Notes of Note from John F. Ince

Archive for August, 2012

Private Currency Competition Is The Monetary Answer – Forbes

The push for monetary reform is on, and intellectuals seeking to reform the monetary system in accordance with free market principles are seriously debating two alternative solutions. One is a return to the gold standard in some fashion. The other is a free market in currency, i.e., private currency competition. Toward the latter end, Rep. Ron Paul has sponsored a bill repealing legal tender law.

Their primary concern is the establishment of perfect money, which they define as money which changes in value the least. A much stronger case can be made for private currency competition than for a national gold standard in achieving this goal. Broadly speaking, private currency competition can provide the means to both a better concept of money (i.e., the development of an ideal monetary standard), and a better practical implementation of a monetary system.

Regarding the first advantage, some believe that humanity has already found the ideal monetary standard in gold. However, there are important reasons why alternate standards should be tested on the market, not the least of which is the theoretical case for commodity baskets.

To say that money should be stable necessarily implies that there is something by which the value of money remains stable; stability does not exist in a vacuum. It is generally accepted that commodity price trends mark the stability of the currency in which they are denominated. A decline in currency value is expressed as a general rise in the price of commodities, which are fundamental to an economy. Commodities should therefore be candidates to serve as a monetary base. Among others, Benjamin Graham and Friedrich von Hayek advocated a basket of commodities, the latter within the context of a system of private currency.

Hayek believed that the measure of a private currency’s stability would be the aggregate price of a basket of commodities in that currency over time. A constant aggregate price is the definition of stability. Issuers would achieve this stability through loan extension and expiration operations (the major, long-term method) or currency trading (the minor, day-to-day method).

via Private Currency Competition Is The Monetary Answer – Forbes.

Will Crowdfunding Ignite Investing For Profits And Purpose? – Forbes

Can you earn a healthy return on your investment and help change the world at the same time?

If you haven’t been paying attention, there are already thousands of entrepreneurs and investors betting that you can, with a multibillion-dollar market to show for it.

The companies and investors in this market aim to create “impact” beyond mere profit – whether that be social or environmental impact. But unlike non-profits, revenues and profits sustain these companies.

These for-profit companies, often called “social enterprises,” are becoming more and more common. Among investors, they’re called “impact investments.”

 

The impact investment market is difficult to quantify since there is no common criteria to define a social enterprise, and no standardized metrics by which to measure impact.

Regardless of where the criteria and metrics eventually land, a recent study from the Calvert Foundation reports that the potential near-term market for sustainable and responsible investing is $650 billion, and that 72% of financial advisors express interest in offering these investment opportunities to clients.

The Forum for Sustainable and Responsible Investment claims that $3.07 trillion of the $25.2 trillion in professionally managed assets consider social impact a key investment criteria.

However you look at the data, we’re talking billions of dollars invested at minimum. And it’s easy to see why…

Consumers want to align their money with their values and are choosing triple-bottom-line brands that support people, the planet, and profit (think: TOMS Shoes, Method, Honest Tea, Patagonia, etc.)

Accordingly, a company with a purpose is becoming increasingly important to investors – rather than just making a quick buck at the expense of society or the environment.

That’s the promise and beauty of social enterprise: making a buck and aligning with your values are no longer mutually exclusive. They’re one in the same.

via Will Crowdfunding Ignite Investing For Profits And Purpose? – Forbes.