optimizing its portfolio for maximal Safety Margin between Intrinsic Value and Market Value.
  • the Central Value Bank's public stock functions as Money in order to be used by the Community as a Complementary Value Currency.
  • Value Banks are commercial banks that partner with the Central Value Bank to broker the Value Currency, Saving Bonds as well as loans granted directly from the Central Value Bank's balance sheet.
  • the exchange rate of the Value Currency is the stock quote of the Central Value Bank.
  • a stabilization procedure is disclosed that stabilizes the Market Value of the Complementary Value Currency, by arbitrating between Intrinsic Value and Market Value, through partnering Value Banks. The stabilization procedure also stabilizes the Legal Tender Currency and allows for stable restructuring of distressed commercial banks.
  • Complementary Value Banking System is implemented utilizing computer systems, and program products and methods in which the Value of money is Objectified, secured and stabilized by the Intrinsic Value of underlying assets of the Certificates used as Money through the Complementary Value Banking System.
  • an article of manufacture for use as currency comprises: A) a token representation of an amount of value as an amount of currency; B) an underlying asset having an intrinsic value associated with the amount of currency; and C) a mechanism for substantiating the value of the currency with the underlying asset.
  • the mechanism for substantiating comprises any of a smart chip associated with the currency, a resolvable computer address embedded in the token representation of the currency, or an alert mechanism for indicating if the intrinsic value of the asset associated with the amount of currency has exceeded a predetermined threshold range of values.
  • a method for transacting the exchange of goods/services comprises: A) providing an amount of goods or services having a value associated therewith; B) providing an amount of currency having an assigned value associated therewith, the currency further comprising a mechanism for substantiating the currency's value with an asset base having an intrinsic value, associated with the amount of currency; and C) exchanging the amount of goods or services for the substantiated amount of currency.
  • the further comprises: D) verifying that the traded value of the currency is substantially similar to the intrinsic value associated with the currency's asset base.
  • the method comprises: Dl) confirming that a portfolio of at least one equity asset associated with the token representation of the currency has an intrinsic value at least substantially equal to the assigned value of the amount of currency.
  • a method of preventing fluctuations in the value of currency comprises: A) providing a representation of an amount of currency, the amount of currency having one of a numerical or nominative value; B) substantiating the value of the amount of currency with a portfolio of equity instruments, the amount of currency being a certificate of the intrinsic value of the portfolio of equity instruments; and C) utilizing one of a model of intrinsic value of the amount of currency or a model of intrinsic value of the equity instrument portfolio to hedge risks of diminishing value of the amount of currency.
  • a method for creating an equity portfolio comprises: A) from data stored in a network accessible memory, the data representing a plurality of equity instruments, each equity instrument associated with an entity issuing the equity instrument, computing for each equity instrument: i) an objective fundamental criteria, and ii) a subjective market criteria; B) eliminating the equity instrument associated with any entity having an associated value for the objective fundamental criteria and the subjective market criteria outside a predefined range of values; C) for each of the plurality of equity instruments, scaling a ratio of the computed value of the objective fundamental criteria to the computed value of the subjective market criteria by at least one weighting criteria so as to minimize risk; and D) retaining within the equity portfolio only those equity instruments resulting in positive weight values in C) above.
  • a free-market banking system comprises: A) at least one network accessible central bank system comprising : i) a network interface; ii) at least one processor; iii) a memory for storing an executable equity portfolio model and a plurality of predefined rules associated with selection or trading of equity instruments and the issuance of currency, the currency; and B) a plurality of participating bank systems coupled over a network to the central bank system, each of the participating bank systems comprising a user interface for enabling automated and semi-automated interaction with the central bank system over a network.
  • Figure 1 illustrates conceptually the relationship between physical goods and/or intangible services, the new complementary currency described herein and the equity portfolio substantiating such new complementary currency;
  • Figure 2 illustrates conceptually a network environment in which the Value Banking System disclosed herein may be implemented
  • FIG. 3 illustrates conceptually system architecture, respectively in which the system disclosed herein may be implemented
  • Figure 4A-B illustrates conceptually data structures useful in implementing the new complementary currency and free-market banking system in accordance with the disclosure
  • Figure 5 is a conceptual graph illustrating the transient behavior of the
  • Figure 6 is a conceptual graph illustrating the Money Price Stabilization Procedure, using its Intrinsic Value to arbitrate the market price of Money and aligning the Money Supply with the Money demand;
  • Figure 7 is a conceptual diagram illustrating the transactional flow between
  • Figure 8 illustrates a flow diagram of a Safety Margin algorithm in which the Value Stock selection by the Central Value Bank in the Value Banking System disclosed herein may be implemented.
  • Figures 9 illustrates a graph of an efficient stock market where the market priced profit equals the Objective Profit as disclosed herein.
  • Financial Crisis A crisis caused by the financial system or the bank system, such as a recession or depression.
  • the Great Depression of the last century's thirties, as well as the current financial crisis are constitutive or inductive examples that formed the concept of a Financial Crisis.
  • Monetary Confusion The confusion between the variation of the Value of a good and the variation of the Value of Money used to express the Value of the good, as its price.
  • Free-Market Banking System A Free-Market Banking System is a banking system in which interests on savings and loans are freely determined by the market without government intervention and where Money can freely compete to become the (most popular, or most current) Currency.
  • Money and Currency - Money is a means of storing and exchanging value, enabling barter trades within a community to be executed in the absence of the actual goods involved in the barter.
  • Money that is actively and fluently used in a community becomes a Currency.
  • Money is individually used by humans to store Value over time and collaboratively by a community, as a Currency, to exchange Value.
  • Value Certificate - Value Certificates consist of electronic, paper, metal or other tokens of the right to value, typically the right to participate in the partial or full liquidation of assets held on the active side of a balance sheet, where the passive of that balance sheet consists of those Value Certificates.
  • Certificate Money - Certificate Money consists of Value Certificates that are individually used as Money to store Value over time and collaboratively by a community, as Currency, to exchange Value.
  • Value Banking System is a banking system in which the Money consists of Value Certificates backed by Value Stock.
  • Value Stock - Value Stock is equity stock in an enterprise (en entrepreneurial activity with the aim to create Value) that has maximal Safety Margin between Objective Intrinsic Value and Subjective Market Price.
  • Metal Money - Metal Money is made of metal.
  • the metal can be the actual valuable asset providing Value to Money or just be a token of it, as Certificate Money.
  • Complementary Currency consists of Certificate Money that is freely used by a community or a subdivision of a community, as a currency that runs in parallel to the existing Legal Tender Currency.
  • the Legal Tender Currency is the dominant currency of a jurisdiction that is imposed by legal tender law.
  • the legal tender law fixes the Nominal Value of Fiat Money, having caused it in history to be the Currency of the community dominated by that jurisdiction.
  • Nominal Value - The Nominal Value of Certificate Money is the Objective Value determined by the name (in words) and the amount (in numbers) displayed on Certificate Money.
  • the name and number can also be united in one figure, as the face of the issuer (or someone else the issuer chose).
  • Complementary Value Currency is a Complementary Currency that consists of Value Money.
  • Value Money or Currency - Value Money or a Value Currency consists of Certificate Money that is a token of participation in assets with Intrinsic Value that are acquired with application of a Safety Margin.
  • Intrinsic Value - Intrinsic Value of an Object is the Objective Value of that Object that is logically derived as a necessary characteristic of that language Object, resulting from the definition of that Object and a formally and logically correct deductive reasoning.
  • Safety Margin - A Safety Margin is the margin of safety that exists between the higher Objective Intrinsic Value of a Good and the lower Subjective Market Price at which that Good is acquired.
  • An Object is a mental projection emerging from networked neuronal firing that is logically and/or numerically consistently interpretable by a different Subject than the Subject that expressed it in language and/or numbers. Most mental projections are not entirely Objective. People tend to believe or assume that there remains a residual non-consistency between mental projections in different Subjects. The Object is therefore a reduction of the mental projection, called notion, concept or idea.
  • Subject - A Subject is a mental projection that is not (yet) entirely logically and/or numerically reducible in Objects, without residual non-consistency or Bivalence.
  • a raw or total Subject contains conscious as well as sub- or pre-conscious information on phenomena and therefore also includes all known Objective dimensions.
  • a pure or remaining Subject contains only the residual non- consistency that hasn't yet been logically and/or numerically consistently interpreted in objects.
  • Human beings, as well as animals are classical constitutive or inductive examples that formed the concept of a Subject, also referred to as a spirit or psyche.
  • the word Subject not only means a human or other living being, it means also the Subject of a sentence, as well as the Subject as the topic of a writings or conversations, as in the Subject or topic of a scientific discipline, meaning the total field of knowledge of certain phenomena.
  • the Right Brain Consciousness is the consciousness that emerges from the entire brain, under the direction of the right pre-frontal cortex.
  • the Right Brain Consciousness empathically integrates phenomena into images and Subjects, to induce concepts, invent ideas or intuitively visualize meaning as a notion. While the Left Brain Consciousness is analytically reducing and differentiating phenomena from all over the brain into Objects, the Right Brain Consciousness is intuitively integrating phenomena over the entire brain into Subjects, meaning and sense.
  • Knowledge - Knowledge is the name of Subjective and/or Objective representations of conscious as well as sub- or pre-conscious information on phenomena.
  • Science - Science is the collective human endeavor to analyze or reduce the abstract Subject of certain phenomena into differentiated Objects. Individually it primarily emerges from the Left Brain Consciousness, although Science is the result of a combined, but not necessarily simultaneous, activity of the Left and Right Brain Consciousness. Science is created when Subjects in the Right Brain Consciousness are reduced to Objects in the Left Brain Consciousness, which allows the Left Brain Consciousness to detect contradiction with existing (formal) memory of phenomena and new (empirical) phenomena to exclude wrong knowledge and further reduce the Subject into Objects.
  • Bivalence - Bivalence is the Objective name I gave to the Subjective concept, notion or idea of phenomena being both Subject and Object at the same time, because the Right Brain Consciousness and the Left Brain Consciousness exist simultaneously when humans are conscious of phenomena. Being is fundamentally Bivalent, since human consciousness is bivalent, because the brain is bilateral. The equivalence of matter and energy in physics is just one, albeit a very convincing example of my Subject-Object and Left-Right Consciousness Bivalence concept or hypothesis.
  • Transcendence - Transcendence is the Objective name given to the Subjective concept, notion or idea of phenomena not being reducible to Objects only, unless the phenomenon is a pure tautological mental projection or pure Object.
  • a pure Subject is irreducible to nothing (unless it's a pure Object, but then it is no Subject), so being remains Transcendent to language (and numbers). Residual measuring inaccuracy is an example of Transcendence.
  • Cult or symbolic religion A cult or a symbolic religion is a collaborative human endeavor to intuitively synthesize phenomena into a (and eventually the) total Subject. Individually it emerges from the activity of the Right Brain Consciousness. Culture - Human Culture is the combination of Cult and Science in their pure and mixed forms.
  • Free Will - Free Will is the Objective name given to the Subjective concept of Transcendence in understanding human behavior. Free Will is defined as the residual non-consistency, remaining after neurological, psychological, sociological and other Objective reductions of the scientific Subject of free human behavior. Free Human Action - Free Human Action is the Subjective result of human Free Will.
  • Free Human Action (as well as free animal Action) is the pure Subjective source of real change. It is not (yet) deterministically reducible to Objective causes of change, such as heat, mechanical force, post-natal depression or lack of dopamine.
  • Free Human Action is defined as free, outside family and between families human behavior. One person families qualify as well as family.
  • Economics - Economics is the scientific discipline that tries to further reduce the Bivalence in Free Human Action.
  • the Subject of Economics is Free Human Action, resulting from Free Will. Contrary to Psychology, Economy does not Objectify Free Will, but only Free Human Action.
  • Psychology - Psychology is the scientific discipline that aims at further reducing Bivalence in the Human Subject or psyche itself.
  • the Subject of Psychology is the psyche.
  • the endeavor is to further objectify and thus reduce the psyche in Objects such as Motivation, Emotion, sub- and pre-conscious projections and representations and finally name the remaining Subject Free Will. Therefore the Free Will, as well in Psychology as in Economics, remains the residual inconsistent, unreducible and therefore Transcendent Subject.
  • Motivation - Motivation is the Subjective source of immediate Action.
  • Emotion - Emotion is the Subjective source of future Action.
  • Fear - Fear is the Objective name for the generalized Subjective Emotion with negative valence.
  • Fear is the Subjective force Objecting change.
  • Risk - A Risk is an Objectified Fear, grounded in Objective reality and expressed in language and/or numbers.
  • Desire - Desire is the Objective name for the generalized Subjective Emotion with positive valence. Desire is the Subjective force creating change and Subjecting to change. Also this word Subject, in 'to subject', is the same word Subject as in the concept and definition of Subject described and it has the inverse meaning of the word Object in 'to object'.
  • the adjective Good is used in a specific sense, not as a Subjective judgment of Value, but as an Objective adjective indicating that the specific character of the noun contributes to human specie's evolutionary fitness for survival.
  • Complementary Value Money - has an Objective structure that is the same structure that contributed to civilization's fitness for survival : dealing Objectively with Fear. Therefore it will probably also contribute to civilization's further fitness for survival. Therefore it is called Good Money, rather than good money.
  • Figure 1 illustrates conceptually the relationship between physical goods/intangible services 3 (hereafter goods), the new complementary currency 5 described herein and an equity portfolio 15 substantiating such new complementary currency.
  • goods 3 may comprise any tangible items or services which have value and may be exchanged or processed for a form of the new complementary currency 5 whose value is maintained stable by equity portfolio 15 in accordance with the new value banking system disclosed herein.
  • New complementary currency 5 may take the form of physical notes or coins 5A, a physical apparatus 5B, or a physical or electronic certificate 5C.
  • the currency 5 in the form of physical apparatus 5B may be implemented as a currency token which, in one embodiment, may be substantiated with a smart card having one or both of a magnetic strip 2 or smart chip 4 embedded thereon for communicating with any of the systems 10 within the new value banking system.
  • Certificate 5C may be in the form of a physical certificate, such as a traditional stock certificate or may be an electronic certificate stored in a computer memory and having a data structure associated therewith similar to that described in Figure 4A herein.
  • Equity portfolio 15, as described elsewhere herein, may be comprised of a plurality of individual equity instruments 9A-N.
  • equity portfolio 15 and its constituent equity instruments are selected based on a model and one or more associated rules which are used to collectively implement in an automated manner the bylaws of the new value central bank.
  • the equity portfolio 15 provides the underlying asset basis for the amount of value of the currency as issued.
  • FIG. 2 illustrates a network environment in which a free-market banking system in accordance with the disclosure may be implemented.
  • bank systems 10A-B, users 16A-B representing savers, user 17 representing a debtor, as well as exchange 19 are all interconnected via a computer network topology 29, typically a combination of LAN and WAN networks, i.e. the Internet, to facilitate electronic financial transactions.
  • a computer network topology 29 typically a combination of LAN and WAN networks, i.e. the Internet, to facilitate electronic financial transactions.
  • bank 10A or bank 10B are part of the free-market bank system described herein, operating in accordance with the bylaws incorporating the free-market bank protocol.
  • Such protocol may be implemented with a series of computer algorithms and threshold values which are stored by the bank the form of a collection of rules which may be acted upon by a decision engine and utilized in conjunction with the banks various day-to-day procedures and decisional processes as it transacts business.
  • Figure 2 further illustrates that each of banking systems 10A-B may comprise one or more additional computer systems 27, databases and servers 37 and/or dashboard displays 23.
  • FIG. 3 illustrates conceptually a computer architecture 10 which may be implemented any of the systems illustrated in Figure 2 to perform methods described.
  • computer architecture 10 comprises a central processing unit 12 (CPU), a system memory 30, including one or both of a random access memory 32 (RAM) and a read-only memory 34 (ROM), and a system bus 11 that couples the system memory 30 to the CPU 12.
  • An input/output system containing the basic routines that help to transfer information between elements within the computer architecture 10, such as during startup, can be stored in the ROM 34.
  • the computer architecture 10 may further include a mass storage device 20 for storing an operating system 22, data and various program modules, such as the decision engine 24, rules 21 and portfolio models 13.
  • the mass storage device 20 may be connected to the CPU 12 through a mass storage controller (not illustrated) connected to the bus 11.
  • the mass storage device 20 and its associated computer-readable media can provide nonvolatile storage for the computer architecture 10.
  • computer-readable media can be any available computer storage media that can be accessed by the computer architecture 10.
  • computer-readable media may include volatile and non-volatile, removable and non-removable media implemented in any method or technology for the non-transitory storage of information such as computer-readable instructions, data structures, program modules or other data.
  • computer-readable media includes, but is not limited to, RAM, ROM, EPROM, EEPROM, flash memory or other solid state memory technology, CD-ROM, digital versatile disks (DVD), HD-DVD, BLU-RAY, or other optical storage, magnetic cassettes, magnetic tape, magnetic disk storage or other magnetic storage devices, or any other medium which can be used to store the desired information and which can be accessed by the computer architecture 10.
  • the computer architecture 10 may operate in a networked environment using logical connections to remote physical or virtual entities through a network such as the network 29.
  • the computer architecture 10 may connect to the network 29 through a network interface unit 14 connected to the bus 11.
  • network interface unit 14 may also be utilized to connect to other types of networks and remote computer systems.
  • network interface 14 includes the necessary transceiver hardware (not shown ) to communicate wirelessly with other network devices or processes.
  • the computer architecture 10 may also include an input/output controller for receiving and processing input from a number of other devices, including a keyboard, mouse, or electronic stylus (not illustrated). Similarly, an input/output controller may provide output to a video display 16, a printer, or other type of output device.
  • a dedicated graphics processor 25 unit may also be connected to the bus 10.
  • a number of program modules comprising sequences of executable instructions, and data files may be stored in the mass storage device 20 and RAM 32 of the computer architecture 10, including an operating system 22 suitable for controlling the operation of a networked desktop, laptop, server computer, or other computing environment.
  • the mass storage device 20, ROM 34, and RAM 32 may also store one or more program modules.
  • the mass storage device 20, optionally in conjunction with RAM 32 may store the executable instructions that program modules comprising decision engine 24 for execution by the CPU 12.
  • the decision engine 24 can include software components for implementing portions of the processes discussed in detail with respect to Figure 8 as well as the other computational communication properties described herein 10.
  • the decision engine 24 may also be stored on the network 29 and accessed by any computer within the network 29.
  • patent database 37 and its accompanying server process may be coupled directly to the bus 11 of system 10 or may be remotely connected thereto via network 29.
  • the software modules may include software instructions that, when loaded into the CPU and executed, transform a general-purpose computing system into a special-purpose computing system customized to facilitate all, or part of, the volatility index generation techniques disclosed herein.
  • the program modules may provide various tools or techniques by which the device or computer architecture may participate within the overall systems or operating environments using the components, logic flows, and/or data structures discussed herein.
  • the CPU 12 may be constructed from any number of transistors or other circuit elements, which may individually or collectively assume any number of states. More specifically, the CPU 12 may operate as a state machine or finite- state machine. Such a machine may be transformed to a second machine, or specific machine by loading executable instructions contained within the program modules. These computer-executable instructions may transform the CPU 12 by specifying how the CPU 12 transitions between states, thereby transforming the transistors or other circuit elements constituting the CPU 12 from a first machine to a second machine, wherein the second machine may be specifically configured to manage the generation of portfolios and/or decisions.
  • the states of either machine may also be transformed by receiving input from one or more user input devices associated with the input/output controller, the network interface unit 14, other peripherals, other interfaces, or one or more users or other actors.
  • Either machine may also transform states, or various physical characteristics of various output devices such as printers, speakers, video displays, or otherwise.
  • Encoding of executable computer program code modules may also transform the physical structure of the storage media.
  • the specific transformation of physical structure may depend on various factors, in different implementations of this description. Examples of such factors may include, but are not limited to: the technology used to implement the storage media, whether the storage media are characterized as primary or secondary storage, and the like.
  • the program modules may transform the physical state of the system memory when the software is encoded therein.
  • the software may transform the state of transistors, capacitors, or other discrete circuit elements constituting the system memory.
  • the storage media may be implemented using magnetic or optical technology.
  • the program modules may transform the physical state of magnetic or optical media, when the software is encoded therein. These transformations may include altering the magnetic characteristics of particular locations within given magnetic media. These transformations may also include altering the physical features or characteristics of particular locations within given optical media, to change the optical characteristics of those locations. It should be appreciated that various other transformations of physical media are possible without departing from the scope and spirit of the present description.
  • Figure 4A illustrates conceptually a data structure 33 which may be stored by the Central value Bank 10B in association with a particular value share certificate representing the new value currency in accordance with the disclosure.
  • data structure 33 may be implemented as an object, record, file or other storage construct maintainable in accessible memory and may comprise one or more fields or parameters which help identifying the particular instance of new currency. Such fields or parameters may be utilized to identify one or more of the following self-explanatory parameters:
  • a plurality of data structures 33 may be stored in database 37 or other memory of a New Value Bank system 10 in accordance with the disclosure.
  • Figure 4B illustrates conceptually a data structure 35 which may be stored by the Central value Bank 10B in association with a loan or promissory note in accordance with the disclosure.
  • data structure 35 may be implemented as an object, record, file or other storage construct maintainable in computer memory and may comprise one or more fields or parameters which help identifying the particular instance of new currency. Such fields or parameters may be utilized to identify one or more of the following self- explanatory parameters:
  • a plurality of data structures 33, each in association with a certificate of shares of new currency, may be stored in database 37 or other memory of a New Value Bank system 10 in accordance with the disclosure.
  • Value whether moral or economic, is a Subjective Right Brain projection that remains transcendent to Objective reduction in language and figures. While fundamentally Subjective, Value can also be Objective, when it is expressed in language and/or numbers.
  • Intrinsic Value is, as any other Right Brain projection, relative. Something is judged by a Subject more valuable than something else. Intrinsic Value however is Value that is not judged by a Subject and therefore entirely Objective. Intrinsic Value is a property of the Object itself. Few Objects have intrinsic Value. Intrinsic Value only exists, if the Value is a logical property of the language Object itself.
  • Intrinsic Value can be expressed in language, only when the Value is tautologically intrinsic to the definition of the object, or when it can logically consistently be derived from that definition.
  • 'the Intrinsic Value of a Value creating entity an enterprise, or entrepreneurial activity
  • 'the Intrinsic Value of a Value Certificate is the Value of the assets it represents' or as in : 'the Value of a bill of one dollar is one dollar'.
  • the Market Value is the momentary Subjective Value attributed to an Object when it is traded on a market, by the Subjects participating in that market.
  • the Market price is the Objective expression of this Subjective Market Value. It is expressed in a currency and therefore the market Value of that currency equally contributes to the market price, as the market Value of the good does.
  • the Market Value is Subjective, but can incorporate Objective parts, when a certain factor or rationale influencing the price can be deterministically modeled.
  • the Intrinsic Value of equity stocks or Certificate Currencies forms the Objective part of their Subjective Market Value, the remainder is the purely Subjective part. It is determined by Fear and Desire interacting with the Free Will of the participating members of the market. Given the fluctuations of Desire and Fear, the pure Subjective part of the Market Value fluctuates most. Also the fluctuation of the Subjective Market Value of the Currency, in which the Market Value of the good is expressed, is an equally important contributor to any price volatility.
  • the Market Value is therefore composed of an Objective part and a purely Subjective part.
  • the aim of the science of investing, as of any other science, is to reduce the Subjective part into Objective parts.
  • a key insight of Popper on the scientific method is that Objective knowledge on a certain scientific Subject grows and becomes more accurate when more empirical tests proof current Objective knowledge to be false and when the current hypotheses are replaced by new conjectures that are Objectively formulated and that resist falsification in new experiments, meaning they are corroborated by empirical experiments.
  • the range and duration of the transient behavior is a function of purely Subjective factors and is therefore not fully reducible in Objective knowledge. Meaning e.g. that the duration of the 'long run' in Keynes notorious 'In the long run we are all dead' is unknown.
  • the Market Value of any good, as well as Money is variable, based on demand and offering in the market, itself determined by the relative Subjective valuing of goods and Money, depending on the Fear of not possessing the good (e.g. food), the Desire for the good (e.g. an iPad) and the expected future Value of the good (e.g. fish) and Money (cf. Monetary inflation).
  • Non-Physical Gold Certificate Money was recurrently liable to fraud.
  • the stable Value of gold did not itself hedge the risk of the gold not actually being present to back the certificate.
  • Certificate Money The continuously changing Value of Certificate Money is stabilized by the stability of the Market Value of the assets the Certificate Money represents. At least if Subjective trust in their ability to exchange the currency for its underlying Value. Transparent auditability of a balance sheet is a condition for Subjective trust in that balance sheet, also the balance sheet of a Value Certificate, such as Certificate Money. The actual presence of the assets underlying the Value Certificate used as Money, should be reliably auditable, to enable the Subjective trust among Community members to, that their Money system is not fraudulent.
  • the Subjective Market Value of the Money decreases.
  • the Value of the Money can be stabilized by decreasing the amount of Money through its exchange for the stable Valued asset underlying the Currency, e.g. by melting golden (or other precious metal) coins for different use, or re- minting them in a different Currency.
  • the Value of Money is not stabilized by exchanging it for the underlying assets, reducing the amount of Money, the Value of Money remains decreased and Monetary Inflation occurs.
  • Monetary Inflation When the relative Subjective Value of the underlying assets decrease, such as is the case when large gold quantities are mined or discovered, Monetary Inflation emerges as well, as Friedman has shown from history. When the decrease of Value of the currency is abrupt, Monetary Inflation is called Monetary Hyperinflation.
  • a participant in a market uses the price signals to sell more and possibly produce more or buy more and possibly consume or invest more.
  • Price signals are confused by the instability of the Value of Money. This phenomenon is referred to as Monetary Confusion, being the confusion between a change in Value of a good and a change in Value of the Money used to trade the good.
  • Money is the Object that hedges the Fear for loss of Value over longer time in savings as well as shorter time as currency. Good Money does that well. Objects have neuropsychologically, evolutionary evolved to deal with Fear. Therefore for Money to be Good Money, it should have Objective Value.
  • Fiat Money backed by debt does therefore not secure Value over longer time.
  • the Subjective Market Value of Fiat Money based on debt without Intrinsic Value is not stabilized Value over short term, e.g. by saving or reminting, either. Therefore the contemporary Fiat Money does not secure Value over shorter neither longer time and is really bad Money. It causes Monetary Confusion, economic cycles, recessions and depressions.
  • Physical Gold Money has worked quite well as Money, because the Subjective Value of gold is relatively stable and it is further stabilized through its property of being infinitely remeltable without loss, although gold has no objective Value.
  • Physical Gold Money is the best money of the prior art, but still is no Good Money.
  • the Spanish inflation in the 16 th century, resulting from a massive overseas inflow of precious metals proves it.
  • Non-Physical Gold Money has the problem of lack of continuous and transparent auditability and is therefore liable to fraud. Therefore it is not Good Money either.
  • the invention described is Good Money.
  • Money should have Objective Value and in order to be a Good Currency it should as well enjoy Subjective trust among the members of the community.
  • the Objective Value of the Money described here results from the Intrinsic Value of a Value Stock Portfolio used as the asset underlying the Certificate used as Money.
  • the continuous and transparent auditability of a public stock portfolio is Objectively trustworthy and therefore allows for building of Subjective trust among the members of the community using the Money as Currency.
  • Disclosed is also a method to allow Subjective trust in the Banking System and its Currency to grow among the members of the Currency Community.
  • This Community Currency is freely and voluntarily chosen by members of the community and is Complementary to the Legal Tender Currency.
  • the Central Value Bank is a publicly quoted investment fund.
  • the publicly quoted shares of the fund are the Certificates that are Good Money and therefore are used as Community Currency.
  • the publicly quoted shares of the fund are the Value Certificates or the Money, the stock quote form the exchange rate.
  • the continuous publicly trading of the Money allows for the continuous exchange for other currencies, allowing the Subjective trust to grow and the Objective stabilization mechanism to be executed, under direction of the Central Value Bank.
  • the profit made by selling Value Money at a premium to its Intrinsic Value to Value Banks flows back to the Currency Community, as described further.
  • the profit Bank Partners make by buying Value Money at a discount to Market Value and selling it at Market Value is used by Bank Partners to repair their balance sheets, which are typically damaged by government debt or other toxic assets.
  • Securing Value over longer time is accomplished by Objectively modeling the Intrinsic Value of the stocks and selecting those stocks that have the smallest (and even negative) purely Subjective component in their Market Value.
  • Stocks have Objective Intrinsic Value.
  • the decrease of the Subjective component in the Market Value of the Value Currency is hedged by selecting the stock portfolio to maximize Safety Margin.
  • the Safety Margin is the margin between the Objective Intrinsic Value of the stock and its Subjective Market Value, as for example simply expressed in the price earnings ratio.
  • the geographical selection of the Value Stock Portfolio is done in such way that it reflects the importance of the trading partners.
  • x% When trade with a certain foreign currency is x%, then x% of the Value Stock Portfolio is selected in that foreign currency.
  • the maximal inflation rate in the host community's Fiat Currency can be controlled by allowing to build up the market premium of the Complementary Value Currency over a relatively longer period and then arbitrate it back to zero, effectively creating a brake on the speed of adoption of the Value Currency and stabilizing the host community's inflation at the maximal premium of the Value Currency's Market Value above its Intrinsic Value.
  • Guaranteeing the full reserve character of the Value Money is done by bringing Savings and Loans directly on the balance sheet of the Central Value Bank.
  • Value Currency (as well as some other currency) is held in reserve at the active side of the upper (as well as lower) balance sheet, for trading purposes.
  • the profit made by selling or buying Value Money at a premium or discount to its Intrinsic Value flows to the Community. This profit adds to a separate balance sheet not represented in Figure 3, the balance sheet of the Community Representing Entity, discussed further.
  • the profit or loss made by the increase or decrease of the Market Value of the Value Stock flows to the Intrinsic Value of the Value Sock Portfolio and as such directly to the holders of the Certificates representing the assets on the upper balance sheet. These are the holders of the Money, hence the members of the Currency Community.
  • Value Bank loans are granted in Value Currency. These Value Loans are granted directly from the Central Value Bank's second balance sheet, the lower balance sheet in Figure 3.
  • the Bank Partners act as brokers when selling these loans to the Currency Community. These earned commissions vest at the moment of loan pay out. This has the extra advantages that income for distressed commercial banks, partnering with the Central Value Bank is accelerated. These accelerated profits allow for reparation of the balance sheets of these banks, which are typically distressed due to impairments to government bonds and other toxic assets.
  • the Central Value Bank finances the Value Loans, expressed in its own Value Currency, by issuing Saving Bonds in the market, brokered by its Banking Partners, the Value Banks.
  • the risk associated with loan impairments is covered by issuance of Perpetual Saving Bonds, also brokered by the Value Banks.
  • a rule is applied (and transparently communicated to the public) fixing a minimal boundary condition on the percentage of outstanding Value Loans covered by Perpetual Saving Bonds.
  • a fraction of Savings Bonds may be held in cash for practical and trading reason.
  • the amount of Perpetual Saving Bonds is the maximal boundary condition for Private Equity Value Stock, as shown in Figure 3.
  • the interest rate of the Value Saving Bonds is determined by its market price, when issued.
  • a liquidity rule under the Value Banking System is that Saving Bonds redemption terms should always be pro rate more mature than Value Loans redemption terms.
  • the interest rate charged on Value Loans is that same interest rate, increased with the commission for Value Banks and a margin reflecting the average loan impairment percentage, which is periodically fixed and transparently communicated to the public.
  • the Value Banking System rules are freely and voluntarily applied when licensing this invention as Central Value Bank, Bank Partner, Currency Community member or Currency Community Representative Organization.
  • the Central Value Bank assets and liabilities can solely consist of those represented on Figure 3 while respecting the boundary conditions as indicated in this Disclose, or 2) the valid tendering of the Value Currency as a means of settling debt, is freely and voluntarily agreed among Currency Community members when they buy the Value Currency or 3) the redistribution of profits (as a Free and Voluntary Tax, when distributed to the Currency Community) is freely and voluntarily agreed when buying Value Currency or Value Saving Bonds. No new legislation is necessary to implement this invention.
  • This Safety Margin optimization criterion can be the price earnings ratio, or the method disclosed or any other criterion that Objectively expresses Fear for loss of Intrinsic Value of the Value Share.
  • the Central Value Bank is not allowed to include purely Subjective criteria, expressing Desire for gain of Market Value. Therefore the optimization criterion expresses an Objective Safety Margin and not Subjectively expected or imagined gain.
  • a Value Certificate can only be successful or Good Money, if Fear is Objectively hedged, since evolution has learned us that the successful way to deal with Fear is to Objectify it.
  • Boundary conditions take only into account Objectified real risk, such as available market liquidities to hedge illiquidity risks, currency geographies to hedge contamination by the Monetary Confusion in other currency geographies, balance strength to hedge financial risks, etc.
  • the Safety Margin may be calculated as Graham and/or Buffet do, although not obligatory. Under the rules of the Value Banking System the Value Investing Rules applied by the Central Value Bank should be Objective and transparently communicated to the public, while the stock portfolio itself is not published, unless from time to time as required by law and other regulations, the Central Value Bank is bound to.
  • Good banking should be an Objective Left Brain activity that does not Subjectively speculate and therefore does not Desire profit or Value, it only hedges the Fear of money losing Value and not being trustworthy.
  • the Community Representing Organization organizes the selection of projects that candidate as beneficiaries of these redistributed profits, purely on Objective grounds, without Subjective (e.g. political) preferences.
  • the Community Representing Organization also organizes the control and pay out of the moneys to these projects, factually becoming a redistribution organ of Free Tax.
  • Some financial activities may be organized under the same brand as that of the Community Representing Organization and/or the Central Value Bank, but with a different and entirely separated balance sheet, meaning no liabilities or risks may be shared between these activities and the Central Value Bank.
  • Such activities are called Excluded Activities, since they are excluded from the balance sheet of the Central Value Bank and Related Activities since they can be executed under the same brand as that of the Community Representing Organization and/or the Central Value Bank.
  • Insurance activity is such a Related Activity. It becomes Value Insurance Activity when insurance risks are Objectified and investment of the insurance premium is done using Value Investing.
  • a Left Brain Interface should preferably be used to guide the investment as well as the insurance process.
  • a potential pay out under a Value Insurance claim should be limited in time and amount.
  • Life insurances and life annuity are Related Activities that should be separated from Value Insurance Activity, since life and its duration is not Objectifiable, with sufficiently high accuracy or low remaining pure Subjectivity. After all life is the Objective name of the Subjective transcendence in nature over material reality.
  • all banking processes may be automated in software, and, regardless of software automation, may be maximally left brain similar to other computer traditional user interfaces.
  • the right brain processes may be interfaced through a management dashboard 23, as illustrated in Figure 2, which functions as, an interface between bank management decision engine 24 and the system 27 or other system 10.
  • the dashboard 23 enables 1) defining new or extra rules, 2) changing existing rules in order to hedge newly perceived or differently perceived risks to the value safety margin of value stock, or 3) changing loan granting rules or general rules or parameters and variables used.
  • the dashboard interface also allows for the analysis of performance and general functioning of the system in automated and non-automated modes.
  • the dashboard 27 comprises a first or right brain user interface display 80, used predominantly for viewing of video content which, in the illustrative embodiment, may be implemented with television display and an accompanying remote controls.
  • a second or left brain user interface in system 27 predominantly uses and/or stimulates activity in the left hemisphere of the human brain, and also, to a limited extent, the right hemisphere of the human brain.
  • System 27 may be implemented with a traditional personal computer, including a desktop or laptop system, as well as other systems.
  • dashboard 33 presents visual, non-textual information while computer 27 displays textual and/or numeric information and graphics.
  • the trading system used by the Central Value Bank should be semi-automated and Objectively structured.
  • This automatic trading is based on a mathematical and thus Objective software model that models the Margin of Safety between the current trading price and the current intrinsic Value of the traded asset (e.g. share).
  • the model incorporates an optimization function for the Margin of Safety between the current price and the Value of a security, calculated by dividing the price through the total percentual weighted historic earnings and/or paid out dividends and/or other Value indicators.
  • the best buys are selected.
  • a risk is defined as an Objectively defined Fear for loss; it cannot Subjectively be defined as a loss of opportunity. At times the trading system cannot fully automatically function, manual intervention is allowed, but Subjective judgment should be minimized.
  • Non-exceptional manual intervention is done through a Left Brain software interface.
  • Such left brain software interface is designed to limit the available Actions only to Actions that are related to objectively modeled Fears or risks. For example a manual trade or new automatic trading rule in order to optimize return is not allowed and therefore blocked in the interface.
  • Exceptional periods are periods during which new Objective risks are detected in the environment, not periods during which new Subjective opportunities are experienced.
  • the Right Brain processes are interfaced through a dashboard, as illustrated in Figure 2, which functions as, an interface between Central Value Bank management decision engine and the participating bank system.
  • the dashboard enables 1) analyze phenomena graphically, 2) defining new or extra rules and running simulations on past data, 3) changing existing rules in order to hedge newly perceived or differently perceived risks to the Value safety margin of Value stock and run simulations, or 4) changing loan granting rules or general rules or parameters and variables used and run simulations.
  • the dashboard interface In addition to actively changing the system parameters, the dashboard interface also allows for simulation of newly proposed hedging strategies and graphical analysis/synthesis of performance and general functioning of the system in automated and non-automated modes.
  • This automatic trading is based on a mathematical software model that models the margin of safety between the current trading price and the value of the stock or bond.
  • Such model incorporates an optimization function for the margin of safety between the price and the value of a security weighing and totaling historic and/or predicted earnings and/or dividends paid out and/or other value indicators as well as boundary conditions consisting of balance sheet risks and other risks such as geopolitical risks, monetary inflation risks, perceptual and absolute exposure risk and other risks.
  • Risk is defined as an objectively defined fear for loss, not subjectively defined and not as a loss of opportunity. If such trading system cannot be executed fully automatically, manual intervention may be exceptionally allowed.
  • Non-exceptional manual intervention may be done through a left brain software interface.
  • Such left brain software interface may be designed to limit the available actions to actions that are related to objectively modeled fears or risks. For example, a manual trade or new automatic trading rule in order to optimize return is not allowed and therefore blocked in the interface, however entering a new boundary condition that models a new or altered risk is allowed and well supported in the interface.
  • the Central Value Bank's standards and rules, including choices of variables (such as the numerical Value of mentioned percentages) are transparently communicated to the public and rigorously applied and enforced.
  • the Central Value Bank's bylaws reflect this disclosure's rules. Management is liable in case of willful breach. Bylaws can be changed to a those of a Central non-Value Bank, when the majority of votes of savings bonds holders desires so, but only if the Central Value Bank pays out the no voters who wish so.
  • the Objective Profit of a company is defined as the ex post realized profit.
  • the priced Subjective Profit is the profit expected by all investors participating in the stock market.
  • An efficient stock market is one where the market priced profit equals the Objective Profit. This is illustrated in Figure 6.
  • the Safety Margin is the distance above the 45-degree line. For those companies the Objective Profit is larger than the Subjective Profit expected by investors.
  • the maximal Safety Margin in the graph is the top left part, where the Objective Profit is strongly positive and the priced Subjective Profit is strongly negative.
  • Figure 5 illustrates the algorithmic process 800 for developing a Value Stock portfolio utilizing one or more of the computer systems and software described herein.
  • the process for creating an equity portfolio by computing for each equity instrument i) an objective fundamental criteria, and ii) a subjective market criteria, as illustrated by process blocks 802 and 803.
  • the Objective fundamental criteria may comprise any number of criteria such as valuation multiples, profitability criteria, solvency criteria and liquidity criteria with regard to the most recent fiscal year available.
  • Subjective market criteria may comprise criteria such as market capitalization and average daily turnover.
  • network accessible memory 30 and 20 of system 10 is utilized to store data on a plurality of equity instruments, each equity instrument associated with an entity issuing the equity instrument, for example, a sovereign tea, government agency, corporation.
  • the nature type of the equity instrument may be chosen from a large plurality of different equity instrument types.
  • the underlying equity instrument s comprising the asset that substantiates the currency comprises at least one of: a stock; a commodity; a futures contract; a bond; a mutual fund; a hedge fund; a fund of funds; an exchange traded fund (ETF); a derivative; and/or a negative weighting on any asset.
  • Such equity instruments may also comprise any of a debt instrument; at least one unit of interest in at least one of: an asset; a liability; a tracking portfolio; a financial instrument and/or a security, where the financial instrument and/or the security denotes a debt, an equity interest, and/or a hybrid; a derivatives contract, including at least one of: a future, a forward, a put, a call, an option, a swap, and/or any other transaction relating to a fluctuation of an underlying asset, notwithstanding the prevailing value of the contract, and notwithstanding whether such contract, for purposes of accounting, is considered an asset or liability; a fund; and/or an investment entity or account of any kind, including an interest in, or rights relating to: a hedge fund, an exchange traded fund (ETF), a fund of funds, a mutual fund, a closed end fund, an investment vehicle, and/or any other pooled and/or separately managed investments.
  • ETF exchange traded fund
  • an objective metric of intrinsic value of an equity instrument which serves as the underlying asset substantiating the currency, may comprise at least one of: revenue; profitability; sales; total sales; foreign sales, domestic sales; net sales; gross sales; profit margin; operating margin; retained earnings; earnings per share; book value; book value adjusted for inflation; book value adjusted for replacement cost; book value adjusted for liquidation value; dividends; assets; tangible assets; intangible assets; fixed assets; property; plant; equipment; goodwill; replacement value of assets; liquidation value of assets; liabilities; long term liabilities; short term liabilities; net worth; research and development expense; accounts receivable; earnings before interest and tax (EBIT); earnings before interest, taxes, dividends, and amortization (EBITDA); accounts payable; cost of goods sold (CGS); debt ratio; budget; capital budget; cash budget; direct labor budget; factory overhead budget; operating budget; sales budget; inventory system; type of stock offered; liquidity; book income; tax income; capitalization of earnings; capitalization of goodwill; capitalization of interest; capitalization of revenue; capital
  • the universe of entities with which an equity instrument may be associated may include at least one of: a sector; a market; a market sector; an industry sector; a geographic sector; an international sector; a sub-industry sector; a government issue; and/or a tax exempt financial object; agriculture, forestry, fishing and/or hunting industry sector; mining industry sector; utilities industry sector; construction industry sector; manufacturing industry sector; wholesale trade industry sector; retail trade industry sector; transportation and/or warehousing industry sector; information industry sector; finance and/or insurance industry sector; real estate and/or rental and/or leasing industry sector; professional, scientific, and/or technical services industry sector; management of companies and/or enterprises industry sector; administrative and/or support and/or waste management and/or remediation services industry sector; education services industry sector; health care and/or social assistance industry sector; arts, entertainment, and/or recreation industry sector; accommodation and/or food services industry sector; other services (except public administration) industry sector; and/or public administration industry sector.
  • the underlying asset base substantiating an amount of currency comprises equity instruments other than debt instruments of a government or sovereignty.
  • the predefined weighting criteria may be stored in memory 20 of system 10 as one or more rules 21 interoperable with decision engine 24.
  • rules may, for example, have the form of any of the following : Rule 1 - No more than x% (of the total value of the equity portfolio) shall be invested in one
  • Rule 4 The portfolio's profitability criteria must be in the upper a th percentile;
  • Rule 5 The portfolio's solvency criteria must be in the upper 3 th percentile;
  • Rule 7 The portfolio's valuation multiples (except for valuation multiple i) must be in the lower zth percentile.
  • the value of x may be between 0% - 5% but more preferably between 0% - 2%, but even more preferably between less than 1%.
  • the value of x may be pre-determined or calculated dynamical y by a separate risk model .
  • yl and y2, respectively may have vales depending on matching the ratio of foreign trade currencies in the foreign trade of the community using the currency, with the ratio of selected stock expressed in those foreign currencies.
  • alpha, beta and gamma are typical higher best quarter selections, and may have values between 1% - 100%, but more preferably between 50% -100% but even more preferably between 75% and 100%
  • z may have a value representing a lower best quarter selection, and may have values between 0% - 100%, but more preferably between 0% -50% but even more preferably between 0% and 25%
  • any two elements which communicate over a network or directly may utilize either a push or a pull technique in addition to any specific communication protocol or technique described herein.
  • any existing or future network or communications infrastructure technologies may be utilized, including any combination of public and private networks.
  • specific algorithmic flow diagrams or data structures may have been illustrated, these are for exemplary purposes only, other processes which achieve the same functions or utilized different data structures or formats are contemplated to be within the scope of the concepts described herein. As such, the exemplary embodiments described herein are for illustrative purposes and are not meant to be limiting.

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Abstract

L'invention concerne une nouvelle monnaie physique et un jeton électronique quelconque associé échangeables contre des marchandises corporelles ou des services incorporels et ayant une valeur qui est stabilisée par un portefeuille de titres sous-jacents ou un autre bien ayant une valeur intrinsèque, dont la valeur de marché à court terme est arbitrée directement ou indirectement par une banque centrale des valeurs.
PCT/EP2012/061617 2011-06-16 2012-06-18 Système bancaire de valeurs et technique utilisant une monnaie de valeur complémentaire WO2012172117A1 (fr)

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EP12731349.2A EP2721570A1 (fr) 2011-06-16 2012-06-18 Système bancaire de valeurs et technique utilisant une monnaie de valeur complémentaire

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US13/278,789 US8489527B2 (en) 2010-10-21 2011-10-21 Method and apparatus for neuropsychological modeling of human experience and purchasing behavior
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PCT/EP2011/068485 WO2012052559A1 (fr) 2010-10-21 2011-10-21 Procédé et appareil de modélisation neuropsychologique d'expérience humaine et de comportement d'achat
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